Due Diligence

by Grant Sutherland

  We spend a few minutes discussing the outlook for the Dollar up to the weekend - long-term planning in the FX market — then Henry leaves.

  Alone again, I reach over and flick on the PC screen: the columns of green numbers swim back into view. Rubbing my eyes, I reflect momentarily on how far my own pride has got me. Then I rest my face in my hands. Since last walking out of Hugh's office, I have got precisely nowhere with this. Nowhere at all.

  So now I put aside my own pride, I pick up the phone and dial. Two rings, then it's answered.

  ‘Hugh, it’s Raef.’

  Silence. I swivel in my chair and look down to the river. A cruise boat glides slowly toward the bridge, a solitary passenger out on deck, taking in the grey scenery.

  ‘I’d like to come over.’ The silence draws out; the cruise boat passes out of sight. ‘Hugh?’

  'Yeah,' he says.'I was wondering how long it'd take you to call.'

  4

  * * *

  Hugh's whiteboard has been wiped clean. He’s on the phone when I enter, and he acknowledges me with a nod. Silently he mouths the words ‘one minute’, so I wander over to the wall and peruse the framed tributes to Hugh Morgan's many triumphs. There are letters of thanks and commendation from the Met Fraud Squad and the Serious Fraud Office. Others bear the insignia of foreign institutions, mostly American, but some written in Arabic and French. At the far end of the wall there’s a collection of caricatures, a private Rogues’ Gallery of the crooks Hugh has successfully despatched: some round and jolly, others thin and pensive, nearly all of them smiling.

  Hugh hangs up the phone.

  ‘So,’ he says, ‘change of heart?’

  I give him a chastened look, and he asks if Penfield is still threatening to move in on Friday night.

  ‘Not threatening. Promising.’

  Hugh drops into his chair and leans back. He clasps his hands behind his head. ‘So,’ he says again, and he smiles.

  Unlike others of our generation, unlike me, the passing years seem to have left him largely untouched. He looks much as he did up at Oxford, apart from the white hair, and it occurs to me now that the secret of his prolonged youth might actually be his work: unlike the rest of us, Hugh remains on the side of the angels. And he loves his job.

  ‘You’ve had a go at the numbers?’

  ‘Till my head aches,’I confess. ‘No joy.’

  ‘I meant what I said, Raef. You gave me some help on the Petrie fraud, and I probably owe you. But I don’t owe you enough to get myself compromised digging you out of a hole. I don’t owe anyone that much.’

  ‘You wouldn't be compromised.’

  ‘That’s for me to say. And if you think you're going to talk me round without clearing up this Odin Investments business first, don't bother. You could have saved yourself the trip.’

  Beneath his stern gaze, my last hope of keeping Odin secret slowly withers.

  ‘We had a visit from the DTI,’ I tell him, but he makes no comment on that. He waits for my response on Odin. ‘It isn’t that easy, Hugh.’

  ‘See this?’ He touches a pile of documents on his desk. ‘Evidence to be used in the trial of Mr Habibi. I’ve been to Rabat, Beirut, Cairo, other places you’ve never heard of, putting this together. Once I’ve finished my report, he'll be charged. If the prosecution do their job properly he’ll be put away for a couple of years. That’s real, Raef. A thief goes out of circulation for a while. The world's a little bit of a better place.’

  ‘I understand that.’

  ‘No,’ he says quietly ‘No I don’t think you do. Because you’re interfering with this.’ He slams his hand down on the documents. Hard. I draw back in surprise. ‘You want my help, but you don’t want to give anything back. Make up your mind, Raef. Yes or no. Do I help you or not?’

  I have developed the banker’s base instinct that everything is negotiable. It was a mistake, I see, to test that instinct on Hugh.

  ‘We did someone a favour,’ I admit warily.

  ‘Who’s “we”?’

  ‘The bank. Carltons.’

  He gestures for me to continue.

  ‘Nothing illegal. It had approval right down the line.’

  ‘So what’s the big secret?’

  ‘National security.’

  Surprised, he holds up his hand. ‘Hang on. Back- track a little. The Odin deal, the quick in-and-out on the Franc. Carltons dropped close to four million. You knew about that from the start?’

