CONFIDENTIAL UK COMMS ONLY
142200
MDHOAN 8136
REPRESENTS 14 DAYS' SALARY AND EXPENSES FOR ALL UK EMPLOYEES. EVERY 7 DAYS THEREAFTER, THE SHAREHOLDERS WILL PAY FURTHER SUMS AS ESTIMATED TO REPRESENT 7 DAYS SALARY AND EXPENSES. SEVEN DAYS' NOTICE IS REQUIRED FOR DISMISSAL OF STAFF, AND DISCUSSIONS
WILL CONTINUE REGARDING THE FORMULATION AND IMPLEMENTATION OF A
GENERAL DISMISSAL AND REDUNDANCY SCHEME.
TREASURY ORDER IN COUNCIL
4. HM TREASURY HAVE LAID AN ORDER UNDER SECTION 7 OF THE BANKING ACT 1987 TO PROVIDE THAT FOR PURPOSES OF THE DPF, DEPOSITS SHALL BE DEFINED TO EXCLUDE ANY SUM TO WHICH A PERSON BECOMES ENTITLED AFTER A WINDING-UP PETITION IS PRESENTED (OR AN EQUIVALENT EVENT OCCURS). THIS ORDER WILL HAVE EFFECT FROM 230OZ ON 30 JULY, AND IS DESIGNED TO COUNTERACT THE PROBLEM OF DEPOSITORS ASSIGNING OR GIVING BENEFICIAL RIGHTS OF PARTS OF LARGE DEPOSITS TO THIRD PERSONS (SPLITTING) PRIOR TO THE MAKING OF A WINDING-UP ORDER, IN ORDER TO MAKE MULTIPLE CLAIMS AGAINST THE DPF. THIS LOOPHOLE IN THE EXISTING LEGISLATION HAD IN FACT BEGUN TO BE EXPLOITED IN RECENT DAYS BY SOME UK DEPOSITORS BUT IT IS NOW CLOSED.
PUBLICATION OF DOCUMENTS.
5.
AT A COURT HEARING ON 31 JULY THE VICE CHANCELLOR FURTHER RULED, AND THE BANK READILY ASSENTED, THAT TWO MAIN DOCUMENTS ABOUT THE BCCI FRAUD SHOULD BE PUT ON THE COURT FILE IE IN EFFECT MADE PUBLICLY AVAILABLE. THESE DOCUMENTS ARE: (I)
THE INITIAL BANK AFFIDAVIT
(II) THE PRICE WATERHOUSE SECTION 41 REPORT
WITH ALL SENSITIVE NAMES BLACKED OUT IN BOTH CASES. (FOR YOUR INFORMATION THESE ARE THE SAME VERSIONS AS THOSE ALREADY MADE AVAILABLE UNDER BANKING ACT RULES TO OTHER REGULATORY AUTHORITIES CONCERNED).
INTERESTS OF OTHER DEPOSITORS
6. IT HAS BEEN VARIOUSLY ALLEGED THAT THE BANK OF ENGLAND WAS GIVING UNDUE PREFERENCE TO UK DEPOSITORS BY SEEKING AN EARLY LIQUIDATION: AND/OR THAT THE SCHEME DESCRIBED AT 3(A) ABOVE WOULD HAVE THE SAME EFFECT. THE LATTER AT LEAST CANNOT BE THE CASE, SINCE IT IS THE MAJORITY SHAREHOLDERS NOT BCCI WHO ARE PROVIDING SUPPORT FOR UK DEPOSITORS AND IN THE FORM OF A LOAN