Barings culprits `will never work in the City again'

BY JOHN EISENHAMMER

in London and

STEVE BOGGAN in Singapore

Those found responsible for the Barings collapse will never work in the City again, according to Christopher Sharples, chairman of the Securities and Futures Authority, which polices investment banks.

"I think it is extremely likely that some of the people who prove to be culpable in this regard will find they will have to seek a career outside of the City," he said.

Speaking on the Panorama programme, to be broadcast tonight, Mr Sharples said: "We have always taken a very tough line over individual registration, and lots of people have found they have not been allowed to continue to practise in the City following misdemeanours or failures far less significant that this one."

In an interview for the World in Action programme, also to be broadcast tonight, Mr Sharples revealed that Nick Leeson, the Singapore dealer whose disastrous derivatives speculation bankrupted Barings, had misled the SFA in an application to become a trader in London. He failed in 1992 to reveal a County Court judgment against him for an outstanding debt of £639.

"We carry out our own checks and we established that he did have and so we notified Barings of the fact that this individual had been untruthful in terms of disclosing to us, and Barings simply withdrew the application," Mr Sharples said.

"People are now considering carefully where it is safe to place their deposits. I can't think of anything that's happened in my memory that has struck more to the heart of the City as a financial centre, particularly because of the very British nature of what has taken place," he said.

The Singapore investigator, Niky Tan, of the accountants Price Waterhouse, confirmed that in January and February Barings in London sent some £750m to Singapore. Andrew Bayliss, deputy managing director of Barings Securities until 1993, told Panorama : "An enormous sum like that could not have been transferred without the authority and approval of the most senior people. It is inconceivable you can bet twice the worth of the bank, or nearly that amount, without that being known about, signed off by people at the very top."

Mr Sharples said: "It seems to me that Mr Leeson pulled the trigger. But the bank gave him the gun, and the bank gave him the ammunition, and when he wanted more ammunition they gave him as much as they could give him until they ran out, and then the bank was bust."

In Singapore yesterday, two directors were removed from their posts at Barings, in what appeared to be the first blood-letting since the collapse.

James Bax, formerly managing director of Baring Futures (Singapore), and Simon Jones, formerly a director of Baring Futures and Securities, have been told they will be kept on by Barings' new owners, Internationale Nederlanden Groep (ING). But the Dutch bank and insurance conglomerate said it did not know what role the men would play. Cees Maas, an ING board member, also said the bonuses of all 20 people who worked in the Baring Futures office in Singapore with Nick Leeson had been cancelled.

Mr Maas announced that Baring Futures (Singapore) would be liquidated. ING will incorporate a new company today to trade on the Singapore International Monetary Exchange.

The new futures company will be known as Barings Futures International Limited and is likely to resume business in a few days. Baring Securities (Singapore) will restart operations on the Stock Exchange tomorrow.

The new chairman of the securities operation, Jaap Manse, painted a grim picture of what ING officials found when they went into the Baring Futures office, but he rejected reports that documents had been shredded before Mr Leeson's sudden departure. Asked what controls there would be to prevent a similar disaster, he said: "Put it this way, there will be controls."