The Bank of England poured scorn on the liquidators of BCCI yesterday for failing to turn up in court as the central bank made an attempt to recover £81m in legal costs run up during the epic 12-year action.
The Bank is refusing to settle its legal costs out of court with the liquidators, the accountancy firm Deloitte, and expects to hear from the High Court today whether it can go ahead with the legal proceedings to claim indemnity costs.
Nicholas Stadlen QC, the Bank's lawyer, also asked Mr Justice Tomlinson for a full public judgment to exonerate the Bank and its officials as completely innocent. In the £850m mammoth action, which the liquidators dropped in November, 22 Bank officials were accused of deliberately turning a blind eye to fraud at Bank of Credit and Commerce International. Nicknamed the Bank of Cocaine and Criminals International, it collapsed in 1991 with £10m of debts.
Mr Stadlen accused the liquidators in the High Court yesterday of "playing their get out of jail card" by making an offer to pay the costs and then staying away from court to avoid a judgment condemning their action. Mr Stadlen said: "They are seeking to skulk in the shadows without any suggestion of apology."
Mr Stadlen said the liquidators' stated reason for not appearing in court was that the creditors would not allow them to spend any more money on the case. He said: "This plea of poverty rings a little hollow" after the liquidators pursued the action for 12 years.
He noted that Deloitte had made £184m in fees during the entire liquidation and a reported £56m during the 12 year litigation against the Bank.
The Bank is claiming £73.5m in costs plus interest of £8m on an indemnity basis, the highest level of costs.
The liquidators have already paid £73.5m into the Bank's account, but the Bank, anxious for its reputation, has always said it would not settle out of court. It is determined to push ahead with the legal proceedings, which could take a year or longer as the costs will be assessed by a cost judge, who will be new to the case.
Meanwhile, the liquidators believe a line should now be drawn under the case. Mr Stadlen poured scorn on the liquidators' position that despite their offer to pay the costs, they thought the Bank was not really entitled to them. Deloitte still claims the liquidation was the most successful to date, saying it has recovered 82 per cent of what was owed to creditors from other institutions amounting to about $4.2bn (£2.4bn), and that it expects to pay out a further dividend.