THE BARINGS DEBACLE : Trader Jailed; Singapore to Seek Extradition : Bank’s Workers Cheer Capture, Word That Firm May Have Buyer

Runaway bank trader Nicholas W. Leeson was in a German jail Thursday night as officials from Singapore prepared to seek his extradition on fraud charges stemming from his reputed role in the collapse of Barings, Britain’s oldest merchant bank.

At Barings headquarters in London, employees cheered the news of Leeson’s capture and word that the company may yet be sold intact. Barings’ court-appointed 1administrators announced late Thursday that they had entered into “exclusive negotiations” with ING Group of the Netherlands.

“ING intends to acquire substantially all of the businesses, assets and liabilities of the Barings Group, including substantially all of the Baring Bros. & Co. bank, Baring Securities and the Baring Asset Management operation,” they said in a news release.

No figure was officially mentioned, but there were rumors early in the day that the company had offered to buy Barings and all its debts for a token British pound, or about $1.60.

The opposition Labor Party, meanwhile, called for an independent parliamentary investigation into the debacle, which was set off by Leeson’s estimated $1 billion in losses in futures trading in Singapore.

Leeson, 28, is scheduled to appear before a magistrate today in Frankfurt, where he and his wife, Lisa, were captured early Thursday after a week on the lam in four countries.

The couple disappeared from their Singapore apartment in a white Mercedes last Thursday, traveled to Malaysia and then to the Southeast Asian nation of Brunei en route to Germany, officials said. They were removed from a Royal Brunei Airlines flight by German Border Police acting on tips from the news media.

The couple were flying under their own names, and Leeson told German authorities that he had planned to make his way to London, although the ticket he had purchased for cash in the Malaysian resort of Kota Kinabalu was written only as far as Frankfurt.

Britain has no extradition treaty with Singapore, but Germany does. The Frankfurt judge is to determine whether there are sufficient grounds to continue holding Leeson while the government of Singapore fights what could be a months-long battle for extradition.

Frankfurt attorney Eberhard Kempf emerged from a meeting with Leeson saying he had been hired to represent the trader. Asked what he expected from today’s hearing, Kempf replied: “Anything is possible. It can be that he is going to be released tomorrow.”

Other legal observers said they considered that unlikely.

When pressed on Leeson’s mood, Kempf would say only that “it is as you can imagine it to be.”

Leeson declined to speak to reporters as he was escorted through the Frankfurt airport wearing blue jeans and carrying a paperback book and knapsack.

His wife is not being held, and there were conflicting reports on her whereabouts Thursday night. Kempf said she had flown back to England, while a spokesman for the Foreign Office in London said she was spending the night in Germany.

One British newspaper has reported that Lisa Leeson worked in the Singapore operation’s back office, which is meant to be the risk-management center of a merchant bank, responsible for confirming trades.

British authorities said they have no plans to seek Leeson’s extradition to England, where some legal experts are suggesting that he cannot be charged because his alleged crimes were committed in Singapore.

Singapore authorities obtained a warrant for Leeson’s arrest Monday based on Barings’ statement that he committed forgery on false contracts and passports. They are expected to present the German court with the warrant and a request for his extradition today.

Meanwhile, the British news media reported Thursday that the Bank of England is continuing its investigation of the role senior Barings officials in London might have had in the fiasco and said Barings Chairman Peter Baring is expected to be forced to resign.

It has been reported that Barings officials sent Leeson as much as $70 million from London to cover his trading losses before he eventually fled. But London newspapers quoted Barings officials Thursday as saying they had been tricked by Leeson into believing he had a new client and that his trading was on the up-and-up.

The European Wall Street Journal reported that an internal Barings report had warned of problems in its Singapore operation last July but that the warnings and advised action went unheeded.

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Times researcher Ulli Seibert in Frankfurt contributed to this report.