sandhu - financial fraud; money scams, embezzlement and swindles in singapore (2013)

Leeson was general manager of Barings Futures Singapore BFS and was seen as a whiz-kid trader because of the amount of money he was thought to be making the bank.. A source told The Stra

Financial Fraud

Financial

balvinder sandhu

© 2013 Marshall Cavendish International (Asia) Private Limited

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National Library Board, Singapore Cataloguing-in-Publication Data

Sandhu, Balvinder.

Financial fraud / Balvinder Sandhu – Singapore : Marshall Cavendish Editions, [2013] pages cm

ISBN : 978-981-4398-39-8 (paperback)

1 White collar crimes – Singapore 2 Fraud – Singapore 3 Commercial crimes – Singapore

4 Commercial criminals – Singapore I Title.

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introduction 7 chapter 1 The Man Who Brought Down A Bank 11

chapter 7 Civil Servants Gone Wild 115

Introduction

White-collar crime is not without its casualties While it usually does not involve death or physical harm, individuals or companies are nonetheless victimised, be

it in terms of the loss of money or value of a product, or even that of the company itself the list of financially-motivated crimes include cheating, forgery, embezzlement and fraud

some of the criminals mentioned in this book are famous—or should we say infamous—while others were involved in relatively low-key crimes But this does not detract from the fact that they have committed crimes and have been made to pay for them

one of singapore’s most famous cases was that of trader Nick leeson, who was responsible for bringing down one of england’s oldest financial institutions then there was the case of David rasif, the lawyer who absconded after taking millions of his clients’ money, and who is still on the run today

and who can forget the case involving the National

Kidney Foundation (NKF), in which its CEO was accused of misappropriating the charity’s funds?

Even senior finance managers often succumb to greed, betraying their employer’s trust to fund their lavish lifestyles or gambling habits, or on expensive gifts for their mistresses Such cases include that of Chia Teck Leng from Asia-Pacific Breweries (APB), who pocketed over $100 million of the company’s money, as well

as civil servants Koh Seah Wee and Lim Chai Meng, who worked at Singapore Land Authority (SLA) and effectively cheated the government organisation of more than $10 million

Financial Fraud also profiles other small-scale criminals

who might not have benefited near as much financially, but committed severe crimes nonetheless

But as we find out, be they small-time crooks or seasoned swindlers, no one is above the law

9

Introduction

The Man Who Brought Down A Bank

Chapter 1:

The Man Who

Brought Down

A Bank

IF THERE EVER was a financial crime in Singapore that garnered the most international interest, it was the case of Nick Leeson The Englishman was responsible for bringing down Barings, one of Britain’s oldest and most prestigious merchant banks As if that wasn’t shocking enough, he was also just a few days shy of turning 28 when it happened.

Just how did a young and relatively inexperienced trader cause the downfall of a 223-year-old blue-chip bank, of which even Queen Elizabeth was a customer? The collapse happened in late February 1995 and was sparked off by Leeson initiating US$27 billion worth of reckless trades on Japanese futures contracts

Leeson was general manager of Barings Futures (Singapore) (BFS) and was seen as a whiz-kid trader because of the amount of money he was thought to be making the bank Of course, a lot of this wasn’t actually true—Leeson was allegedly falsifying accounts and recording fictitious trades in order to hide his trading

losses in Japanese stock futures When this finally came

to the bank’s notice, it had already lost £860 million

On 17 January 1995, the Kobe earthquake shook Japan and its stock market suffered as a result Leeson decided

to try and recoup his losses by gambling heavily on a strong recovery in the Nikkei 225 futures share prices He continued gambling as the market slid further, eventually accumulating a loss of £827 million

While on secondment to the group’s Singapore office, a senior settlements clerk from Barings London uncovered a US$190 million ‘hole’ in Leeson’s account

on 23 February But before he could get an answer from Leeson, the former general manager left the office, never

to return again

Chapter 1: The Man Who Brought Down A Bank 13

the blame Game beGins

On 26 February 1995, the Bank of England announced that Barings had been put under administration

