Second secret account is found
Wednesday 15 March 1995
The investigation into Barings' huge loss in Singapore has uncovered another "secret error" account similar to the one in which dealer Nick Leeson allegedly hid his rogue trades.
Members of the team unravelling Leeson's network of deals are understood to have found the second questionable account during a visit to the futures exchange in Osaka, Japan.
It is not known whether the account, named Error Account 92000, will yield more unpleasant surprises for Baring utures in Singapore. But it is thought that its discovery will result in Singapore's Commercial Affairs Department - the equivalent of the Serious raud Office - examining the records of other Barings traders. Some investigators are known to be anxious to rule out the possibility that the culture of concealment of bad trades was endemic within Baring utures.
Leeson's other error account, No 88888, was the vehicle through which he allegedly built up £840m losses without the knowledge of the bank in London. Within the banking community here, however, there is a degree of scepticism over the suggestion that Leeson's activities remained undiscovered and unchecked for so long.
Error accounts are not uncommon. They can be used in disputes or to hold losses on a very short term basis until other trades can sort them out. But it was the way Leeson misused his that has concerned investigators.
Yesterday, as the 20 strong Baring futures staff began their enforced paid leave, Peter Teo, the assistant regional manager of ING, the company's new owners, denied that the employees would not be re-appointed and would not receive bonuses for 1994.
His boss, Cees Maas, said on Sunday that no utures staff would be given bonuses. But Mr Teo said: "Only those found responsible for the debacle will not receive bonuses."
He also said ING wanted to keep the staff intact. Employees however were sceptical. "We have been told categorically that we will not be receiving a bonus," said one. "Everyone has been offered at least one job, in Hong Kong, Australia or Tokyo. We are just waiting to see what Barings does next. It's unlikely that we will leave as a team because Nick was the main attraction."
The remaining 100 employees at Barings Merchant Bank and securities divisions were told yesterday that staff due bonuses of $20,000 (£13,000) or more will be paid the first $20,000 this week. Those owed more will be topped up to $50,000 in three months and the remaining bonuses, up to $1m, will be paid in six months.
Simex, the Singapore futures exchange, criticised Barings last night for not disclosing that Nick Leeson had lied about county court debts of over £3,000 when applying for a dealers licence in London.
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