Senior executives at the Singapore office of Barings, the merchant bank that collapsed last year with losses of GBP830 million (about HK$9.86 billion), were yesterday alleged to have conspired in a huge 'cover-up' that prevented the fraud being detected earlier.
The former head of the financial products group at Barings, Ron Baker, said a GBP50 million fraud had been hidden from him and that his name and office had been used fraudulently to 'obtain audit clearance from Coopers & Lybrand Singapore, for a spurious transaction invented by Nick Leeson to cover his cash-flow deficit in account 88888 at year-end 1994'.
In testimony to a British parliamentary committee investigating the bank's collapse in February last year, Mr Baker said senior management had known of the fraud since early January.
He said he started taking responsibility for the trading of Leeson - now serving six years for fraud in a Singapore jail - only in the first six weeks of last year.
With hindsight, he said, the fraud could have been uncovered if he had taken charge a year earlier.