Due Diligence (17 page)

He stared into his glass. He didn’t answer.

Look at Celia, I said, she’s falling apart.

Did she put you up to this? he asked.

When I told him no, he finished his drink in one shot.

Stay out of it, he said.

Maybe I can help.

Yeah, you can, he said. You can help by staying out of it.

That stopped me. He was like that even when we were boys: cheerful and relaxed until someone crossed into his private territory, and then he’d haul up the drawbridge. I knew that, but I felt I owed it to Celia to try again. So, a few months later, I gave it another shot. This time there was no exchange. Daniel simply got up and walked out of my office, pausing to offer me three words of advice: Fuck right off.

It was the last mention I made of it. Their business, I thought, not mine. Rather ironic, considering.

‘How’s that?’ Henry steps back from the Equity desk and hands me a note. The Dealing Room is still in full cry. The note summarizes the mornings trading in Parnells: our broker has secured another two per cent. When I ask him who's selling, he recounts the names: smaller institutions, plus the market-makers and some arbitrageurs who’ve decided that it’s time to cash in. The game is panning out just as Vance predicted. Though we aren’t there yet, the increased bid has swung the whole momentum of the deal our way.

I guide Henry away from the desks, and we stop beneath a row of wall-clocks. In Tokyo, Bahrain and New York, time passes.

‘What’s this with Sandersons refusing our name?’

‘They’re a bit tight with us,’ he says. ‘No big deal.’

‘You know their Chief Dealer?’

Henry nods.

‘Get hold of him. Find out if there’s a genuine limit problem or if they’re just messing us around.’

He notices something over my shoulder. ‘I think you’re wanted.’

Turning, I find that Sir John, agitated, is signalling to me from the door.

‘What does that guy actually do?’ Henry mutters, and I pretend not to have heard. Reminding him about Sandersons, I move off to find out what has happened now.

5

‘W
e have visitors,’ Sir John tells me. He has been waiting for me just beyond the Dealing Room’s plate-glass door. He seems sober. ‘Two gentlemen from the DTI.’ When he pushes away from the wall I place a hand on his arm.

‘Who?’ I ask him.

‘Some fellow, Skinner,’ he says. ‘I didn’t catch the other one.’

The name means nothing to me, and that isn’t what I meant anyway. As he walks down the corridor I stay at his shoulder. He explains that the two men arrived unannounced, and that he knows as little about it as me. The Department of Trade and Industry isn’t known for sending its functionaries on social calls; the last time they came unannounced like this was the beginning of the Arnold Petrie case. In my head I run through a checklist of our clients: Who is it this time?

We enter Sir John’s office and go through the introductions. Skinner is the taller of the two men, clearly the more senior, and when Sir John invites them both to sit it’s Skinner who declines.

‘We won’t keep you,’ he says. Skinner addresses his next remark to me. ‘We’ve been instructed to make enquiries into a certain trade in Parnells.’

He consults a file and reads the details aloud.

The Johnstone deal. But the speed of this response from the DTI is unprecedented. In the normal course of things, the Stock Exchange would take weeks to decide if the transaction warranted a referral to the DTI, and months of preliminary enquiries before the DTI followed it up. But to have sent two of their people in person immediately? Someone, somewhere, has pulled a string.

‘We informed the Takeover Panel ourselves,’ I say. ‘We understood they were satisfied with our explanation.’

Skinner closes his file. ‘The Department’s obliged to satisfy itself on certain questions. Of course we'll keep the recommendations of the Panel in mind.’

‘Who instructed you?’

He raises an eyebrow.

‘You said you were instructed to make inquiries,’ I remind him. ‘Instructed by whom?’

At this, Skinner looks distinctly uncomfortable. It occurs to me that he isn't actually enjoying this sudden departure from routine, that he hasn't had time to properly prepare.

‘We take our instructions from the Department, Mr Carlton,’ he says finally, and his colleague flips open a briefcase. Two pieces of paper are handed to us: the details of the Johnstone deal above a paragraph of incomprehensible Whitehallese.

Leaning across Sir John’s desk, I hit the line to Funds Management and tell Mannetti to come down. While we wait, I try to draw Skinner out, but he responds to my questions in such vague and guarded terms that he might as well be speaking a foreign language. A language from well west of the City. He reminds me, in fact, a little of Charles Aldridge.

