Bank of England accused of negligence over BCCI

(First Edition)

NEW YORK (Reuter) - A co-founder of the Bank of Credit and Commerce International has accused the Bank of England and Price Waterhouse, the auditors, of negligence in supervising the failed bank.

In a letter to the New York Times, Masihur Rahman said that at the behest of the Luxembourg central bank 'a college of regulators was formed in 1987, with the Bank of England in charge (in all but name) to oversee BCCI'.

As co-ordinator-chairman appointed in March 1990 'to investigate the many frauds and irregularities 'suddenly' found by Price Waterhouse in Grand Cayman and out of Grand Cayman, I found that every irregularity and fraud 'detected' at this late stage by Price Waterhouse was controlled out of London by the chief executive officer and a handful of his associates,' Mr Rahman said.

'Every case emanated from Grand Cayman or was booked there - under the nose of the Grand Cayman regulators, Price Waterhouse and the Bank of England.' Mr Rahman called for a group of experts to study the banks' papers.