View from City Road: Still in search of BCCI compensation
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Your support makes all the difference.The BCCI liquidators from Touche Ross are off to the Gulf again this week to reopen talks with the disgraced bank's majority shareholder, the state of Abu Dhabi.
The men from Touche hope to put together a new compensation package for BCCI's thousands of depositors, following the rejection of the original dollars 1.7bn plan by a Luxembourg court.
Many UK depositors were distraught when the original offer of 30p-40p in the pound was scuppered in October. If Touche cannot resurrect some kind of deal it will probably have to sue Abu Dhabi. This would end hopes of a payout for a decade, as well as being expensive.
The Luxembourg court decided that the first plan gave an unfair advantage to Abu Dhabi over the rest of BCCI's creditors in that the emirate would share money the liquidators recovered from BCCI but the creditors would give up their right to take legal action against Abu Dhabi.
Another obstacle to settlement is the threat by a small but vocal minority of depositors, led by Adil Elias, a Florida businessman who lost dollars 1m, to sue Abu Dhabi anyway if depositors do not get half of all their claims paid by next July.
Middle Eastern sources believe the liquidators will also discuss a civil case to be brought by Abu Dhabi against 13 senior BCCI officials now on trial on criminal charges in the emirate. Abu Dhabi will use the case to portray itself as a victim, not a villain, of the BCCI affair.
Against that background, the official line is that Abu Dhabi has no intention of increasing its offer. But it takes the damage to its reputation very seriously and has considered paying out more.
One proposal already aired unofficially in Abu Dhabi is to increase the payout to creditors by bypassing the accountants and solicitors in the affair, whose costs are heading towards pounds 200m.
BCCI's UK victims want a payout as soon as possible. If Touche can resurrect a deal, it might just earn its fees. And Abu Dhabi should swallow its pride and sweeten the offer. It has no more to gain than anybody else from lengthy litigation.
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