Due Diligence

by Grant Sutherland

  ‘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 help 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.

  ‘Find out who’s selling. I’ll be in my office.’

  Passing back through the desks to the door, I nod to the senior dealers in a calm and businesslike way. I am in control. We are taking thing
s in hand. But their manner tells me that they are not wholly convinced. They study me, searching for flaws. I cannot pretend to be one of them: I haven’t earned their respect. It occurs to me that at a time like this, for all his faults, they would really much rather have Daniel.

  7

  * * *

  When Henry comes to the phone he doesn’t sound that bad, so I outline the situation and he agrees to get straight back.

  ‘My office, not the Dealing Room,’ I tell him. I want to see what kind of state he’s in before I turn him loose out there.

  Next I ring Keith Trevalyn, a director of one of the money brokers.

  ‘Social or business?’ he asks.

  When I remind him that it makes no difference in his trade, he laughs.

  Five years ago he worked for Carlton Brothers, but the parting was amicable, he’s stayed in touch, and we’ve done each other favours in the past. The money brokers serve as useful points of connection for scores of Dealing Rooms, but they’re telephonic middle-men in a world that’s going electronic. Whenever we meet these days, Keith offers the broker’s usual cynical observation. ‘Screens,’ he says, ‘don’t buy lunches.’ True, but neither do screens get paid a hundred thousand pounds a year: the days of the brokers are numbered. Keith Trevalyn might be looking for work very soon.

  So now I tell him that I have a small problem. How small? he wants to know. I explain that we’re having our name turned down a little too often.

  ‘Limit problems?’

  ‘Doubtful. Too many full on us all at the same time.’

  ‘Overtrading?’

  A possibility, I admit, that hadn’t occurred to me. But my rush of hope fades when I recall how quickly and widely the market has turned against us: too much of a coincidence.

  ‘I don’t think so. Look Keith, is there any chance you can sniff around a bit? Maybe your boys have heard something.’

  ‘Like what?’

  ‘Anything. A rumour, I don’t know, anything.’

  ‘Rumours? Christ, a quid for every rumour I heard in this place, I could bloody retire.’

  ‘Keith—’

  ‘Yeah, yeah, don’t fret. I’ll call you back later.’ He pauses. ‘Listen, if I get no joy out of my knuckleheads, I’ll ring round.’

  I tell him that I don’t want the other money brokers involved.

  ‘Not those shits? I mean the clients. I'll try a few of the banks.’

  The offer I’ve been waiting for. The banks, at this stage, will tell him more than they want to tell me. With or without my approval, Keith will now call them anyway, so I might as well hear the result. I suggest a couple of names, two of the clearing banks. Before he can question me any further, I say I’ll be expecting his call in half an hour. Then I hang up.

  Henry arrives ten minutes later. Dishevelled, and dripping wet, he has his coat on his arm. He picks at his soaking shirt gingerly, holding it away from his chest. As he comes towards the desk, the stench of beer envelops me.

  ‘What’s up?’ he says.

  Deflated, I suggest he should return to his party. He looks surprised. But then he realizes what’s in my mind, and he shakes his head. ‘One of the dickheads tipped a pint over me.’ He gives another tug at his shirt. ‘What’s this name- problem crap?’

  ‘How much have you had?’

  ‘Not enough.’ He smiles. ‘Sounds like maybe I should’ve got stuck in while I could.’ He nods to the ensuite bathroom. ‘Any towels?’

  He really does seem okay. ‘Use the shower, Henry. You reek. There’s a clean shirt in the cupboard.’

  Then we hold a conversation, voices raised, between office and bathroom. I give him the sobering news. He reappears in the doorway clutching a towel around his waist, his face quite pale now. A sudden thought seems to strike him.

  ‘Hey, this isn’t some stupid birthday wind-up, is it?’

  ‘Uh-uh.’

  ‘Christ all fuckin’ mighty.’

  He steps back out of view. The shower comes on and steam billows into my office.

  ‘When you’re finished in there, get out to the Dealing Room.’ He doesn’t answer, so I step up to the open door and repeat the instruction. Then I head out to find Sir John.

  8

  * * *

  ‘They won’t like it,’ Sir John says. ‘Not at all.’

  My astonishment at this remark strikes me dumb at first. They won’t like it? The sole redeeming feature of Sir John’s 'arrangement' with the clearer was the leverage it gave us; but now that we need it, he comes out with this: they won’t like it?

  ‘Nobody’s asking for their opinion. Call them, tell them they reinstate our trading line, or that parcel of their shares we own goes to the highest bidder.’

  ‘That’s a threat, Raef.’

  ‘If you want to ask them politely, go ahead. Once they’ve turned you down, just tell them.’

