(2 of 3)
| As British anger mounted, some financial experts accused the Bank of England and the accounting firm Price Waterhouse, which had audited B.C.C.I.'s books since 1985, of failing to warn the public early enough about the huge problems at the bank. While a recent audit uncovered widespread fraud at B.C.C.I. and triggered this month's global crackdown, U.S.-based Price Waterhouse had previously signed its public audits of the bank without exposing irregular practices. Price Waterhouse vehemently denied that it had overlooked problems at the bank and said the firm was insured against any lawsuits that disgruntled B.C.C.I. customers might bring.
Many countries swiftly joined the B.C.C.I. crackdown after the global sweep shut most of the bank's operations. In China authorities closed B.C.C.I.'s branch in the Shenzhen Special Economic Zone, nerve center of the country's program to encourage private enterprise. Next door, Hong Kong closed the bank's 25 branches, which had 40,000 depositors, after regulators dithered for days while insisting that the offices were "viable and sound."
Furious Abu Dhabi officials protested the timing of the global shutdown. It came, they said, just as Zayed was planning to pony up fresh funds to buttress B.C.C.I.'s finances and was preparing to reorganize the bank into three units based in London, Abu Dhabi and Hong Kong. Perhaps adding insult, the Bank of England tried to persuade Abu Dhabi to help rescue British depositors. While British officials conceded that the sheik had no legal obligation to reimburse customers, they hoped he might act "as a matter of honor." But Zayed seemed in no mood to offer assistance. Declared Keith Vaz, a Labour Member of Parliament: "It is incredible that the Bank of England did not contact the sheik, the leader of a friendly gulf state that supported us strongly in the war, and inform him what was happening."
Zayed, whose access to $15 billion a year in national oil revenues makes him one of the world's richest men, does not easily forgive slights. Acquaintances say the ruler, who is in his mid-70s, will probably cover any losses suffered by gulf Arabs and may even extend his generosity to depositors in the rest of the Middle East. But he is unlikely to bail out anyone else, insiders say. They predict the ruler will seek to redress his own losses and public embarrassment by bringing lawsuits against any non-Arabs he deems responsible for his plight.
While Zayed is revered throughout the Middle East for his honesty and | diplomatic skills, he has proved less adroit in his financial affairs. The sheik was among Arab investors who in 1980 sustained heavy losses on silver investments when prices collapsed after the Texas-based Hunt brothers tried to corner the market. At home, Zayed's openhanded ways have led him to spend lavishly on his 19 sons and 22 daughters (he is rumored to have been married either 12 or 14 times). To celebrate his eldest son's 1981 wedding, Zayed threw a $40 million bash in Abu Dhabi that featured seven nights of revelry in a 20,000-seat amphitheater built for the occasion.