Bank slams BCCI case as a 'conspiracy'

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The Independent Online

The Bank of England yesterday launched a fierce retaliation against the liquidator suing it over the failure of BCCI, dismissing a key plank of its case as a "paranoid conspiracy".

The liquidator, Deloitte & Touche, was also basing its claim on "desperate and vexatious" arguments, the Bank's QC, Nicholas Stadlen, told the High Court.

Deloitte is suing the Bank for £1bn in compensation, alleging it failed in its duty as financial regulator in the 1980s. BCCI became the biggest failure ever in the banking sector in 1991, collapsing with more than £5bn of debts owed to 80,000 creditors.

Yesterday Gordon Pollock, QC, acting for Deloitte, was forced to clarify exactly which Bank officials the liquidator thought had deceived Lord Bingham, now Britain's most senior law lord, while he investigated BCCI's collapse.

The liquidator said they were former heads of banking supervision, Peter Cooke and Roger Barnes, and Brian Gent, deputy head of the department.

Mr Justice Tomlinson, who is presiding over the case, warned the liquidator last week that if it did not spell out who it was accusing of misleading Lord Bingham, it risked "derailing the trial".

Mr Stadlen interjected yesterday to say the way the liquidator was conducting its argument was "disgraceful".

The Bank is expected to call witnesses to back up its denial of wrongdoing including the former Bank governor Sir Eddie George.