Latent Hazard

by Piers Venmore-Rowland

  The colonel’s whisper became quieter. ‘Some shadowy figures are coming out of the woodwork. My sources inform me that a number of racketeers and other undesirables from Russia and Central Europe were caught up in Maryam Vynckt’s investments and suffered massive losses. Rafi, dear boy, a hornets’ nest has been stirred up. Several of the large criminal organisations are seriously short of cash. They are furious and intent not only on replenishing their coffers but also on revenge. To complicate matters, their competitors have noticed this weakness. A new playing field is being created. Former allegiances have been shattered and a war of attrition has started.’

  He paused. ‘Desperate people do desperate things. The stakes have been raised and they may have to think big to survive. Be careful not to cross their paths – they are in a dangerous mood.’

  Rafi felt the colonel place his large hand on his shoulder. ‘Sorry, I have more bad news. Just before I left I was informed that the FSB have reopened their investigation into the death of Pinja Koit. They now think that the charred body in the plane crash was not his after all. Perhaps you could tell your people at MI5?’

  The colonel’s voice reverted to his normal deep growl. ‘Great party, thank you, Rafi. Kristina has had a ball. She’s very excited; it seems your sister has invited her over to shadow her for a couple of days’ work experience; even offered to put her up. Say a big thank you to Saara for me. And, Rafi, remember: let me know if I can be of any help. You know where to find me.’

  Rafi hesitated before replying; he was still taking in what the colonel had just said. Jörg Emcke’s team were only in the preliminary stages of researching the financial grey areas and piecing together the web of cross-border crime syndicates. Colonel Matlik had given him another whole angle to consider.

  Rafi turned around to ask him a question but he’d disappeared into thin air.

  Kate was standing nearby.

  ‘Have you seen Matlik?’ he enquired.

  ‘Yes, he left a moment ago, just after chatting to you,’ replied Kate. ‘You look as if you’ve seen another ghost.’

  Rafi took a deep breath. A sense of foreboding came over him. If Matlik was right and the criminal classes were about to flex their muscles, Jörg’s team had two groups to worry about. On the one hand there were those whose finances had been crippled by their losses in the derivatives markets – they needed to make money fast. On the other hand there were those champing at the bit to grab market share, intent on eliminating their weakened competitors.

  A cold shiver ran down his back. And on top of this, Kate and he possibly had two rogue bulls to contend with: Pinja Koit with his Chechen contacts and Miti Lakhani, about whom they still knew practically nothing. They would have to watch their backs. Unwanted memories of the Headland Hotel crept back into his mind.

  Kate squeezed his hand. ‘Are you alright?’

  Rafi pulled his overactive imagination back to the present.

  ‘Sorry, I was just mulling over something Colonel Matlik said. Oh, by the way, Saara has offered Kristina a couple of days’ work experience and invited her to stay after she has finished her university finals. Have you seen Jeremy?’

  Kate pointed to the back of the restaurant.

  ‘I won’t be long; there’s something I could do with asking him.’

  Jeremy was sitting at a corner table talking quietly with Ewan.

  ‘Am I disturbing you?’ Rafi asked him. ‘As it’s work-related, would you prefer we chat when we’re back in Luxembourg?’

  ‘Not at all,’ replied Jeremy. ‘We were just catching up on a few matters relating to Maryam and her bank.’

  Rafi sat down with his back to the room.

  ‘We have managed to get into the bank accounts Maryam was using to fund the terrorist activities,’ added Ewan. ‘In some cases the payments go back over three years. She was using numbered accounts so at this stage we have not been able to put precise names to them. However, what has caught our attention is the series of large payments to an Estonian bank account, which stopped and then started again a week or so later but went into a bank account in Pakistan and another in Iran. We were speculating as to whether these accounts were linked to Pinja Koit.’

  ‘Could I add something?’ asked Rafi butting in. ‘I have just been chatting to Colonel Matlik and he was telling me that the Russians – the FSB – have been looking into Pinja Koit’s death. There seems to be considerable doubt as to whether he was on the plane that crashed.’

  ‘When was that?’ enquired Ewan.

  ‘About fourteen months ago,’ replied Jeremy. ‘He makes a good addition to our team, doesn’t he, sir?’ said a beaming Jeremy. ‘It seems Colonel Matlik trusts him more than you or I!’

  Ewan nodded, deep in thought. ‘Fourteen months ago . . . That ties in with the switch in the bank payments. So we can assume Mr Koit is still out there.’

  ‘That makes sense,’ added Jeremy. ‘When Radu Dranoff arrived to help Aslan Popovskaya, I bet it was Pinja Koit who arranged it. He must have been involved behind the scenes coordinating all the dirty work. As I see it, he was so pissed off with you, Rafi, that he sent Dranoff to take you out. I don’t see why he shouldn’t still be seriously pissed off with you.’

  Rafi looked shocked. He thought for a moment. ‘How do you think UKSOIL, the suicide bombers and Kaleem Shah fitted in?’

  ‘I am not sure,’ said Ewan. ‘The attack on the atomic weapons establishment at Aldermaston and the style of Kaleem Shah’s operation have had me thinking. I am wondering whether it was the terrorists’ insurance policy to get the Iranians on their side.’

