Investigators believe "emergency" or "fast" funding worth as much as $70m (£44m) was arranged by the bank's London treasury department to allow Mr Leeson, 28, to meet desperate margin calls on his positions.
Mr Leeson, whose transactions broke the bank, wrote to its London treasury department one month ago to confirm the arrangements. Peter Baring, the bank's chairman, has said he knew nothing of the problems before last Friday.
Market professionals who phoned Barings in London as long as two weeks ago over the bank's growing exposure to the Tokyo futures contracts were told the positions were being built up as part of a planned strategy with clients.
Investigators have established that Mr Leeson hid his position from auditors by creating fictitious client accounts.
Sources in Singapore said last night that Barings Securities in London knew Mr Leeson had no important clients other than those the London operation supplied him. His job was "arbitrage" between the Osaka and Tokyo markets, not to deal on behalf of clients. City experts said the profits Mr Leeson was making for Barings before the dbcle were out of proportion to the business he was meant to be undertaking.
According to the Registry of Companies in Singapore, the profits of Baring Futures, of which Mr Leeson was general manager, multiplied eightfold during his first 18 months as a dealer, from Singapore $2.72 (£1.18m) in 1992 to Singapore $20.32 (£8.83m) by the end of 1993. "He was astonishingly successful," one Barings source said. "He was very valuable to the firm and they wanted to cultivate him. It appeared he could do no wrong. That may be why he wasn't monitored as closely as he should have been."
A full-scale fraud inquiry into the trading that brought down Barings has been launched by Singapore's Ministry of Finance. Sources in the ministry confirmed the investigation was concentrating on information handed over by Barings executives at a meeting on Monday.
Mr Leeson's whereabouts were a mystery last night. He was last seen at the Regent Hotel in Kuala Lumpur, Malaysia, but checked out last Friday. According to unconfirmed reports in South-East Asian newspapers, he was sighted with his wife, Lisa, in Phuket in Thailand and in a Malaysian hospital.
The ministry source said: "The definition of fraud in Singapore is very broad and could result in a wide range of charges being brought against Mr Leeson. The investigation will concentrate on whether Mr Leeson, possibly with others, breached the [Singapore] Companies Act or the Securities Industry Act. The penalties are very severe - lengthy prison terms."
There was concern in Barings' London offices about Mr Leeson's activities at least a month before he disappeared. "London executives wanted to know more and more about what Leeson was up to," one Barings source said.
Investigators have not established the extent of the bank's exposure to these transactions but there are fears they may significantly add to the £750m of losses which have come to light.
Anguished executives in Barings' City headquarters were engaged in a furious witchhunt. They were due to receive large bonuses last Monday. One said: "People are spitting blood. We really have to find out exactly who knew what, and when, about Nick Leeson's activities."
It emerged that a Barings crisis team had flown out to Singapore on 17 February, alarmed at "discrepancies in accounting" one week before Barings said it had reacted to the disaster.
Barings' internal inquiry yesterday sought to pinpoint at what level managers might have known about the risks involved in the Leeson strategy. Speculation by Mr Baring that the bank's collapse had been engineered deliberately by Mr Leeson met with disbelief in the City and the Far East.Reuse content