Mount affidavit kept secret

CREDITORS have been blocked from seeing the Bank of England's explanation of why it wants to wind up Mount Banking Corporation, the pounds 200m bank that was forced to close last Sunday, writes Peter Rodgers.

The Shah family, which controls Mount, is understood to have asked the High Court on Wednesday to prevent the release of key documents, including an affidavit by Bank of England officials explaining why they shut the bank.

One source suggested that the request, made in a private hearing, could be a prelude to a decision by the Shah family to fight the winding-up petition in the courts.

Normally, affidavits are available for creditors to study, after an application to court officials.

But the effect of the latest move is to keep the files under wraps, at least until the hearing of the Bank's petition later this year.

The Shah family, which has business interests in Kenya and India, controls Mount through a holding company, I&M Holdings of Jersey.

Philip Wallace of KPMG Peat Marwick, one of the provisional liquidators of Mount, said that substantial funds remained in the bank. 'Unless new things come to light depositors should recover most if not all of their deposits.'

The Bank of England did not allege insolvency in its winding up petition, suggesting problems with the way the bank was run.