'It was I who spoke to Miss Chater. And I spoke to a Mr Shoffman about it a few months ago. We are quite sure we have given no guarantee to this Tremont Capital. Indeed, we have no record of such a deal existing. If you have some information on this company, we would like to follow up. We don't like people misusing the name of our bank.'
'Thank you very much, Mr Hakata. I will send you some information if I can. Goodbye.'
This didn't make any sense. How could Honshu Bank be unaware of a guarantee they had given? Hakata had clearly checked his files quite carefully. Still, Honshu Bank was a very big bank. Perhaps the guarantee had somehow got lost. Unlikely, but just about possible, I supposed.
If Honshu Bank hadn't heard of the issue, then Bloomfield Weiss certainly should have. I decided to call them. I didn't call Cash. If Debbie was right and there really was something wrong with this issue, I didn't want to alert Cash to it at this stage. So I rang the Bloomfield Weiss library, which would have complete information on every bond issue they had ever managed.
A young woman's voice answered the phone, 'Library.'
'Good-morning. It's Paul Murray from De Jong here. Can you please send me all the details you have on a private placement you led for Tremont Capital NV. It was about a year ago.'
'I'm afraid we have no details on that issue,' the librarian replied immediately. No pause to check files or cards.
'But you must have. Can't you check?'
'I have checked. Your colleague Miss Chater rang last week. We have no details on the issue. And the reason is that the issue does not exist.'
'You must have made a mistake. You can't be so sure. Please check again.'
'Mr Murray, I have checked very thoroughly.' The librarian's voice rose. She was obviously not a woman who liked her professional pride to be questioned. 'Miss Chater was just as insistent as yourself. The issue just does not exist. Either our records are wrong, or yours are. And we have spent hundreds of thousands of pounds on modern relational database retrieval systems. No mention of Tremont Capital anywhere. When you have found the correct name of the bond you own, please call. We will be delighted to help.' With that the librarian hung up, sounding anything but delighted to help.
I leaned back in my chair, stunned. How could the lead manager and guarantor have no knowledge of this bond? Did it really exist? I thought for a moment. Because it was a private placement, it didn't have to be listed on any stock exchange. But there were always lawyers involved in these sort of transactions. I grabbed the prospectus and leafed through, looking for the name of the law firm who had put the transaction together. I quickly found it. 'Van Kreef, Heerlen, Curacao.' Odd. I would have expected a London or New York firm. A few more minutes' examination of the prospectus showed me what I was looking for. 'This agreement shall be interpreted under the laws of the Netherlands Antilles.' None of the customary mention of English or New York law.
Why hadn't this been picked up before? I supposed that if everyone was busy, the documentation might not have been read as thoroughly as it should have been. After all, the Honshu Bank guarantee had probably made it seem unnecessary to check the fine print.
But there was no Honshu Bank guarantee. De Jong & Co. had lent $20 million to a shell company we knew nothing about. We didn't know who owned it. We didn't know what had been done with our money. We certainly didn't know whether we would ever get it back. The legal documentation was probably full of holes.
I made a quick phone call to administration to check to see whether we had received our first interest coupon payment. We had. At least we hadn't lost any money yet. Whoever had set up the company would probably pay at least some interest in order not to arouse suspicion. It looked very much as though we were victims of an elaborate fraud.
I couldn't ask Cash about it directly. If he were implicated in some way, it might tip him off, and I couldn't risk that. But I somehow needed to find out more about Bloomfield Weiss's involvement. I had an idea. I picked up the phone and punched out a number.
'Allo. Banque de Lausanne et Geneve.'
'Claire, it's Paul. Are you free for lunch today?'
'Oh, what a nice surprise. Of course, I should love to have lunch with you.'
'Great. I'll see you at Luc's at quarter past twelve.'
Claire had worked at Bloomfield Weiss until six months ago. She ought to be able to tell me something about Tremont Capital, and Cash's involvement with it. Besides which, it was nice to have an excuse to take her to lunch.
I got to Luc's Brasserie early and was shown to a table by the window. The restaurant was on the second floor of a building in the midst of Leadenhall Market. The sun streamed in through the open window, bringing with it the noise of the shoppers below. The restaurant was only half full; it tended to fill up around one o'clock with underwriters from nearby Lloyd's.
I had been waiting only a couple of minutes when Claire arrived. The loud clack of her high heels on the black and white floor, the tight short skirt hugging her thighs and the trace of expensive but subtle perfume following her captured the attention of every man in the room. As she came to my table, held out her hand in greeting, smiled, and sat down opposite me, I could not help feeling a touch of pride at the envious glances in my direction. Claire was not classically beautiful, but she was desperately sexy.
We ordered, and shared complaints about how quiet the market was. After a few minutes, I came to the point. 'Claire, I did actually have something specific to talk to you about. But it's very delicate, and I would be very grateful if you wouldn't mention it to anyone.'
Claire laughed. 'Oh Paul! How exciting! A secret! Don't worry, I won't tell a soul.'
'It's about Cash.'
All trace of laughter disappeared from her face. 'Oh, Cash. That bastard!'
'Why do you call him that? What has he done?' I asked.
'Perhaps I shall tell you a secret first.' She looked down at the table, picked up a knife and began to fiddle with it. 'As you know, I worked for Bloomfield Weiss for two years before I moved to BLG,' she began. 'Well, after a year or so I built up a good group of clients. I was doing lots of business. I was happy, the clients were happy, Bloomfield Weiss was happy. Then Cash Callaghan arrived from New York. He had a big reputation and a big salary to live up to, and he didn't have any existing clients in Europe. So he stole them.'
'How did he manage that?' I asked.
'Subtly at first. He would work out which of the big accounts salesmen did not have enough time to cover properly. He would 'help them out'. Eventually, the client would end up wanting to talk to Cash rather than his original salesman. I suppose in a way that was not too bad, the client got better coverage and the firm did more business. But then Cash began to use more drastic methods.
'In my case he had his eye on my two or three largest customers. If ever I was out of the office, he would call them. But they were loyal, they wanted to stay with me. So then he began a rumour about myself and a client. I am afraid I cannot tell you his name.'
'What was the rumour?'
'He said that I was sleeping with this client, and that the client was giving me all his business because of it,' she said, her voice burning with anger. 'It was ridiculous. Completely untrue. The reason my client did most of his business with me was that I gave him good ideas and he made money out of them. I would never have an affair with a client. Never. It would be completely unprofessional.'
She looked up at me, her eyes alight with fury. Then she laughed. 'Oh Paul, don't look so disappointed.'
I could feel my face redden with embarrassment. Her declaration of professional conduct with clients had shattered some half-hope at the back of my mind. I had no idea that my disappointment had shown.
She went back to her story. 'I didn't know anything about this. Nor did my client. But everyone else was talking about it, or so I am told. It became one of those stories that circles around and around, so that after a month or two you have heard it from several different sources and it has to be true. I am sure my boss must have heard about it, but probably only whispers. Of course I could not deny it. I didn't know there was anything to deny.
'One day Cash went to my boss. He said that my 'affair' was making Bloomfield Weiss the laughing stock of the City. He had some numbers, which he claimed came from a source inside my client's company, that showed that my client was doing 95 per cent of his business through me. Cash must have fabricated those numbers. I know my client did a lot of business with other brokers.
