Leave to Act as a Company Director Following Disqualification: Re Barings plc

Abstract

The decision of the Secretary of State for Trade and Industry to seek disqualification orders in the High Court against several former senior executives of Barings under the Company Directors' Disqualification Act 1986 (CDDA) has brought the bank's collapse firmly into the province of company law. The immediate cause of Barings' collapse in February 1995 was put down to the unauthorised trading activities of a group subsidiary, Baring Futures (Singapore) Pte Ltd, on the Singapore International Monetary Exchange. These activities were attributable to Nick Leeson, the senior floor trader and general manager of Baring Futures. The unauthorised trading produced losses amounting to some £827m which were concealed by Leeson in an unnamed client account. The bank's collapse raised fundamental questions about the system of financial regulation and, in particular, the interaction of banking supervision and the regulation of financial services under the Financial Services Act 1986. For present purposes, it also exposed the failure of the bank's senior management to maintain a proper system of internal controls.