Barings win right to sue auditors in UK
Saturday 03 August 1996
Spokesmen for Coopers and Deloitte in Britain stressed this would only affect the Singapore parts of these firms, which are separate legal entities.
Price Waterhouse, on behalf of ING Barings, will, however, be able to summon Barings directors to testify in the case. ING Barings was formed after the Dutch bank ING rescued Barings following the Nick Leeson debacle last year.
The UK High Court judge Justice Chadwick yesterday threw out an application by Coopers Singapore. Two Coopers auditors claimed that the ING Barings lawsuit had no legal validity in the UK because any alleged negligence took place abroad.
The judge said a UK court hearing would be the best option in the case. The ruling will oblige Barings directors, some of whom were blamed by a Bank of England report for allowing Leeson to remain undetected, to give evidence in court.
Mr Justice Chadwick told the court: "I am satisfied that composite proceedings in London offer the best chance of achieving the two objectives which I regard as paramount.
"That is to say firstly avoiding the risk that different courts will reach different conclusions on the same underlying facts and secondly avoiding the risk that Deloitte & Touche or Coopers and Lybrand (Singapore) will be sued in both London and Singapore in respect to the same transactions."
He added: "Most, if not all of the relevant witnesses are based in London and, if not called by the plaintiffs will be available on subpoena."
Coopers and Deloitte performed the audits for Barings Futures before the bank's collapse.
Singapore-based Rajah and Tann, solicitors for Price Waterhouse, have said its claim is in excess of S$1bn each for negligence in the audits of Barings Futures. Nick Leeson lost more than pounds 860m while in control of Barings Futures leading up to and after Christmas 1994.
The suit, filed in Singapore's High Court, also claims that the auditors failed to detect Leeson's hidden account 88888, which he used to hide the gigantic losses that brought down Britain's oldest merchant bank.
Deloitte & Touche is being sued for negligence for the period 1992-1993 and Coopers & Lybrand for the period from then leading up to the firm's collapse in February 1995.
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