Death of a Financier

by John Francis Kinsella

  Barton had been a willing participant in the mortgage crisis, indirectly fuelling the house price bubble by encouraging all and sundry to make fraudulent declarations as to their revenues and invest in everything from BTLs to apartments on the Costa del Sol and even further afield for the wealthier. How could the punters lose? Home prices went up quicker than he could put a loan together, in the euphoria he not only leveraged his clients investments but also his own, acquiring even more property, pumping up the balloon faster than mortgage companies could invent more unbeatable deals for home owners.

  It had reached a point where anyone who could hold a ballpoint pen and was not brain dead could sign up for a one hundred percent plus mortgage on almost any property after self certification. In the words of a friend, the director of a leading bank, it was one of the greatest credit bubbles ever seen.

  The writing was on the wall, the music had stopped, whatever the clich? it was time to get out, and quick, but how? Prices had stalled and were even starting to fall, behind the hype it was difficult to move property. Barton's worse deal was in Dublin, where prices had fallen ten percent in six months.

  To his great regret, he had become involved in the development of a fancy Dublin Bay BTL project. After three months of unsuccessfully trying to let the flats profitably the bank had leaned on him, forcing him into lowering the rents to generate some badly needed cash flow. It was costing him as he pumped money into the Dublin business to cover the shortfall and keep the bank happy, a situation that could not last long and he had to find a way out. To top it all the Irish stock market had lost 26% over the previous twelve months, a bad sign, a very bad sign. The Irish banks had thrown enough money away to make the Northern Rock look like Scrooge.

  The same scenario was unfolding at the Guadalmina Golf and Country Club development in Spain, where he was promoting the sale of luxury holiday homes to British buyers for the first and second phases of the residential development.

  Like in many other businesses alarm bells, rather than tills, were ringing. After a ten year spending boom, hundreds of thousands of over indebted families were plunged into insolvency as their creditors caught up with them. The moment was ripe to move on, to where and into what he was unsure. Dubai looked good on paper, but in view of the quantity of new property the Arabs were putting on the market it was neither the Yanks nor your average Brit who were going to be putting their money there. In any case Tom did not feel happy with Middle Easterners, things could turn nasty out there with Iran just short hop across the water.

  Then there was China, but he knew nothing about the country or its language, his only experience of the Far East was limited to the very friendly manager of an overly expensive local Chinese restaurant in Epping, whom he suspected would shake hands with anyone who could produce a valid credit card. As for Australia the shit had already hit the fan and homeowners, lenders and real estate agents were running for cover.

  Though Tom had taken risks and enjoyed good living, he knew that inevitably all good things came to an end, past experience had taught him that when he had fallen back to earth, but he had always dusted himself off, picked up the pieces and started over again.

  Now, older and wiser, he had had the foresight to set-up what he liked to think of as a disaster fund. He had, on the advice of a good friend at the West Mercian, opened a bank account in Luxembourg, into which he put a little money aside when ever the occasion arose. Barton congratulated himself on his prudence, since unlike Gordon Brown, who in better times had convinced the British public that the boom was all to do with his careful management, he had put something aside for a rainy day, and that day was now at hand.

  That Wednesday morning Barton was about to unload a batch of BTLs he owned at a Canary Warf development. He had bought them off plan three years previously and the prices had more than doubled, even taking into account the unfavourable discount he was forced to concede to his buyer given the changed market conditions. It was a good deal, the BTLs were all occupied by young City executives, who for the moment were still paying their greatly exaggerated rents

  The buyers were Indian investors who owned a chain of supermarkets and were paying cash, which Barton suspected was derived from some undeclared business in the Midlands, wherever it came from it was not his problem, business is business he thought, caveat emptor and the rest of it. Barton would make a cool three and a half million pounds profit after the outstanding loan to West Mercian Finance was deducted.

  Michael Henderson, a serious man who stuck to the essential with few unnecessary questions, confirmed the purchase monies had been received and transaction completed that morning with the buyers' solicitors. All that remained was the hand over of the keys, which Barton promptly produced wishing his buyers success and goodbye.

  He then turned his attention to another task. Henderson had drawn up papers appointing Barton's very capable junior partner and longstanding assistant Michael Smeaton as managing director of the brokerage firm, a limited company, it was Barton's Christmas, if not parting, gift. The business was sound, only Barton's personal investments had been bad.

  Late that morning, after a quick visit to his bank, he headed back to his office, more than satisfied with the day's business in the sure knowledge that his profits were safely now transferred to the Kansallis Bank in Luxembourg. He was ready to announce the anticipated news of Michael Smeaton's appointment as MD, as well as the year end bonuses.

  Henderson had only one further task, which was the transfer of Barton's shares in the brokerage for the symbolic sum of ?1, effective 1st January, to Smeaton, who was to be informed of the transaction immediately the holidays were over.

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  Chapter 4

  Once the serious business was over his next job was to fit himself out with a new wardrobe and prepare for his retreat by joining the Christmas crowds in the West End stores. His needs included a new set of quality suitcases as he planned to be away for an undetermined period of time. Then there were things he had not had much use for recently such as swimwear, Bermudas, trainers, polos and sunglasses. As for cameras and electronic gear he would be able to pick up all that he needed in Dubai.

