'610m failure of auditors in fall of Barings'

AUDITORS being sued for 1 billion over the collapse of Barings Bank were branded incompetent in the High Court today for failing to spot the illegal dealings of rogue trader Nick Leeson.

Charles Aldous, QC for the bank's liquidator KPMG, told Mr Justice Evans-Lombe there were "elementary" failings which even a newly qualified auditor should have picked up.

He said there was "no excuse" for not spotting Leeson's unauthorised dealings over three years in Singapore which alone produced losses of 610 million. Barings went bust in 1995 with total debts of 850 million. "If this basic audit failing had not happened none of this would have occurred and Barings would still be here today," said Mr Aldous.

Defending the claim are the British and Singapore branches of Coopers & Lybrand, now part of PricewaterhouseCoopers, and the Singapore branch of Deloitte & Touche.

Mr Aldous said the judge should not be deterred from finding the auditors negligent as they were paid more than 1.5 million a year. "Barings were entitled to expect a high standard from these two firms," he said.

The hearing, expected to cost 50 million and last 18 months, continues.

Copyright 2001
Provided by ProQuest Information and Learning Company. All rights Reserved.