and JOHN EISENHAMMER
The Barings bondholders yesterday gave up in their fight to have Nick Leeson, the former Barings trader, tried in London.
They said that they would not seek a judicial review of the decision by the director of the Serious Fraud Office to take over and drop their private prosecution since, as the law stands and on the evidence available, their chances of persuading the High Court to reverse the decision appeared remote.
The Bank of England yesterday responded to one of the criticisms in its Barings report by calling on Arthur Andersen, the consultants, to conduct a thorough review of its supervisory and surveillance departments. The Bank was criticised for not knowing enough about the businesses it was supposed to be supervising, and not responding promptly enough to problems and requests for clarification.
The bondholders said they remained convinced that the proper place for a criminal prosecution of Mr Leeson was in the UK and they did not feel the public interest was best served by allowing him to be sent to Singapore to face what they see as subsidiary charges.
David Harrel, the solicitor at SJ Berwin who is advising the Barings Perpetual Noteholders' Action Group, said earlier this week: "It is bad enough that the SFO has not properly investigated the affair. Then they go and trample on a private prosecution
The SFO, for its part, has always maintained that the most appropriate place for a trial is Singapore and it has stated that it does not wish to compete with Singpaore's extradition request for Mr Leeson.
The bondholders said they would maintain pressure for the fullest inquiry into the Barings affair in the UK. The Perpetual holders' action group speaks for investors who lost more than pounds 50m in the Barings crash.
The Bank of England's report into the Barings' crash recommended that the supervisors needed to be independently supervised. Arthur Andersen is to make recommendations for a new quality assurance mechanism separate from the supervisory division.
The Singapore International Monetary Exchange, which was criticised in the Singapore Barings report for being insufficiently alert to the massive build-up of positions by Barings, said that it had created a new regulatory and risk management division in line with recommendations by an outside consultant.