Barings inquiry aims for April deadline

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The Independent Online
The Bank of England is aiming to complete its investigation into the Barings collapse around 20 April and the Securities and Futures Authority wants to finish its parallel inquiry about the same time, it emerged yesterday.

Both are under considerable pressure from ING, the new Dutch owner of Barings, which could be forced to remove tainted executives itself if the inquiry drags on. It is anxious to avoid acting ahead of a verdict.

Investigations are concentrating on two parts of Barings' London operations, and their relations with the Singapore business. The first is the Financial Products Group, headed by Ronald Baker, which ran Barings' derivatives dealings.

Responsibility was organised on product, rather than regional, lines, which meant that Nick Leeson's derivative activities were not controlled from within Singapore, but directly from London.

The second part is the Asset and Liability Committee (Alco), set up in 1994 as the central body for assessing and controlling risk within the group at its daily meetings.

A number of people from these two groups have been removed by ING from active involvement in the new Barings. Although expected to be present in the office, they are understood mainly to be helping the authorities with their inquiries. There were reports yesterday that up to 40 executives face dismissal.

A similar group of individuals has also been left out of the new Barings' management structure recently announced by ING. The group includes Peter Norris, aged 40, head of Barings Securities, who was the senior representative on the eight-man Alco.

Mr Norris, a long-standing Barings man, apart from a brief spell at Goldman Sachs, came back in 1992 from running Barings' Hong Kong operations, assuming the top securities job following the departure of Christopher Heath in March 1993. Given the title of adviser to the management, he has in effect been frozen out of the daily business.

Another is Ronald Baker, a bearded Australian in his early 40s, brought in from Bankers Trust in 1992 to develop the bank's derivatives operation. As head of the Financial Products Group, he sanctioned Nick Leeson becoming a trader in 1993, and was his direct boss. Mr Baker reportedly assured Alco members repeatedly that Mr Leeson's unusually large trades were risk- free, and that he knew of the clients apparently behind them. Mr Baker is no longer actively engaged in the business.

Mary Walz, who supervised south-east Asia within the Financial Products Group in London, has also been stripped of managerial responsibilities.