  Sir John wavers a moment, his discomfort quite plain. This will not go down well with his friends at the Club. And if that cloistered world closes ranks against him, he'll be out in the cold — a prospect, I see now, that terrifies him.

  'Surely it’s not that bad,’ he protests. ‘Why don’t I just call round, get this straightened out quietly.’

  I raise a hand; don’t even think about it. 'The Dealing Room’s on its knees. You start asking favours now and the market’ll smell blood.’

  ‘But I could just see, Raef. Surely.’

  Between clenched teeth, I name the clearing bank.

  ‘Call them. Right now.’

  ‘Raef—’

  ‘Call them!’

  He starts back, surprised. And hurt. It would be so much easier if I could bring myself to dislike him, but I can’t. As he reaches for the phone I feel a twinge of remorse at my impulsive outburst. But when he looks at me before he dials, I hold firm against his silent plea. I pick up the extension and listen.

  Sir John’s call is put through, and a high reedy voice comes on at the far end.

  ‘John?’

  ‘Matthew. Bearing up? Thought I might just catch you for a word.’

  ‘Can I call you back John? Bit busy here.’

  Sir John seems about to concede. I glare at him, mouthing the word, No.

  ‘Well, no actually,’ Sir John tells him. ‘There’s a situation I was hoping we could discuss.’

  ‘Yes?’

  Sir John rests his forehead in one hand. ‘There’s been a misunderstanding between our bods in Settlements. We’re being told you no longer have any trading line open with us. Just wanted to let you know. Give you a chance to clear it up before it becomes a nuisance.’

  A few seconds’ silence follows; it occurs to me that a whispered conference is taking place.

  ‘No, apparently that’s right,’ the reedy voice says. ‘We’ve filled up our trading line with you temporarily. It should roll off in a few days. I really must fly, John.’

  Sir John looks at me as if to say, What next?

  I whisper, 'Tell him. The arrangement.’ And I make a slicing gesture across my throat.

  This has gone beyond a gentlemanly game. After what I saw in the Dealing Room, and after hearing the clearer’s attempt to drop us, I am certain now that a deliberate punch below the belt is necessary.

  I whisper it again. ‘Tell him. Now.’

  ‘Matthew,’ Sir John says. ‘I wonder if you’ve had any time lately to look at our arrangement.’

  Another silence follow, longer this time. There are definitely others at the far end, listening in. Harris’s tone becomes silky. ‘The telephone’s hardly appropriate. What say the Club at eight?’

  I shake my head. While Sir John declines the invitation, I scribble a few words on a pad and turn it for Sir John to see. He reads, then looks up at me.

  ‘Matthew,’ he says frowning, ‘there appears to be a chance that the arrangement no longer suits our book. In fact it’s possible the whole position will have to be unwound.’

  ‘Unwound?’ the voice blurts out. But th
en something, or someone, seems to check him. More silence.

  I scribble another note to Sir John. Committed now, he takes a deep breath.

  ‘If our trading line with you can’t be reopened today,’ he tells Matthew Harris, ‘we really won’t have any choice. We’ll have to clear the decks. The arrangement will have to go. Tonight.’

  Harris, regular churchgoer and respected man in the City, calls Sir John a cunt. Sir John’s look darkens. His eyelids droop in a way I haven’t seen for years. When I signal for him to hang up he raises a finger; one moment.

  ‘Thank you for your cooperation, Matthew,’ he says softly. ‘I look forward to receiving your call before six o’clock. Kindest regards to your wife.’

  Matthew Harris hangs up. Sir John looks at me and smiles. It is a glimpse of the man he once was, and I feel, just for a moment, quite ridiculously proud of him.

  9

  * * *

  Many of our clients, when they run into difficulties, stick their heads deep in the sand. This is known, around our office, as the Ostrich Effect. It is the common factor behind nearly every bankruptcy we see. We had one client, a toymaker, whose line of toys was condemned by the National Safety Council in August. Micawber- like, he omitted to mention this to us and kept on producing the toys until December in the vain hope that something would turn up. By the time he stopped payment on our loan, he had a full inventory of mechanical dinosaurs, a workforce that hadn’t been paid for a month, and an extremely long list of shops that had refused to stock his discounted wares. Vance had one of the purple brontosauruses encased in glass as a memento, and once each quarter he presents it to the member of his department who has made the worst blunder: my first year in Corporate Finance, I won it twice.

  ‘Speak to us.’ This is what we tell our clients. ‘If you get into trouble, let us know.’ Good advice, and some of them take it. And this is the question for me now: do I take this good advice, or do I succumb to the Ostrich Effect? Do I go to see Roger Penfield and tell him what’s happening, or do I cross my fingers and stick my head in the sand?