Funds ban Barings dealing
Tuesday 21 March 1995
Threats of litigation against Barings and its new Dutch owner, ING, grew yesterday as a number of fund managers said that they had banned dealing with the bank in the wake of its collapse and rescue.
Some institutions which used to employ Barings' broking skills said they would hold back business for a few months to see if the old management guard tainted by the bank's collapse was cleared out, and Barings had shown it can hold on to its best staff.
"There is a general wait-and-see attitude; people want to know that the Barings' house really has been put back to order," said one fund manager.
The strongest pressure was coming from those institutions holding Barings bonds, which are now almost worthless, because ING has said it will not honour them.
Iain Watt, managing director of Edinburgh Fund Managers, has told ING he will not deal with Barings securities until EFM gets satisfaction on its £600,000 bond holding.
"I wrote to ING on 10 March, saying you cannot pay out to ordinary shareholders and then refuse your preference bondholders. But I have had no reply. There are a lot of Scottish companies no longer dealing with Barings," said Mr Watt.
Scottish Equitable has also excluded Barings from its dealing list. "There are lots of angry big investors out there, and the only real leverage they have is to refuse to give us commission business - it is a natural negotiation stance," said a senior Barings executive.
Scottish Amicable is one of three members of a bondholders committee at the Association of British Insurers which is leading the lobbying of ING. Some of theinstitutional bond holdings are in excess of £1m.
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