Comhairle To Clear BCCI Debts

13 May 2003

Comhairle nan Eilean Siar has received a further 14% dividend from the liquidators of the Bank of Credit and Commerce International (BCCI). This amounts to £4.1m and nearly clears the Comhairle of BCCI debt.

The dividend will be used to repay the Scottish Executive in line with previous agreements. At the time of the BCCI crash, the Comhairle borrowed £24m from the then Scottish Office.

Savings on loan charges in the current year will amount to over £100k. Annual savings after from 2005/06 onwards will amount to over £300k.

A spokesperson for the Comhairle said: “This is excellent news for the Comhairle and for the Western Isles and it justifies the faith that the Comhairle has sustained with the liquidators. This does not mean a cash bonanza for the Western Isles as the money will be used to repay the Scottish Executive. However it does mean substantial savings in loan charges this year and in future years”.

Further dividends can be expected from the legal action taken by the liquidators against the Bank of England and the BCCI’s former auditors.

The Comhairle will be free to use any further dividends received.
BCCI went into liquidation in July 1991. The Comhairle lost £24 million deposited with the bank. To finance this loss the Comhairle were loaned £24 million by the Scottish Executive to repay over 30 years.

Schedule of debt repaid

• Total BCCI debt borrowed - £24.0m
• Less: Dividends from liquidation - £18.8m
• Less: Favorable currency movements - £ 2.7m
• Less: Repaid by the Comhairle - £ 2.2m
• To be repaid by 31/5/05 - £ 0.3m

Further dividends can be expected to be financed from three sources:

• Legal proceedings against the Bank of England
• Legal proceedings against the former auditors.
• Further asset seizures of former debtors of the bank.

Nigel Scott
Communications Officer
Comhairle nan Eilean Siar

Tel: 01851 709389 (Work)
Tel: 01851 706412 (Home)
Tel: 07884 236103 (Mobile)
email: nscott@cne-siar.gov.uk