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Last Updated: Wednesday, 12 April 2006, 18:56 GMT 19:56 UK
Judge calls BCCI case a 'farce'
BCCI sign
BCCI collapsed in 1991, owing millions to its investors
The case brought against the Bank of England by the liquidators of collapsed lender BCCI was a farce, according to the judge that presided over it.

Mr Justice Tomlinson said the case could have damaged the legal system.

Liquidators Deloitte sought damages of 1bn for BCCI creditors, claiming the bank failed to protect investors, but it dropped the case last November.

The Bank of England is now seeking about 80m in costs to cover the 12-year legal battle.

'Folly of their enterprise'

It rejected an offer of 73m last January and wants a High Court ruling that repudiates the allegations made against it.

BCCI collapsed in 1991 owing more than $16bn, and is thought to be the world's biggest bank fraud.

Mr Justice Tomlinson slammed the lawsuit brought by Deloitte, which eventually entered the courts in January 2004 and was the first the Bank of England had faced in its 300-year history.

After weeks of listening to opening submissions, the judge said he "became so concerned about the case that I decided to both consult and warn the Lord Chief Justice about it".

He told the then Lord Chief Justice, Lord Woolf, that the case "was a farce" and "had the capacity to damage the reputation of our legal system".

They discussed whether they could do anything "to persuade the liquidators of the folly of their enterprise".

The judge said that the Bank of England had been accused of "an immense catalogue of outrageous behaviour" over its supervision of BCCI's activities between 1980 and 1991.

He said a publicity campaign co-ordinated by the liquidators' PR company produced a "wholly distorted picture of the Bank's conduct".

The case clocked up 256 days in court before the liquidators withdrew their claims.

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02 Mar 04 |  Business
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23 Mar 01 |  Business

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