‘Thanks for coming.’ Aidan greeted them with a beaming smile. ‘What do you think? Beverley is fantastic; look at all the Post-its she’s given me.’
Emma looked around the room; each pile had a Post-it on top of it.
‘Is this entire lot colour-coded?’ enquired Emma.
‘Yep. It hasn’t taken nearly as long as I thought it would. I’ve categorised the contract notes into various different types of deal with colour-coding. Things are falling into place,’ he said to Emma. ‘Rafi’s hunch is right: there’s definitely something afoot. Let me summarise where I’ve got to. I’ve been focusing on the long gilt contracts. The trades, individually, are modest in size, but when put together it’s a different matter. Someone has been position building for several weeks. I started with my book at Maine Leadbetter. I’ve had six investors writing – selling – put contracts. On the other side, Prima Terra have been buying them via an offshore account. I then looked at deals done by other brokers and I’ve been able to piece together a relatively complete picture. The other players buying the put positions are using intermediaries, mainly second or third division international banks.’
John stuck his head around the corner of the door. ‘I thought that you might be up to something.’
‘Come on in,’ said Aidan with a smile. ‘Let me show you what I’ve uncovered. I’ve found the main buyers and sellers of the derivative contracts. Those with blue Post-its are Prima Terra’s and the green ones are those which I also reckon are linked to the terrorists.’
‘Sorry to interrupt,’ said Emma. ‘I forgot to ask, how did your call to ESSA go?’
‘Oh bloody hell! It quite slipped my mind. What time is it?’
‘4.43 p.m.’
‘Excuse me, let me make that call,’ said Aidan apologetically.
‘OK,’ said Kate, ‘let’s rendezvous back here when Aidan has finished his call.’
Ten minutes later Aidan was back in the conference room. ‘Where were we? Oh, yes. On the other side to the terrorists’ positions, I’ve identified a number of investors whose exposures could lead to huge losses,’ said Aidan pointing to the various piles strewn over the conference room table with pink Post-its. We’ve two building societies, two insurance companies, one local authority and one metropolitan authority – all have been investing the wrong way around: they should be buyers of these put contracts, not selling them! They have increased their risk exposure exponentially. Bloody strange, bloody silly and bloody dangerous!
‘Their risk management systems should have picked this up, unless the contracts were booked in a hidden holding account,’ continued Aidan. ‘If so, no one other than the dealers would be aware of the positions. The expectation would be that they would be traded on for a profit in a matter of days – this neatly ties in with my fascinating phone conversation with ESSA. Would it surprise you to find that ESSA has placed people at both of the building societies and one of the insurance companies? I only found out about these three. I didn’t want them to smell a rat if I rattled off the whole list! My conclusion is that these people have been writing the put contracts that the terrorists have been buying.’
‘Very clever,’ said Emma.
‘Rafi did you read the Bank of England’s Financial Stability Report that came out recently?’ enquired Aidan.
‘Yes.’
‘With this scale of potential losses I have uncovered, if things go as the terrorists plan – given the delicate state of the financial sector – contagion would rapidly set in, wouldn’t it?’ asked Aidan.
Rafi nodded.
‘Sorry – I’ve heard you talk about contagion before, could you explain what you mean by it, please?’ asked John.
‘If you get measles you’re contagious, right? In the financial markets contagion sets in when the troubles of one player are transferred across to another financially healthy player, who, for their part, gets into financial trouble and passes the problem on to more players. We saw it happen in the recent credit crunch when a number of banks that had been financially sound, suddenly found themselves to be in financial difficulty. Basically it’s a matter of there being too many forced sellers and too few buyers. Prices of assets fall dramatically, which leaves the financial sector short of capital. In our case, the terrorists have targeted six institutions. And they will very quickly become insolvent. Other banks, insurance companies and financial institutions get sucked into the downward spiral, unless the provider of liquidity of last resort, the Bank of England, quickly steps in and provides sufficient cash to help those in trouble,’ said Aidan. ‘What makes it particularly dangerous is the losses will be heaped on six players and not spread across the market.’
