Due Diligence (5 page)

He gives a brief shake of the head. Glancing around the panelled room, I recognize a few faces, just enough to make me understand that this is my father’s world, not mine. But the man answering questions, him I do know. It is Roger Penfield, even with his back turned he is quite unmistakable: broad shoulders; a well-tanned scalp that gleams beneath the camera lights; a voice as smooth as velvet. He is the Deputy Governor of the Bank of England. But I seem to have arrived just as the Committee Chairman is thanking Penfield for his time. Penfield rises, buttoning his jacket. As he walks past me on his way to the door he grins with fellow-feeling and rolls his eyes: Westminster. Not his favourite place either.

The Committee Chairman consults his agenda and asks if Darren Lyle is here. While Darren makes his way to the table up front, there is a general stir as everyone stretches, or talks with a neighbour. Several men in suits - Bank colleagues, I presume — follow Penfield out of the door.

Covering my mouth with my hand, I tell my father quietly, ‘Daniel left a note on the Odin loss.'

My father acknowledges someone across the room. ‘Yes?’ he says, smiling with his teeth.

‘Our compliance officer found it.’

‘Is it a problem?’

'I don’t think so. It’s just the numbers. Odin isn’t named.’

My father considers a moment. ‘If you can stop it without a fuss, stop it. If not, don’t worry, it can’t be traced.’

Nodding, I drop my hand. Darren has settled into place before the Committee, the room falls quiet now. The Chairman welcomes him, and asks him to give a quick outline of the work done by the ‘Best Practice’ committee. Darren complies, but when he starts to ramble the Chairman cuts him off. ‘Thank you. Now perhaps we can move on to some specifics, Mr Lyle. If you don’t mind.’

‘I don't mind.’

The Chairman doesn’t like it, but Darren’s riposte draws a titter from the room. Maybe there really is some substance to the rumours that Lyle is considering a move into politics. Playing to the gallery is something he does well.

A series of questions and answers follows. The Committee members try to score points off one another, while Darren remains polite and helpful, a side of him we never saw much when he worked at Carltons. My gaze wanders down to my watch. I am terribly tired, but when I find myself drifting into thoughts of Daniel I take a deep breath and look up. I cannot afford to dwell on it. Not here. Not now.

It’s another fifteen minutes before they finally touch on the matter that concerns Carltons.

‘I understand your “Best Practice” committee produced a series of guidelines for those banks which wished to tender for Government business.’

‘Yes, that’s right,’ Darren Lyle says.

‘The guidelines would cover privatization business too?’ the Chairman prompts.

Lyle nods. ‘Among other things.’

The Chairman asks when the guidelines were published. Lyle tells him. ‘So they were published before tenders were invited for the privatization of the Government Laboratories, then. Is that right?’

‘Months earlier,’ Lyle agrees.

Carltons was the Government’s main adviser on the deal; we underwrote the flotation. It must be clear to a good many in the audience just what this is building up to. Darren Lyle, we all know, is no friend of Carltons.

‘And would you say, Mr Lyle,’ the Chairman enquires, ‘that your committee’s guidelines were respected in this particular case?’

This is Darren’s big moment, he pauses as if he is actually considering the question. ‘No,’ he says at last. ‘No, I wouldn’t.’

Now I sense the eyes turning towards my father and me. After all Lyle’s innuendo, our family, and our bank, really do not look good. But this damaging moment is suddenly broken when a northern MP on the Committee remarks, ‘Aye. ‘But ’twould ’a’ been with proper law, not daft guideline rubbish.’

The Chairman goes scarlet. Another Committee member chokes back a laugh, and a murmur of amusement ripples around the room. It becomes louder when Darren cranes round and everyone sees how cross he looks. More than cross, he is absolutely livid.

The Chairman attempts to reassert himself. ‘Mr Lyle, would you tell us exactly how the guidelines were breached?’

Darren obliges. He does his best to maintain a note of shocked surprise at how the privatization was carried out: he even mentions Carltons by name several times, but the sting has been taken out of the implicit condemnation now. After the northern MP’s gruff intervention, all of Darren’s fine phrases about probity, self-regulation and integrity just sound like so much City cant. He shifts uncomfortably in his seat as he speaks.

‘It appears a horse and cart were driven through the guidelines,’ the Chairman says.

