Sources at Touche Ross, the liquidators, suggested that the first payout might eventually be higher, but this can only be decided in April 1996. The liquidators, who are seeking to recover as many of the assets as possible on behalf of creditors, also hope that large funds will be available for further compensation payments from the several litigation cases under way.
BCCI, closed by the Bank of England and regulators in the two other jurisdictions where it was registered, Luxembourg and the Cayman Islands, left more than pounds 7bn of debts. Of the 250,000 creditors world-wide, some 35,000 are based in the UK, a large proportion of them from the Asian community.
About 30 local councils are owed a total of pounds 82m, which they lost in deposits at the bank. Worst hit was the Western Isles council, which lost pounds 24m. Until now British creditors have only received payments under the Bank of England's Depositors Protection Fund, with a maximum of pounds 15,000.
Although the first settlement deal with Abu Dhabi, the majority shareholder, was signed as long ago as the summer of 1992, creditors' hopes of receiving some money have been constantly thwarted by a series of court delays. Legal agreement was necessary from all three jurisdictions, but Luxembourg has proved the source of most of the difficulties.
Yesterday marked the removal of the final technical hurdle, as the Luxembourg court formally approved the earlier withdrawal of an appeal against the settlement from four former BCCI employees.
The liquidators have so far retrieved some pounds 2.2bn, including pounds 1.2bn in a settlement with Abu Dhabi, and the remainder from funds located in the US and a settlement with Saudi Arabia's most prominent banking family.
However, only pounds 1.3bn or so is likely to be used for the first tranche of the compensation payout, as the liquidators are required to withhold funds to complete the heavy litigation schedule and as a contingency for the myriad of disputes in the affair.
The biggest potential pot of money for creditors and former employees of the bank is the litigation being pursued by Touche Ross. The liquidators are suing the Bank of England over "misfeasance in public office". Touche Ross claims the Bank failed in its role as regulator of BCCI.
The liquidators are also suing Luxembourg's banking regulator, the Institut Monetaire Luxembourgeois. The biggest action of all is against BCCI's auditors, Price Waterhouse, for a claim of pounds 2bn plus interest. Price Waterhouse recently announced plans to seek protection for its audit business from legal claims by re-registering it in Jersey, but this would not help against the BCCI claim, the biggest outstanding against the auditing profession.
BCCI, founded in Luxembourg by the Pakistan businessman Agha Hassan Abedi in 1972, collapsed after a string of investigations into its affairs showed widespread evidence of money-laundering, fraud and deceit.
A US judge hearing evidence into one of the cases dubbed the bank "the most corrupt in history". The CIA admitted using BCCI to move money involved in drug stings. Many former officials of the bank have been jailed or fined following investigations and court cases into the bank's collapse.Reuse content