  ‘Yes.’

  ‘Who else at Carltons knew?’

  ‘No-one.’

  ‘Someone must have.’

  I shake my head.

  ‘Then how’d the deal get done?’ He studies me The light comes into his eyes as he realizes. ‘You?’

  ‘Me.’ I explain that I put the paperwork through aflter-hours. ‘It didn’t go through the Dealing Room.’

  He rises from his chair, paces to the window and then back to his desk, thinking. ‘I guess I don’t have to ask who it was that scrubbed the Odin deal from the disc then, do I?’ he says.

  ‘There wasn’t any need for you to know.’

  ‘Yeah, well now there is. Carltons deliberately dropped four million quid that went to Odin. Why?’ He raises a finger. ‘And before you try it, Raef, I don’t want to hear any shit about national security or the Official Secrets Act. It’s just you and me here, and it’s your last chance. Convince me I can trust you or I show you the door.’

  Trust. It is a gamble I’ve lost once too often; but this time the gamble is Hugh’s. ‘There was an overseas defence contract,’ I tell him. ‘Some consortium from the UK lodged a bid against the French and Swedes. The French got knocked out early, but the Swedes were splashing a lot of money around, it looked like we’d lost it. Then right at the close my father got word a one-off payment could land the contract.’

  ‘That’s where Carltons came in?’

  ‘The consortium started bickering: who should pay what. My father saw the deal drifting away for no reason.’ I spread my hands. ‘It was a one-off.’

  Hugh seems unfazed by what I’ve told him. He has the intent look of a man going deliberately about his daily work. ‘Your father couldn’t get it from the consortium in time, and I suppose he couldn’t risk carving it out of the Defence Budget. So he went to Carltons?’

  ‘This is the only time it’s ever happened.’

  ‘I’m sure,’ Hugh says; but his eyes say something else. ‘What did Carltons get for its troubles?’

  ‘The consortium won the contract. My father banged their heads together and two weeks later they covered Carltons’ loss.’

  ‘Through more Odin deals against your Treasury?’

  ‘Fees and advisory contracts.’

  ‘For which you do fuck all, I take it.’

  Feeling diminished and rather grubby, I tell Hugh he has the general idea. What I don’t tell him is that it wasn’t just the consortium that was grateful. I don’t tell him that we received a pay-off from Her Majesty‘s Government in the form of a privatization contract. It will be altogether safer for him not to know.

  He makes a slow circuit of the office, arms folded, staring at his feet. He doesn’t like what I’ve told him, but if he was going to show me the door he’d have done it by now. He stops abruptly and looks up. ‘How much do you think Mahmoud Iqbal kept?’

  I freeze in my chair. There is an unpleasant prickling up the back of my neck. Hugh has somehow traced the beneficial ownership of Odin. And in the next moment I see something more: I see that if Hugh knew Mahmoud Iqbal was involved, he must already have guessed the nature of this affair before I even opened my mouth. He has, for the past five minutes, been jumping me through hoops.

  ‘He’s that arms trader,’ Hugh says. ‘Lebanese.’

  I tell him, quite sharply, that I know who Iqbal is. The whole world knows who Iqbal is. Hugh comes back to his desk. I glare at him over the papers and pens.

  ‘Sorry, Raef. But I had to be sure you wouldn’t drop a ano
the pile of bullshit on me.’

  ‘If everyone’s happy now,’ I say, ‘maybe we can start finding out if there’s anything to that note of Penfield’s.’

  ‘No luck with the Shobai numbers?’

  I shake my head.

  ‘Not to worry. I’ve made an appointment with Shobai’s Treasurer this afternoon.’ When he sees my surprise, Hugh smiles. ‘Never doubted you for a moment,’ he says.

  5

  * * *

  At lunchtime the office is quiet. Becky has gone out for sandwiches, and as I stroll past Corporate Finance I find that most of Vance’s team have disappeared too; it’s the middle of the week, and enthusiasm for work is fast on the wane. Surprisingly, I’ve had a good morning since returning from my meeting with Hugh. My paperwork’s up to date, the voice-mail’s answered, and I even had a chance to look at the new recommendations from the Accountancy Standards Board. My head seems to have cleared since passing on a portion of my troubles.