In Singapore, the Commercial Affairs Department (CAD)—which probes white-collar offences—started its investigations by questioning key senior Barings employees such as regional managing director James Bax and director Simon Jones Both surrendered their passports to the CAD Bax was in charge of the group’s Asian operations outside of Japan and reportedly told the CAD that he had no control over Leeson’s trading activities as the trader answered directly to London Although there were rumours that Barings PLC had sent a team to Singapore to check the books just a week before the crisis erupted, the bank denied these allegations and claimed to have no idea of the losses suffered by its Singapore offices

British newspapers reported that investigators had evidence that Barings’ treasury department in London had advanced as much as US$70 million to Leeson Another report said that Leeson had obtained an extra US$130 million in February alone However, a Barings spokesman dismissed these reports as being “purely fictitious”

A source told The Straits Times in early March that

Barings had conducted investigations even before Leeson fled town on 23 February

“Obviously, Barings knew beforehand something had gone wrong and flew three officials down to go through the books before the whole case blew up,” said the source “The officials left in haste just before the authorities moved in and placed Baring Futures under judicial management.”

Both the Singapore and British authorities conducted investigations on alleged fraud and falsification of accounts Judicial managers from Price Waterhouse went through the books and said that they were getting assistance from Leeson, who was arrested in Frankfurt, Germany, on 2 March

When Leeson went missing and the world was talking about him and how he brought down a British institution,

it turns out that he and his wife Lisa were catching some sun by a hotel pool in Kota Kinabalu The couple had checked in to the Tanjong Aru Beach Resort in the East Malaysian state of Sabah and checked out on 28 February.They departed for Bandar Seri Begawan (Brunei’s capital city) the next day, and spent the day at the airport’s transit lounge before flying on two economy class tickets

to Frankfurt, Germany that evening

As more details emerged about the case, it seemed that both the bank and the Singapore authorities were aware that something wasn’t quite right with the operations that Leeson was handling An internal audit that Barings

Chapter 1: The Man Who Brought Down A Bank 15

PLC had done in August 1994 highlighted the problems that eventually led to the bank’s downfall Although top Barings executives in London were aware that the Singapore futures arm was exposed to “significant risks” because Leeson had too much control over both dealing and settlement operations, they chose to keep him as general manager because of his experience and the profits

he had generated for the bank BFS had raked in profits

of $20 million in 1994

And despite the report’s recommendations that Leeson should not retain responsibility for supervision, cheque-signing and other back-office functions, these suggestions were ignored

no controls over leeson

In January 1995, the Singapore International Monetary Exchange (SIMEX)—now known as the Singapore Exchange (SGX)—had also warned Barings about the huge volume of trade built up by its Singapore futures arm The top management of Barings PLC assured SIMEX that the bank had enough assets to back its trades This assurance was given by Barings group treasurer Anthony Hawes, who had flown to Singapore in January after a series of exchanges between SIMEX and the bank

of London Because margin calls were met, SIMEX saw

no need at the time to suspend BFS from trading But the chairman of SIMEX, Elizabeth Sam, noted that BFS only had four clients—three were part of the Barings group and the other was Banque Nationale de Paris.

“The failure of internal controls within the Barings group has allowed the general manager of BFS to commit the Barings group to substantial positions which now account for the loss sustained by the Barings group,” she said

The findings also revealed that Leeson had directed his staff to modify the relevant records, and that “Leeson was able to do this as he was the key manager appointed

by Barings UK to take charge of the dealing and trade settlement functions.”

