- The Observer,
- Sunday January 19 2003
BCCI's creditors are reckoned to have clawed back about 60 per cent of their estimated £7 billion losses over the years, but have never received a penny from the Bank of England.
This autumn's High Court case promises to be gruelling for the Bank, whose officials will take the stand for the first time in its 300-year history.
Some are likely to give evidence, for several weeks each. They include Robin Leigh-Pemberton, who was Governor of the Bank when BCCI crashed; Eddie George, the present Governor and Leigh-Pemberton's deputy at the time; and Brian Quinn, who headed the banking supervision division. Quinn is now chairman of Celtic football club.
The creditors claim the Bank failed in its duty to protect investors by granting BCCI a banking licence. They allege the Bank knew perfectly well that BCCI was in trouble but chose to do nothing.
They will cite Lord Justice Bing ham official report of 1992, which said the Bank 'did not pursue the truth about BCCI with the vigour which BCCI's market reputation justified'. Bingham condemned the Bank for failing to investigate allegations of wrongdoing at BCCI which it received in the Eighties. He added that it was wrong not to get more more involved in attempts to rescue BCCI in the year prior to its collapse.
The Bank denies responsibility, and has said it could not have known about the huge black hole in BCCI's accounts. It is likely to argue that BCCI was regulated principally by the authorities in Luxembourg, where it was incorporated, and neither they nor BCCI's own auditors discovered the fraud until it was too late.
Both sides have assembled small armies of lawyers, with City firm Lovells and Lord Neill, the QC and former chairman of the Committee on Standards in Public Life, representing creditors.
