Their man in Singapore

Kit McMahon

ALL THAT GLITTERS: THE FALL OF BARINGS by John Gapper and Nicholas Denton Hamish Hamilton, £20, pp. 384 Here's a funny thing.

Last February Stephen Fay produced a full and vivid account of the events that had led up to the collapse of Barings 12 months before. Having interviewed virtual- ly everyone concerned except Nick Leeson himself, he provided a convincing explana- tion of how, seemingly incredibly, one young man was able to run up losses in Singapore on a scale that broke the City's oldest merchant bank.

Now, seven months later, two Financial Times journalists have produced a book on precisely the same subject which their pub- lisher (Hamish Hamilton, no less) is pre- pared to describe in the dust-jacket blurb as telling 'for the first time the full enthralling story'. Moreover, the authors make no reference of any kind anywhere to the earlier book. (Fay himself is mentioned once in a footnote, but only as the author of a book on a completely different subject published many years ago.) This would be a surprising display of bad manners even if they had produced major new evidence leading to significantly different conclusions and therefore effectively super- seded the earlier book. But since they follow Fay on all important points and come to all the same conclusions, their silence might seem to raise more serious issues than politeness.

Fay established that Leeson was not the plausible scallywag that he presented himself as on the David Frost show, who started his famous secret account to shelter mistakes made by his sub- ordinates and gradually got drawn in deep- er and deeper, but a calculating liar who began his unauthorised trading on his own account almost as soon as he arrived in Singapore. Gapper and Denton establish this too.

Fay convincingly demolished the theory, unwisely put forward by Peter Baring immediately after the debacle, that Leeson might have been acting in concert with an outside speculator or customer. Gapper and Denton convincingly demolish it too.

Fay takes the reader step by step through the intricacies of Leeson's trading, his mounting losses, and his increasingly desperate evasions, lies and frauds to hide them from a grotesque network of mis- management, divided responsibilities, office politics and self-blinded wishful thinking above him. Gapper and Denton do likewise.

So what's new? Well, there is undoubted- ly more detail in the new book, which is nearly half as long again as Fay's. The authors give more on Barings' earlier tumultuous excursion into securities trading (from which Barings' top manage- ment learned precisely the wrong lessons) and on the trading operations in Singapore, Tokyo and Osaka while Leeson was operat- ing. But there comes a point with any sub- ject when one can be told more than one wishes to know. For many of the lay read- ers whom they are clearly addressing (because they go to a lot of trouble to explain very lucidly all the business of derivatives, arbitrage, straddles etc) Gap- per and Denton will have gone beyond that point.

They have certainly done their home- work, interviewing, like Fay, virtually every- one concerned except Leeson himself. But they give the impression of valuing facts more for their own sake than as evidence to be used in trying to reach judgments or answer questions. One example of the dif- ferent approaches of the two books will have to suffice.

Among the questions Fay confronted at the end of his book was: could Leeson have done all that he did without a fellow- conspirator inside the bank? Many people thought he could not and the main candi- date advanced for this role (especially by a number of people in Barings) was Peter Norris, chief executive of Barings Securities and Leeson's ultimate boss. Fay, while acknowledging the well-known difficulty of proving a negative, made a strong case against Norris (or anyone else) having colluded with Leeson. But he admitted a worrying conflict of evidence. When Norris visited Singapore a week or two before the collapse and saw Leeson (for the first time!), he said they only spoke for five or ten minutes. But others in the building tes- tified that they were in a room together for an hour or so.

Leeson's own account, which Fay hadn't seen, provides a surprising but convincing reconciliation of two apparently unrecon- cilable accounts. He describes coming in to see Norris in great trepidation (he had to be sick in the lavatory on the way), but hav- ing, when he got there, to wait while Norris made two very long international telephone calls before a blessedly brief and cursory conversation with him.

Fay has now incorporated this new evidence in the paperback version of his book. But Gapper and Denton, with all the evidence before them, do not address the question of whether there was a fellow con- spirator at all. They simply assume that there was not and give without comment Norris's account that he had a very short conversation with Leeson.

The new book does have something gen- uinely new and exciting to offer, however. The authors have secured the transcripts of a number of internal telephone conversa- tions at Baring Securities which took place in the last weeks before the crash. These provide a vivid picture of in-fighting, chaos and rising panic and represent something of a journalistic coup. Granted there is another version of the Barings collapse available, who are Gapper and Denton aiming at? The phrase `Bruges, a town in northwest Belgium' gives some sort of a clue. But how about this description of the inhabitants of Watford, where Leeson was brought up: 'Some of these lower middle classes, as they were categorised in the exacting hierarchy of British class. .. '? The phrasing, together with its curious past tense, might suggest a Martian readership — or failing that, a Middle American one.

Perhaps the target readership is in markets where the Fay book has not

been published. Certainly if there were no

alternative, All that Glitters could be recommended as a goodish read for the intelligent layman prepared to do a bit of judicious skipping. The story is, after all, an amazing one and Gapper and Denton on the whole tell it well. But it is hard to see why one should prefer it to the earlier book which is just as authoritative, more read- able and — now that it is in paperback cheaper.