‘The Bank would have to act very quickly and decisively or the downward momentum could become unstoppable,’ added Rafi.
‘I don’t think procrastination will be a problem, given their recent experience with the banking crisis,’ Aidan scratched his head. ‘What concerns me is the UK Government can’t keep on borrowing vast sums of money to bail out companies in the financial markets. Very soon they will hit the buffers and find that international investors will not lend to them. Or if they do it will be at massively increased interest rates. Then it will be crunch time.’
‘And there could be big costs associated with their missile attacks,’ Rafi looked thoughtful, ‘so part of our plan must be to put across to the Government the downside hazards in such a way that they can make informed decisions quickly.’
‘Good idea,’ said John. ‘What scares me is that they have resources which rival those of a hostile small to medium sized country. And we should not underestimate the damage they are capable of inflicting.’
Kate’s mouth was wide open; she regained her composure. ‘Thank you for describing the scale of the bad news. This is seriously frightening. But first things first – we have a lot of loose ends to tidy up and time is short. In order of priority: we must stop the terrorists’ attacks or at least significantly limit the damage. And then, Rafi and Aidan, we need you to come up with a solution to stop the markets going into meltdown.’
‘And third, pigs may fly,’ added John.
‘No, thirdly we’ve got to break this appalling news to our bosses – and soon.’ Kate stood up, looking pale and tired. ‘Aidan thanks for your excellent work.’
Rafi had been thinking quietly about the practicalities of getting the Government and the Bank of England to move quickly. ‘One last item, please? Sorting out a strategy to avert the financial mess will take some while and time isn’t a commodity we have,’ he said, ‘I’d like to suggest at our meeting with the chiefs that we get permission to gather together a small team of financial experts who could draw up a briefing document to assist the decision makers at the Treasury and Bank of England.’
‘Good idea,’ replied Kate.
Jeremy returned, positively bouncing like Tigger. ‘Who’s a clever boy? I’ve had a most fruitful time with Dominique, the manager at the travel agent that UKSOIL use. We looked at the typical characteristics of the tickets booked by them. The vast majority were low-cost packages to locations throughout Africa and were generally last minute bookings on to charter and other flights which had unsold seats. The typical duration was between one and three months.’
‘Then I got Dominique to see if there were any tickets which were out of the ordinary,’ said Jeremy. ‘She wasn’t impressed as there are thousands of tickets. Specifically, she went searching for business class and full cost tickets, and trips where there were prearranged stopovers. My logic was that if they were recruiting bombers they’d look after them and want them to go to a training camp as well as do their voluntary work.’
Jeremy smiled. ‘We have ten. Yes, ten individuals who were given favoured treatment by UKSOIL. And guess what? One of the names that came out of the computer was that of Ima adwafeeq, – or if one puts the space in the right place: Imaad Wafeeq, the Bishopsgate bomber! I’ve passed all the names to my colleagues, who will send through
as much information as they can find on each of them. As we speak all the suspects are being traced and will be put under surveillance.’
Jeremy beamed. ‘The offer of coffee and doughnuts did the trick. Within half an hour she’d gone back three years and identified all the people who fitted our search criteria. There were literally hundreds of flights that matched. In a tick she had them sorted alphabetically. The number of different names on the list wasn’t that great – just below fifty – but only ten had a pre-booked stopover in Somalia. When I pointed out Imaad Wafeeq’s name, she went white. She thought I was there to prove she was implicitly involved in the Bishopsgate bombing. It took me five minutes to calm her down and to emphasise the importance of keeping what we had found totally confidential.’
‘As a matter of curiosity, where exactly were the stopovers in Somalia?’ enquired Emma.
‘Mogadishu,’ replied Jeremy.
‘Hold on a minute – where was it that the other PhD student, Miti someone, came from?’
‘What a good memory you’ve got,’ said Jeremy. ‘You’re spot on. Miti Lakhani’s family have a business operation in Mogadishu. I wish I’d remembered that before you did,’ he said with a smile in Emma’s direction.
