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Bank of Credit and Commerce International

I assure my right hon. Friend that I do not want the process to last longer than necessary, but, when it comes to closure, there are interests to be weighed in the balance about the recovery of moneys for the creditors. It is important to bear that in mind. He asks me to bring the matter to a close as soon as possible and I appreciate his desire for closure because 17 years is a long time. I also appreciate the anxiety that those who lost money through no fault of their own as a result of having deposits in the bank at the time of the liquidation have experienced. However, let me make a couple of points about closure. It is not determined by me or the Secretary of State. The problem of time scale—long as it has been—must be balanced with the creditors' interests. If the creditors judge that the well of recovery has not run dry and that some sums could still be recovered, and push up the anticipated 86.5 per cent. recovery rate to which my right hon. Friend referred even higher, it may not be in their interests to bring the matter to a premature close. The creditors and the liquidators must make that judgment. The Department and the Secretary of State have not turned their eyes away from the problem. Throughout the period, the Secretary of State has received an annual report from the liquidators on the conduct of the liquidation. The closure of such a liquidation, which has run for nearly two decades and realised billions of dollars for creditors, is not a simple process. It must also be borne in mind that the English liquidation is not the main procedure. Bank of Credit and Commerce International was registered in Luxembourg, and the main proceedings are the Luxembourg liquidation. Consequently, Luxembourg liquidators, Luxembourg law and the Luxembourg court have the most important say in when and how the liquidation is closed. It is essential to the efficiency of the global liquidation that all three liquidations close in an orderly and co-ordinated fashion when the time comes. I repeat that the process should take no longer than necessary, but I stress that it must be consistent with the creditors' interests and the possibility that further moneys may be recovered for them. The English liquidation must close before the Luxembourg liquidation, but that can happen only when the winding-up process is complete. Deciding on the right time to close down the liquidation is a matter for the liquidator and the liquidation committee, working with the other global liquidations. Potential further recovery is a live issue. As I understand it, one recovery involves the enforcement of a judgment that exceeds $300 million. Any recoveries from that would be paid into the liquidation for the benefit of creditors. All parties would like the liquidation to finish as soon as is reasonably practicable while continuing to act in the creditors' best interests. When they are pursuing such moneys, we must ask whether it is in their interests to engineer the closure of the liquidation. I am happy to meet my right hon. Friend next week, as has been arranged, but I want to be clear about my role in such situations and to stress the interests of the creditors. I turn to the parallels that my right hon. Friend drew with the banking crises that we have seen in recent months. He mentioned Northern Rock and some other cases. However, I suggest that there is a legal difference between the Government's role in stopping a collapse of the banking system—that is what has driven the recent interventions, which started with Northern Rock and was followed by some others—and the Government's legal position in respect of the running of an individual liquidation many years after it began. As I have said, insolvency legislation gives that role to creditors and liquidators. I appreciate my right hon. Friend's point about intervention, but I am not sure that we are talking about a parallel situation. However, I am happy to discuss that with him further when we meet next week. In conclusion, I again pay tribute to my right hon. Friend's tenacity and to the compassion that he has rightly shown for those who had deposits in the bank. The Government have not turned a blind eye to the problem; nor do we intend to do so. We operate within the insolvency legislation, which gives a role to the liquidators and a role to the creditors through the liquidation committee. That is the context in which the liquidation is being done. Substantial sums have been recovered, and I hope that more can be recovered for the creditors affected. When discussing how long such a long-running liquidation should take, it is important to bear that interest in mind, as well as our legitimate desire to bring the process to a close within no longer a time scale than is necessary. Question put and agreed to.