As such, he was “placed in a position where he could both initiate transactions and also ensure that transactions were settled and recorded in accordance with his own instructions”

This lack of control over Leeson’s dealings seems to have contributed significantly to the bank’s downfall The issue actually been brought up before—in a letter dated 25 March 1992, Bax had alerted London of the danger placed on its Singapore arm, even before Leeson was made general manager of BFS

This letter was directed to Andrew Fraser, head of equities, and it said: “My concern is that once again we are

Chapter 1: The Man Who Brought Down A Bank 17

in danger of setting up a structure which will subsequently prove disastrous and with which we will succeed in losing either a lot of money, or client goodwill, or both.”

“In my view, it is critical we should keep clear reporting lines, and if this office is involved in SIMEX, then Nick (Leeson) should report to Simon (Jones, a Barings director) and then be ultimately responsible for the operations side.”

“If this is not the case, then the involvement of both Simon and myself (as current director of BFS) is inappropriate and needs review.”

As investigations into Barings continued, a host of discrepancies and non-professional behaviour soon came

to light It was first revealed that documents detailing the million-dollar deals in the last eight weeks of Leeson’s trades were missing from BFS and believed to have been shredded.Thankfully, SIMEX had a complete set of records of Leeson’s transactions Addressing rumours that Barings records were shredded on a daily basis, Charles Sng, the SIMEX spokesman, noted that firms were “required under the Futures Trading Act to keep records for at least six years”

A few days later, it was revealed that Barings had suppressed information that Leeson was caught lying to

British regulators when applying for a London trading licence in March 1992 Had regulators in Singapore been informed, they would have demanded more information before deciding whether he would be allowed to work here as a futures trader.

Christopher Sharples, chairman of London’s Securities and Futures Authority (SFA), was quoted by BBC as saying that Leeson had lied on his application form and that Barings had been informed

In the form, Leeson was asked whether he had been the subject of any criminal proceedings or had any county court judgements against him He answered no, even though he had two outstanding judgements amounting

to about £3,000 When Barings was informed, they withdrew Leeson’s name as they knew that he would not have been granted a licence in Britain

As he didn’t require a trading licence from SIMEX at the time, he started working in BFS

did he act alone?

Contradictory reports from different sources soon emerged as to whether Leeson acted alone or if he had help from people in London

In Singapore, the CAD conducted a probe into Leeson’s possible fraud and to show that he forged two

Chapter 1: The Man Who Brought Down A Bank 19

documents to cover losses of 7.8 billion yen that he sustained in derivatives trading If they could prove this, they had a case for extraditing him from Germany to face fraud charges in Singapore, where the maximum sentence for forgery was seven years in prison (Following his arrest, Leeson had told a German court that he didn’t want to be extradited to Singapore.) London’s Serious Fraud Office (SFO) backed the CAD and its request for extradition Another separate investigation was also taking place locally, led by two inspectors from Price WaterHouse who probed allegations of fraud and misconduct by those linked to the Barings scandal These inspectors were appointed by then Finance Minister Richard Hu in early March, and had wide-ranging authority to question officials as well as to seize documents both in Singapore and overseas.

In April, the Bank of England (BOE) admitted for the first time that they did not know about all the cash transfers taking place within Barings, which amounted to more than double the bank’s total shareholders’ capital when

it eventually collapsed BOE governor Eddie George said that Barings PLC had broken the law by transferring large sums of money to its Singapore operations without first

informing the British central bank Banks are required

to inform the BOE in advance if they are transferring money totalling more than 25 per cent of their capital

“It is a criminal offence to advance the money without notifying us,” said George “I can be absolutely certain

to tell you that we did not know as of February 27 that

£443 million plus £317 million were advanced to the bank,”

he told the parliamentary committee cross-examining him during the investigation

In its last audited annual report, Barings’ total shareholders’ funds stood at £308.8 million

the oFFicial investiGation report

The Price WaterHouse inspectors appointed by the Finance Minister released their report to him in September and the findings were made public a month later It singled out Peter Norris, Barings’ chief executive at the time, as the individual to blame for the bank’s collapse.The 183-page report noted that the crisis could have been averted if Norris and other executives, including Bax, did not hinder investigations into a $115 million discrepancy in BFS’ accounts The report concluded that the bank’s collapse was caused by “institutional incompetence and a total failure of internal controls” Norris was named as “the man at the centre of an