Colonel Matlik was punctual. At 5.15 p.m. Kate’s phone rang. She was pleased to hear his telltale accent on the line.
‘Good evening, I have more news for you,’ he said, in his customary succinct manner. ‘Thank you for the names and photos you emailed me. You have caused quite a stir. We looked at the mugshots and straight away identified three as being highly undesirable. I hope it’s OK – I bounced their details on to the FSB, the Russian Secret Service. The phone lines between here and Moscow have been red-hot. It seems that you have unearthed four individuals who are on their most wanted list! They are using false identities. In reality they are: Rudnik Miromov and Dakka Dudayev, two former Chechen army officers. The Russians lost track of them ten months ago. The other two are: Aslan Popovskaya and Sergy Kowshaya, whose last known occupation was as part of a specialist Chechen hit squad – they also disappeared. Be advised: all four individuals should be treated with extreme caution. They have no scruples and are trained in everything from unarmed combat and heavy machine guns, to missile launchers and high explosives. In the words of my Russian friends these four are “wermin” – the sooner they can be exterminated, the better! Kornet missiles in their hands are a recipe for disaster.’
‘Kate, I must tell you, the next person on your list had the Russians rolling with laughter. He’s an Arab, from the Gulf originally. Kaleem Shah trained as an officer cadet at your Sandhurst. No doubt your records will confirm this and where he went subsequently. They have him down, until a year ago, as being attached to an international news corps as their minder in the battle zones of the Middle East. We have nothing untoward on the other three names. I have asked a colleague to email you all the details we have on these undesirables. He is sending you copies of both the Russian files and our translation of them. I hope that they help. Sorry to sound like an overprotective father, but if the Russians say they’re real shits, tell your SAS to treat them with the utmost caution.’
‘Colonel, thank you,’ said Kate.
‘Unfortunately, I have some further information from the raid on AEIEA’s premises. It is not news you will want to hear. Their manifest shows that they made a delivery of four South African 60 mm Vektor mortars and eighty high-explosive shells on the same day as the Kornet missiles were handed over. They’re compact and deadly. Their barrel length is only 650 mm, but they have a range of up to 2 km if the firer opts for a ballistic trajectory.’
‘Sorry?’ said Kate.
‘Detonates the explosive round in the air above the target,’ explained the colonel. ‘The firing rate, in the hands of a professional, is twenty shells a minute. If aimed straight at its target the range drops to half a kilometre and the shells can go through 500 mm of armour or over one metre of reinforced concrete. Basically, they are nasty little weapons – rather useful for attacking soft targets, I would suggest.’
‘Such as?’
‘In ballistic trajectory mode, their blast radius is thirty metres. They would work a treat against,’ the colonel paused, ‘fuel tanks – oil and gas storage plants in particular.’
‘That fits in with a couple of the targets we’ve identified,’ said Kate. ‘Your information is most timely and thanks for all the trouble you’ve taken.’
‘No problem; we Europeans have a duty protect one another,’ came the reply. ‘Look after yourself.’
‘I’ll try to,’ replied Kate, ending the call.
Kate raised her voice for all to hear. ‘Our worst fears have been confirmed by Colonel Matlik. There are four Chechen mercenaries on the terrorists’ payroll.’ She picked up the phone again and dialled Neil Gunton, Jeremy’s boss. Normally she would have waited for Jeremy to liaise with his boss, but time was critical. She got through on the third ring.
‘Neil Gunton speaking,’ said a gravelly voice.
‘Good afternoon, Kate Adams here.’ She cut to the chase. ‘The names Jeremy sent you earlier from Immigration – how are you getting on?’
‘So far we haven’t managed to get much on them. Our analysts suggest that three, possibly four, of them are Chechen. However, we do have chapter and verse on Kaleem Shah. We trained him at Sandhurst. He’s been working in Lebanon and the Middle East as a journalist with a number of the international networks.’
