Due Diligence

by Grant Sutherland

  ‘No.’

  ‘He accused you, then you hit him.’

  ‘We scuffled.’

  ‘Your secretary saw him fall.’

  ‘He took a swing and I grabbed him. We wrestled a bit. He wasn’t hurt.’

  ‘Were you?’

  I hold up my wrist. ‘Broke my watch.’

  He asks why he's only hearing about this now.

  ‘Because it isn’t important,’ I say.

  He stands and takes a turn around the office, pausing by the window. ‘You and Stewart were friends a long time. Back to Eton.’ When I incline my head, he says, ‘You might help me.’

  ‘If I could.’

  His look immediately darkens, and I know at once that I have made a mistake.

  ‘I hope you don’t think this investigation can be deflected, Mr Carlton, because I won’t let that happen.’ He goes to the door. ‘I’ll call on Mrs Stewart. If you contact her before I do, I’ll regard that as an obstruction of my inquiries. Thanks for your time.’

  The truth — the simple truth — is all that he wants. But the simple truth is the one thing I can't give him.

  I pick up the phone and dial Hugh Morgan.

  8

  * * *

  Before lunch there’s a gathering of the corporate finance team in Vance’s office. The atmosphere is cheerful, almost partylike, everyone discussing different angles on the bid. When Henry walks in with Peter Fanshawe, our broker on the bid, young Haywood claps theatrically and cries, ‘Bravo.’ Fanshawe takes a bow. The backslapping done, I draw Henry aside.

  ‘How much have we got?’

  He gestures back to Fanshawe. ‘They’re still doing the numbers. Looks like we’re over forty per cent, thereabouts.’ As Vance hoped. From here on in, Parnells will find it extremely difficult to shake us loose. ‘Dried up a bit after ten,’ Henry says.

  ‘Last bid you saw?’

  ‘177.’

  ‘Last trade?’

  ‘Same. Just hanging round there.’

  Vance, overhearing, leans across. ‘Maybe the arbitrageurs might stay out of it for a change.’

  Henry tells him to keep right on dreaming.

  I touch Vance’s arm and we step out into the corridor. Behind us Henry regales the others with a Dealing Room story that would turn the Equal Opportunities people apoplectic if they heard.

  ‘What do you think?’ I ask Vance as we walk down the passage. ‘Forty per cent enough?’

  ‘Could be worse. You’ve still got lunch with Brian McKinnon today?'

  Brian McKinnon, the manager of an investment fund that is one of Carltons’ major shareholders: they own a large parcel of Parnells too. Over lunch, I will try to convince McKinnon that 180 is a worthwhile bid.

  I confirm with Vance that lunch is still on. We stop by the coffee machine and he leans against the wall and stifles a yawn.At last the sleeplessness is getting to him, he is human after all.

  'This Inspector Ryan’s getting on my pip,’ he says.

  ‘Humour him, Stephen.’

  He rubs his eyes. ‘I keep thinking about Daniel. I was checking my diary just now. Daniel and Celia were meant to be coming round for dinner tonight.’

  ‘At your place?’

  He sees my surprise. ‘Burying the hatchet,’ he explains. After their last big argument I told him to do just that. Apparently he intended to try. ‘But now?’ He shrugs. ‘You know what I mean?’

  I know exactly what he means. Mortality weighs heavy on us both.

  ‘Just like that,’ he says. ‘How old was he, forty?’

  ‘Thirty-nine.’

  ‘Jesus, his boys too.’ Vance shakes his head. He asks if I’ve spoken to Celia.

  ‘She’s all right.’

  ‘That Ryan, the Inspector.’ Vance lifts his head. ‘Did he say anything to you about Daniel and me?’

  ‘If he's bothering you, Stephen, I’ll have a word.’

  Becky calls me from down the corridor, we look down there.

  ‘I’ll ring you after I’ve seen McKinnon,’ I tell Vance.

  ‘He asked me about you.’

  ‘McKinnon?’

  ‘Ryan,’ he says.

  ‘Raef?’ Becky calls.

  Backing away down the corridor, I tell Vance I don’t want to keep McKinnon waiting.

  9

  * * *

  ‘They’re saying it was a hit,’ Hugh Morgan informs me. When I look blank, he adds, ‘Professional.’

  ‘Who’s saying?’

  He waves his hand airily. ‘Contacts.’

  'The police?’