  ‘Pardon?’ said Rafi.

  ‘Well, let us assume for one moment that the terrorists’ plans had been successful; Maryam, the sheikh, Jameel and Talal would have become pariahs in the Western world and would have needed somewhere to go to escape the reach of our laws.’

  ‘Hence Iran?’ asked Jeremy.

  ‘That’s my thinking,’ said Ewan. ‘Especially as they are prevented from having any nuclear capabilities. Iran doesn’t like being excluded from the nuclear club and they can’t have been happy with the UK’s decision to upgrade Trident. One set of rules for us and another for them.’

  ‘So do you reckon Pinja Koit is in Pakistan or Iran regrouping?’ asked Rafi.

  ‘Yes; probably Pakistan,’ replied Ewan.

  ‘But they have one serious problem,’ interjected Rafi. ‘They will have lost their source of funding!’

  ‘Good point,’ said Ewan, ‘but we should not underestimate Koit’s capabilities. I will bring MI6 up to speed and make tracking him down a priority.’

  ‘In the meantime,’ added Jeremy, ‘if I was you, Rafi, I’d try and avoid dark alleyways – and that applies to Kate as well.’

  ‘On the bright side, after Newquay, we at MI5 and the SAS owe you one, so we will do our best to keep an eye on you,’ said Ewan.

  Rafi was about to reply, when Saara ambled over. ‘So this is where you have got to!’ She was beaming. ‘Now that’s what I call a party. I hope you enjoyed it, big brother.’

  ‘Fantastic. The best ever; thank you, Sis.’

  ‘Steve is making a real party of it. I doubt whether I’ll get him home for hours. I’ve given Kate my set of keys, in case you want to leave before us. Last I saw of her she was looking for you,’ said Saara.

  Jeremy smiled at Rafi. ‘Let’s chat some more back in the office.’

  Rafi spotted Kate in the distance. He got up and shook hands with Ewan. ‘Thank you for bringing me up to speed. If you will excuse me, I should go and see why Kate wanted me.’

  ‘It has been a pleasure talking to you . . . And Rafi, please, remember to keep Jeremy in the loop with all your thinking. I sense that these are still treacherous times,’ added Ewan.

  Rafi, with Saara beside him, went off to find Kate.

  She greeted him with a hug and a lingering kiss, then jangled Saara’s keys in front of his nose. ‘How’s about we say our remaining few goodbyes and t
hen try out the new bed in your flat?’ she said suggestively.

  ‘Great idea,’ Rafi replied. He felt alive. He had traded the comfy and highly paid world of the City for the adrenaline-filled world of counterterrorism, and to his surprise he wondered what he had ever seen in his previous existence. Then he saw in Kate’s eyes the same fire that had burned that first night they were in Luxembourg and with a flutter of her eyelashes, his worries about the hazards that lay ahead vanished.

  Appendix A

  THE TERRORISTS’ CORPORATE WEB

  Prima Terra

  Fund Managers with large stakes in:

  ESSA plc

  Executive Search & Selection Agency

  Dewoodson plc

  Property Services business

  Renshaw Smithers plc

  Niche financial intermediary – a deal maker focusing on public sector projects and out sourcing companies

  Unicorn Sceptre Finance plc

  Credit cards & student finance

  Rainer Spencer & Mitchell

  Chartered Accountants which run:

  CGF Company Services Ltd

  Company secretarial business run by Rainer Spencer & Mitchell

  AGVC Ltd

  Acorn Growth Venture Capital which controls:

  AEIEA Ltd

  African Estonian Import / Export Agency

  AGVCFOF

  Acorn Growth Venture Capital Fund of Funds

  CCVH Ltd

  Central City View Hotels

  SJFR Ltd

  Small Joe’s Fish Restaurants

  CDAFO Ltd

  Commercial Development & Fit Out

  HFFF Ltd

  Hotel Frozen Fish Foods

  PSSAF Ltd

  Public Sector Services and Facilities

  SPAD Ltd

  Security Protection & Defence

  UKSOIL Ltd

  UK Students Overseas Initiative Live

  PREH plc

  Prime Real Estate Holdings

  A pooled property investment business which has Prima Terra and AGVC Ltd as major investors

  Glossary

  Annuities / REITs An annuity is used to provide pensioners with a regular income in return for a lump sum investment. For more details on the characteristics of REITs and their suitability as a substitute for annuities, and the beneficial funding implications. See www.annuityreits.com.

  AWACS Airborne Warning and Control System. Undertakes surveillance, command and control, and battle management activities from specially equipped long range planes.

  Basis Point One basis point is 0.01%. It is smallest measure for quoting a change in an interest rate or a yield. So a 50 basis points (bps) change is a ½% change.

  Bear market / bearish A falling market / pessimistic.

  Bull market / bullish A rising market / optimistic.

  Call In the context of a derivative instrument – with an option contract it is the right and for a futures contract it is an obligation – to buy an underlying security / index / commodity / asset at a predetermined price on a specific future date. A speculator can make a profit if prices rise further than expected, as they can sell at a higher price in the market and at the same time buy at a lower price by exercising their future or options contract.