  Up in Funds Management, apathy rages. A few lonely figures loll at their desks fielding lunchtime calls. There’s a TV in one corner, supposedly for CNN, but just now three £100,000-per-annum men sit glued to a Tom and Jerry cartoon. A section of flooring has been lifted, and two workmen in overalls are hauling up a tangled spaghetti of cables and wires. I ask how they're doing, but one gives me an ugly look so I move on. This place is much bigger now than when I worked here years ago, the warren-like maze of internal walls was stripped out last July. Bigger, but the atmosphere is somehow the same: things gone to seed, the vital force ebbing but never quite dying out. Moving on from here to Corporate Finance was like exchanging a broken-winded hack for a thoroughbred. Even the past six months’ shake-up from Mannetti has done little to dispel the torpor.

  ‘Come to pay us a visit?’ I turn to find Mannetti smiling at me in a friendly way. ‘You see the new cabling?’ he says, and he leads me back over there, explaining the ins and outs of the new wiring. ‘They’ll have it done by next week. Hey,’ he says addressing the two workmen. ‘Done by next week or what?’

  He looks like he might press the point, so I steer him away. I tell him I’m drafting a letter of complaint to the DTI. I ask if he has any suggestions.

  ‘Yeah, I’ve got a few,’ he says. ‘Suggestion one is they sack that four-eyed prick Skinner.’

  ‘Not what I had in mind.’

  ‘Am I meant to thank him? Don’t hold your breath.’

  A wall of windows stretches down one side of the open-plan office, Mannetti goes and perches himself on the ledge. ‘I don't have to take that shit.’

  His face is profiled now against the leaden sky. He has those sharp features you see in fashion magazines, a rather gay look, but striking. He’s in his early forties, twice divorced, and currently walking out with one of the female partners at Slaughter and May. I rechecked the CV this morning: college in New York, an MBA from Columbia, and then a quick rise through the ranks at American Pacific; he’s worked nowhere else apart from there and here, an unusual record in the age of the Golden Hello.

  ‘If it’s any consolation,’ I tell him, ‘they asked about me too.’

  ‘You? Shit.’ He says that my country is unbelievable. ‘What rights do those guys have anyway? Search and destroy? Don’t you have privacy laws?’

  Tony, do you want to tell me something?’

  He doesn’t pretend not to understand my question. I am asking about the cock-up.

  ‘I didn’t make a cent out of it,’ he says. ‘I swear.’

  Karen’s search through the personal accounts suggests the same. And Johnstone, too, appears to have made nothing from the blunder. If any insider trading went through on the back of Parnells, it didn’t go through us, a fact that the DTI will be able to confirm when we finally give them access.

  ‘I’ve read your report, Tony. Why didn’t you call and check what Johnstone was up to?’

  ‘No phones.’ He explains that the island where he spent his holiday was set up like that, deliberate disconnection. The only place connected to anywhere was the manager’s house. ‘I would’ve looked like a jerk knocking on his door every ten minutes.’

  I spare him the obvious comment. A girl calls from one of the desks, and Mannetti answers her question then turns back to me. I ask if he’s done anything to patch up his relationship with Vance.

  ‘I think he’s talking to me. Who knows with that guy?’

  ‘Make an effort, Tony.’

  ‘Sure.’

  But I can see by his aggrieved look that he thinks I am playing favourites. ‘I’ve told Stephen the same thing, Tony. You’ve got to meet him halfway.’

  Suddenly a drill screams into life. Our colleagues by the TV start shouting at the workmen, but the workmen ignore them. Nobody seems inclined to challenge the workmen physically, so the deafening whine of the drill continues.

  I raise my voice. ‘If Skinner comes back, I don’t want you to speak to him alone.’

  Mannetti takes a moment with that. Then he raises his own voice over the sound of the drill.

  ‘Good idea.’

  6

  * * *

  ‘You’d better come,’ says Owen Baxter. He stands in the doorway, one hand holding the open door, a damp patch of perspiration beneath his extended arm. He looks scared. As we go down the corridor, I ask if this is about Henry. Owen tells me that Henry and his lunch guests moved on half an hour ago. ‘Fuckin’ Henry,’ he says.

