E&Y resigns from Barings case
In an eleventh-hour move, Ernst & Young partners have stepped down as liquidators in the multi-billion pound Barings case due to reach the High Court on 2 October.
KPMG insolvency practitioners Philip Wallace and Richard Heis will take over as liquidators of Barings. The hand over process has yet to be finalised.
E&Y said in a statement that its liquidators Alan Bloom, Maggie Mills and Nigel Hamilton would work with KPMG ‘to ensure a smooth transition and enable the action against the Barings’ former auditors, Coopers & Lybrand London, Coopers Singapore and Deloitte & Touche Singapore’.
E&Y were due to claim Pounds 1bn from Coopers and Deloittes in the High Court for their role as auditors of the collapsed merchant bank. Despite a change in liquidators, the hearing will go ahead. It is expected to be the most expensive in legal history.
E&Y would not elaborate on the reasons for their resignation.
Concerns have arisen that E&Y may not have enough funds to cover the legal costs if Coopers, now part of PricewaterhouseCoopers, and Deloittes successfully defend their positions.
A failed attempt was made earlier this year by a group of US vulture funds, Barings’ creditors, to remove E&Y from the case and replace them with KPMG. The US group bought Barings’ debt when it collapsed in 1995 in the hope of a future lucrative settlement.
KPMG was unavailable for comment.
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