Mannetti arrives. He keeps smiling after I’ve introduced him, but I can tell he’s surprised. I hand him the DTI note.

Skinner asks, ‘Do you trade on your own account, Mr Mannetti?’ but Sir John cuts in to explain that Carltons has clear guidelines for employee trading.

‘Mr Mannetti?’ Skinner presses.

‘Do I trade personal?’

Skinner nods. That is his question.

‘Sometimes.’ Mannetti looks from me back to Skinner. ‘Occasionally. Look, I didn’t buy any Parnells if that’s what you're getting at. Not personal.’

Most of our staff hold accounts with Carlton Brothers, it’s an in-house rule that all private trading goes through us. The accounts are open to the scrutiny of our compliance department, so if any Parnells went through Mannetti’s, Karen Haldane would know. Yesterday I asked her to double-check Mannetti's account: she found nothing.

‘We'll need to see the records of your account, Mr Mannetti,’ Skinner says.

‘What is this?’ Mannetti looks disbelieving. ‘You’re investigating me?’

‘A statement for the past six months should do initially.’

‘You gotta be kidding.’

Skinner is clearly unaccustomed to having his demands questioned. ‘I do not kid, Mr Mannetti,’ he says coolly, and he turns aside to his colleague.

Mannetti steps forward and taps Skinner on the chest with one finger. ‘Hey, smartass. Neither do I.’ Daniel used to joke that with a name like Mannetti, and coming from New York, Tony had to be mafia. Now, in the chilling moment of silence that follows, the joke seems very unfunny. The air of threat is apparent to all of us. Skinner looks like a rabbit caught in the headlights of an oncoming truck. Mannetti stares him down then steps past him, leaving without a backward glance.

Skinner doesn’t seem to know where to look at first. Sir John begins to explain that Mannetti’s an American, and gradually the atmosphere slides back into something like normality. Skinner’s colleague asks who else has been involved with the bid.

‘Our head of Corporate Finance. A few in his team. The PR people.’I shrug. ‘Take your pick.’

‘Names?’ Skinner says, recovering.

But I tell him he’s using a sledgehammer to crack a nut. ‘It happened the way we told the Takeover Panel. If someone suggested it didn’t, I’d like to know who he is.’

‘Mr Carlton, do you trade a personal account?’

Beside me, Sir John mutters, ‘This is absurd.’ But I have Skinner’s measure now. He doesn’t want to be here, he hasn’t had time to prepare for a proper inquiry, and finally, and most importantly, these are not his own questions.

Taking my cue from Mannetti, I face Skinner square. ‘I do have a personal account. I use it to invest long-term. Day-trading is a dangerous business, Mr Skinner. People get burnt. You think you’re onto a winner, then you find you’ve backed the wrong horse.’ He tries to hold my gaze, but he's wilting, so I finish, ‘Even very clever men come unstuck. Perhaps you should keep that in mind.’

That look comes back to his eyes. Mr Skinner, our man from the DTI, is caught in the headlights once more. I tell him to feel free to pass my message on to Gerald Wolsey.

6

D
arren Lyle has called a meeting. It’s common practice for the advisers on either side of a takeover to meet during the course of a bid, but most of our overtures to Sandersons have been rebuffed. Now, after the announcement of the final offer, and Vance’s session this morning before the Panel, Lyle has contacted us. Vance set the terms: two o’clock in our conference room.

While I wait for them to arrive I work on the discs, copies of those I gave Hugh. Scrolling through the Shobai-Carltons deals from December, I try to see them as he might. I focus on one deal, and then another. I assemble deals, break them up and reassemble. I search for patterns. I fiddle. After half an hour I’ve got precisely nowhere and I flick off the screen and kick back.

Odin, I think. How did Hugh do that? It worries me that he retrieved the name, but what worries me more is the ease with which the trick was done. If Hugh found it, why not some keen young programmer in our IT department? Too late now, I regret the whole Odin business.

Vance looks in. Our friends from Sandersons are here.

The Sandersons team, Lyle at their centre, is arrayed on one side of the table; Vance, two lawyers, Haywood, Cawley and me, are seated opposite. Each of us has a folder open in front of him: dogs, marking territory The meeting has not gone well. There was the usual speculation before the Sandersons team arrived: Haywood and Cawley almost convinced themselves that the bid was over, that the Sandersons team was coming to convey the Pamells concession of defeat. It hasn’t worked out like that. Jeremy Quin, Vance’s opposite number at Sandersons, has done much of the talking, mainly a recap of what's already happened. Lyle is doodling on a pad.

