pounds 520m claim against BCCI auditors fails

THE HIGH COURT has struck out a $866m (pounds 520m) claim against Ernst & Young, the accountancy firm which acted as joint auditor to the collapsed Bank of Credit and Commerce International (BCCI) until 1987.

However, Deloitte & Touche, liquidator to BCCI, said it would seek to overturn the judgment in the Court of Appeal. Deloitte & Touche is pursuing Ernst & Whinney, a predecessor of Ernst & Young, for a total of $3.5bn - including the $866m struck out

yesterday - and has made allegations of negligence, breach of contract and breach of duty.

In his judgment, Mr Justice Laddie stated that, had the liquidator's submissions been accepted, "they would represent a radical extension of the liabilities shouldered by an auditor".

Nick Land, a senior partner of Ernst & Young, said he was "not surprised" that the claim had been found unsustainable.

Christopher Morris, a partner of Deloitte & Touche said: "The result is disappointing, but we shall be taking the matter to the Court of Appeal and hope to have the order reversed, as we did on a previous occasion".