Abu Dhabi 'will not negotiate on BCCI cash'

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A SENIOR Abu Dhabi official yesterday warned creditors of the failed Bank of Credit and Commerce International that if they rejected a compensation deal now on the table the offer would be withdrawn and not renegotiated.

Ahmed al-Sayegh, a member of the Abu Dhabi government's working group on BCCI, said in London that if creditors rejected the offer of cash from Abu Dhabi they might not see any money until the next century. There would be a mass of lengthy lawsuits.

'There is no intention whatsoever of renegotiating the arrangements,' he said.

Mr Sayegh said preliminary fraud charges had been laid against 14 former officials of BCCI. He promised a trial that all the world could see would be fair. However, he was unable to say when a trial would begin because preparations would be lengthy.

Mr Sayegh attacked the Bank of England, saying its claim that it closed BCCI in July 1991 because massive fraud had just been discovered could not stand up. The Bank knew everything about the fraud by the end of February.

In the first on-the-record briefing in London by a senior Abu Dhabi official, he made clear that massive actions for damages against the Bank of England and Price Waterhouse, BCCI's former auditors, were highly likely.

He attacked Price Waterhouse, saying it had a conflict of interest because it secretly worked for the Bank of England at a time when it was auditor to BCCI, a member of the investigating committee and an adviser on restructuring. He accused its officials of fleeing Abu Dhabi the day before the closure of BCCI.

Price Waterhouse said its four roles were known to all concerned. Its executives had left for a meeting in Luxembourg.

Mr Sayegh rejected claims, understood to be in the draft report by Lord Justice Bingham, that Abu Dhabi delayed telling the Bank of England of the seriousness of the situation at BCCI though it knew the problems in April 1990.

Swaleh Naqvi, BCCI's former chief, had said dollars 2bn was missing but had given only sketchy information. Preoccupation with the invasion of Kuwait prevented full- scale investigation until the autumn. 'Our whole country was going to blow away in smoke, not just our investment in BCCI.'

Mr Sayegh criticised the British government for allowing lawyers for the Treasury and the Bank of England to edit the Bingham report for publication.

No one party involved should be allowed to edit the report, he said. Abu Dhabi wanted to see 'fair and whole publication'.

Asked about claims that the compensation deal allowed Abu Dhabi to walk away from more than dollars 4bn of promissory notes in return for a maximum payout of dollars 2.2bn to creditors, he said the figures were misleading. The true cost of the package, including claims Abu Dhabi was dropping, was over dollars 4bn.

First American Bancshares, the US bank illegally controlled by BCCI, has set aside funds to cover the legal costs of its former chairman, Clark Clifford, and president, Robert Altman. Mr Clifford, a veteran political adviser, and Mr Altman, his law partner, are accused of acting as frontmen for BCCI.