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The liquidators meet, consult and correspond with the committee on a regular basis. There may be a suggestion that the committee is not able to exercise its
scrutiny role, and that the liquidators are free to proceed, if I may use the vernacular, in their own way and in their own sweet time, but it is worth stressing that the committee, which is representative of the body of the bank’s creditors, receives its own independent legal advice funded by the liquidation itself. If one looks at the make-up of the committee, one finds that it does not look like a body of people who would be easily duped. The committee meets quarterly and may also have ad hoc meetings in the year. It receives its own independent legal advice, which the court has authorised as an expense of the liquidation. The committee receives a full set of accounts each quarter, together with a report on the liquidators’ activities in that period. Aspects of the liquidation can be very complex and the independent legal advice ensures that the committee can understand the content and the import of the reports that it receives. The liquidators’ remuneration is approved by the committee on a quarterly basis.
My right hon. Friend may wish to take issue with that, and he is perfectly free to do so, but it is not a process in which the creditors have no voice, or only a passing voice. The liquidators prepare an annual budget for their activities, and their performance is measured against that on a quarterly basis.
Keith Vaz: That is most helpful and useful. All we ask is that ministerial minds be focused on that issue from time to time and that the Minister write to the liquidators regularly. If necessary—if the Government are hard up—I will give him the stamp, but he is the Minister for post offices, so that should not be a problem; some remain open in this country. Will he write to the liquidators and ask what the current position is and why things are taking so long? A letter from the Minister carries so much more weight than a letter from a Member of Parliament or anyone else. It concentrates the minds of the liquidators. He simply has to put in his diary every two months a reminder to ask what is going on.
Mr. McFadden: 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.
Adjourned accordingly at twenty-two minutes past Six o’clock.
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