London firm Memery Crystal, the solicitors to creditors of the collapsed Bank of Credit and Commerce International (BCCI), is formulating a battle-plan for possible litigation against the BCCI majority shareholders in Abu Dhabi.
This long-term strategy is being devised despite the revised agreement with Abu Dhabi that would provide an improved offer to creditors of US$1.8 billion.
Bernard Clarke, a Memery Crystal partner, says it has been sifting through various allegations against the majority shareholders. These have come from different sources including the Bingham report, which censured the Bank of England, and the Kerry investigation. The latter, by the US Senate's committee on foreign relations, examines the whole operation of the BCCI.
However, work is being hampered by restricted access to paperwork and the resulting need to use secondary material.
“Part of the difficulty we have is that the agreement as it stands means that the primary documents were then subsequently handed to the liquidators. They are not going to see the light of day,” says Clarke.
Meanwhile Memery Crystal continues to act for its client, The Depositors Protection Association (DPA), in relation to the new draft agreement with Abu Dhabi.
The DPA is recommending its members approve a new agreement which it hopes will pay out no less than 20 per cent of money owed by a deadline of 5 July 1995 – the fourth anniversary of the collapse of the BCCI group. Important conditions in the new agreement include allowing individual creditors to retain the right to sue the Government of the Emirate of Abu Dhabi. Memery Crystal has advised the DPA on the agreement.
The UK court appointed the firm to act for Dr Elias and Tony Scott of the DPA, who represent it on the liquidation committee.
The many solicitors who have acted for BCCI creditor clients have not been kept fully up to date with the progress of the talks between the DPA, liquidation committee and Abu Dhabi because negotiations have been “shrouded in secrecy”, says David Pine, partner with Manchester-based Eversheds Alexander Tatham.
“The only dissatisfaction we have is over the delay involved and that the monies are being eaten up in costs and expenses,” says Pine.