The Bank of England thought the founders of BCCI were becoming too "flash" and tried to contain their ambitions to gain a higher profile in the UK, the High Court heard yesterday.
The Bank, which is being sued for allegedly failing to monitor properly the business before its collapse in 1991, disapproved of BCCI's attempt to move into more impressive offices in the City in the late 1970s, the court was told. Gordon Pollock QC, acting for liquidators of BCCI which are suing the Bank, said: "The Bank thought this was a very bad idea because they thought BCCI's executives were giving themselves airs. Its address would be too prestigious." A number of officials at the Bank were uneasy about the business practices of BCCI's founder, Agha Hasan Abedi. Their attitude was that he had "expanded too far, too fast and too quickly" and that he was "far too flash", Mr Pollock said.
Deloitte & Touche, liquidators of BCCI, hope to win £1bn in compensation from the Bank in the high-profile case that is set to last 18 months and to cost £50m in legal fees.
The Bank has said the suggestion it failed in its public duty as a regulator is "outrageous". However, its legal team suffered a setback yesterday when it tried to undermine the liquidators' case. The liquidators are arguing that some senior officials at the Bank decided the institution should avoid taking on the responsibility of being BCCI's main regulator because they were worried the business was a can of worms. Mr Pollock has spent nearly a week building up his case from inferences in a series of documents compiled by officials in the 1970s and 1980s.
The Bank's QC, Nick Stadlen, argued the liquidators were not allowed to make such a claim unless they could provide documentary evidence of such a decision being taken. But the judge, Mr Justice Tomlinson, said the liquidators could continue.
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