  He nods, tapping at the keyboard of his portable. We’re in Darcy’s, a coffee bar in a cramped City alley, Hugh asked me to meet him here. We have a rear table, Hugh has his back to the wall. The few customers who enter don’t stay long, they buy what they want and move on. Hugh turns the screen a little so that I can see.The Carlton Brothers numbers appear.

  ‘What does that mean?’ I say. ‘Professional?’

  ‘Like it sounds. Someone who knew what he was doing. Someone who got paid.’ He glances up. ‘This is just between us, by the way.’

  ‘A hitman killed Daniel?’

  ‘You remember a few months back that dealer at Shobai?’ Shobai, one of the big Japanese banks. ‘He didn’t show up for work two days running. Police broke in, and there he is, suicided all over the floor.’

  ‘What’s the connection?’

  ‘Maybe none.’ He tastes his coffee. ‘The Shobai managers asked us in to take a discreet look at the books. Seemed okay. But the Inspector on the suicide didn’t like the smell of it. He turned up so many questions the coroner brought in an open verdict.’

  ‘Meaning?’

  ‘Meaning maybe it was suicide and maybe it wasn’t.’ He concentrates on the screen again. ‘I don’t suppose you know how much business your Treasury does with Shobai?’

  'Not offhand.’ He hits a key and a long list of last month's Shobai-Carltons deals comes up in black and white. The list is in three sections. Hugh points to the smallest. ‘Miscellaneous,’ he says. ‘Equities and commodities, you don’t do much.’ His finger runs over the other two sections. ‘Forex and money-market, a bit more.’

  ‘Which tells us what?’

  ‘Bugger all.’ There’s a certain look Hugh gets when he wants to be serious, he goes quiet and seems to sink into himself, thinking. He gets that look now. ‘Actually, we should drop your miscellaneous file. You want something by Friday, I’ll have to narrow the field.’

  ‘You’re assuming this is connected with Shobai?’

  He shrugs. ‘One possibility. We’ve got too much information anyway. We do some pruning now or we’ll be thrashing around the data jungle for the next four days going nowhere.’ He puts up a hand and orders two more coffees. 'I've scanned all the files you gave me, the pattern’s similar. Plenty of forex and money-market deals, a lot less equities and commodities. Most of these frauds rely on burying crooked trades under truckloads of real ones. If you want to hide a tree, plant it in a forest.’

  ‘So we drop the miscellaneous file?’

  ‘You agree?’ he says.

  It’s Monday. Only four full days left. I tell Hugh I’m completely in his hands. He bends over his keyboard, explaining how he spent half the morning reformatting the Carlton Brothers discs. ‘Compatibility,’ he ‘says in that American accent he sometimes affects. ‘Such a bitch.’ A female customer looks sharply our way. Hugh doesn’t seem to notice. He points to the screen and the list of miscellaneous details disappears: if the fraud was buried there, we won’t find it, not by Friday Our fresh coffee arrives.

  ‘You don’t take this hitman business seriously?’ I say.

  ‘The name Roberto Calvi ring any bells?’

  It does. Roberto Calvi, a banker with connections to the Vatican, was found hanging by his neck one morning beneath Blackfriars Bridge. Coincidentally, a stone’s throw from where Daniel was found. Another open verdict.

  ‘I could show you ha
lf a dozen more, just from our own files.’ Hugh finishes typing and looks at me. ‘A friend at Scotland Yard, he’s been there thirty years, he says every murder he’s ever seen was over money or love. In the City, Raef,’ he touches the numbers on the screen, ‘no shortage of money.’

  I ask him what happens now.

  ‘Now I fly by the seat of my pants.’ He stares at the screen. ‘I’ll look for patterns. Counterparties that never take a loss, deals that don’t fit. Needles in haystacks.’

  ‘How can I help?’

  He pushes a pen towards me. ‘Do me a list of who does what at Carltons. Just money-market and forex. You know. Who’s trading gilts, SpotYen or whatever.’

  I explain that there are scores of faces in the Dealing Room I know only by sight.

  ‘OK, just the senior dealers. When you get back to the office you can send me a fax with the rest.’

  As I jot down the names and job descriptions, Hugh plays with the numbers on his screen. When I’m done, I read the list I’ve made. Almost twenty names, and I find it alarmingly easy to suspect more than half of them.

