Appeal delays BCCI payout

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The Independent Online
THE FIRST payment to creditors of Bank of Credit and Commerce International has been delayed by up to nine months after three of those owed money appealed against the terms of a compensation plan first proposed nearly a year ago.

The payout, funded by dollars 1.3bn from BCCI's majority shareholder, the Sheikh of Abu Dhabi, was agreed by the bank's liquidators. It should eventually pay the bank's 54,000 creditors around the world up to dollars 4bn or as much as 40p in the pound.

It also emerged yesterday that at least two parties have applied to the Lord Chancellor for legal aid to enable them to sue the Bank of England, which was criticised in the Bingham report over its handling of the BCCI affair.

The appeal by Adil Elias and Hal Skolnik, both Americans, and Assilaos Artiki, a Greek, was given the go-ahead on Christmas Eve by the Luxembourg court dealing with the liquidation of BCCI.

The creditors were not available for comment last night, but legal sources said the creditors maintained that Abu Dhabi, which owned 77 per cent of BCCI's shares when it was closed in the summer

of 1991, should pay far more.

Abu Dhabi, which is angry about the challenge to its proposed compensation deal, stressed unofficially that it would not be provoked into taking the deal off the table, and no more money would be forthcoming.

Brian Smouha, of the accountants Touche Ross, one of three liquidators appointed by the Luxembourg court to wind up BCCI, was angry last night that efforts to unravel BCCI's affairs in more than 60 countries were being held up. He said: 'I'd like to get the size of this whole thing down, get the assets in and the money out to creditors.'

The decision by Mr Elias and the others to appeal against the compensation package originally put forward by Abu Dhabi in February 1992 'split the BCCI's creditors' committee down the middle', according to one source.

The compensation plan was cleared by the Luxembourg court on 22 October last year after it had conducted a ballot that showed that 94 per cent of the creditors worldwide were in favour of the proposed payout.