Barings units may find buyers

March 01, 1995|By New York Times News Service

LONDON -- Optimism ran high within Barings PLC yesterday that the failed firm could be sold within days, probably in pieces, despite the $1 billion loss sitting on its books.

Two days after Barings was brought down by a single trader's enormous losing bet on the direction of Japanese stocks and interest rates, Barings executives said representatives of banks and investment houses from around the world were discussing possible deals with a court-appointed administrator.

The rumored suitors were a veritable roll call of the financial services industry. They included Merrill Lynch, Bankers Trust and GE Capital of the United States, National Westminster Bank and HSBC Corp. of Britain, ABN-Amro of the Netherlands, Deutsche Bank of Germany and various Japanese institutions. None of them made any public statement of their intentions.

Barings executives said they had completed presentations to six potential buyers, whom they declined to identify. Similar presentations are scheduled over coming days as the firm's bankruptcy administrator scrambles to sell as much of the company for as high a price as possible to make up the huge loss incurred by Nicholas W. Leeson, a 28-year-old trader in the Singapore office of Barings.

Mr. Leeson disappeared Thursday, just before Barings discovered the losses. Despite an intensifying manhunt by police throughout Southeast Asia, Mr. Leeson was nowhere to be found yesterday.

Although police in Singapore are reported to have asked for Mr. Leeson's arrest if he is found, they did not specify what crime, if any, he may have committed, saying only that they were investigating a complaint filed against him by Barings. Bankers said that the likeliest accusation would involve making fraudulent statements to Barings managers.

Mr. Leeson was reported to have fled Singapore with his wife on Thursday, driving his Porsche across the causeway into neighboring Malaysia, where he checked into the luxurious Regent Hotel in Kuala Lumpur, the capital. The manager of the Regent Hotel said that Mr. Leeson had left Friday.

There was continued speculation within the firm that Mr. Leeson might have been working with someone inside or outside the firm, perhaps in a deliberate attempt to bring down Barings -- a possibility first raised by Peter Baring, the firm's chairman.

But Barings executives and Bank of England officials said it was still too soon to know how and why Mr. Leeson made his disastrous investments. They said he had covered his tracks skillfully, probably by using a variety of accounts and his knowledge of back-office settlement procedures from his early years with the firm, which he joined in 1989.

Bank of England officials said they hoped that an intensive investigation of the Barings records in Singapore and London would determine the extent to which fraud, lax internal controls or poor regulation in Singapore led to the huge losses.

Barings has three major operating divisions that are all expected to attract bidders: its fund-management subsidiary, which had $46 billion invested on behalf of clients last year; its corporate finance arm, which is one of the most active advisers on mergers and acquisitions in Britain and throughout Europe, and its securities business, which is highly respected for its research and trading operations, especially in Asia, Latin America and Eastern Europe.

"There seems to be an adequate number of interested buyers for all the businesses," a Barings executive said.

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