Bank of England seized inquiry papers

The Bank of England repeatedly thwarted the investigations in Britain of the Singapore authorities into the Barings collapse, writes John Eisenhammer.

An extraordinarily vehement five-page appendix to the Singapore report reveals a significant breakdown of relations between the British and Singaporean supervisory authorities.

Whereas the Singapore investigators were freely assisted by ING, the new Dutch owners of Barings, and Ernst & Young, the administrators to the collapsed merchant bank, they complained of a deliberate policy of obstruction at the hands of the Bank's Board of Banking Supervision, charged in the UK with reporting on the Barings collapse.

In its own report published in July, the Bank of England said it had had only "very limited access" to information in Singapore, and had been prevented from conducting formal interviews with senior members of the Barings' office in Singapore.

In April the Singapore inspectors interviewed a number of Barings employees in London on a voluntary basis, arranged through ING. On 2 May, Norton Rose, solicitors for the Board of Banking Supervision "notified the administrators' solicitors, Slaughter & May, and ING's solicitors, Lovell White Durrant, that pursuant to Section 41(5) of the UK Banking Act 1987, the board required them to hand over the transcripts of all interviews conducted by us by the close of business 3 May 1995".

The Singapore investigators and their lawyers wrote to the Bank of England of their amazement, and expressed the hope that the Bank would allow access to interviews it had conducted during its own investigations. "The board did not reciprocate ... ", the Singapore report noted.

There follows details of how the two, by now clearly rival regulatory authorities, haggled during May over whether each had provided sufficient "consideration" to the other in the form of handing over information, to get other documents and interviews in return.

The report stated that in March, after the Barings collapse, the Singapore authorities fulfilled initial requests for information from the Bank of England investigators. When the Singaporeans asked for reciprocal assistance in London, they claimed they were told they had no authority and the secretary of state would appoint a UK subject to conduct interviews on their behalf. In response to a request to do the interviews informally, the Singaporeans were told: "This was not permitted as HM Treasury was of the view that there was no reciprocity in connection with the board's work in Singapore," the report said.

Later Norton Rose, the board's solicitors, said they could not release any documents or information sought by the Singaporean investigators, saying this could only be done in the UK in return for "consideration". "When (the Singapore lawyers) pointed out that the board had already received 'consideration' Mr Bagg (of Norton Rose) maintained such documents and information was 'past consideration' and hence 'no consideration' ... '' the Singapore report stated.