Attempt to rescue Mount under way

AN attempt is under way to revive Mount Banking Corporation, the Asian-owned bank that went into administration last year after being closed down by the Bank of England, writes Peter Rodgers.

But the move is threatened by restrictions imposed by the Bank on the way Mount will operate, including a ban on the return of some of the former management.

The Bank has agreed that with the restrictions Mount can continue to hold its banking licence, which has not been cancelled despite the closure last October. The Bank made clear at the time that the provisions of the Banking Act under which it closed Mount related to the fitness and properness of those in charge.

As a prelude to relaunching Mount Banking, creditors have agreed to a proposal by the administrators, Peat Marwick, to move from administration into a corporate voluntary arrangement. This arrangement gives more freedom to prepare the business for rescue.

If the appeal against Bank restrictions fails, other options include new top people to run the bank - 'ring fenced' from the former management, a sale of the bank or a winding down.

The attempt to revive Mount comes against a background of concern among Asians that of four small banks that serve their communities, three - Mount, Roxburghe and Equatorial - have stopped business recently.