XN000022-1992-02-19 — Page 33

WEDNESDAY, FEBRUARY 19, 1992

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THEN, IN MID-DECEMBER 1991, THE FIRST OF A NUMBER OF POTENTIAL LIABILITIES IN THE FORM OF VERY SUBSTANTIAL BCCI RELATED CLAIMS BEGAN TO APPEAR, WHICH DID NOT APPEAR ON THE BOOKS OF THE COMPANY.

THE FIRST INTIMATION OF A CLAIM WAS FOR $430 MILLION FROM A MAJOR OVERSEAS CUSTOMER.

BRANCH

THE NEXT, IN JANUARY 1992, WAS FOR $580 MILLION FROM THE BCCI LIQUIDATOR IN TOKYO IN RESPECT OF LOANS BY HIS BRANCH TO THE

SAME CUSTOMER.

SINCE THEN FURTHER BCCI CLAIMS HAVE BEEN RECEIVED FROM BCCI LIQUIDATORS IN LUXEMBOURG ($125 MILLION), LONDON ($85 MILLION), SAN FRANCISCO ($570 MILLION), NEW YORK ($31 MILLION), AND, VERY RECENTLY, THE CAYMAN ISLANDS BCCI (OVERSEAS) LIQUIDATOR ($275 MILLION).

IN ADDITION, MANY BCCI LIQUIDATORS HAVE WRITTEN TO THE SPECIAL MANAGERS RESERVING THEIR RIGHT TO MAKE FURTHER CLAIMS AND THE LAWYERS FOR ONE OF THE LIQUIDATORS HAVE INDICATED THAT FURTHER CLAIMS ARE LIKELY TO BE FORTHCOMING.

MOST OF THESE CLAIMS HAVE BEEN RECEIVED SO RECENTLY THAT IT HAS NOT BEEN POSSIBLE TO RESEARCH THEM IN FULL AND EVALUATE THEIR STATUS PRECISELY. HOWEVER, ALTHOUGH THEY MIGHT NOT BE ADMITTED TO PROOF IN À LIQUIDATION, THE CLAIMS WERE SUCH THAT THEY COULD NOT BE REJECTED OUT OF HAND. BECAUSE OF THIS, ANY SCHEME OF ARRANGEMENT WOULD HAVE ΤΟ TAKE ACCOUNT OF SUCH CLAIMS SO AS TO BE MANIFESTLY FAIR AND REASONABLE TO ALL CREDITORS.

ALTHOUGH THE ABU DHABI GUARANTEE, IF FORTHCOMING, WOULD HAVE BEEN OF LIMITED ASSISTANCE, IT CLEARLY WOULD NOT HAVE CATERED ADEQUATELY FOR ALL THE CLAIMS WHICH HAVE BEEN RECEIVED, GIVEN THEIR MAGNITUDE.

AFTER ALL FURTHER LEGAL AND COMMERCIAL ALTERNATIVES WERE EXPLORED BOTH SIDES AGREED WITH REGRET THAT, IN VIEW OF THE SCALE AND MAGNITUDE OF THE BCCI AND OTHER CLAIMS, AND IN THE ABSENCE OF A SUFFICIENT GUARANTEE AGAINST SUCH UNRECORDED LIABILITIES, IT WAS NOT POSSIBLE TO TAKE FORWARD A SCHEME THAT WAS BOTH ACCEPTABLE TO HKCB AND COMPATIBLE WITH THE PROVISIONAL LIQUIDATOR'S DUTY TO ALL CREDITORS.

IT WAS THEREFORE AGREED BETWEEN HKCB AND MR GLEESON THAT THE PROVISIONAL AGREEMENT SHOULD LAPSE AND THAT BOTH PARTIES SHOULD WITHDRAW FROM FURTHER NEGOTIATIONS. MR GLEESON SAID THAT HE WOULD NOW BE APPLYING TO THE COURT FOR DIRECTIONS AS TO THE FURTHER CONDUCT OF THE WINDING-UP PETITION.

HE CONCLUDED THAT SHOULD THE COURT ORDER THAT BCCHK BE WOUND UP HE WOULD ANTICIPATE THAT THE LIQUIDATOR SHOULD BE IN A POSITION TO PAY SUBSTANTIAL FIRST DIVIDEND FROM THE CASH COLLECTED TO DATE WITHIN APPROXIMATELY SIX MONTHS FROM THE DATE OF SUCH ORDER, BUT HOPEFULLY

A

SOONER.

/MR GLEESON