Trader Blamed in Banking Scandal Detained in Frankfurt
FRANKFURT, Germany (AP) _ After a week on the lam, the young trader blamed for destroying Britain’s oldest investment bank was taken into custody today by German police who said he was heading to London.
Nicholas Leeson, a 28-year-old Briton who reportedly made millions trading Japanese futures, was wearing jeans and carrying a backpack, book and baseball cap when police escorted him and his wife, Lisa Simms, off a flight from Malaysia.
Leeson told German police he wanted to go on to Britain, where his employer, Baring Brothers & Co., was trying to sort out how one man could have brought down the 232-year-old bank in a matter of weeks.
The government of Singapore requested Leeson’s extradition, saying he had committed fraud while working as chief trader for Barings’ office there.
Traders cheered and jeered when news of Leeson’s detention flashed on a giant screen above the floor of Singapore’s futures market.
Leeson and his wife disappeared from their luxury condo in Singapore on Feb. 23 as word of the trading losses became known. They checked into a hotel in Kuala Lumpur that night, but left 12 hours later.
The trail went cold until police at Frankfurt airport escorted the couple off the overnight Royal Brunei Airlines flight from the Malaysian resort of Kota Kinabalu, on Borneo 750 miles northeast of Singapore.
The airport police director, Klaus Severin, said police heard through the media that Leeson was flying to Frankfurt.
Police carrying pictures of the Leesons boarded the plane and escorted the couple to the terminal. Authorities later said Mrs. Simms was free to go because she was not named in the arrest warrant.
Severin said he did not know why the couple had chosen to fly to Frankfurt, but The Daily Express in Malaysia reported today that Leeson went to the airline office in Kota Kinabalu on Tuesday, asked for the next available flight to Europe, and paid $1,500 in cash for the tickets.
``We have not asked him any official questions but I understand he wanted to go on to England,″ Severin said.
Frankfurt’s chief prosecutor, Heinz-Hermann Eckart, told a news conference he had received an international arrest warrant which accuses Leeson of falsifying a passport and mishandling money.
Leeson was being taken to an ``immigration prison″ for the night, said Eckart. ``I would say he will be in prison for three months,″ if he continues to fight his extradition.
Leeson is scheduled to appear Friday before a magistrate who will hear Singapore’s extradition request.
Singapore had said its request was based on a complaint by the Baring Futures company of Singapore that Leeson ``committed offenses of forgery.″ The statement did not elaborate.
Leeson has demanded to be allowed to continue to Britain, his homeland.
Rising from public housing projects near London to manage Barings’ Singapore office, Leeson is said to have made failed bets on the Tokyo stock market that cost the bank an estimated $1 billion.
On Sunday, Barings PLC, the bank’s holding company, was put under the control of court-appointed administrators, who are trying to assess what can be salvaged of the institution that had Queen Elizabeth II among its clients.
In London today, The Guardian newspaper reported the queen could lose more than $1 million deposited with Barings’ asset management arm.
The Prince’s Trust, a charity for young people headed by Prince Charles, could lose $520,000, the newspaper said.
Barings executives in London did not immediately return calls from The Associated Press. The court-appointed administrators who are looking to find buyers for Barings refused again today to discuss Leeson.
The Bank of England also refused to comment, and the Foreign Office in London refused to say whether it was seeking his extradition to Britain.
The Leesons both worked for Barings in London when they were married in 1992. They reportedly were transferred to Singapore later that year.
Court administrators in London said Wednesday they had not found a buyer for the entire bank. But Barings says more than a dozen firms have shown interest in buying its major divisions.
ABN Amro Bank of the Netherlands, National Westminster Bank of London and Wall Street investment bank Morgan Stanley and Co. have been mentioned as potential buyers.
News reports today said retirees, local governments and charities could end up among the losers.
The court-appointed administrators froze deposits, meaning the queen and other clients will not have access to their money until administrators sell off parts of the bank.