‘At this end we’ve had a bit of luck,’ Kate replied. ‘I’m emailing you the information we’ve just received from David’s friend at the Estonian Security Service. Unfortunately, four are Chechens and are as bad as they could possibly get. We’re advised that in addition to the Kornet missiles, they have four South African 60 mm Vector mortars.’
‘Oh, hell!’ came the reply.
‘We’re making progress at this end in identifying likely targets,’ said Kate. ‘We now believe that the four Chechens will attack two targets each. We’re working on identifying or eliminating the number of targets.’
‘What do you mean by eliminating?’
‘It’s just occurred to me that the fifth Kornet missile launcher could be for the terrorists’ fast getaway vessel. If confirmed, I believe that there will be eight and not ten targets to find,’ said Kate.
‘What makes you think a missile launcher is destined for their getaway boat?’ asked Neil.
‘The terrorists have had a large cool box built into their getaway boat, and the description indicates it is the right size to house the boxes containing the missile launcher and its missiles. We think we now know the location of five of the targets, so I reckon we’re now only missing three targets.’ Kate paused, then went on, ‘An alternative view could be that the fifth Kornet launcher is with the Arab, Kaleem Shah, a professional soldier, and that he has two targets. If so we are five targets short. We have a briefing meeting with the commissioner at 6 p.m. You would be welcome to attend.’
‘Thank you,’ said Neil. ‘Jeremy is keeping me well posted. You’ve pulled more out of the woodwork in the past twenty-four hours than we’ve been able to over the past couple of months! I’ve got a 6 o’clock meeting with my boss too. Shall we talk again after our respective meetings?’
The question was followed by an ominous pause. ‘Bloody hell, I see what you mean. I’ve just decrypted your email attachments,’ said Neil. ‘These Chechens are mean buggers. I’ll speak to the boss immediately and ask that he puts the whole section on standby.’
‘Sir,’ said Kate in a diplomatic tone. ‘The work you and John’s team have been doing points to the terrorists having many people in high places. I understand your lengthy list is still growing and includes a special adviser to Number 10, several Members of Parliament and a number of other very well-connected individuals. Should we be worrying about whether any of these people are moles or sleepers?’
‘Yes, we should.’
‘Well, sir,’ said Kate, hesi
tating briefly, ‘our concern is that if the terrorists were to find out through one of these people that we are on to them, they will move to a plan “B” and change their targets, leaving us totally in the dark and up shit creek without a paddle. With the Kornet missile launchers they can have a shot at practically any target they like.’
‘You’re right, Kate, it’s a very tricky situation. The potential damage that one of these missile launchers can do in the hands of a professional is unthinkable. Your reading of the position is very similar to ours,’ said Neil. ‘MI5 agrees that it would be better to go after the terrorists at known targets rather than let them slip away and blow the ruddy daylights out of a series of other targets when the whim takes them.’
‘Thank you, sir,’ said Kate.
‘What’s your latest thinking regarding when the attacks will come?’ asked Neil.
‘Tomorrow between dawn and the London Stock Market’s opening at 8 o’clock. They’ll want as much news exposure as possible to undermine the financial markets, so that they can take their huge profits on their derivatives positions. Has Jeremy chatted to you about this?’
‘Yes, thank you,’ said Neil. ‘Sorry, I have to dash, let’s talk again soon.’
Rafi looked across at Kate. He sensed that she felt pleased with her team’s progress, but was shocked by the horrendous possibilities that were opening up in front of her. He looked across at the clock; it was 5.18 p.m. There was less than an hour to go before the evening meeting with the commissioner and the chief superintendent. They were still missing the extra pieces of property information and he was pinning his hopes on Manchester police unearthing something. However, he was worried that they wouldn’t have enough time.
Rafi felt out of sorts and irritable. Something he couldn’t put his finger on was missing. He stood up and walked around the office. His tired head ached and he was finding it increasingly difficult to concentrate for anything more than a few minutes at a time. Bloody hell, he needed to get his act together. It was only late afternoon, but it felt like midnight. He walked over and poured himself a cup of black coffee. Back at his desk, he sipped the hot coffee, studied the valuation report again and picked up the last three sets of accounts for PREH.
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