Chapter 1: The Man Who Brought Down A Bank 21

effort” to downplay the significance of an unauthorised transaction by Leeson that led to a hole worth $115 million

in the bank’s accounts Although Norris was told about this discrepancy, he discouraged all independent probes, made sure that other directors were kept in the dark and withheld any action against Leeson He had also told Bax

to help to downplay the issue

Bax purportedly then told Leeson to deceive the auditors When group treasurer Anthony Hawes came

to Singapore in February to investigate this discrepancy, Bax instructed BFS financial director Simon Jones to “get Nick (Leeson) out of this loop” and “take on” Hawes.Even though both Bax and Jones had earlier denied being involved in any cover-up, the inspectors wrote that “we are unable to accept their denials”, noting that key individuals were “grossly negligent, or wilfully blind and reckless to the truth” because they kept on sending money to BFS even though there were signs that all was not well in the Singapore operations

The report added that “had Mr Norris and Mr Bax not taken such steps and as a result of proper investigations, the flow of funds to BFS been curtailed, this may have averted the collapse of the Barings group… Instead, in the three weeks leading to February 24, Barings group companies remitted about $1 billion to BFS.”

Another point it noted was that regardless of whether the

management knew about Account 88888 and what Leeson was up to, they could still have taken steps to investigate

“For three years, Account 88888 purportedly escaped the notice of the entire Barings group management Yet within hours after Leeson had fled, Baring Securities London personnel working in London and Singapore with incomplete documentation uncovered Account 88888 and identified it as the immediate cause of the collapse.”The report received international press coverage, the majority of it favourable

extradition From Germany

Following his arrest in Frankfurt on 2 March, Leeson was detained, pending an application for extradition to Singapore As is the practice in extradition cases, German prosecutors argued Singapore’s case against Leeson, with CAD officers helping in the legal arguments

In late March, German prosecutors asked for a report

on Singapore’s legal system and prison conditions in case Leeson’s lawyers asked for him not to be extradited on the grounds of human rights

“Mr Leeson’s lawyer has announced that he will make objections that prison conditions do not fulfil international standards, and that Mr Leeson fears unfair trial against him in Singapore,” said senior Frankfurt

Chapter 1: The Man Who Brought Down A Bank 23

prosecutor Hans-Hermann Eckert Leeson’s lawyer, Eberhard Kempf, did not bring up these objections in court but had raised them privately with Eckert

“The report will be precautionary, in case Mr Leeson’s

lawyers raise such objection,” Eckert told The Straits

Times Since Leeson’s case came to light, British tabloids

had been generating reports about the adverse conditions

of prisons in Singapore Terms such as “harsh justice” and “worsening human rights record” were used liberally.But Eckert wasn’t bothered by this coverage: “I think that prison conditions in Singapore are agreeable and normal, and that Mr Leeson can live in your prisons.”There were also rumours that the UK Serious Fraud Office (SFO) would seek to extradite Leeson to the UK instead, to face charges there However, in May 1995, the SFO said that it wouldn’t be contesting any moves by the Singapore authorities to extradite him It had been unable to find sufficient evidence of the involvement of any London-based Barings employee in the alleged fraud, which was the only grounds for extradition to England.The following month, the Hesse State Superior Court

in Germany accepted all charges levied against Leeson in Singapore’s extradition request The court had initially only accepted evidence supporting a single forgery charge while it waited for the other charges to be translated to German But on 7 June, it ruled that the remaining 11

charges were crimes under German law, which is the main criterion for extradition The 12 charges consisted of four charges of forgery, two charges of defrauding Barings Futures and six charges of cheating SIMEX.

