As administrators continued their search for a buyer for the ruined Barings brokerage Wednesday, evidence mounted that Barings officials in London knew about the sour dealings of their rogue trader in Singapore several weeks ago, and may even have sent Nicholas W. Leeson millions of dollars to bail him out of his financial hole.
Investigators looking into the estimated $1 billion in losses that brought down the centuries-old Barings believe that the bank's London treasury sent as much as $70 million to Leeson to meet his margin calls, according to Wednesday's editions of the Independent newspaper.
The paper reported that a Barings crisis team flew to Singapore on Feb. 17 to investigate "discrepancies in accounting" on the part of Leeson, who was general manager of Barings Futures in Singapore. That is a week before the bank's chairman, Peter Barings, said he discovered the disaster.
"Cash is thought to have been transferred from London," the daily Financial Times reported in a front-page story.
A spokesman for the court-appointed administrators refused to comment on the reports.
Some British banking experts speculated that Barings executives in London could have known that Leeson was in trouble without knowing the extent or reason for it. "Maybe they didn't know what he was doing, but they knew there were discrepancies," speculated a banking industry observer who asked not to be identified.
What the 28-year-old Leeson did was speculate on the future price of stocks on the Tokyo Stock Exchange using so-called derivatives, which essentially are bets on whether the index will rise or fall.
Analysts have said that Leeson could not have functioned without help from the back office--or record-keeping department--to cover up his losses, and on Wednesday the Daily Telegraph newspaper unveiled a possible cohort: Leeson's wife, Lisa, who is believed to be on the lam with him.
The newspaper reported on its front page that Lisa Leeson, 24, worked in the Singapore operation's back office, which is normally the risk-management center of a merchant bank and is responsible for confirming trades.
Leeson's losses wiped out the 233-year-old Barings, a conservative and, until this year, profitable bank that is now in the British equivalent of bankruptcy.
Spokesmen for the administrators of Barings said Wednesday night that negotiations were continuing for the sale of the remains of the bank.
"It is impossible to say what stage they're at," said Paul Desmond, a spokesman for the administrators. "We are talking about both the whole thing and separate businesses."
Reports of possible bidders included the U.S. brokerage house Merrill Lynch and Abn Amro, the biggest bank in the Netherlands.
Industry analysts said they believe the bank will be broken up, and they stressed that any sales must be closed quickly, before valuable employees jump ship.