The crucial delay, which occurred a year before the bank was closed, is highlighted in the draft report by Lord Justice Bingham on the supervision of BCCI.
Conclusive evidence emerged in Abu Dhabi in April 1990 of huge holes in BCCI's balance sheet, and of false and deceitful conduct by some executives.
Price Waterhouse, the bank's auditors, reported their findings to the college of banking supervisors, including the Bank of England, which handled BCCI. Lord Justice Bingham was told that information was passed on to the Bank of England's banking supervision section.
But it was not until 3 October 1990 that Abu Dhabi decided to start a formal investigation of its own into corruption at BCCI.
Abu Dhabi is understood to be strongly criticised for this delay, despite its excuse that the invasion of Kuwait had forced it to concentrate on other matters. The Bingham report is also known to criticise Abu Dhabi for not passing on all it knew.
However, the Bank of England is also believed to be in in the firing line over the delay, for not insisting on a much earlier and more urgent start to the probe once the initial suspicions emerged.
This point is in addition to a separate criticism of the Bank, reported in the Independent on 16 July, of a delay in taking action between March and July 1991.
Senior officials in the Bank's banking supervision department are understood to have obtained a near-complete picture of the extent of the fraud by the end of February 1991, but efforts continued until July to arrange an injection of new funds into the organisation.
The draft of the Bingham report also contains a critical analysis of communications within the Bank of England itself, and between the Bank and Price Waterhouse.
It makes explicit criticisms of the quality of this communication, although the Banking Act prevents it discussing the content of individual meetings.
Bingham is known to discuss whether, given the seriousness, Price Waterhouse was right to report only to the relatively junior supervisory level in the bank. A key question the draft probes is whether the auditors should have gone straight to the top of the bank, perhaps even to Robin Leigh-Pemberton, the Governor.
The decision to close the bank came as a surprise. The Bank of England is adamant that closure occurred because new information about the scale and depth of fraudulent activity came to light in the Section 41 report under the Banking Act, by Price Waterhouse.
But Lord Justice Bingham has been told by several of the most prominent parties involved that they can only understand the last- minute decision to close the bank in the context of legal actions that were imminent in the United States. Both the Federal Reserve and the New York district attorney issued indictments in July 1991, within weeks of BCCI's closure.
One key source maintained that if the 1990 Abu Dhabi inquiry had not been delayed to October, BCCI could have been restructured by the end of the year. But the delay to the following summer ruled that out.
The same source did not regard the delay the following year as so critical. He said that between March and July 1991 'a little more evidence was found of the dry rot, but it was only a matter of degree'.
The draft Bingham report is not thought to explore in any detail the relationship between BCCI, Abu Dhabi and Saudi Arabia's National Commercial Bank. Two weeks ago, the US Federal Reserve indicted NCB's former chief operating officer, Khalid bin Mahfouz.
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