BCCI - Joint disciplinary scheme tribunal findings

Published at 10:18 AM on 20 April 2006

Following the publication of the conclusions of the Joint Disciplinary Tribunal, Kieran Poynter, Chairman of PricewaterhouseCoopers LLP (the successor firm to Price Waterhouse UK) said: “The conclusions of the Joint Disciplinary Scheme (JDS) on this long outstanding matter concern technical issues or alternative judgments in relation to some aspects of the 1987, 1988 and 1989 audits. Importantly, after a long and detailed investigation, the JDS did not find that Price Waterhouse should have concluded that the relevant Bank of Credit and Commerce International (BCCI) accounts failed to give a true and fair view.  “After nearly 15 years, this matter can finally be put to rest.  Price Waterhouse has accepted the fine of £150,000 and the costs on the basis that to continue to contest the matter further would have been an expensive distraction from which no useful lessons would emerge.  “Throughout this matter we have consistently said that Price Waterhouse was deceived, as indeed criminal convictions have proven. “At the time BCCI was closed in 1991, the most recent audit opinion relating to 1989 was subject to questions.    The JDS has not found that there was anything fundamentally wrong with the opinion, thereby reaffirming Lord Justice Bingham’s conclusion reached in 1992 after his Inquiry which was: ‘I rather doubt if other auditors, similarly placed, would have acted very differently.’” The Tribunal conclusions state that: “It should be recorded that there is no question as to the honesty and integrity of those involved with the audits on behalf of PW UK. In contra-distinction the extent of the massive BCCI fraud was, as is now known, unparalleled and unusual and was such that auditors were actively deceived not only by BCCI management but, in addition, by customers and shareholders acting in collusion with management.” All UK investigations subsequent to the closure of BCCI have recognised that BCCI was a unique situation. A well planned and executed audit cannot be relied upon to discover fraud if customers and other third parties conspire with management to provide false responses to the auditor's enquiries.  Nevertheless it was only as a result of the Price Waterhouse investigation that a fraud on a massive scale was revealed leading to the regulatory decision to close the bank in July 1991. ENDS

Notes to Editors:

1. As the JDS confirms the Price Waterhouse UK firm did not sign any opinions on BCCI’s accounts. Price Waterhouse UK provided assistance to Price Waterhouse Luxembourg in their audit of Bank of Credit and Commerce International Holdings (Luxembourg) SA 


For more information contact:

Alison Sharpe
UK Head of Media Relations, PricewaterhouseCoopers LLP 
Tel:020 7213 8593 
Mobile:07733 227375 

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