  The orgy of Christmas shopping was everywhere, he had expected crowds, but nothing like those he encountered on Regent Street and Bond Street. It only confirmed that year end consumer spending was hitting an all time high in spite of the bad news on the economic front. The rosy future that had become a permanent feature for most Britons was slowly beginning fade, in fact it looked much less promising and the looming economic crisis was slowly but surely beginning to weigh on the finances of the average Briton.

  It was like fiddling as Rome burnt, a Bacchanalian feast of food and drink as plastic flashed across the counters of department store, supermarkets, travel agencies and restaurants to satisfy the need of a generation raised on rising expectations, rising house prices and rising incomes.

  Low interest rates and the battle between credit card firms had sparked a deluge of unbeatably offers. The invention of introductory balance transfer rates with an interest free period for new customers had given birth to a new species called 'rate tarts' by the media, which spent its life jumping from one card to another. Debt was recycled and every time an application was made for a new card, a credit search was carried out and recorded, if the outstanding balance of a previous card had been transferred, then it showed up as having paid off the debit, which was interpreted as an indication of creditworthiness by lenders.

  As credit companies fought it out, vying with each other to press new cards onto their already overloaded customers, hopping from card to card became a habit with card holders being drawn into the plastic frenzy developing an uncontrollable desire for limitless spending.

  However, in spite of the events that were threatening the financial institutions and the economy of the country, a situation which had been announced by the spectacular nineteenth century run on the Northern Rock, the British public flooded int
o their brightly decorated temples, their wallets bulging with plastic and seemingly limitless credit, to celebrate their annual pagan feast and to offer sacrifice, sacrifice in the form of obscenely high interest rates to their goddess Juno Moneta.

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  Chapter 5

  The same morning in their small Smethwick semi, David and Barbara Parkins were preparing for their Christmas break, they deserved it. The Parkins managed a local hotel and restaurant, part of a countrywide chain, and twice a week Barbara also used one of the hotel's meeting rooms for her meditation classes and Ayurvedic massages, she also ran a mail order business selling diets and herbal supplements to a growing number of Ayurvedic adepts.

  Over the years they had managed small hotels in different locations, living carefully and putting their money aside for an early retirement. They had worked hard and the BTLs they had invested in were nearing completion, in fact the first of the six apartments they had bought was completed and they had found a tenant. The rent was a little lower than they had anticipated, but perhaps it was just the time of the year. The other five BTLs were nearing completion and when they returned from vacation they would start advertising for tenants.

  Their holiday destination was Kovalam in Kerala, situated on the Malabar Coast in south west India, where Barbara would attend classes given by her Ayurvedic guru, Doctor Dharma Jayanthi, for advanced training.

  Barbara's first visit to India went back several years. Until that time her travels had been limited to the Costa del Sol or Tenerife. She had jumped at the opportunity of joining a couple of girl friends, who were into yoga, on a holiday in India. David had agreed to look after the business as he usually did - taking holidays together had always been a problem with a hotel to run.

  Together with her two friends she had left a miserably cold Smethwick under three inches of melting snow, Barbara sniffing throughout the eleven hour flight to India as flu invaded her body.

  The next morning full of aches and pains she discovered Dharma Jayanthi's small massage centre nearby the guesthouse, she was perhaps attracted by the smell of eucalyptus oil, but in any case was convinced by the tall bearded Indian who told her a massage would put her right in no time.

  At first the massage seemed to increase her aches and pains, but then they started to ease as Dharma's skilful hands kneaded her body and as the aroma of exotic oils invaded her sinuses, clearing the thickness that had filled her head, and a wave of well being flowed over her.

  Barbara had never before experienced such a sensation of pleasure and relaxation, and each morning she went to Dharma's to be massaged and listen to his soothing words - at that time when prices were affordable and well within her budget he had no difficulty in persuading her to join his daily yoga class.

  Dharma was a born businessman from a merchant caste, though his family had little money. He realised that the thousands of foreigners who spent money to come to Kerala could be his path to wealth, if only he figured out how to use them. By speaking to women like Barbara every day he began to understand a world he knew little of, he had never in fact travelled outside of Kerala. But the task was a difficult one, the foreigners lived so far away, the telephone was out of the question, surface and even airmail mail took too long, it seemed insoluble, that was until the Internet came to Kovalam some five years later.

  In no time enterprising Indians like Dharma flooded the web with Ayurvedic websites, mixing exotic holidays with mystical massages and hotel bookings with rejuvenation in Kerala and its budding beach resorts.

  Kerala was still a relatively unknown tourist destination, but its government did not intend it to remain that way for long and Ayurveda with cheap medical tourism was their trump card.

  As tourists were delivered to their hotels in Kovalam they were submerged by publicity panels of all shapes and sizes vaunting the quality of innumerable Ayurvedic centres.

  Ideally, a complete Ayurvedic diet needed four weeks for its benefits to be longer lasting, but for most tourists their vacation lasted one or two weeks and perhaps at a stretch three, very few stayed longer though those who did were mainly retired and were most in need of a cure. Return business soon became a key part of Ayurvedic tourism and thus Dharma's need to cultivate the loyalty of clients.

