The former employees of the collapsed bank BCCI are calling for a government investigation into the conduct of the liquidator Deloitte, after it dropped its £850m damages case against the Bank of England on Wednesday.
The BCCI Campaign Committee, which represents the bank's former staff, said yesterday it had always believed legal action should never have been brought against the Bank. That view was shared by many individual creditors, it claimed.
"There was no case for misfeasance against the Bank of England and legal costs should not be incurred in chasing such an impossible claim. This was a tall order to prove against one of the most revered institutions of England," the committee said.
The Bank has statutory immunity from negligence claims and so the liquidators pursued the stronger claim of misfeasance, which implies that Bank officials were not just reckless but acted dishonestly in failing to prevent the collapse of BCCI in 1991.
The case, which took 11 years to come to court, has cost the creditors about £56m in legal costs plus the liquidator's costs, also estimated at £56m, the committee said. On top of that, the Bank has incurred £70m in legal fees which it is seeking to recover from the liquidator.
Mohammad Qayyum, the joint co-ordinator of the committee, said he would write to the Department of Trade and Industry to demand an investigation into the liquidator's actions. He said the DTI had not been "very responsive" so far. The committee has co-opted Keith Vaz MP, who has campaigned on behalf of BCCI depositors and employees, arguing that the action brought against the Bank was "a waste of money," costing cash which should have gone to the creditors.
The committee said: "It is time the liquidators should stop incurring further and unnecessary costs and wind up the liquidation, paying over all the remaining monies to the creditors." So far, the liquidator has returned 75 per cent of the £4.1bn which is due to creditors and pledged another 6 per cent by December.
At its peak, BCCI had more than 400 branches in about 70 countries and 14,000 staff. The former employees, who believe BCCI should not have been shut down in 1991, have already settled with the liquidator over misappropriation of money and stigma damages, getting £42m in cash and a waiver of loans to the tune of £56m.Reuse content