Bank considers ban on key executives : THE BARINGS COLLAPSE
Tuesday 07 March 1995
However, the Bank of England categorically denied there had been any move to ban Barings executives.
But there is a widespread expectation in the City that a number of senior Barings personnel are eventually likely to be prevented from working in banking and securities.
Under the 1987 Banking Act, the Bank has the power to write to Barings and say that as a result of information it holds it believes a director or a manager is not "fit and proper" to continue in his or her position.
A copy of the letter must be sent to the person concerned. The Securities and Futures Authority has similar powers over securities specialists.
After a 28 day breathing space for representations, the Bank of England can confirm, vary or withdraw its original letter. But if there is a dispute the case goes to a tribunal, and at any stage in the process those affected can ask for a judicial review.
Bankers believe it highly unlikely the Bank of England would have jumped the gun and sent out letters before its own investigations of Barings are complete.
If nothing else, if the Bank appears to pre-judge the issue, this could easily be used as grounds for a judicial review.
Lord Spens, a former director of Ansbacher, the merchant bank involved in the Guinness affair, is suing the Bank of England for blackballing him in a letter to his employers that he claims lost him his job.
Under pre-1987 banking legislation he had no right to an appeal.
Even with the new act, there is a procedure similar to blackballing which affects executives who have left an employer in the City - so it would not yet apply to the Barings chiefs.
The Bank of England writes to those concerned that if they seek work in a bank it would be "minded" to take their records into consideration before they can be approved as fit and proper for the job.
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