Dead in the Water: Murder and Fraud in the World's Most Secretive Industry

by Matthew Campbell

In the late 1970s, so many cargo ships were going down in the South China Sea that the Lloyd’s market took the unprecedented step of ordering an inquiry, to be led by the specially appointed Far Eastern Regional Investigation Team, or FERIT. In typical Lloyd’s style, FERIT’s report was kept confidential and was not to be shared with nonmembers, although several historians have written about its contents. More than half of the forty-eight casualties it investigated were deemed “suspicious,” while sixteen were found to be probably the result of scuttling. In all cases, the ships were older and ostensibly loaded with valuable goods: Japanese stereos or, in one instance, about half of Singapore’s annual export volume of cloves. (A port official became suspicious when he noticed that the shipment lacked the distinctive odor that normally accompanied nine hundred tons of spice.) Sometimes the cargo had already been removed and sold in secret before an insurance claim was made. In a few cases it had never existed at all. The cost to the London market of the South China Sea claims alone was estimated at $100 million.