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The Independent Online

Heard the one about the man who lost a packet at Lloyd's so put his money where it would be safe ... Barings?

No, it is not a joke, but it could be the archetypal investment story of the Nineties. Michael Stearn, 50, deposited enough money at Barings to enable him to continue underwriting after three successive losing years in the insurance market, but discovered this week that all the cash has been frozen.

He is one of a growing number of individuals, charities, pension funds and corporations waiting to find out if their assets will ever be recovered following the disastrous collapse of Barings on Sunday.

Potential new victims to come forward yesterday included the London Transport pension fund, which could lose up to £20m.

Mr Stearn's problems began when administrators Ernst & Young froze the assets of Baring Brothers & Co, the banking arm of the group. "I had deposited a large sum of money so that Barings could issue a bank guarantee to Lloyd's so I could continue trading as a `name'," he said yesterday.

"But now I'm told it has been frozen. I simply can't believe my bad luck. I have lost money at Lloyd's for three years running - and now this happens. "

Mr Stearn, a marketing consultant from Woking, Surrey, will not say how much he deposited at Barings, nor how much he lost at Lloyd's.

However, Lloyd's `names' must have £250,000 in unencumbered assets to be called upon in the event of a loss. And the last three sets of results at Lloyd's, totalling deficits of £6.4bn, mean that most members have faced losses running into six figures.

"I just think that people ought to know that when they go into a bank to deposit some money ... some young trader in Singapore can gamble it away on something called derivatives," he said. "I got involved with the City's two blue chip institutions and my experiences show that no one is safe."

A spokesman for Ernst & Young said cash deposits were unlikely to be returned.

However, could it be that, since Barings issued Mr Stearn's guarantee, it would be responsible in the event of a call on his assets?

"No," said a Lloyd's spokesman. "If his guarantee is frozen, we reserve the right to go for his other assets ..."