Creditors of the Bank of Credit & Commerce International (BCCI) got their first repayments on 10 December, five years after BCCI was shut down in one of the biggest banking fraud cases in history.

A spokesman for BCCI’s liquidators, Deloitte & Touche, told MEED that $1,350 million had been paid to creditors on 10 December, out of $2,650 million set aside for a first dividend. The balance is being held back to cover any future claims, including those by creditors in countries which have not yet joined a pool arrangement set up for repayments, such as Germany, Japan and Cyprus (MEED 29:11:96).

BCCI was shut down by regulators around the world in 1991 after evidence emerged of massive fraud. It has many thousands of creditors, most of them depositors in the UK or the UAE. They are expected to get about 40 per cent of their money back. Repayments have been delayed for years by legal disputes, and the large fees paid to the liquidators have upset some creditors.

The $2,650 million set aside for a first dividend is about 25 per cent of the $10,500 million claimed by creditors. The liquidators hope to pay out another 10 per cent in the next 12-16 months and with a final dividend later on. Some claims being assessed at the moment might be rejected, bringing the $10,500 million figure down as low as $9,000 million.

So far, gross recoveries by the liquidators are about $4,000 million. The spokesman said the net amount available for dividends was about $3,000 million. Part of the difference between the two figures is the $400 million paid in fees and legal costs. The role of the other $600 million is not clear, though one possibility is that it is being held back to cover future costs.

More money is expected from recoveries of BCCI’s US assets and a settlement of a BCCI-related case, with no liability admitted, by Saudi businessman Sheikh Khalid Bin Mahfouz. The liquidators have brought court cases against BCCI’s auditors and regulators in the UK and Luxembourg. Another $250 million is due from Abu Dhabi, the majority shareholder in BCCI, under a settlement agreed with the liquidators in May. Abu Dhabi has already paid $1,550 million (MEED 24:5:96).