Senior prosecutor Eckert said that “one or two charges

of forgery may break down” and may be dropped, but he was confident of Leeson being extradited to Singapore

“But the other charges are just too strong All in all, I don’t see any chance of him fighting extradition at this stage.”

On 4 October, Frankfurt’s High Criminal Court ruled that extradition to Singapore was allowed on 11 of the 12 charges against Leeson Only one charge of forgery was dropped Ironically, this was the original charge of forgery used to keep him behind bars when he was first detained, which was deemed not punishable under German law Leeson’s case was then handed over to the Federal Ministry of Justice in Bonn for the diplomatic stages of the proceedings The decision would be made in four to six weeks Leeson’s lawyer, Kempf, said after the ruling that he would file an appeal in Germany’s Constitutional Court against the decision, but this never happened

On 7 October, it was reported that Leeson had appointed a legal firm in Singapore to advise him John

Chapter 1: The Man Who Brought Down A Bank 25

Koh of John Koh & Co confirmed that he had been

“asked to advise Nick Leeson on Singapore law”, but declined to give any further comment

By the end of October, it seemed that Leeson had resigned himself to the fact that he would be tried in Singapore He released a statement on 29 October:

“After consulting my legal advisers, I am satisfied that

I will be fairly tried and judged in Singapore I wish to apologise to all Singaporeans for having doubted that I could receive a fair trial.”

“I have decided to return voluntarily to Singapore and I will therefore not be pursuing my appeal against the extradition order in Germany.”

Eckert later revealed that Leeson dropped his right

of appeal against extradition for two reasons: he was convinced he had “no chance” of success and his lawyer was talking to the CAD about the charges

leeson returns to sinGapore

The infamous trader eventually returned to Singapore

on 23 November, 272 days after he fled the country

On flight SQ325 from Frankfurt, he reportedly sat in

a window seat at the rear of the aircraft’s upper deck in business class Although he wasn’t handcuffed, he had

a Singapore security official next to him and two more

seated behind him His wife Lisa sat eight rows behind her husband with his British lawyer, Stephen Pollard

The flight touched down at 4.13pm More than 100 members of the media—some from countries such as Germany, Britain and Hong Kong—showed up at the airport to witness his return The fraudster looked unfazed

as he walked out in a green Adidas sweatshirt, grey trackpants and navy blue baseball cap worn backwards

He didn’t say a word as he emerged in front of the media but managed a smile when an onlooker yelled, “Keep your chin up, mate!”

His lawyer, Koh, told The Straits Times that his client

was “positive about coming back” and was “eager to resolve all the outstanding issues”

“There are a lot of things going through his mind, but he’s not worried that he’ll be made a scapegoat and he’s comfortable that he’ll be treated fairly,” said Koh Leeson was escorted into a waiting police car and taken

to the Criminal Investigation Department, where he was fingerprinted and photographed He was then brought

to the CAD headquarters where he was questioned and gave a statement

Mrs Leeson came out of the arrival hall five minutes after her husband was driven away and took a taxi to the city with Pollard

Chapter 1: The Man Who Brought Down A Bank 27

leeson charGed

Leeson was finally formally charged in court on 24 November 1995 with 11 counts of forgery and fraud No plea was taken as CAD director Lawrence Ang asked the court for more time to question him and the case was adjourned for a week Leeson was held at the top-security Tanah Merah prison until the case was mentioned again

On the day of the trial, Leeson arrived at the Subordinate Court just before 8am and appeared before District Judge Tan Siong Thye about an hour later, dressed smartly in a white shirt with cufflinks, red patterned tie and navy trousers

Leeson pleaded guilty to only two out of the 11 charges

He was convicted on two counts of cheating, with the nine other charges taken into consideration for sentencing.The first charge of cheating Coopers & Lybrand was a ‘simple’ one “designed to throw off auditors” Leeson pleaded for leniency as there were no losses suffered by anyone The second charge was for cheating SIMEX, which was presented as a “desperate attempt

by a judgement-impaired young man in panic trying to eliminate the ballooning losses”

In his hour-long plea, Koh pointed out that Leeson was just a reckless trader and wasn’t out to profit from the cheating “What he did was a cover-up of losses, not

a cover-up of crimes.”

