When BCCI was established in 1972, Bank of America became an important founding shareholder, initially subscribing about 25% of the Bank's capital and later increasing its interest to around 30%.
By the late 1970s, however, the interests of the two banks had begun to change. The rapid growth of the Middle East economies following the rise in oil revenues encouraged Bank of America to establish its own direct presence in the region rather than participate indirectly through BCCI. At the same time, Bank of America's shareholding placed limitations on BCCI's ability to expand independently into the United States.
The two banks therefore agreed that Bank of America would gradually divest its BCCI shareholding. The sale was publicly announced by Bank of America on 1 September 1978.
Under arrangements associated with Agha Hasan Abedi, the shares were acquired through ICIC Overseas and ultimately became part of structures established for the benefit of BCCI Group employees and their dependants, principally the ICIC Staff Benefit Trust and Staff Benefit Fund.
This was an important development in BCCI's ownership. Instead of Bank of America's holding passing to another outside banking institution, a substantial interest in BCCI came to be held through employee-benefit arrangements. Abedi's longer-term concept was that employees should themselves have a meaningful stake in the institution they helped to build.
The ICIC Staff Benefit Trust and Fund should not, however, be confused with the separate ICIC trading and investment companies that later featured in serious allegations concerning BCCI. Although senior BCCI executives were involved with some of these organisations, the employee-benefit bodies had a distinct purpose: to provide benefits and financial support for BCCI employees, former employees and their dependants.
The divestment therefore marked more than the departure of an original shareholder. It altered BCCI's ownership structure and strengthened the role of employee-benefit interests alongside the Bank's predominantly Middle Eastern shareholders.
That ownership structure would become relevant again several years later when losses in BCCI's Central Treasury emerged and questions arose about how those losses had been financed and absorbed.