  ‘Something else,’ he says, taking the list ‘I need an outline of your security Who signs what, when. Who answers to whom.’

  I suggest that a chart might be helpful.

  ‘Chart’s fine. If you’ve got one, fax that over too.’

  Nodding to the PC, I ask him how long it took to sift out the Shobai deals.

  ‘Push of the button, once I’d done the reformat. Software program's tailor-made, one of mine.’

  Hugh was the computer whizz in our Oxford days, the one everyone called on when a poorly written program went haywire.

  ‘What if I give you another name?’

  ‘Fire away.’

  ‘Try Sandersons.’

  ‘The bank?’

  I nod, and Hugh’s fingers go dancing over the keys.

  ‘What's the story here?’ he says.

  But so far our suspicions about Sandersons are a private affair, just my father, Charles Aldridge and me. For the time being, I think, it’s probably as well to keep it that way. So I lie.

  ‘Daniel had a problem with their Treasurer.’

  Last month’s deals with Sandersons appear. Hugh scrolls forward two pages to the end: there are many more deals than with Shobai.

  ‘Didn’t stop you dealing with them,’ he remarks.

  I’ve seen Hugh’s suspicious mind at work on others, the last thing I need is for him to turn it against me. I force my eyes to the screen and the numbers. Beyond these there are thousands more deals with other banks and corporations worldwide. Alone I would be lost, but with Hugh there’s at least a faint ray of hope. He scrolls back and forward over the Sanderson deals, chewing his lip.

  ‘Four days,’ he murmurs.

  I stir my coffee bleakly.

  ‘Who’s the Inspector on Stewart’s murder?’ he asks, ands when he sees that the question surprises me, adds. ‘Four days, Raef. I’ll need all the help I can get.’

  ‘Inspector Ryan.

  Hugh hunches up his shoulders. ‘Moustache? Stocky build?’

  Warily, I nod.

  ‘Handshake like a vice?’

  ‘That the one,’ I say.

  ‘That Shobai business. The Inspector who wouldn’t buy the suicide?’

  A cold feeling creeps up my back. ‘Ryan?’

  ‘Yeah,’ Hugh says thoughtfully. ‘Ryan.’

  10

  * * *

  There was a time when boatmen ferried passengers across the Thames all day long. Now, looking out from Butler’s Wharf, I see just the one solitary craft. As it passes, I read the black lettering: River Police.

  McKinnon booked this table with a view; he isn’t one to stint himself on the perks of City life. We're onto the cheese and port before our conversation, City gossip till now, moves on to the business at hand.

  McKinnon slices the Stilton. ‘Richard Parnell wasn’t too happy with that piece in the FT.’

  ‘The truth, wasn’t it?’

  ‘Come on.’ He smiles from the midst of a full black beard. A Scotsman, and one of the best fund managers in the business, he is excused this hirsute eccentricity. ‘They went way overboard. There’s bloody hundreds as bad as Parnells.’

  ‘Not too many in your portfolio, I hope.’

  ‘You buy one, you buy another one. How was the salmon?’

  ‘Good.’

  He tells me that he owns ten per cent of the fishery that supplied it: conversation the Fund Manager way. But I respect Brian McKinnon. Most fund managers are part of a herd, when the markets are abuzz about Latin America, they all rush to set up Latin American Growth Funds, their hapless investors climbing on board just in time to run off the cliff. Then the fund manager hears that technology stocks are booming; he sets up a Hi-tech Fund and invites the survivors from the Latin American disaster to join him. And this is the strange part. Many of them do.

  In this world Brian McKinnon stands out like a beacon. He can be cantankerous and rude, sometimes very funny, but whatever else he is, he is definitely not part of a herd. He’s the London end of an Edinburgh-based operation, part of the Scots mafia. Even Stephen Vance respects him, a rare tribute.

  ‘Richard Parnell’s been onto you then?’

  Brian misses a beat before he nods.

  ‘A bit late in the day for him to be thinking of shareholder loyalty,’ I say. ‘Did he make any promises?’

  ‘Usual story. Hang on, the upturn’s coming next quarter. Your name was mentioned.’

  ‘Compliments?’