‘My committee’s job was advisory, not regulatory,’ Darren responds. He is defensive. Unexpectedly, we seem to have been carried over the worst of it by sheer good fortune. The Committee asks more questions, but Lyle answers now with a good deal less enthusiasm than he showed earlier; and soon the subject moves on from anything that might concern Carltons.

‘Not so bad,’ I whisper to my father.

He smiles, thin-lipped, and we sit through another ten minutes of questions to Lyle before the Chairman looks left and right. ‘Nothing else then? No? Nothing?’ It appears to be over. He begins thanking Darren for his time, and I have half-risen from my chair when the only woman on the Committee speaks.

‘Just one thing before you go, Mr Lyle.’ She smiles disarmingly at the Chairman, who stops mid- sentence. ‘With your experience in the City,’ she says to Lyle, ‘perhaps you might suggest any other City-to-Government links that deserve this Committee’s scrutiny.’

Darren pauses. ‘The privatizations? I’m sorry, I’m not with you.’

He is not the only one. The Chairman is looking at her curiously, it is clear this was not on his agenda.

‘I’m thinking of particular areas,’ she says. ‘Departments. For example, the Department of Social Security and the City, links like that.’

Lyle drops his head to one side. She elaborates. ‘If you could give us a specific department to focus on, it could save us some time.’

Beside me, my father stiffens.

‘A particular department?’ Lyle asks.

‘Yes,’ she tells him. ‘If you can.’

Darren thinks a moment, trawling for some hidden reef, then at last he seizes the opportunity. ‘Defence,’ he says.

‘Thank you,’ the Chairman breaks in.

‘And the general rule,’ the woman concludes, ‘is to keep Government and business well apart?’

Darren turns in his chair, smirking. ‘One time it doesn’t pay to keep things in the family,’ he says.

The eyes are on us again, and now no-one is laughing. Rage, pure rage, wells up in me. I feel the restraining pressure of my father’s hand on my knee. The Chairman suggests a fifteen-minute break. There is no time to gauge how damaging Lyle’s last sally has been. The Committee rises, then we all rise, my father guiding me out ahead of the crush.

‘Don’t hang about,’ he says in the corridor. ‘We’l1 look ridiculous.’

‘What’s he playing at?’

‘I’ll speak with Charles.’ He nods to the exit. ‘Go on.’

But at the exit I look back, only to see Lyle in the corridor chatting amiably with that woman MP. And right beside them is Gerald Wolsey. Westminster games. Turning sharply, I walk from the shadowed hall, out into the cold afternoon.

5

S
ir John pours us both a drink. ‘Stephen tells me you’ll be working with him on the Meyer bid. Be like old times for you.’

My arm rests along the back of the sofa. Sir John’s‘ office has no Reuters or Blomberg screen, and there is no PC either; it feels more like a country-house library than a place of work. The Turner watercolour behind his desk is a piece from his private collection.

‘That’s not what I came about.’

‘No,’ he says, handing me my drink, ‘I thought not.’ He slumps into his favourite armchair, asking how things went at the Select Committee.

‘Penfield was there.’

‘Darren Lyle?’

‘Star of the show.’ Running a finger around the rim of my glass, I add: ‘That’s not what I came for either.’

He sips his whisky, then sighs. ‘The arrangement?’

Yes, I tell him, the arrangement.

He takes a real swig this time. Carlton Brothers, under Sir John’s instructions, and in my absence, has borrowed money from one of the clearing banks and used the funds to buy that same clearing bank’s shares. Privately, at his club, I shouldn’t be surprised, Sir John has agreed to warehouse this parcel. A cosy arrangement: they get protection from predators, and we get a powerful friend. The money has passed through enough intermediaries to make the transaction opaque, but in principle the deal is illegal. I want it undone.

‘Useful friends,’ he remarks of the clearing bank.

‘Not once the Stock Exchange gets its teeth into us.‘ They’ll run a mile.’

'I don’t believe so.’

‘I don’t want a debate, John. I just want us out of it.’

We’ve had this conversation once before. Then, I suggested he undo the deal: now I am telling him. Still nominally my superior, Sir John looks peeved.

‘They’ll be furious, Raef. They’re relying on us.’

