Beyond political considerations, Hainsworth’s interest in INI, lay in the good profitability of its different units, and its valuable property portfolio in London. Moscow was another kettle of fish. INI’s link-up with InterBank had been promising and to his mind the default of Yakutneft could have been avoided with a little flexibility on the part of Tarasov. What Hainsworth did not see however was the Kremlin’s machination to bring down the oligarch. His experience with Russia was extremely limited to say the least. Sanctions he perceived as being essentially the work of Washington and imagined, given the weight of City & Colonial, he could with a few shrewd manoeuvres circumvent these, finding a mutually profitable arrangement with Moscow.
As a banker Hainsworth viewed political meddling as non-productive to profit making, though in this particular case it suited his plans. In his view the Kremlin would welcome a positive solution to a problem they saw as being of Tarasov’s making.
All in all the windfall, as he called it, was not a bad deal for City & Colonial, and the recapitalisation of INI could be balanced by the sale of its business activities that did not fit in with his plans. The effect on City & Colonial’s balance sheet, considering its assets of nearly two trillion pounds sterling, would be inconsequential.
*
Fitzwilliams felt as if he had been mugged. He shook his head trying to see things objectively. The first positive note was the realisation his own wealth remained relatively intact. The difference between him and other fallen bankers, he concluded, was that he and his family owned significant blocks of shares in the diverse entities of the banking group, unlike for example Fred the Shred at RBS, who had in simple terms been nothing more than a hugely paid employee of the bank, like most other banking heads. “Including that fucker Hainsworth of City & Colonial,” he mumbled to himself.
That Monday morning he belatedly called James Herring, his longtime friend and lawyer. Herring’s mother had hailed from Cork, which made James fiercely Irish, an ambiguity in view of the fact his father was as English as they came, and who in his time had headed a well-known Oxford law firm.
Herring, a born fighter and strategist, had been astonished when Fitzwilliams recounted the details of his previous day at the Chancellery and the way Fitzwilliams had let himself be drawn into the trap without even consulting him. Perhaps Michael had been stressed by the suddenness of events, or simply too tired after his long journey back from Tanzania, more probably both.
First of all there was the question of legality, whether the takeover was within the rules of law, then came Tarasov, the Yakutneft deal, the role of the Russian government and the charges of fraud and tax evasion, all of which posed the problem of Fitzwilliams’ position as the legal head of bank and the risk of his being accused of aiding and abetting unlawful tax evasion.
Herring would need time and in the meantime suggested to Fitzwilliams he take a break, avoid the press, get away from it all, somewhere where Herring could be easily contact him as he built his case. It would not be easy, City & Colonial was a giant and was backed by the country’s most powerful institutions.
*
To Fitzwilliams’ uncontrollable chagrin he had been forced out of his position as chairman in a bloodless coup, mounted by transient politicians, government functionaries and a predatory banker.
Looking at Bloomberg, saw the Footsie 100 share index had fallen a little less than one percent and INI just under five percent. Not that big a deal in terms of market reaction, he noted grimly.
If Michael Fitzwilliams had been eschewed of his position as chairman of the group, the Fitzwilliams family still had their word to say in the London bank and to varying degrees in the bank’s different holdings, most notably in the Dublin entity. However, they did not have a controlling interest in any of these.
As to its holding in INI Hong Kong Ltd, London did not own the controlling interest, though with 26% of the shares it was marginally the largest individual shareholder. Various Liu family members federated slightly over 30% in the Hong Kong entity and this along with shares held by other local companies and holdings, could in concert constitute, according to the Hong Kong Ordinance, the controlling vote in a board decision.
Other minority shareholders included the Fitzwilliams family and Tarasov’s Moscow Bank. How much Pat Kennedy controlled was not clear, but it was at least 15% of the bank’s shares.
INI Hong Kong Ltd., was specialised in private and corporate banking, trusts and investments. It offered bespoke services for entrepreneurs and their families in the domain of wealth management, more notably: development, preservation and succession. In other words it offered very wealthy Chinese protection from their own government.
For the average man, the functioning of a private bank was opaque; it was intended to be, so opaque that governments and their different fiscal authorities could not penetrate the secrets of those who banked their money with them. Offshore accounts, in Panama, Hong Kong or some island territory, held by screen companies - one hiding the other like matryoshka dolls - grouped in holdings, trusts and other structures protected by an impenetrable veil of secrecy. They served not only the seriously rich, but also high net worth individuals such as Jack Reagan, Tom Barton or Steve Howard, to whom investment risk seemed the most natural of things, but regarded paying excessive taxes as confiscatory, legalised larceny.
As such they were not alone, it was almost a tradition for all those who had accumulated or inherited wealth, including royalty, aristocracy, old money and proletarian sportsmen, actors, entertainers and above all corrupt politicians, elected and non-elected leaders, wherever they were, including those of Russia and China.
Accepting Herring’s advice, Fitzwilliams pulled himself together, a few days of peace and quiet were really what was needed to calmly reflect on his own future and no where was better than his estate in Ireland.