  ‘Not exactly.’ A waiter comes our way. With a turn of the head, Brian warns him off. It is no surprise to me that Richard Parnell has been trying to secure Brian McKinnon’s allegiance. McKinnon’s fund owns one of the last large parcels of Parnells that might still fall into the Meyer brothers’ hands. Vance has given me the job of ensuring it does, hence lunch here today. ‘Not a bad old goat,’ Brian says referringto Richard Parnell. ‘Just stayed around too long. The Meyers are doing the rest of the Parnell family a favour.’

  ‘They’re doing every Parnell shareholder a favour.’

  ‘Look, if I bale out of Parnells I'll be underweight in industrials. And what's to buy out there in UK industrials?’

  'Come around to the office. Our analysts will be happy to help.’

  ‘Your bloody analysts wouldn’t know their arse from their elbow,’ he remarks cheerfully.

  ‘Brian, without the Meyer bid, Parnells is a dog.’

  ‘Stephen gave me the flim-flam last night, Raef. Save your breath.’ We stare at each other. Carltons wants something, he has it; I can’t walk away. ‘So tell me about precious metals,’ he says. ‘You’ve heard the Central-Banks-building-gold-reserves story?’ I have. We all have. This old chestnut comes by as regularly as Christmas. A story like that doesn’t normally register with a man like McKinnon: he’s trying to tell me something else. So I ask what’s the McKinnon yearly special on gold. He taps the side of his nose significantly and gives me a look. Now I know what he’s after.

  ‘Remind me, Brian. Did you come to the Crest presentation?’ His eyes open a little. Crest? Had he mentioned Crest? But as I have...

  'The African crowd?' he says. 'I dropped in for a wee look. Weren’t too bad.’

  ‘They were better than that.’

  He laughs. ‘You’ve been reading your own PR bullshit.’

  ‘No, I’ve been reading the subscriptions‘ list. How much are you down for?’

  ‘None,’ he says.

  'None?'

  A look of belligerence comes over him. His voice rises. ‘None. Zero. Half of fuck-all.’

  I glance across to the other tables, mainly men in suits, talking quietly. In one corner an old woman dressed as a young woman shakes her gold bangles and throws back her head. No one is looking our way.

  ‘Half of fuck-all,’ I say turning back. ‘That’s not much.’

  He smiles now. He tells me good-naturedly that I’m a
cunt. We’re on familiar territory here. When a company brings its shares to market the shares are underwritten, pre-float, by a bank or a broker which then places the stock with investors: usually institutional funds managed by the likes of Brian McKinnon. Crest has been an easy sell for Carltons, money for jam, the institutions have been clamouring for the stock. But somehow Brian’s fund has failed to apply for an allocation: it seems we have something he needs.

  ‘Say someone was interested in a decent-sized parcel,’ he says. 'That’d be useful to you.’

  ‘We’re oversubscribed.’

  ‘Say a ten per cent parcel?’

  ‘Not a hope in hell.’ I remind him of the five per cent limit the Crest vendors have placed on individual subscriptions, they don’t want the shares manipulated post-float. ‘Why the late rush anyway?’

  He takes up his glass. He tells me we’ve all got our problems.

  If only he knew.

  ‘We can look at numbers up to five per cent,’ I offer. ‘But that's it.’

  He looks over the grey river to the City. ‘Someone might trump the Meyers’ bid.’

  ‘I don't think so.’ The choice is clear. He either accepts the Meyers’ offer for his parcel of Parnells, and gets an allocation of Crest from us; or he doesn’t accept their offer, in which case he has to buy his Crest shares after flotation, an expensive proposition. ‘Five per cent of Crest’s available today, but don’t expect the full amount tomorrow. By then it’ll be down to four per cent.’ I say. Brian takes this calmly enough, so I add, ‘Three per cent by Thursday.’

  He nods, businesslike. We understand one another.

  How many hours of my adult life have been spent like this? Sometimes the dance can go on for days and reach no definite conclusion. Days? Sometimes months. I’ll show you mine if you’ll show me yours. And endless meetings later you discover that you don’t want what the other party has, that the childish scheming has been absolutely futile. At least with Brian McKinnon the whole ritual can be concluded over lunch. Small mercies.

  I signal for the bill now, ignoring Brian’s offer to pay.

  While we’re waiting, he toys with the cheese-knife. ‘Any idea why your Treasurer was shot?’ he asks me. The question hits me like icy cold water. I make a sound. ‘You looked at your own share price lately?’ he adds, pointing to the floor. ‘Going down. I’ve got seven per cent of Carltons at the moment. I’m starting to wonder why.’