Coopers and Deloitte face Barings suit

The liquidators of the Barings Futures operation in Singapore which brought down the merchant bank are suing the division's auditors, Coopers & Lybrand and Deloitte & Touche for more than S$1bn (pounds 460m) each.

Spokesmen for the British parts of the two accountancy firms stressed that the legal action, taken by the liquidators Price Waterhouse, would be confined to Singapore and have no impact in the UK.

A spokesman for Rajah and Tann, solicitors for Price Waterhouse, said: "The claim is in excess of S$1bn (each) for negligence in their 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 was 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.

Entirely separately, the UK administrators of Barings, Ernst & Young, are suing Coopers in the UK and both firms in Singapore. Ernst & Young have refused to discuss how much its own claims are for.

In Singapore, Deloitte & Touche's managing partner, Po'ad Mattar, confirmed the firm had been served a writ of summons and statement of claim by Price Waterhouse.

He said the suit was "not unexpected" but his firm was "disappointed" that the liquidators chose to sue them in Singapore.

Mr Mattar said Deloitte & Touche, which served as Barings Futures' auditors from 1986, when Barings Futures was incorporated, until 1993, was "completely satisfied that the audits ... were conducted with all professional skill and care."

David Compton, partner in Coopers & Lybrand, said the firm was not responsible for the collapse, saying investigations by both the Bank of England and the Singapore authorities had separately concluded that fraud and management failure were to blame.

"We are confident that our work as external auditors was properly carried out and we intend to vigorously defend any claims against us," he said. He said the firm was being sued for an audit it had not completed and would fight the claim.

The Singapore report by inspectors appointed by the Minister for Finance concluded that the bank collapsed because of "institutional incompetence" by senior management and a cover-up of escalating losses.

However, the report also questioned the audits by the two firms, saying they didn't follow appropriate steps to confirm account balances.

The inspectors criticised Deloitte's treatment of the key 88888 account, saying that while the auditors were aware it existed they did not do enough to check on how it had been used. Deloitte has used "inadequate procedures," they concluded.

Coopers & Lybrand Singapore replaced Deloitte as Barings Futures' auditors for the year ended 31 December 1994. The inspectors criticised Coopers, saying appropriate procedures "were not followed," "sufficient work was not done" and unusual transactions "were not adequately examined".

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
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

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

The Jenrick Group: Night Shift Operations Manager

£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

SThree: Trainee Recruitment Consultant - LONDON

£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

Day In a Page

Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all
The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there