“He was not taking personal positions against the company or against a client to make money What do the facts show? Recklessness Our client is not a crook

If he was, he could have enriched himself.”

And because Leeson had been served with a Writ of Summons in England, which strips him of any gain he might have made, it was unlikely that he would profit from his notoriety “There is no Hollywood movie with Hugh Grant,” said Koh, which drew some chuckles from the packed court

Koh revealed that Leeson had been assisting the CAD

in its investigations and that Leeson would pay the prosecution’s legal costs of $150,000 Leeson’s lawyers—Koh and Pollard—were tight-lipped on whether a ‘deal’ had been struck, although Koh referred to a plea bargain

in his closing statement

Koh said that his client was willing to take responsibility for his actions and his remorse was shown in his plea, his voluntary return to Singapore and his cooperation with the CAD in their investigations Leeson also did not run away at the height of Barings’ losses as he had

“genuinely believed” until December 1994 that he could recover them Around the same time, he was also coping with the trauma associated with his wife’s miscarriage

“He ran away from the situation, not from the law He left because he could not cope with the pressure.”

Chapter 1: The Man Who Brought Down A Bank 29

Leeson was the only person charged with crimes involving Barings’ collapse On 1 December, Koh mentioned again in court that Bax and Jones, Leeson’s immediate bosses in Singapore, as well as senior executives

in London, knew of the discrepancies that led to the auditors being deceived “At one point our client was encouraged to mislead the auditors in certain respects the bosses knew something was amiss but took no action,” said Koh

Deputy Public Prosecutor Lawrence Ang did not seek

a deterrent sentence and said in his closing statement that

he was “leaving the question of sentencing to the court”.Leeson’s wife, Lisa, was not in court and was said to have left the country for England a few days before

“to trade his honesty and his integrity”

“When faced with financial difficulties consequent upon his speculative activities in the 88888 account

which led to a deficit of 7.778 billion yen in the accounts’ equity balance, he tried to trade himself out of them.”

“There was manoeuvring of the transactions or purported transactions in question into and out of relevant accounts intended to give the auditors and SIMEX a superficial reality It was deliberately designed to beguile them.”

In his 18-minute judgement, the judge also noted that Leeson had “placed the integrity of SIMEX at risk”

as the stock exchange would have suspended the trading activities of BFS or liquidated the positions it held if it had known the facts

He also said that the other nine charges of cheating and forgery—which involved about US$256 million—were very serious offences “While the amount of money

is not the only determinant of the length of sentence, it

is a useful practical indicator Where very large sums of money are involved, a lengthy sentence of imprisonment

is warranted… The sentence must be sufficiently substantial to indicate to the public the gravity of the particular offence.”

But the judge also took into account mitigating factors that included Leeson’s surrender, his guilty plea and his cooperation with the CAD The fact that he didn’t profit from his deception and that there were no losses caused

to SIMEX were also taken into consideration

Leeson was eventually sentenced to six-and-a-half years

Chapter 1: The Man Who Brought Down A Bank 31

in prison The sentence was backdated to 2 March, when Leeson was arrested in Frankfurt Leeson was dressed

in a dark suit and a tie and although he looked relaxed when he arrived at court, he blinked and bit his lower lip when the sentence was passed

While there was speculation that Leeson would file for appeal and risk a higher sentence, a spokesman for his law firm said that the ex-trader had decided not to proceed with it when the time came

the man behind the scandal

Nick Leeson comes from a modest background He lived in Watford in North London, and was the son of a plasterer and a nurse He started working after his A-levels to help support his three siblings after his mother died of cancer

The Daily Mirror in the UK quoted his sister: “Nick

has worked hard for what he’s got and he deserves it all

He wasn’t one of those public (private) school types which has had it all handed to him on a plate.”

