Barings bondholders target SFO

The action group trying to bring a private prosecution against Nick Leeson, the former Barings futures trader, said last night it would fight the Serious Fraud Office "all the way" if it tried to shut the case down.

Yesterday, Michael Hill QC, acting for the Barings bond-holders, met George Staple, the SFO director, after the SFO case controller, James Kellock, surprised bondholders on Friday by asking them to send the SFO their papers. His first letter was followed by a second demand within 30 minutes. By yesterday the papers had been handed over to the SFO.

Although the bondholders are taking a private prosecution against Mr Leeson, the SFO is arguing that it has powers under the 1987 Criminal Justice Act to take over such a prosecution if it falls within the remit of serious commercial fraud.

Jonathan Stone, who is leading the bondholders' action group, said yesterday "the SFO does not have a leg to stand on". Mr Stone laid eight summonses against Mr Leeson last week in the City of London magistrates' court. He said the court was "absolutely clear that we had jurisdiction over these offences. The court had no cause for concern. It is absolutely inappropriate for the SFO to step in now". Mr Stone added: "We will fight them all the way. . . The SFO has quite a reputation for tripping up."

The SFO said Mr Kellock had asked the bondholders' solicitor on Friday for their papers on the case and had now received them. "The director has the power to take over a private prosecution in certain cases and he is now considering whether he can do it on this particular occasion," a spokeswoman said.

Sources at the SFO said the office believed the most appropriate place for a trial on the Barings affair was Singapore. The office had to show it was prepared to work closely with other prosecuting authorities in tackling overseas fraud. "If we want better co-operation in the future we have to show that we are prepared to do the same ourselves. And we feel that all the witnesses are in Singapore and the evidence and we do not wish to be shy in saying that."

The SFO view contrasts strongly with that of the UK bondholders and of Mr Leeson's solicitor. They believe there is sufficient evidence for a trial to be played out in the UK. They have argued that the people who lost out from the collapse of Barings are predominantly based in the UK and that more of the background to the case will emerge if the trial takes place here.

The German authorities expect to make a decision on whether to accept the Singaporean extradition application later this week. If they accept the request, Mr Leeson's lawyer has said it will be resisted.

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