Barings’ liquidator Ernst & Young will tell the High Court that the failure by auditors acting for Coopers & Lybrand and Deloitte & Touche to discover Nick Leeson’s £860m unauthorised trading amounted to professional negligence, Accountancy Age has learned, writes Lucinda Kemeny.
In a triple claim, E&Y is taking action against Coopers & Lybrand Singapore for its 1994 audit of Barings London as well as the firm’s London office which acted as watchdog. Deloittes is also being sued because it was auditor for the years 1992 to 1993 before Coopers’ appointment.
‘The claim is for professional negligence in the conduct of the audits of a number of Barings companies between 1991-1994,’ an E&Y spokesman said. ‘We believe that they did not meet the standards required and failed to discover Leeson’s trading which we contend they should have.’
The £1bn trial is due to begin in February 2001 and is likely to last at least 30 weeks.
With legal fees expected to run to several million pounds, Deloittes and Coopers offered to settle last year. But now the firm’s legal argument has been settled, E&Y’s head of insolvency Alan Bloom said the firm was ‘going hell for leather’ for a court hearing.
PricewaterhouseCoopers has contacted Leeson’s solicitor but has not yet interviewed Leeson, who has already met E&Y and Deloittes. He is not expected to stand trial.
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