Barings fraud inquiry frozen

The Serious Fraud Office appears to have dropped for the time being its investigation into allegations of fraudulent trading by former directors at Barings, weeks before the expected publication of the Bank of England's report into the fiasco.

The SFO's decision to reduce its interest in the affair follows advice from its top accountant working on the case. Following a review of available evidence, Michael Kenney concluded that there were insufficient grounds to justify further investigations.

Mr Kenney gave the advice to the SFO two days after George Staple, the office's director, told MPs that the inquiry into fraudulent trading, which centres on Barings former directors rather than Nick Leeson, the rogue trader, was still continuing.

"We are talking about investigating matters that could lead to the prosecution of individuals," Mr Staple told members of the Treasury and Civil Service Committee on 12 June.

Mr Kenney, on secondment to the fraud office from the accountants Grant Thornton, was pressed to look further into the financial position of the Barings group immediately before its collapse, after Brian Sedgemore, the Labour MP, had made fresh allegations of fraudulent trading at the bank. At the committee hearing Mr Staple had to field questions from Mr Sedgemore about the state of the SFO's inquiries.

Mr Staple said: "We are still conducting an investigation in this country. Yes." He added: "Fraudulent trading is what the SFO is looking at, we are investigating that . . . If the SFO believes there is a realistic prospect of conviction we will bring charges."

In order to prosecute any directors or former directors of the UK bank for fraudulent trading, the SFO would have to show the directors knew that the losses being clocked up by Mr Leeson in Singapore had put the bank into an insolvent position and that they had none the less continued trading while insolvent for a significant period.

Sources say that, having considered the evidence available, Mr Kenney decided that he had seen nothing to indicate knowledge by the directors of the huge losses incurred on Mr Leeson's notorious account 88 888 until 24 February, the day they approach-ed the Bank of England in an attempt to stave off collapse.

There is still a possibility that investigations may be resumed at some point if further evidence becomes available.

An SFO spokeswoman said allegations of fraudulent trading had been passed on to the office and had been looked into. "We do not normally go into details of an investigation unless a formal decision has been made and to the best of my knowledge there has been no formal decision."

The SFO is co-operating closely with the Bank of England, which is conducting the main City of London investigation into the collapse.

"If their investigation uncovers anything that might be of interest to us, they will pass it to us," the SFO spokeswoman said.

PROMOTED VIDEO
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Client Services Executive / Account Executive - SW London

£23000 - £26000 per annum: Ashdown Group: Account Executive / Client Services ...

PA to CEO / Executive Secretary

£36000 - £38000 per annum: Ashdown Group: Executive PA to CEO & Executive Dire...

Generalist HR Administrator, Tunbridge Wells, Kent - £28,000.

£25000 - £28000 per annum: Ashdown Group: Generalist HR Administrator - Tunbri...

Management Accountant

£30-35k + Excellent Benefits: Guru Careers: We are seeking a Management Accoun...

Day In a Page

Kate Bush, Hammersmith Apollo music review: A preamble, then a coup de théâtre - and suddenly the long wait felt worth it

Kate Bush shows a voice untroubled by time

A preamble, then a coup de théâtre - and suddenly the long wait felt worth it
Robot sheepdog technology could be used to save people from burning buildings

The science of herding is cracked

Mathematical model would allow robots to be programmed to control crowds and save people from burning buildings
Tyrant: Is the world ready for a Middle Eastern 'Dallas'?

This tyrant doesn’t rule

It’s billed as a Middle Eastern ‘Dallas’, so why does Fox’s new drama have a white British star?
Rachael Lander interview: From strung out to playing strings

From strung out to playing strings

Award-winning cellist Rachael Lander’s career was almost destroyed by the alcohol she drank to fight stage fright. Now she’s playing with Elbow and Ellie Goulding
The science of saturated fat: A big fat surprise about nutrition?

A big fat surprise about nutrition?

The science linking saturated fats to heart disease and other health issues has never been sound. Nina Teicholz looks at how governments started advising incorrectly on diets
Emmys 2014 review: Can they genuinely compete with the Oscars

Can they genuinely compete with the Oscars?

The recent Emmy Awards are certainly glamorous, but they can't beat their movie cousins
On the road to nowhere: A Routemaster trip to remember

On the road to nowhere

A Routemaster trip to remember
Hotel India: Mumbai's Taj Mahal Palace leaves its darker days behind

Hotel India

Mumbai's Taj Mahal Palace leaves its darker days behind
10 best pencil cases

Back to school: 10 best pencil cases

Whether it’s their first day at school, uni or a new project, treat the student in your life to some smart stationery
Arsenal vs Besiktas Champions League qualifier: Gunners know battle with Turks is a season-defining fixture

Arsenal know battle with Besiktas is a season-defining fixture

Arsene Wenger admits his below-strength side will have to improve on last week’s show to pass tough test
Pete Jenson: Athletic Bilbao’s locals-only transfer policy shows success does not need to be bought

Pete Jenson: A Different League

Athletic Bilbao’s locals-only transfer policy shows success does not need to be bought
This guitar riff has been voted greatest of all time

The Greatest Guitar Riff of all time

Whole Lotta Votes from Radio 2 listeners
Britain’s superstar ballerina

Britain’s superstar ballerina

Alicia Markova danced... every night of the week and twice on Saturdays
Berlin's Furrie invasion

Berlin's Furrie invasion

2000 fans attended Eurofeurence
‘It was a tidal wave of terror’

‘It was a tidal wave of terror’

Driven to the edge by postpartum psychosis