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Depositors rage at $1bn BCCI closure

THE COST of winding up BCCI, the corrupt bank closed by regulators in 1991, is eventually set to break $1bn, with fees paid to British accountants and lawyers totalling $330m by 15 October, creditors heard yesterday.

More than 250 depositors of BCCI, owed a total of $2bn by the bank, held the annual meeting of their BCCI Depositors' Protection Association (DPA) in London yesterday.

Having flown in mainly from the Middle East and Far East, the depositors heard that the global cost of liquidating the bank had already passed $750m.

"The costs are enormous," said Keith Vaz, MP for Leicester East, who has acted as coordinator for the campaign for BCCI's victims since its collapse. "We need to question the rates charged by those handling the liquidation. It has been going on for eight years and could go on for another eight."

The meeting's anger was mainly directed at the Bank of England, which provided BCCI with a banking licence in the 1980s and then helped close it down with other banking regulators in 1991.

The liquidator Deloitte & Touche, depositors and MPs argued that the Bank of England should either make a settlement over its part in regulating BCCI or publish its own internal records to prove its innocence.

Adil Elias, chairman of the DPA, said that although 46 per cent of BCCI's $12bn losses had been repaid by the liquidators, depositors still faced heavy losses, and the Bank of England was partly responsible.

Mr Elias said that "if there is ever to be liability on a public official for abuse of office in this country, then the Bank of England will be held liable either by the courts here or in Europe".

The liquidators are preparing a legal claim for pounds 600m against the Bank of England. Yesterday's meeting unanimously agreed that the Government should release the previously unpublished parts of the Bingham report into the collapse of BCCI, in order to establish the Bank's responsibility. The Bingham report was published in 1991 but its lengthy appendices were kept secret.

Mr Vaz asked Alistair Darling when he was appointed chief secretary to the Treasury on Labour's election last year, to read the appendices and decide whether they should be published. Mr Darling did so and decided against publication.

Mr Vaz is tabling three motions in the Commons today, one urging full publication of the Bingham report, another recommending another meeting of all BCCI's remaining creditors, who last met five years ago, and a third motion concerning the treatment of funds held by the liquidators on behalf of creditors.