Barings bondholders to sue


Financial Editor

Bondholders of Barings yesterday decided to sue the former top executives of the collapsed merchant bank and three prominent City houses in an effort to recover more than pounds 100m lost last year.

The directors to be named in the writs are Peter Baring, the former chairman, Andrew Tuckey, the former deputy chairman who is still working at Barings on a consultancy basis, and Peter Norris, the former head of investment banking. All three resigned last year shortly after Barings collapsed under nearly pounds 900m of losses run up by Nick Leeson in illicit derivatives speculation.

The City advisers are BZW Securities, Hoare Govett Securities of the ABN Amro group and Cazenove & Co, which participated in the January 1994 bond issue.

When ING, the Dutch bancassurer, bought Barings last year, it left out of the deal the Barings holding company that had issued the bonds, rendering them worthless. A large number of private investors, as well as several powerful institutions like Scottish Amicable and Legal & General, lost money.

"We are confident that proceedings will be issued as anticipated in early March," said Jonathan Stone, a lawyer leading the Barings Perpetual Noteholders Action Group. The writs will be aimed at recovering the original pounds 100m lost on the bonds, and a further pounds 9m in lost interest payments, as well as costs of litigation. The action group is represented by the solicitors SJ Berwin. BZW and Hoare Govett yesterday made no comment on the announcement of impending legal action.

Mr Stone said the legal action would be based on claims that the January 1994 bond prospectus put out by Barings plc and the managers, Hoare Govett, BZW, Cazenove and Baring Brothers & Co, was defective. "There are a number of issues in the document which give rise to considerable concern, and if it had not been defective, the bonds could not have been issued," Mr Stone said.

Ernst & Young, administrators to Barings Group, have issued writs against three firms of accountants alleging negligent auditing and claiming several millions of pounds. The firms involved are Coopers & Lybrand in London and Singapore and Deloitte Touche in Singapore. Ernst & Young have been collecting evidence since the collapse of the merchant bank in late February 1995.

Mr Baring, Mr Tuckey and Mr Norris have all been investigated, along with 20 other former executives fired by ING last year, by the City watchdog the Securities and Futures Authority. Some of the senior executives are expected to face disciplinary sanctions.

The bondholders said the decision to resort to legal action resulted from frustration at lack of progress in attempts to persuade ING to recognise the grievances of the investors.

According to Mr Stone, ING committed a serious error of judgement when it agreed shortly after purchasing Barings to honour the pounds 90m bonuses due staff for 1994, despite the fact that the merchant bank had been bankrupted. In view of this, ING should be willing to consider meeting the pounds 100m compensation claim, Mr Stone said.

A model of a Neanderthal man on display at the National Museum of Prehistory in Dordogne, France
Richard Dawkins dedicated his book 'The Greatest Show on Earth' to Josh Timonen
newsThat's Richard Dawkins on babies with Down Syndrome
Arts and Entertainment
Eye of the beholder? 'Concrete lasagne' Preston bus station
architectureWhich monstrosities should be nominated for the Dead Prize?
ebooksAn evocation of the conflict through the eyes of those who lived through it
Dinosaurs Unleashed at the Eden Project
Arts and Entertainment
Life and Style
This month marks the 20th anniversary of the first online sale
techDespite a host of other online auction sites and fierce competition from Amazon, eBay is still the most popular e-commerce site in the UK
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Quantitative Analyst (Financial Services, Graduate, SQL, VBA)

£45000 per annum: Harrington Starr: Quantitative Analyst (Financial Services, ...

Application Support Engineer (C++, .NET, VB, Perl, Bash, SQL)

Negotiable: Harrington Starr: Application Support Engineer (C++, .NET, VB, Per...

AIFMD Business Analyst / Consultant - Investment Management

£450 - £600 per day: Harrington Starr: AIFMD Business Analyst / Consultant - I...

Business Analyst Solvency II SME (Pillar 1, 2 & 3) Insurance

£450 - £600 per day: Harrington Starr: Business Analyst Solvency II SME (Pilla...

Day In a Page

Middle East crisis: We know all too much about the cruelty of Isis – but all too little about who they are

We know all too much about the cruelty of Isis – but all too little about who they are

Now Obama has seen the next US reporter to be threatened with beheading, will he blink, asks Robert Fisk
Neanderthals lived alongside humans for centuries, latest study shows

Final resting place of our Neanderthal neighbours revealed

Bones dated to 40,000 years ago show species may have died out in Belgium species co-existed
Scottish independence: The new Scots who hold fate of the UK in their hands

The new Scots who hold fate of the UK in their hands

Scotland’s immigrants are as passionate about the future of their adopted nation as anyone else
Britain's ugliest buildings: Which monstrosities should be nominated for the Dead Prize?

Blight club: Britain's ugliest buildings

Following the architect Cameron Sinclair's introduction of the Dead Prize, an award for ugly buildings, John Rentoul reflects on some of the biggest blots on the UK landscape
eBay's enduring appeal: Online auction site is still the UK's most popular e-commerce retailer

eBay's enduring appeal

The online auction site is still the UK's most popular e-commerce site
Culture Minister Ed Vaizey: ‘lack of ethnic minority and black faces on TV is weird’

'Lack of ethnic minority and black faces on TV is weird'

Culture Minister Ed Vaizey calls for immediate action to address the problem
Artist Olafur Eliasson's latest large-scale works are inspired by the paintings of JMW Turner

Magic circles: Artist Olafur Eliasson

Eliasson's works will go alongside a new exhibition of JMW Turner at Tate Britain. He tells Jay Merrick why the paintings of his hero are ripe for reinvention
Josephine Dickinson: 'A cochlear implant helped me to discover a new world of sound'

Josephine Dickinson: 'How I discovered a new world of sound'

After going deaf as a child, musician and poet Josephine Dickinson made do with a hearing aid for five decades. Then she had a cochlear implant - and everything changed
Greggs Google fail: Was the bakery's response to its logo mishap a stroke of marketing genius?

Greggs gives lesson in crisis management

After a mishap with their logo, high street staple Greggs went viral this week. But, as Simon Usborne discovers, their social media response was anything but half baked
Matthew McConaughey has been singing the praises of bumbags (shame he doesn't know how to wear one)

Matthew McConaughey sings the praises of bumbags

Shame he doesn't know how to wear one. Harriet Walker explains the dos and don'ts of fanny packs
7 best quadcopters and drones

Flying fun: 7 best quadcopters and drones

From state of the art devices with stabilised cameras to mini gadgets that can soar around the home, we take some flying objects for a spin
Joey Barton: ‘I’ve been guilty of getting a bit irate’

Joey Barton: ‘I’ve been guilty of getting a bit irate’

The midfielder returned to the Premier League after two years last weekend. The controversial character had much to discuss after his first game back
Andy Murray: I quit while I’m ahead too often

Andy Murray: I quit while I’m ahead too often

British No 1 knows his consistency as well as his fitness needs working on as he prepares for the US Open after a ‘very, very up and down’ year
Ferguson: In the heartlands of America, a descent into madness

A descent into madness in America's heartlands

David Usborne arrived in Ferguson, Missouri to be greeted by a scene more redolent of Gaza and Afghanistan
BBC’s filming of raid at Sir Cliff’s home ‘may be result of corruption’

BBC faces corruption allegation over its Sir Cliff police raid coverage

Reporter’s relationship with police under scrutiny as DG is summoned by MPs to explain extensive live broadcast of swoop on singer’s home