Abu Dhabi, the majority shareholder in the failed Bank of Credit & Commerce International (BCCI), has signed a $1,800 million agreement with the bank’s liquidators. The agreement, announced on 14 May, means that BCCI’s creditors may now be close to receiving compensation after a wait of nearly five years.
‘The liquidators of BCCI Holdings, BCCI SA and BCCI Overseas announce that they have signed an agreement with the government of Abu Dhabi under which Abu Dhabi will pay $1,800 million,’ said a statement in London from liquidators Deloitte and Touche.
Abu Dhabi is paying $1,550 million directly to the liquidators and another $250 million into an escrow account to be released later. The settlement ‘constitutes a major step forward in the liquidation towards the payment of a first dividend to BCCI’s admitted creditors later this year,’ Deloitte and Touche said.
However, the liquidators added: ‘The amount of the first dividend will be subject to court decisions which are currently in progress.’ The High Court in London is yet to hear the cases of creditors who argue that their claims for compensation should take precedence.
Abu Dhabi welcomed the signing in a separate statement. ‘The majority shareholders have consistently maintained that agreement with the liquidators is the only outcome capable of providing a significant return for creditors. We are pleased that our joint efforts.. have ultimately been successful.’ The liquidators have said they intend to pay a first dividend of about 20 per cent of claims this summer, rising to 30-40 per cent later. BCCI was closed in 1991 amid revelations of massive fraud.