‘Jeremy,’ I say, interupting at last. ‘You’re telling us the Parnells aren’t conceding. Is that right?’

Quin turns to Lyle who puts down his pen.

‘That’s right,’ Lyle says.

I ask him why he's called the meeting then. What, I say, do we have to discuss?

Lyle stares at the doodles on his pad. ‘The Parnells want some light shed on the Meyers’ intentions.’

Ludicrous. Cawley snorts in surprise. We’re weeks into the bid, the final offer has been lodged, and now the Parnells want to know the Meyers’ intentions?

‘You’re asking us what the Meyer Group wants?’

‘We’d like to clarify the detail.’

‘The Meyer Group wants Parnells,’ Vance says evenly. ‘How much more detail do you need?’

Quin’s face remains a mask. Lyle, however, turns his head, one of those more-in-sorrow-than-in-anger gestures. He couldn’t look more insincere if he tried. He asks why Reuben Myer wasn't at the Takeover Panel hearing this morning.

Vance says, ‘You lost, Darren. Take it like a man.’

Lyle grins straight back. ‘I bet David Meyer really rubbed your nose in it.’

I flip my folder shut. I tell Lyle he’s wasting our time.

His answer is to turn to Cawley, the youngest of our team. ‘Be a good lad, go fetch the biscuits.’

Cawley reddens, he doesn't quite know how to take it. This is just Darren Lyle's style. He is often spoken of admiringly as ruthless, but there remains a staunch and significant minority view: scum floats.

To save Cawleys from embarrassment now, I make a joke of it. I pick up a pad and move behind both teams like a waiter, taking orders. Forget the Law of the Jungle, this is the City, and what generally prevails here is the Law of the Nursery. Lyle catches my eye as I go to the door, it seems he wants a private word. When I nod, he follows me out.

It’s not the done thing for a banker to wander around a competitor’s offices alone, so Lyle, plastic security pass clipped to his lapel, stays close. We skirt Corporate Finance where a few of those not working on the Parnells bid are huddled together comparing spreadsheets. They watch us out of sight. In the kitchenette, Lyle perches himself on a stool. I open a cupboard, fossicking for mugs and a tray.

‘Not as easy as you thought,’ he says.

It takes a moment before I realize he means the bid. I really have been on the sidelines too long. ‘Darren, you haven’t got a hope in hell of saving them.’ I set a tray on the bench and count the mugs. Two short. I open another cupboard.

‘How’s David Meyer?’

‘Honestly?’

‘Yeah.’ He smiles with malicious pleasure. ‘Honestly.’

I find the two last cups and place them on the tray. ‘Always pleased with our work.’

He laughs. ‘David Meyer is a wanker.’

Spooning coffee into the filter now, I am only half-listening to his opinions on David Meyer. In the space of the five years since he left us, Lyle has elevated himself from the ranks of the lowly MBAs to the Managing Director’s chair at Sandersons: quite an achievement.

But those at Sandersons who once thought they were his friends now find they were merely temporary allies in the onward march of his career. This isn’t just standard office politics either. Lyle leapfrogged two senior colleagues in spectacular fashion to take the Managing Directorship there. A deal with one of their biggest clients had gone badly wrong, the Serious Fraud Office was called in to investigate, and Lyle’s two colleagues resigned in disgrace. Nobody listened, at the time, to their protestations of innocence. Since then the case has been dropped, and Sandersons are said to have paid the disgraced pair substantial severance cheques. For a while there were rumours of unrest at Sandersons, but Lyle seems to have ridden out the storm. To the victor the spoils of an unscrupulous war.

Lyle concludes a vaguely slanderous story about David Meyer. ‘Anyway, he’s your problem.’

‘He’s my client,’ I correct him.

‘Same difference.’

‘No, he’s my client.’ I turn and point. ‘But he’s still your problem, Darren, or you wouldn’t be here.’

One of the secretaries looks in. Lyle reaches over and shoves the door closed in her face.

‘What do you want, Darren?’

‘What’s on offer?’

‘If you don’t stop buggering us around, what’s on offer is a sudden close to this meeting.’ I fill the sugarbowl and get the cream from the fridge.