‘Then you’ve got some work to do.’ Our eyes lock for a moment before his gaze slides away. He turns his glass in his hand. When my father resigned the Managing Directorship of Carltons nine years back, there was some soul-searching before he appointed Sir John to replace him. I was ruled out early — still too young, my father thought. My turn, he promised me, would come. But the other candidate was Charles Aldridge, eminently suitable, and it cost my father a good few sleepless nights before he made his final decision. Sir John, Deputy Manager at Carltons then, got the nod. Charles seemed to take it well enough, but relations between him and Sir John have never been quite the same since. And more than once lately I’ve wondered if my father didn’t perhaps choose the wrong man. I have nothing against Sir John, not personally. But professionally I’ve lost all faith in him. Nine years ago he was a good banker, exceptional even, but changes in the City and an over- fondness for alcohol have steadily clawed him down. The days when I admired him as much as I admire Stephen Vance are well and truly over. Yet, for the man he was, I retain a vestigial respect; next to my grandfather and Stephen Vance, Sir John has taught ~ me more about banking than anyone.

I certainly do not enjoy seeing him hanging his head before me now. To help him over his embarrassment, I ask if he's coming down to the shoot at Boddington tomorrow.

‘Wouldn’t miss it,’ he says. ‘Wouldn’t miss it.’ He seems relieved by the change in subject, and for a few minutes we discuss the shoot. But as soon as I feel I’ve soothed the bruises raised earlier, I set my glass down.

Disappointed, he urges me to stay. ‘Just five minutes, Raef.’

In his eyes, I see something I’d rather have missed. Sir John, the mentor of my youth and caretaker of my inheritance, does not want to be left drinking alone.

6

N
oise crashes over me like a breaking wave; the markets are in full cry. Henry Wardell is behind his desk in the Dealing Room, almost hidden by a high bank of screens and squawkboxes. His hands are cupped to his mouth, and he’s shouting. The Chief Dealer at Carltons, this room is his domain.

When he pauses, I ask him what’s news.

He points to a screen. The US Discount rate has risen half a per cent. The equities screen is awash with red numbers, but as I watch the numbers start turning blue: the bargain hunters moving in.

‘Were we set?’

‘We’ll do okay this time.’ Henry gives me a look. The last Rate rise we were caught flat-footed: our Chief Economist was convinced it wouldn’t happen, and when it did happen we took heavy losses across the board. Our Chief Economist's name is William Butler: here in the Dealing Room they call him Billy Bullshit.

‘Heard anything on Daniel?’ Henry asks me, and I turn my head; no. He hits his keyboard and bonds replace equities on the screen. ‘That fat bastard came to see me,’ he says. ‘The Inspector guy. Ryan.’ He lifts his eyes from the screen and shouts at the bond desk, ‘Dump it!’

‘What was he after?’

‘Christ knows.’ Henry scribbles a number on his deal-sheet. ‘Was Daniel different lately? Stuff like that.’

‘What did you say?’

‘Nothin’.’

There is another flurry of activity, an increase in volume. Henry shouts at the proprietary desk this time. In here Henry has none of the awkward self- consciousness he displays outside. Here in the loosely- reined chaos of the Dealing Room he is completely at home. In his mid-thirties now, he joined the bank a year or two before me, straight out of sixth form. Initially a clerk in Settlements, he convinced one of the desk managers out here to take him on as a trainee. Since then his career has been a steady rise, the past few years under Daniel’s tutelage. He has a gaunt look, prominent cheekbones and sunken cheeks. His voice now as he shouts across the room is surprisingly loud coming from such a small frame. But he doesn’t bully, he commands: here in the Dealing Room he has earned their respect.

I ask him if Karen Haldane’s been down.

‘What for?’ he asks, and I explain about the scribbled note that Daniel left behind. ‘Ahha,’ Henry says.

Then Owen Baxter comes over. Owen tells Henry that one of our trading lines is full, not an unusual problem for a small bank like ours. We have limits on our exposure to all the counterparties in the market, the other banks and institutions, and at busy times like this our trading lines fill fast. Generally we have to convince others to increase their exposure to us: this time, Owen explains, it’s a small Canadian bank which needs our limit for them increased.

Henry asks by how much.

‘Fifty in the one week.’ Fity million US, one week forward. ‘They’re the only decent bid we’ve seen,’ Owen says.

Henry glances at me. The extra exposure will roll off in a week, and Owen looks like he really needs it. I nod.