SINGAPORE issued a stinging report yesterday on the collapse of Britain's oldest merchant bank, Baring Brothers, claiming its senior management was largely to blame.
Inspectors appointed by Singapore's Ministry of Finance found severe shortcomings in the organisational and reporting structure within the group.
Barings collapsed on February 27 with accumulated losses of GBP830 million (HK$10.1 billion) run up by Singapore-based trader Nick Leeson.
Leeson fled to Germany and is in a Frankfurt prison where he is fighting extradition to Singapore.
The investigators blamed the collapse of Baring Futures (Singapore) on 'institutional incompetence, a general lack of understanding of the futures business among its senior executives, including those managers who were directly responsible for the futures business'.
They also attributed the collapse on 'a total failure in internal controls and the efforts of senior executives to hinder investigations into the discrepancy identified by external auditors'.
By placing Leeson in charge of both trading and settlement operations, Barings breached 'a fundamental principle of internal control, namely that responsibility for these functions should be separated'.