Tuesday, September 22, 1998 Published at 18:36 GMT 19:36 UK
Business: The Company File
BCCI auditors pay up to stop legal dispute
30,000 people were left out of pocket when BCCI went bust
The liquidators winding up the affairs of the scandal-struck Bank of Credit and Commerce International (BCCI) are to drop legal proceedings against the bank's auditors in return for £75m.
The bank's two auditors Price Waterhouse - now PricewaterhouseCoopers - and what was the Ernst & Whinney partnership will between them pay the £75m as a final settlement of the row.
In return the liquidators for the bank, Deloitte and Touche, will withdraw lawsuits pending against the two accountancy firms.
The liquidators are also withdrawing lawsuits against the Luxembourg Central Bank and the State of Luxembourg in return for cash payments.
The money will go towards paying creditors of BBCI left in the lurch when the Bank collapsed in 1991.
The bank left more than 30,000 people out of pocket worldwide when it went bust.
Auditors welcome settlement
The former auditors welcomed the settlement as a way of ending huge legal costs and avoiding a court case which might not have reached a hearing before 2005 at the earliest.
Price Waterhouse said it had consistently denied any liability in the case and that it had refused previous settlement offers.
Ian Brindle, senior partner of the former Price Waterhouse said: "We would have liked to fight this to the bitter end, to vindicate ourselves in court.
"But we are advised that it could easily be another 10 years before the case comes to trial, and it is simply too costly, and distracting in terms of management time, to continue with this."
The firms of Price Waterhouse merged with the former firms of Coopers and Lybrand on July 1 to form PricewaterhouseCoopers, which is not involved in the BCCI dispute and has not assumed Price Waterhouse's responsibilities.
Ernst and Young, the successor of Ernst and Whinney, the auditor working with BCCI at the time, also welcomed the settlement.
Chairman Nick Land said: "We will be pleased to bury this matter once and for all and stop spending vast sums of money defending ... against a claim which we have no doubt would have failed had it gone all the way to trial."
The company said it was keen to "avoid involvement in what would have been the biggest and most complex trial in British legal history".
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