  Capitalisation [market cap.] The value of a company.

  Clearing house Acts as the intermediary between buyer and seller. Responsible for the settlement of deals done. Usually acts as a guarantor so that the buyer and seller get their money, even if one party defaults.

  Close [to] To settle a position in the market – to sell a [financial] instrument.

  CME Chicago Mercantile Exchange The leading US financial futures and options exchange.

  Companies House The official UK government register containing information relating to UK registered companies. Based in Cardiff, Wales.

  Company Secretarial Business An agent who is responsible for providing company secretarial services to a company. Its role includes keeping up to date: the company’s information posted at Companies House, the company’s share register – which shows who the owners of the company’s shares are – and arranging shareholders’ meetings.

  Contract notes The paperwork that sets out the contract between a buyer and a seller of a financial instrument. It confirms the terms of a verbal (or computer generated) agreement to buy or sell. See My word is my bond.

  Convertible Unsecured Loan Stock [CULS] A security / bond issued by a company to investors which can either be converted into new ordinary shares in the company at a predetermined price on specified date(s),or alternatively it can be redeemed on the expiry date.

  Counterparty The party on the other side of a futures or options contract. Usually this responsibility is borne by the clearing house.

  Credit Rating Agency Provides information to lenders or investors on the likelihood of the company or Government being able to pay back a debt. For example a company or a country with an AAA rating is expected to be able to meet all its financial obligations even in a severe economic downturn. The lower the credit rating the more expensive the cost of borrowings will be. Other credit rating companies provide information on individuals.

  Debt service cover ratio [DSCR] Measures a property portfolio’s ability to produce enough net rental income to cover its mortgage payments – interest and capital repayments. Lenders usually expect the DSCR to be in excess of 125%, i.e. the net rents are higher than the mortgage servicing costs.

  Derivative Examples of derivative instruments are: futures, options and SWAPs. They are priced by the market with due regard to expected price movements in the future, i.e. their performance is linked to the performance of the underlying asset / index. Relatively small movements in the underlying asset / index price can translate into large profits or losses for those owning the derivative instruments. They are used by investors to hedge [protect] a position, and by speculators in the anticipation of making a profit, where they believe the market’s expectations are wrong.

  EGi Estates Gazette interactive. A leading provider of online news, research and information for the UK commercial property market.

  Eurex [in Frankfurt] The leading Continental European financial futures and options exchange.

  Euronext.liffe The leading UK financial futures and options exchange. It is also a clearing house.

  FCP Fonds commun de placement. A collective investment fund popular in Luxembourg as it pays next to no tax. Broadly similar in concept to unit trusts in the UK.

  Financial ratio Or accounting ratio. A ratio of selected values taken from a company’s financial statements. Each ratio can then be compared with that of other companies and the industry average to see how the company in question is performing.

  Focus A leading provider of online information on UK commercial property deals.

  Futures A standardised contract, which places an obligation on both parties, for the delivery or receipt of a specific amount of a financial instrument – or commodity, etc. – at a set price, on a certain date in the future. With a financial futures contract one buys or sells a financial instrument – which for example may be linked to an index, an interest rate, an exchange rate, etc. The price of the future reflects the market’s expectation of how the underlying index / interest rate / exchange rate, etc. will move. Financial futures are settled in money. Physical futures (e.g. gold, oil, corn) are settled by physical delivery. As there is an obligation to complete the transaction, the intermediary – a broker / bank – requires margin payments which protect them against any losses.

  Where futures prices move against a speculator or investor additional “margin” payments will be required or the position will be closed (sold). Futures price movements can be very volatile when the underlying price of the financial asset to which the future is linked moves in an unexpected way. Speculators can put up a small percentage of the value of the contract (margin payment) and can then find themselves liable to make large additional payments if they get the market’s m
ovements wrong – alternatively if they get it right then large profits can be made. See also Call, Derivatives, Options and Put.

  Gearing See Leverage.

  Gilts Government borrowings (bonds) traded on the stock market. Investors are repaid at a predetermined date (redemption date). Interest is paid half yearly.

  Hedge [to] To off-set the risk in another investment. See Unhedged.

  HR Human resources.

  Hypothecation In taxation it refers to an obligation to use tax revenues from a particular source in a particular way.

  Income tax [1 penny increase] This raises the Government approximately £3 billion in additional tax revenues.

  Indexhold A form of residential property ownership put forward to provide accommodation for key workers wishing to live close to their place of work in cities or major towns where house prices would otherwise be too expensive. See www.indexhold.com.

  Inelastic In a market where supply is inelastic, small changes in demand dramatically affect the price by pushing it up (more demand) or pulling it down (less demand).

  Instrument A financial product.

  Interest rate contracts These financial instruments enable speculation on which way interest rates will move. They come in a variety of forms such as exchange traded futures and options contracts, SWAPs, and forward contracts.

  Invisible [an] In the context of MI5 it describes a terrorist who is normally resident in the UK and who can therefore move around freely and unnoticed.