BCCI-linked merchant bank to close down

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The Independent Online
BRUSSELS (Reuter) - A private Arab merchant bank linked to the collapsed Bank of Credit and Commerce International has decided to close its Luxembourg operations, banking sources say.

Callers to the bank, the International Trade and Investment Bank, were told that its managing director, David Scharpin, was away on a business trip and would be back at the bank on Monday to answer questions.

ITIB's last report to the Luxembourg association of bankers named as chairman of the board Sheikh Khalid bin Mahfouz, who was charged by a New York grand jury on 1 July with defrauding depositors and investors of dollars 300m in the BCCI affair.

The Manhattan District Attorney, Robert Morgenthau, alleged that by pumping hundreds of millions of dollars into BCCI in 1986 and then withdrawing it secretly Sheikh Khalid and an associate had enlarged losses for depositors when BCCI finally collapsed.

Sheikh Khalid said the indictment was 'completely unwarranted and without justification'.

BCCI branches around the world were closed in July 1991 on suspicion of massive fraud.

ITIB, founded in Luxembourg in 1973, is 100 per cent owned by the Arab Asian Bank of Bahrain, majority-owned by the Mahfouz family.

The bank, which its last report said it had 17 employees and a balance sheet total of around dollars 228m, apparently had no branches outside Luxembourg.

Shareholders can now vote to liquidate the bank, leaving the liquidator to pay off depositors, if any.