SIMEX traders had the impression of him as both cocky and friendly and described him as “a real big shot who made big deals”

A trader from a Japanese broking firm said, “Before this thing happened, we all thought that he was unbeatable

He appeared very brilliant, very confident.”

But although he was in Singapore for more than three years, those who knew him seemed few and far between

Most of the traders that The Straits Times approached for

comment couldn’t say much about the man A trader from a local futures firm told the paper that Leeson did not socialise with the other people on the trading floor.But there were signs of stress just before the trader

fled the country Time magazine reported in March that,

a week before he left, Leeson “kept throwing up in the bathroom at work Colleagues didn’t know why.” Two months prior to that, the security guard at the apartment building Leeson lived in had also complained about the trader’s computer printer working overnight

The report also said that Leeson had spoken to an unnamed Barings colleague the day he left Singapore

“He sounded really weird on the phone, like he was in

a really good mood He asked me, ‘How’s life?’ It was completely out of character.”

Leeson was said to have tendered his resignation

to Barings via fax He sent a handwritten note on 24 February—a day after he left Singapore—addressed to Jones and Bax from the Regent Hotel in Kuala Lumpur

In his note, he said that he left because “the pressures, both business and personal, have become too much to bear” He also said that it was “neither my intention nor aim for this to happen” and admitted that the work

Chapter 1: The Man Who Brought Down A Bank 33

pressures had “affected my health to the extent that a breakdown is imminent”.

Nick and Lisa Leeson lived in a private apartment on the fifth floor of Angullia View off Orchard Boulevard

In Time magazine’s 13 March 1995 issue, it said that

the couple “never really seemed to fit into the affluent, neo-colonial lifestyle of Singapore—nor into the city’s multiethnic society”

One thing Leeson did enjoy was Singapore’s nightlife—

Harry’s Bar at Boat Quay and 5 Emerald Hill were among his favourite bars An incident on 16 June 1994 at the Off Quay Pub in Boat Quay led to him being convicted and fined for indecent exposure

A 21-year-old woman had been in the pub with her friends and saw Leeson staring at her through the glass door while she was outside Although she ignored him, Leeson and his friend, Chhze Michael Aloysius, pulled down their trousers and exposed their buttocks to her.The pair pleaded guilty in court and were each fined $200 Leeson was involved in another incident at the Singapore Cricket Club (SCC) While Barings paid for his membership at the SCC, the trader was rarely there It was later revealed that he had been suspended from the club

in 1994 for punching a fellow member Although Leeson apologised to the member after it happened, he still had

to face the disciplinary panel and was suspended for a year.The incident took place when Leeson was in the club’s billiard room and was asked for his membership card when he wanted to play a round of billiards with some friends Ananda Kumar, an official of the SCC’s snooker committee, said Leeson felt slighted when he asked the trader for his card Leeson then abused him during the game and later on at the club’s bar

“He took offence at not being recognised,” said Kumar

“But the club rules are that one should produce one’s card when asked.”

Kumar lodged a complaint, but ran into Leeson again

at the SCC car park later in the night “I was in a cab

He stopped the car, waved his hands, and shouted at me

to get out I did, and was punched by him.”

Leeson later sent Kumar a letter of apology

In his spare time, Leeson was one of the two foreign players for Admiralty Football Club and joined them in their bid to win the National Football League Division Two title in 1993 Robert Tan, the team’s then manager,

told The Straits Times that Leeson was “a friendly and

down-to-earth sort of guy”

Chapter 1: The Man Who Brought Down A Bank 35

After the Leesons fled Singapore, it came to light that they had made travel arrangements to leave the country before the entire affair came to a head Two weeks before the bank collapsed, Mrs Leeson made arrangements with international moving company Four Winds Logistics Service Pte Ltd to leave Singapore in early March Diane Massimiani, an assistant manager at the company, had visited the Leesons’ apartment on 15 February to assess the cost of packing for their move to England “They were taking only basic stuff, like the television, hi-fi and kitchenware,” she said “They were not taking furniture.”She spent 30 minutes in the apartment and Mrs Leeson showed her around

