Depositors of Rogue Bank Press for Their Money
Oct. 25, 1991
LONDON (AP) _ A group of depositors in the seized Bank of Credit and Commerce International began an intense campaign Friday to get their money back and change British banking laws to ensure no one else will suffer such losses.
The chairman of the BCCI Depositors Protection Association told about 50 depositors at the group's first formal meeting that they will fight hard for compensation.
''We intend to work on behalf of all our members to recover our losses whomever may be responsible by reason of fraud, negligence or incompetence. Someone should be responsible for this mess,'' said Dr. Adil Elias, an Orlando, Florida-based exporter elected as chairman of the association.
BCCI was seized by banking regulators around the world July 5 on evidence of long-term, widespread fraud. The bank allegedly used unrecorded deposits to cover up losses from bad loans and trading operations.
Elias said the association, made up of about 100 large depositors from 24 countries, will lobby for changes in British banking laws to protect deposits made in British banks in currencies other than sterling.
The Depositors' Protection Scheme, administered by the Bank of England, levies money from banks to pay sterling depositors up to 15,000 pounds, about $25,600, in the event of a bank failure.
The association also wants the protection extended to deposits made in other currencies, and an increase in the maximum protection afforded depositors.
Elias said the group is considering taking legal action and a panel of American lawyers addressed the meeting about possible U.S. court options.
Keith Vaz, a member of Parliament and chairman of the House of Commons all- party committee representing the interests of those who lost money in BCCI, urged depositors to exercise some restraint in court actions. He said negotiations between the court-appointed administrators and the Abu Dhabi government, the bank's largest shareholder, could bring depositors compensation.
''There are a lot of rumors coming out of Abu Dhabi,'' Vaz said, adding that negotiations may involve a cash deal and waivers against any future claims against Abu Dhabi.
''These are unconfirmed, but something is up,'' he told the meeting at a City of London auditorium.
Vaz said he met Thursday with Foreign Office minister Douglas Hogg who will visit Abu Dhabi next week. A Foreign Office spokeswoman confirmed Hogg's trip and said that BCCI was likely to come up during talks with government officials.
Total worldwide deposits in BCCI are believed to be about $19.5 billion.
Vaz told the meeting someone must know where the missing money is.
''How many videos can you buy? Houses, villas, yachts must be found,'' and sold with the proceeds going to depositors, Vaz said.