He reached for his phone to put the bank’s jet on standby, then remembered he no longer disposed of that service. Reluctantly he looked up an air charter service and booked a private jet to fly him to Dublin late that same morning.
PARIS
Pat O’Connelly was glued to the TV in his Paris appartment. Little by little he had unconsciously become one of those Parisian bobos, bourgeois-bohèmes, better to well-off intellectuals, who mixed with ordinary folk in the pretence of sharing their daily drudge.
Suddenly his complacency was shaken. With the deliberate attack on Charlie Hebdo and the cold blooded killing of writers, journalists and commentators, life in Paris would no longer be the same.
If the attack wasn’t a declaration of war then what was? A latent civil war was brewing, there was no mistaking it, he thought as he watched the same shocking images of men firing Kalashnikov in the streets of Paris repeated in an endless loop.
O’Connelly, a successful novelist, liked to think of himself as another Parisian. He use the Paris metro for getting around town just like any other anonymous citizen, a habit that gave him an unambiguous view of life in Paris.
To a lesser degree than most other bobo’s, who studiously avoided talk of France’s changing face, he refrained from openly criticising the transformation. But now, there it was on the TV screen in his living room, a senseless killing a few city blocks from his upmarket appartment, carried out by men who had declared war on France and its way of life.
Those who spoke of France being colonised by its former colonies were spot on, there was no mistaking it. In the ten years he had lived in the city he had observed the changes, only half agreeing with the establishment’s politically correct arguments. Whatever the politicians said, there was not the least doubt that France was changing, the French were not French, at least the kind of French they had been in the mind’s eye of the world since the Belle Époque.
The French press, as always, paid lip service to the government, the proof was there for all who cared to look. Reporters without Frontiers situated France in forty fifth position in their table Freedom of the Press, slipping, in
the space of a few years, from tenth position.
*
O’Connelly looked at his watch, it was getting late, he had fixed lunch with Liam Clancy on the other side of the river in a small restaurant nearby to Saint Sulpice.
It was a brisk ten minute walk to the Marco Polo where a table had been reserved. He was the first to arrive and ordered a glass of Champagne to sip as he looked through the notes he had jotted down that morning on his phone.
Ten minutes later, just as he was starting to worry, Clancy appeared looking a little flustered as he struggled out of his coat and handed it to a waiter.
“Hi Pat, sorry I’m late, you mentioned it was by a church and I was at the wrong one.”
O’Connelly laughed.
“Don’t worry you’re here now. What’ll you have to drink?”
Clancy looked at his friends glass and nodded.
“Looks good, I’ll have the same.”
The subject on everybody’s lips that Monday morning was Charlie Hebdo, a crime against the free press, which amongst other things had put France’s lame duck president on a pedestal. For Hollande and his Prime Minister the tragedy was like manna from heaven. The week before they were in the dumps, everything they touched seem to go wrong. Then on Wednesday morning January 7, the terrorists attacked, and by the end of the week Hollande was plebiscited for his handling of the crisis.
P
aris – Quartier St Sulpice
“Did you go to the march?”
“No, I don’t like that kind of thing. Politicos crying crocodile tears whilst the other poor fucks are laying dead on a mortuary slab.”
Clancy nodded, he was still young.
“So how’s our golden boy, still jetting around the world?”
Before Clancy could reply his phone vibrated.
“Sorry Pat,” he said clicking on his inbox with an air of nonchalant importance, “seems urgent.”
“Jesus!” he exclaimed with a start, reading the message again. It was a mail from head office in London, addressed to all personnel, announcing the resignation of Michael Fitzwilliams and the merger of INI with City & Colonial.
O’Connelly looked on bemused as Clancy, whose eyes were fixed on his iPhone, read and reread the text. It was signed by a new chairman, a certain Sir Alec Hainsworth, someone he had never heard off.
“What’s up? Another terrorist attack?”
“Jesus, it’s worse than that. We’ve been taken over.”
“The bank!”
“The bank. I hope I’ve still got a job.”
Clancy looked deflated. He cursed himself for not looking at the morning news. He had been too occupied untangling himself from the arms of a new girlfriend he had been shagging the night before at her studio flat in Vincennes.
Distractedly he wondered who he should call. He worked directly under the orders of Pat Kennedy, who was in Hong Kong where it was evening time.
“Let’s order Liam, then you can explain it to me,” said O’Connelly as the waiter appeared.
Clancy tossed back his Champagne and pointing his finger at the glass asked the waiter for a refill.
“Sorry Pat, this situation is totally unforeseen. I don’t understand what the fuck’s going on.”
The lunch was spoilt, the conversation difficult, desultory, as Clancy slumped back into his seat overcome by the thought of impending disaster. What should have been a joyfully, boastful, reunion, was spoilt as memories of a depressed Dublin pub flooded back.
He had joined INI three of years before after a difficult period of self imposed exiled in Spain. At the end of 2009, he had been unceremoniously dumped from what was then the Irish Union Bank in Dublin, where he had worked as an up and coming trader. The Irish Union, part of Fitzwilliams’ banking group, had taken a serious hit when the first wave of the financial crisis struck Ireland’s happy go lucky shores.
