Deloitte & Touche, one of the two auditors of Barings, says it will proceed with its defence against a #1bn negligence claim brought by the collapsed bank’s liquidators – despite last week’s settlement with Coopers & Lybrand.
Just hours before the high-profile trial was due to hit court, liquidators at Ernst & Young announced an out-of-court settlement in principle with Coopers, the main Barings group auditor, for an undisclosed amount.
The deal will be finalised before the end of July when the two parties must present documents at the High Court.
Unless a second deal is reached, the case against Deloittes will reach court in October. The liquidators must now decide whether to proceed with the case which, if it runs its full course, is expected to turn into the longest and most expensive in British legal history.
Of a possible second deal, liquidator Alan Bloom, head of corporate restructuring at E&Y, told Accountancy Age this week: ‘Our door is always open for any approach.’ So far, Deloittes has stayed away maintaining that it is confident of its defence.
Deloittes Singapore audited the merchant bank that collapsed following rogue trading by Nick Leeson. The audit contract was worth #10,000 over two years.
Observers said Deloittes is ‘playing hard ball’ in the hope it will only have to pay out a nominal fee in order to prevent a lengthy trial.
It will also be extremely difficult to avoid mentioning the role of Coopers’, now part of PricewaterhouseCoopers, in the bank’s collapse if the trial goes to court leading to adverse publicity which the firm has tried hard to avoid.
Meanwhile, findings from a Singapore Public Accountants Board hearing against Coopers’ partners are keenly awaited.
For more on the settlement see www.accountancyage.com/Business/1122572.
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