The Bank said it had appointed provisional liquidators from KPMG Peat Marwick, the accountancy firm, to wind up MBC, which has about 3,000 depositors and owes them about pounds 160m.
MBC, with assets of pounds 200m, is controlled by the Shah family, who have business interests in India and Kenya. It is thought that most of its depositors are resident in those countries. However, at least some are UK residents.
A spokesman for the Bank of England, which regulates banks, said: 'Our petition (for winding it up) was based on just and equitable grounds and did not allege insolvency.'
This suggests that while MBC was not in any grave financial peril, the Bank had reservations about some aspect of its management or directorate.
KPMG's Tim Hayward, who with Philip Wallace is the liquidator, said last night: 'It's still extremely early days. We're looking into things.'
It was too early to say whether depositors' money was safe, he said.
However, they were protected to a degree under the Banking Act.
The company accounts of MBC show it has been mildly loss-making for two years.
Its directors as at March 1992 were listed as S B R Shah, M M Shah, B C Shah, P Tucker (chief executive), P S Hargreaves and
The bank, which is based in Mount Street, is a subsidiary of a Jersey holding company, which is a subsidiary of a Cayman Islands company, which in turn is controlled by the Shah family.Reuse content