$1.8bn claim against accountants rejected

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The Independent Online
A High Court judge yesterday rejected a $1.8bn (pounds 1.1bn) claim against Ernst & Whinney, the accountancy firm now known as Ernst & Young, brought by the liquidators of Bank of Credit and Commerce International.

BCCI collapsed in 1991 after regulators uncovered evidence of fraud and money-laundering. Its total debts ran to more than $12bn and it was only last month that creditors to BCCI started to receive some of the money they were owed.

After yesterday's judgment, Ernst & Whinney still faces a claim for $1.7bn in respect of its 1985 and 1986 audits of BCCI Holdings SA and BCCI SA.The liquidators' original claim was for $10bn but in June 1995 the claim was reduced to $3.5bn.

"The BCCI liquidators have now had struck out, or been forced to withdraw, 85 per cent of the claims originally brought against Ernst & Whinney," said Nick Land, senior partner at Ernst & Young. "We look forward to dealing with the remaining 15 per cent in a similar fashion."

Deloitte & Touche, the liquidators to BCCI, said they were considering whether they should appeal.