Leeson's bosses now in spotlight turns on

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AS Nick Leeson settles down to prison life, in a cell shared with two other men and the prospect of practically no privacy, he may be consoled by the thought of what faces his former superiors who are under investigation by the Singapore authorities.

It is clear from the Singaporean independent investigators' report into the collapse of Barings that the man held most responsible for covering up Leeson's losses is Peter Norris, the former chief executive officer of the Baring Investment Bank Group, who may face extradition from London.

Mr Norris was known in investment circles as a man of extreme self-confidence, with a reputation for turning round difficult situations. He was brought in to restore the division's profitability. The paper profits made by Nick Leeson in Singapore were helping him to meet this objective.

More vulnerable than Mr Norris are Leeson's two immediate superiors in Singapore, James Bax and Simon Jones. Both men have had their passports confiscated.

Mr Bax, the former managing director of Barings Asia Pacific, is credited with building up Barings' enormously successful stockbroking activities in Singapore and then developing more business by expanding into areas such as futures trading.

It was Mr Bax who took the initiative in warning his superiors in London about the lack of supervision over Leeson's activities, yet in the Singapore inspectors' report he is portrayed as a liar and a party to covering up the losses.

Simon Jones, the former chief operating officer for Barings South Asia, is from an Anglo-Japanese background and came to Barings after managing Japanese funds. Like Mr Bax, he was popular in Singapore financial circles, unlike Leeson who had a reputation for mixing only with his staff and other expatriate futures traders.

It is not clear what incriminating material Leeson may have on these men but he is uniquely placed to give testimony on his relationship with his superiors, which should help to explain how his losses were concealed and why the parent company kept funnelling money in to cover the losses.

The Bank of England blamed all Barings' directors for "a catastrophic failure of management", but found no evidence of a conspiracy or cover- up. Since the Singapore report, however, it has said it would examine whether Norris misled Britain's Board of Banking Supervision.

Norris voluntarily met the Bank of England's supervision director, Brian Quinn, and its special investigations head, Ian Watt, after the Singapore report to discuss discrepancies.

Meanwhile the securities regulator, the Securities and Futures Authority (SFA), is also investigating 12 former Barings officials, including Mr Norris, the ex-chairman Peter Baring and deputy chairman Andrew Tuckey. Expulsion from SFA membership would disbar them from ever working in securities again.

In Singapore John Koh, Leeson's lawyer, has revealed that he negotiated for some two months to bring his client back to Singapore for trial, part of the careful planning for the very rapid execution of justice.

Leeson is said by his lawyers to be without assets. Even the proceeds for his forthcoming ghost-written book are to be swallowed up by legal fees and other costs. As a final indignity Leeson was landed with another bill yesterday for S$1,605 (pounds 740) to remedy a shortfall in a sterling payment he made to cover the prosecution's costs. This arose from devaluation of sterling following the Budget.

As with his gambles on the futures exchange, Leeson had failed to hedge his holdings in sterling to ensure he would not suffer from a devaluation.