The move to Kent was estimated to cost $3,000 Massimiani received a call on 24 February from a friend

of the couple, who said that they were on holiday but wanted to confirm their upcoming departure on 1 March Of course, the couple had already left the country

by then

the man behind bars

Leeson’s life in the Tanah Merah wing of Changi Prison was a world away from his high-flying life as a trader He was prisoner number 38406-96 and wore the standard prison uniform of blue-and-white shorts and white T-shirt

Although he had asked for a room with a shower and a TV, he ended up sleeping on a straw mat like his two cellmates Leeson became a prison tailor and spent his time writing letters to his favourite football club, Manchester City When he heard that Lisa wanted a divorce, he grew depressed and withdrawn and turned

to religion, said prison sources

Several stories emerged of what Leeson was like in prison and ex-jailbirds that knew him in prison had stories to tell upon their release

Pali Singh was jailed in 1995 for selling drugs and was released early in 1997 for good behaviour He claimed

to have been friends with the man who brought down Barings bank

“When I first met him, he was sitting all alone in the yard No one wanted to talk to him because, you know,

he’s an ang moh and everyone thought, ‘high profile

case, better avoid’… But I was in charge of the hall,

so I thought I’d better get to know him since he was transferred to my section When he saw me, he smiled and introduced himself.”

“Even though I knew him for nearly two years, he never felt comfortable talking about his case If you asked him about it, he would just say ‘Yes’ or ‘No’ He wanted

to keep his private life private.”

Singh revealed that Leeson talked about football,

Chapter 1: The Man Who Brought Down A Bank 37

fish and chips, beer and his life in England Despite speculation from foreign authorities and ex-inmates, Leeson never mentioned to Singh that he had money hidden in overseas accounts

“Nick has never mentioned that he had stashed away cash, even though there were rumours floating around

I should know because I consider myself his closest pal

in jail.”

“When I left prison, he shook my hand and said:

‘Take care and don’t end up in shit again.’ And he told

me to come and visit him in England and we could have

an ice-cold beer together.”

cancer & release

On 7 August 1998, it was revealed that Leeson had been diagnosed with colon cancer and was being treated at the prison ward of the Changi General Hospital

A statement released by his London lawyers Kingsley Napley said that the cancer “had spread to his lymph nodes… As can be imagined, Mr Leeson’s family and that

of his ex-wife, Lisa, are devastated at the news.”

Lisa, who had divorced Nick the year before, said:

“We are in deep shock and our thoughts at this time are with Nick and his family.”

His father, William Neeson, was quoted by the AFP

as saying that his son’s illness had nothing to do with the conditions of the prison in Singapore “The jail is A1 It

is as good as gold,” he said

The next day, it was reported in The Straits Times that

Leeson’s family was planning to travel from England to visit him in prison in Singapore

Leeson had an operation on 9 August to remove a tumour, part of his large intestine and part of his colon

A few days later, his lawyers applied for his early release from prison on the grounds of ill health A month later,

he was reported to be responding well to chemotherapy and his appeal for early release was rejected by the then president, Ong Teng Cheong

A Prisons Department spokesman said that the rejection was based on the likelihood that Leeson would survive his remaining prison sentence

While he was in prison, Leeson wrote Rogue Trader:

How I Brought Down Barings Bank And Shook The Financial World (1996) In 1999, the film Rogue Trader

was released, based on the book and starring Scottish actor Ewan McGregor as Leeson

Leeson was eventually released on 3 July 1999 after serving three-and-a-half years of his sentence He was put on a flight to London—bankrupt, unemployed and divorced

Leeson fully recovered from his cancer and married his

Chapter 1: The Man Who Brought Down A Bank 39