FCIB (IN ADMINISTRATION) LEGAL UPDATE

Posted: 27 October 2006

FCIB (IN ADMINISTRATION) LEGAL UPDATE

FRIDAY 27 OCTOBER 2006

Please find attached copies of the following:-

1. update from the Central Bank in relation to the release of funds;

2. an article in relation to John Deuss from the Guardian newspaper dated Monday 23 October 2006;

3. an article from Times On Line in relation to the G6 nations meeting in relation to carousel fraud.

In the update from the Central Bank it has confirmed:-

i. that FCIB were served with court orders for the production of information in August 2006 for approximately 200 of its clients as part of a large scale criminal investigation;

ii. in September 2006 FCIB became subject to criminal investigations by the Dutch authorities in relation to alleged money laundering. FCIB denies this;

iii. the Dutch authorities froze funds held by FCIB’s correspondent banks and as a result the correspondent banks terminated their relationships with FCIB. Consequently FCIB was not able to transfer any funds;

iv. as a result of the above and other matters the Central Bank decided to revoke FCIB’s banking licence;

v. as a result of the emergency measure FCIB is now under the full control of the Central Bank;

vi. under the emergency measure FCIB can no longer be forced to satisfy the existing and future debts and any pending enforcement action is lifted;

vii. the Central Bank will now work towards the repayment of funds to the creditors. However, this will only be after a thorough investigation has been completed;

viii. the Central Bank stated that the payment process is planned to start this week once the various criteria have been met.

The Guardian article confirms that John Deuss, the owner of FCIB, has been extradited to Holland, where he is due to appear before the courts accused by Dutch prosecutors of money laundering and running a criminal organisation.

Mr Deuss was due to appear earlier on this week before an examining Magistrate as prosecutors seek more time to question him.

Times On Line has reported that the G6 nations have pledged to join forces to fight carousel fraud. The government believes that the fraud may be linked to terrorism.

If you would like to instruct us in relation to FCIB please contact us.

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