BCCI payout faces delay
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Your support makes all the difference.Creditors of the collapsed Bank of Credit and Commerce International face several months of further delay before receiving $2.2bn in compensation, because four ex-BCCI employees have lodged an appeal against the settlement.
The compensation package, agreed with BCCI's majority shareholder, the state of Abu Dhabi, in January, has already been delayed once because of a depositor's appeal. The bank was closed by regulators four years ago because of multi-billion-pound fraud.
The four ex-employees filed the appeal in the Luxembourg court yesterday, claiming that the deal does not give equal treatment to different types of creditors. A Luxembourg-based co-liquidator of BCCI, Georges Baden, said: "It will cause a serious risk of a delay for months and months."
Another co-liquidator, Julien Rodin, told Reuters: "We were practically ready to pay late summer to all the creditors. Now everything will be delayed for I don't know how long."
The Luxembourg court has a key role as one of three jurisdictions in which BCCI was registered. The others were the UK and the Cayman Islands.
A separate court hearing in Luxembourg on 19 May will decide whether to approve a $245m settlement between BCCI's liquidators and the National Commercial Bank of Saudi Arabia. The deal with NCB, its former chief operating officer, Sheikh Khalid bin Mahfouz, and an associate, Pakistani banker Haroon Khalon, would settle allegations that they were involved in covering up the BCCI scandal.
NCB is expected to agree to pay into the settlement if it does not have to admit liability for the collapse of the bank and drops counter-claims against BCCI. In return, the liquidators would drop a $10.5bn lawsuit against NCB, a former customer and investor in BCCI.
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