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Leeson and Wife Detained in Frankfurt

March 2, 1995

FRANKFURT, Germany (AP) _ After a week on the lam, the young trader blamed for destroying Britain’s oldest investment bank turned up today on a plane bound for Frankfurt, where police immediately took him into custody.

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, off the 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 233-year-old bank in a matter of two to three weeks.

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 up to an estimated $1 billion.

He and his wife disappeared from their luxury condo Feb. 23 as word of disastrous deals became known.

Leeson ignored questions from reporters as he was moved from an office at passport control to the border police office at the Frankfurt airport.

The Leesons were being held in Frankfurt on a national warrant faxed from Singapore while German authorities awaited an international arrest warrant to be delivered by Interpol.

The airport police director, Klaus Severin, said the warrant listed no charges. The two had not been officially questioned, he said.

After the international warrant is in hand, Leeson is to be brought before a judge in Frankfurt to confirm his identity and the warrant’s validity.

Singapore has an extradition treaty with Germany.

On Sunday, Barings was put under the control of court-appointed administrators, who are trying to assess what can be salvaged of the venerable bank that counted 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 more than $520,000, the newspaper said.

The Leesons bought tickets in their own names on a Royal Brunei Airlines flight that left the Malaysian resort city of Kota Kinabalu on Wednesday night.

Severin said police had heard through the media that Leeson was flying to Frankfurt. They requested that Singapore fax a copy of the arrest warrant as well as pictures of the couple before detaining them.

Upon landing, the plane parked far from the terminal and border police carrying pictures of Leeson boarded the aircraft to verify his identity, witnesses said.

Severin said he did not know why they 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 more than $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.

Barings executives in London did not immediately return phone calls from The Associated Press. The court-appointed administrators who are looking to find buyers for Barings bank 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 to have him extradited to Britain.

The Leesons both worked for Barings in London when they were married in 1992. Barings reportedly sent them to Singapore later that year.

After fleeing Singapore Feb. 23, Leeson checked into a hotel in the Malaysian capital of Kuala Lumpur that same night, leaving 12 hours later. Then the trail went cold for days.

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 three 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 the administrators sell the asset management arm and the rest of the bank. The Guardian said reports suggested depositors might see the value of their deposits cut by a third when they are unfrozen.

The Times of London said Barings’ corporate finance arm is likely to be the first part of the bank to be sold.

Update hourly