  Then he holds the Dealing Room door open for me, and the first thing I notice is the silence: the usual churning wave of noise, the surge and swell of voices — it just isn’t there. Instead there is silence, punctuated by a few isolated voices that seem to echo. Beside me, Owen breathes heavily.

  ‘What’s happened?’

  He doesn’t answer, just gestures for me to go right on in, and I step past him.

  A few of the dealers wander aimlessly around the Room; two on the far side are kicking a football. Most of the others are huddled in small groups, talking, not dealing, and just near me our top four bond traders are shooting each other with elastic bands. There is a sense of things unravelling.

  ‘No one’ll touch us,’ Owen says. ‘Twenty minutes ago the brokers stopped hitting us. Next thing the whole market’s got us on hold.’

  I gaze at the whole incomprehensible scene. For a moment I feel quite giddy.

  ‘Everyone’s turning us down?’

  ‘The ones that count.’

  ‘The clearers?’

  ‘First to go.’

  For a second I press my fingertips to my eyes. When I look again, heads are turning our way. The bond traders have stopped firing their elastic bands, but that other pair are still playing football. My heart hammers. The Dealing Room of Carlton Brothers has been cut free from the market: we are adrift, and apparently rudderless.

  Owen stays at my shoulder as I make a brief tour of the desks. It turns out my first impression was wrong, there remain a few isolated islands where trading continues: our Futures desk is still working, LIFFE, the Futures Exchange, hasn’t cut us off; the Equities desk is also doing business. I ask Owen why.

  ‘Not all the stockbrokers pulled the plug on us. Just the ones with a banking parent.’ Then he lowers his voice. ‘What the fuck is going on?’

  When I look at the equities screen, I see that Parnells hasn’t moved; but Carltons has. Down. ‘Where’s Henry?’

  'Took the birthday party to the Green Man, I think.’

  ‘Pissed?’

  ‘Not when I last saw him.’

  He offers to fetch Henry back in, but I tell him if he just finds the number I’ll call Henry myself. Owen goes off to search. Then crouching by the senior equities trader, I ask him to show me Carltons.

  ‘Just looked,’ he says, hitting the keys. ‘Down, with a bullet.’

  The figures appear, he points to the last trade: we have dropped 15p in an hour. Not good, but not a catastrophe either: that, I know, could change. I stare at the screen as if this will h
elp me understand.

  Owen returns, handing me a slip of paper. ‘Green Man for sure. He left the number.’

  As we step away from the desks, I ask him if the Americans are turning us down too.

  ‘Americans, Krauts,’ — Owen looks left and right — ‘even the fuckin’ Frogs.’

  I make a gesture: stay calm. Then I tell him what I want him to do: no new positions are to be opened, and all our short-dated positions, our commitments out to one week, are to be closed out or rolled over. Now, I tell him. Quickly. Before those banks still dealing with us suddenly change their minds.

  ‘We’re full on some of them,’ Owen says.

  ‘Not any more. As of now, we do whoever does us.’

  Owen mentions a certain notorious bucket-shop in Hong Kong.

  ‘Anyone,’ I tell him firmly.

  The look on his face changes. It is even more serious than he thought.

  ‘Shit,’ is all he manages to say.

  ‘Put as much as you can through Futures, here or Chicago.’

  ‘What about margins?’

  ‘We’ll sort that out later. If anyone from the Exchange queries the volume, refer them to me. Otherwise just keep closing out everything till you’re done.’

  We look around the Room. The two traders with the football have gone back to their desks; now they’re talking together and glancing surreptitiously our way. As is nearly everyone else in the Room.

  ‘Maybe you should say something,’ Owen suggests.

  ‘I’ll leave that to Henry. But until he gets back, this is up to you, Owen. Don't make a song and dance of it. Just get it done.’

  He gives a nervous tug on his braces. Then he thinks of something.

  ‘What if Henry’s aready pissed?’

  ‘Then you’ve got a long night ahead of you.’ I tap my watch. ‘Get cracking.’

  The senior equities dealer leans back in his chair, catching my eye. When I go over, he points to the screen: Carlton Brothers has dropped another 5p.