  Ten years after the modest start his Ayurvedic centre had grown into a luxurious establishment set on several acres of gardens bordering a private beach to the north of Kovalam. The centre consisted of a clinic with luxury airconditioned cottages attractively disposed amongst the palm shaded gardens. The season ran from September to February with the peak during the year end holiday period when Europeans in search of sunshine flooded in and the occupancy rate soared to one hundred percent. The prices also soared; cottages commenced at one hundred pounds a night and three hundred for the larger family units. The proposed Ayurvedic treatment commenced with massages using essential oils at twenty five pounds and at the top end of the range five hundred pounds for the five day programme excluding accommodation.

  Dharma paid special attention to detail, ensuring that the centre was impeccably maintained, a difficult task in southern India, and to what he described as Swiss standards with fully sterile oils, herbal powders and trained masseurs. Certain Europeans overlooked the failings in India, but not the kind of client Dharma sought.

  His recently created foundation controlled a budding European network that counted several associate agents, such as Barbara, and formed an essential part of his business development plan, promoting his centre and distributing his products.

  What most attracted clients such as Nicole Kavanagh was the weight loss and rejuvenation programme. The special purification diet, entirely vegetarian and without alcohol, was a great success with the ladies. Very few returned home without having lost a few or more kilos, which together with the winter holiday break gave them a healthy tone, not forgetting a glowing tan, guarantying them the admiration and envy of their less fortunate girl friends back in the UK or Sweden.

  Even better for Dharma, was their need to continue to feel good, ensuring a steady demand for his products and courses, and naturally a desire to renew the experience by returning to his centre in Kerala.

  The growing success of Barbara's business fuelled her ambition to set up a system of franchises in the UK and in the long term establishing an Ayurvedic treatment centre in Birmingham.

  However, not all advocates of Ayurveda saw it as a business, but rather as a science not to be commercially exploited, which did not prevent the Kerala state government from promoting Ayurvedic treatment as one of the principal tourist attractions of their state, which had few other resources, in an award winning advertising campaign.

  Dharma's master stroke was convincing the Maharaja Palace to invest in a health care centre in the hotel grounds, giving him the operating and management franchise, in that way guests such as Nicole had no need to leave their luxurious hotel or their friends and families who were not necessarily amateurs of Ayurvedic massages, as was often the case for husbands.

  The hotel's restaurants offered dishes and desserts designed to meet the strict vegetarian parameters of Ayurveda enhanced with Chinese, Indian and European flavours.

  The hotel health care centre also boasted a stylish boutique, where a full range of Ayurvedic products from shampoos to medicines were available.

  Dharma was a pretended purist, accusing many newcomers to the business of not providing genuine treatment and only interested in making money. He was of course protecting his own interests and disapproved of licenses indiscriminately handed out by the state government to almost anybody wanting to set up a centre.

  Dharma had been awarded an honorary doctorate from the long established School of Ayurvedic Medicine in Thiruvananthapuram. However, this was more a tribute to his success as a businessman and his generous contributions than for his achievements in Ayurvedic scholarship, and of course because of his support for the school's position in its criticism of the lobby that represen
ted the tourist industry, which was directly responsible for the indiscriminate growth of Ayurveda centres.

  He strongly disapproved of practices that gave Ayurvedic care a bad name, such as the massage parlours that employed female masseurs, beach massages, poor quality oils as well as profiteers without any form of training who fooled ignorant tourists.

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  Chapter 6

  Barton left his Jaguar as planned at the Terminal 4 car park. Heathrow was the usual shambles with its flight delays and the constant threat of strikes. That evening he was lucky, things went smoothly at the Emirates check-in counter, the flight was announced on time when he presented his passport and electronic ticket for Dubai, he had no problem with his forty kilos of baggage; he was flying business.

  It had seemed like a good idea to check out the Dubai real estate market and he had armed himself with a folder full of brochures. It was a seven hour flight to the Emirate and as he settled down in his wide business class seat to sip his Champagne he felt very pleased with himself.

  The Irish could stuff themselves as far as their extravagantly expensive BTLs were concerned, he told himself, they were so effing slow, it would take them weeks, if not months, to discover the limited company set up to manage the investment had folded and its director disappeared. As for his Epping home it would be repossessed on payment default after he was posted as having absconded.

  After the meal he started to thumb through Dubai guide book and the real estate brochures. Though he had heard of the construction boom in the Gulf he had never quite realised that it had been on such a scale, it seemed that there were skyscrapers everywhere and even offshore condominiums built on artificial islands. It was like the dream of a real estate scam come true. He knew there were a lot of rich people around, but this many seemed absurd or perhaps he was simply out of touch.

  On arrival in Dubai, he took a taxi to the Grand Hyatt situated near the Creek where he booked into a suite at 3,300 Dirham, about ?400 a night. The 10th floor suite overlooked a series of swimming pools and palm studded gardens, beyond there was also what appeared to be a lake and further to the west a stunning view of the city's extraordinary skyline.