Barings auditor to escape payout
Barings auditor Deloitte & Touche could escape with only nominal damages over its role in the bank's collapse if fellow auditor, Coopers & Lybrand, reaches a deal with liquidators this week.
On Monday Justice Evans-Lombe agreed to a three-day delay to allow the liquidators and Coopers, now part of PricewaterhouseCoopers, a last chance to broker an out-of-court settlement.
PwC is keen to avoid the publicity of a lengthy trial which could involve an appearance by rogue trader Nick Leeson, whose activities caused the collapse of the bank.
If, as expected, a deal is reached, observers predict the liquidators, from Ernst & Young, will not pursue its £1bn negligence case in the High Court solely against Deloittes.
‘Deloittes is in a strong position since it wasn’t the company’s main auditors. Deloittes seem to be playing hard ball and it would be difficult to open the case without talking about Coopers,’ said one observer.
Deloittes Singapore has maintained its readiness to go to court since a failed mediation attempt by the City’s Disputes Panel in 1998.
A spokeswoman for the firm estimated that the fee income from the Barings’ audit work was only about £10,000. ‘It’s clear we’d only ever settle for a nominal sum. We would have settled in 1998,’ she said.
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