| Bank of England rejects settlement offer from BCCI’s liquidator |
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LONDON - The Bank of England revealed on Tuesday that it had rejected a bid to settle the long-standing lawsuit by the collapsed Bank of Credit and Commerce International.
Deloitte, the liquidator of BCCI had approached the Bank last month in a bid to settle the 12-year long, £850 million lawsuit that alleged that the Bank had failed to protect BCCI’s depositors as it headed for a collapse in 1991. The Bank rejected these overtures without discussion and analysts say that the Bank fears being sued over similar claims in the future if it accepts any settlement. Any deal would also be akin to a moral admission of guilt by the Bank and hence any proposed deal was scuttled, analysts say. This is the first time in 309 years that the Bank is facing legal action.
"It is our usual practice to approach defendants to see if they are willing to negotiate and we regret that the Bank has so far refused to discuss a settlement," said John Richards at Deloitte, the liquidator.
A spokesman for the Bank said, "We've always made clear there would be no deal and no negotiations." Mervyn King, the Bank of England governor stressed that this case should never have been brought against the Bank in the first place.
The case began in January 2004 and created a record for opening speeches. It took 119 days for the Bank and 80 days for Deloitte to conclude their respective statements. The Bank has so far spent £75 million on the case and this figure is set to cross the £100 million mark if the case drags on into the next year.
Posted
on : Wed, 05 Oct 2005 21:00 GMT | Banking News
By : Paula Jenkins
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