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Relations sour in Leeson case

John Eisenhammer Financial Editor
Sunday 14 May 1995 18:02 EDT
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BY JOHN EISENHAMMER

Financial Editor

Relations have worsened dramatically between the Bank of England, the Serious Fraud Office and the Singapore authorities as a result of the Barings' collapse. Sources in London claim there is frustration at the lack of co-operation from the Singapore authorities, who are not releasing vital evidence on the activities of Nick Leeson, the Singapore-based trader whose derivatives speculation provoked the merchant bank's collapse in February.

There is a suspicion within the Bank and the SFO that the Singapore authorities are stalling on assistance until they have secured Leeson's extradition from Germany. They appear determined to get the body before they do anything helpful, said a source.

The SFO is still reeling from the recent refusal by the Singapore High Court of its request to see Barings' documents . It has lodged an appeal, but is resigned to this not being heard for several months.

The Bank, which is conducting its own semi-judicial enquiry into the collapse of Barings, has also run into foot-dragging. If the Bank is to honour its commitment to publish its report on Barings next month, this risks being based on severely incomplete evidence, since much of the key information remains with the Singapore authorities.

The SFO is believed to be near the end of its enquiries in London, and has found nothing that would support a case to extradite Nick Leeson to Britain. "Much of what we need to see is in Singapore," a source said.

Mr Leeson faces 12 charges of fraud and cheating, each carrying a possible seven-year sentence under Singapore law.

Meanwhile, the Seoul branch of Barings Securities hopes to resume trading this month following the suspension of operations on 27 February. Gareth Evans, branch manager, said preliminary approval to resume trading was given on Saturday by the Ministry of Finance and Economy.

The branch, to be renamed Barings Securities International, will be a separate legal entity and take over all the assets of the former branch, which traded as Barings Securities.

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