Now, just after recovering his golden boy aura, this, whatever it was, happened. He was out on a limb and because of his link to Kennedy he would probably be ditched again. That English bastard Hainsworth, or whatever his name was, would surely be wanting to make cuts.
Later that afternoon he was due to return to London on the Eurostar and the following evening scheduled to fly to Hong Kong and Shanghai to met with Pat Kennedy and a group of Chinese investors.
That was now up in the air.
It was always the small guys who paid went things went wrong, he thought as he tried to console himself. It was like that in 2008. He like his fellow traders had done what they had been told to do. In his short career as a trader, Clancy had received no instructions or specialised training in compliance, ethics or market regulations, either internally or externally. He had simply done what every other trader had done in trading rooms, wherever they were in the financial world, using strategies and procedures that had existed prior to his arrival and which continued to be used even after the debacle.
*
O’Connelly wished his young friend goodbye and good luck, who, forcing a grim smile, dumped his carry-on into the boot of a taxi, destination Gare du Nord.
As he watched the taxi disappear along the boulevard Saint-Germain, O’Connelly had the feeling the world was heading for another crisis. His euros would soon be worth nothing at the rate things were going, not that it really mattered to him personally, his royalties were paid in dollars, pounds and euros. It was swings and roundabouts, whatever he lost on one he gained on the other.
It was not cold for January and with a good lunch under his belt he slowly strolled home pondering the fate of Liam Clancy. Everything looked the same as he crossed the boulevard Saint-Germain, as it always seemed to. He supposed some were hit harder than others by the depressed economy, which the French government seemed incapable of resolving, the fact that there were more homeless on the streets spoke more than numbers, though the very poor were always more visible in winter.
He hoped his new book, which would come out in the spring, would have better luck than Houellebecq’s which was launched a few days earlier, two days before the attack on Charlie Hebdo to be precise. Submission should have been a very successful, if controversial, launch with television interviews and press articles. Instead it was swept aside, forgotten, seen as an exercise in bad taste. Worse still, one of Houellebecq’s friend’s died in the massacre, which did not prevent apologists for Islam transforming the writer’s novel into an attack on that community.
The politically correct was transforming France into an Orwellian society, where a pusillanimous media, financed in part by the state, did everything in its power to please its masters. The media was instrumental in deciding what the public should know and not know. The French press brainwashed its readers, the television its viewers, gently rocking them into a state of passive acceptance, as an alien vision of France’s tolerant society slowly spread its roots. It was the media that determined politically correctness, preached unattainable visions of equality, pacifying its audience with football, soaps and reality television, promoting popular idols as role models, whilst the establishment with its political marionettes and their business cohorts were given the liberty of exploiting the ordinary man in their race to accumulate power, wealth and domination.
O’Connelly paused on quai des Grands-Augustins overlooking the Seine, lost in his meanderings, his hands posed on the cold white stone wall, he watched the stream of dark waters flow past, the same stream that had flowed under the same bridges during the Revolution, which was said to have freed the French people from tyranny. He recalled Alexis de Tocqueville’s words:
Democracy extends the sphere of individual freedom, socialism restricts it. Democracy attaches all possible value to each man; socialism makes each man a mere agent, a mere number. Democracy and socialism have nothing in common but one word: equality. But notice the difference: while democracy seeks equality in liberty, socialism seeks equality in restraint and servitude.
The angry sound of a car horn snapped him out of his dream. He s
miled at how he was so easily carried away by his thoughts, grinning when he remembered how he himself had become a wealthy man by his pen.
CITY & COLONIAL
It was late evening in Hong Kong when Pat arrived home, exhausted by the events of the day. The City Colonial’s attempt to seize control of Europa Hong Kong Ltd manu militari had been repulsed. But it did not mean they would not come back. As precaution security guards, together with the bank’s own officers, were posted on around the clock shifts before the bank’s offices with strict orders to prevent, by force if necessary, the entry of unauthorized persons. To reinforce security all personnel were issued with new ID cards for the turnstiles in the main lobby of the tower.
Pat had spent a good part of the day with the bank’s lawyers, who had assured him that whilst City & Colonial had taken over Europa Bank Holding plc, and controlled a significant, though minority, holding in the Hong Kong bank, with a seat on its board, their decision making power was next to zero. They were hobbled without the cooperation of the Chinese shareholders who saw nothing good in the sudden arrival of the mega bank.
The Wu family, at the instigation of Pat Kennedy, had been the real force behind the transformation of the INI’s representative office into a fully licensed Hong Kong bank. Old man Liu saw Pat as the kind of dashing entrepreneur, who could carry the bank forward in twenty first century, riding the Chinese dragon as it sought to develop its growing overseas ambitions. He was cast in the same mould as the men who had built Hong Kong, the stuff of Two Gun Cohen, Liu told his son, who though he did not question his father’s wisdom, had never heard of the Anglo-Canadian adventurer who became aide-de-camp to Sun Yat-sen.
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