BrItish Ju e Delays Plan to Dismantle BCCI 7 311 qi y Steven Mufson ees and BCCI depositors, who hope and several other countries took "no hesitation" in brushing aside the Wash,vett Nat Staff Writer that Abu Dhabi's Sheikh Zayed bin control of BCCI operations on July 5 Bank of England's objections to the Sultan al-Nahyan will save their jobs after officials said audits and investi- delay and said that giving more time LONDON, July 30—A British and savings. gations showed widespread evidence for a rescue plan was "in the inter-, court today delayed dissolving the The government of Abu Dhabi of wrongdoing. New York authori- ests of the depositors as a whole." Bank of Credit and Commerce Inter- and its ruler today deposited 50 mil- ties announced the indictment of Rakesh Shah, a BCCI employee in national for four months to give the lion pounds ($84 million) in the Lon- BCCI Monday on fraud charges, and London who has money deposited in ruler of Abu Dhabi time to come up don branch of the National Bank of the Fed said it was seeking $200 the bank, said he was "relieved" at with a rescue plan for the allegedly Abu Dhabi to cover partial payments million in fines from BCCI. the outcome. "It is a great psycho-. fraud-riddled institution. to BCCI's small depositors and to re- Since the July 5 seizures, the fu- logical victory against the Bank of The court decision dealt a blow to sume the payment of salaries to ture of the banks has been in ques- England ... [which] is only interest-, the Bank of England, which wanted BCCI employees in Britain. tion. ed in closing down BCCI and is not to permanently shut down BCCI im-. Government officials in Britain, The judge, Vice Chancellor Sir Ni- interested in its depositors or share mediately, but elated BCCI employ- Luxembourg, the Cayman Islands colas Browne-Wilkinson, said he had See BCCI. A6, Col. 1 British lawmaker Keith Vaz is congratulated by BCCI employees in London yesterday after court ruling. Vaz supported the employees in an effort to restructure bank. ermg salvaging part of the work, which extended to 69 coun- small Arabian Peninsula states, tries. Sheikh Zayed played an important part in bringing together seven of Other bankers, however, were the states into the new nation of the skeptical about whether the bank United Arab Emirates. Rulers of two could ever be reopened without a of the seven have been named by the run on deposits after so much ad- Federal Reserve as acting as fronts verse publicity. for BCCI in the covert and illegal ac- Similar to Britain's legislated de- quisition of Washington-based First posit protection plan, the Abu Dhabi American Bancshares. Sheikh Zayed fund for BCCI will give depositors in has not been named. Although the the United Kingdom three-quarters UAE rulers are familiar with one an- of their money up to a maximum of other, relations between them can 5,000 pounds ($8,250). Under Brit- be strained and their interests often BCCI, From Al ish law, depositors could receive as differ, political analysts note. holders," he said after cramming much as 15,000 pounds ($24,750) from a fund raised from other British Abu Dhabi is the biggest of the himself into the crowded courtroom. banks. The Bank of England had de- seven emirates, the biggest oil pro- The fate of BCCI now rests with manded that Abu Dhabi match the ducer and the richest in oil reserves. Sheikh Zayed, his son and the gov- maximum set in British legislation. Together, the UAE exported $15.7 ernment of the Persian Gulf emirate. That would have required an addi- billion worth of oil in 1990 and Abu They now own 77 percent of BCCI, tional 39 million pounds ($65.5 mil- Dhabi accounted for 82 percent of having increased their stake last lion). total production. Its production ca- year in an effort to rescue the trou- The former head of BCCI, Swaleh pacity is expected to nearly double bled bank. Naqvi, who allegedly kept 6,000 files by the mid-1990s. So far, they have injected more that were the accounts of the "bank Sheikh Zayed's rule has been rela- than $1 billion into BCCI, and bil- within a bank" at the heart of the al- tively progressive. His city state has lions more may be required to save leged BCCI fraud, is in Abu Dhabi. good educational and health facili- the institution, rife with bad loans. Although housed in luxurious quar- ties. His old palace is a national ar- Sheikh Zayed's willingness to con- ters, it is not clear whether he is chive housing documents on the his- sider further cash infusions for BCCI free to leave the emirate. One re- tory of the gulf states. He has has become as much a matter of port said his passport has been con- planted more than a million trees honor as of business, bankers and fiscated, but Naqvi has refused to and lush gardens. political analysts say. Although an- comment to reporters there. Zayed, however, is a man of the gered by the sudden seizure of The irony of the Bedouin ruler of desert and it is an old custom for the the Abu Dhabi ruler is being BCCI,4 Abu Dhabi, once a British protector- wealthy sheikhs of the Persian Gulf portrayed as wanting to maintain his ate, coming to the aid of the Bank of to go to Pakistan with their trained good business name, and he has the England and British citizens has not hawks and hunt the hubara bird, the oil wealth with which to do it. been lost on the British public. Sev- desert pheasant. It is a newer cus- The Arabs never like to lose eral members of parliament and tom, dating from the boom in Per- face," said a British bank executive British newspapers have commented sian Gulf oil wealth, for the sheikhs who has talked to Abu Dhabi officials on the spectacle of the Bank of Eng- to turn into the prey of business peo- about joining a restructured BCCI. land dosing BCCI, then dispatching ple who are more fox than pheasant. He said that Abu Dhabi was consid- its governor, Robin Leigh-Pember- In the early 1970s, when Paki- ton, to Abu Dhabi to ask for money stani banker Agha Hasan Abedi to pay off depositors and creditors. needed money to found BCCI, he Sheikh Zayed was born in 1917, flew to Abu Dhabi to enlist Sheikh long before oil was discovered in his Zayed's support. desert realm. He came to power in Although Sheikh Zayed has been 1966 when he overthrew his broth- an important shareholder in BCCI er, who is said to have kept his mon- since its founding in 1972, he is be- ey in his tent. lieved to have kept a passive interest In 1971, when Britain withdrew until last year. from its protectorate role for the Though his financial support was REUTER Families of BCCI employees demonstrate outside London court. A judge delayed for four months dismantling of the bank. crucial to the growth of BCCI, he of the Cayman Islands and Luxem- build up the non-petroleum sector of has not been implicated in any bourg. Three new units would be its economy. Abu Dhabi has become wrongdoing, according to the Bank based in London, Abu Dhabi and a reexport zone, importing fabrics of England. Hong Kong. from Pakistan and India, making tex- In 1990, as the magnitude of Abu Dhabi also gave BCCI $1.4 tile goods and reexporting them. It BCCI's troubles began to emerge in billion in deposits and agreed to take is also a major distribution and ser- reports of its auditors, the Bank of responsibility for $3 billion to $4 bil- vice center for the Persian Gulf re- England turned to Abu Dhabi for lion worth of shaky loans. gion. help in restructuring BCCI. New executives were recruited And it had some ambitions to be- In consultation with the British from respected major banks in Lon- come an offshore banking center like central bank, Sheikh Zayed and the don, including two high-ranking offi- Hong Kong or Singapore. The Abu Abu Dhabi government injected cials of Lloyd's Bank. Final talks Dhabi government "was going to about $11 billion into BCCI and in- were to be held with the Bank of build BCCI up as a flagship bank," creased their stake to 77 percent. England on the same day British au- said one of the executives who was They pledged to restructure the thorities moved to close down BCCI. to become a key financial officer of bank and move the headquarters out Analysts say that Abu Dhabi may the restructuring plan scotched by of the relatively unregulated bases have wanted to buy BCCI to help the July 5 shutdown. .