The shares of a company about to be taken over were likely to rise in value. If one could buy them at a low price before even a rumour of takeover started, the gain could be huge.
Such unprofessional behaviour by a merchant bank would be instantly recognised simply because of the profits made, and no investment manager would invite personal disaster in that way.
However, [asked the article] What’s Going On in the merchant bank of Paul Ekaterin Ltd? Three times in the past year takeovers managed by this prestigious firm have been ‘scooped’ by vigorous buying beforehand of the shares concerned. The buying itself cannot be traced to Ekaterin’s investment managers, but we are informed that the information did come from within Ekaterin’s, and that someone there has been selling the golden news, either for straight cash or a slice of the action.
‘It’s a guess,’ I said flatly, giving Alec back the paper. ‘There are absolutely no facts.’
‘A bucket of cold water,’ he complained, ‘is a sunny day compared with you.’
‘Do you want it to be true?’ I asked curiously.
‘Livens the place up a bit.’
And there, I thought, was the difference between Alec and me. For me the place was alive all the time, even though when I’d first gone there eight years earlier it had been unwillingly; a matter of being forced into it by my uncle. My mother had been bankrupt at that point, her flat stripped to the walls by the bailiffs of everything except a telephone (property of the Post Office) and a bed. My mother’s bankruptcy, as both my uncle and I well knew, was without doubt her own fault, but it didn’t stop him applying his blackmailing pressure.
‘I’ll clear her debts and arrange an allowance for her if you come and work in the bank.’
‘But I don’t want to.’
‘I know that. And I know you’re stupid enough to try to support her yourself. But if you do that she’ll ruin you like she ruined your father. Just give the bank a chance, and if you hate it after three months I’ll let you go.’
So I’d gone with mulish rebellion to tread the path of my great-grandfather, my grandfather and my uncle, and within three months you’d have had to prise me loose with a crowbar. I suppose it was in my blood. All the snooty teenage scorn I’d felt for ‘money-grubbing’, all the supercilious disapproval of my student days, all the negative attitudes bequeathed by my failure of a father, all had melted into comprehension, interest and finally delight. The art of money-management now held me as addicted as any junkie, and my working life was as fulfilling as any mortal could expect.
‘Who do you think did it?’ Alec said.
‘If anyone did.’
‘It must have happened,’ he said positively. ‘Three times in the last year... that’s more than a coincidence.’
‘And I’ll bet that that coincidence is all the paper’s working on. They’re dangling a line. Baiting a hook. They don’t even say which takeovers they mean, let alone give figures.’
True or not, though, the story itself was bad for the bank. Clients would back away fast if they couldn’t trust, and What’s Going On... was right often enough to instil disquiet. Henry Shipton spent most of the afternoon in the boardroom conducting an emergency meeting of the directors, with ripples of unease spreading outwards from there through all departments. By going home time that evening practically everyone in the building had read the bombshell, and although some took it as lightheartedly as Alec it had the effect of almost totally deflecting speculation from Gordon Michaels.
I explained only twice about ‘flu’ and pills: only two people asked. When the very reputation of the bank was being rocked, who cared about a dip in the ornamental fountain, even if the bather had had all his clothes on and was a director in Banking.
On the following day I found that filling Gordon’s job was no lighthearted matter. Until then he had gradually given me power of decision over loans up to certain amounts, but anything larger was in his own domain entirely. Within my bracket, it meant that I could arrange any loan if I believed the client was sound and could repay principal and interest at an orderly rate: but if I judged wrong and the client went bust, the lenders lost both their money and their belief in my common sense. As the lenders were quite often the bank itself, I couldn’t afford for it to happen too often.
With Gordon there, the ceiling of my possible disasters had at least been limited. For him, though, the ceiling hardly existed, except that with loans incurring millions it was normal for him to consult with others on the board.
These consultations, already easy and informal because of the open-plan lay-out, also tended to stretch over lunch, which the directors mostly ate together in their own private dining room. It was Gordon’s habit to look with a pleased expression at his watch at five to one and take himself amiably off in the direction of a tomato juice and roast lamb; and he would return an hour later with his mind clarified and made up.
I’d been lent Gordon’s job but not his seat on the board, so I was without the benefit of the lunches; and as he himself had been the most senior in our own green pasture of office expanse, there was no one else of his stature immediately at hand. Alec’s advice tended to swing between the brilliantly perceptive and the maniacally reckless, but one was never quite sure which was which at the time. All high-risk Cinderellas would have gone to the ball under Alec’s wand: the trick was in choosing only those who would keep an eye on the clock and deliver the crystal goods.
Gordon tended therefore to allocate only cast-iron certainties to Alec’s care and most of the Cinderella-type to me, and he’d said once with a smile that in this job one’s nerve either toughened or broke, which I’d thought faintly extravagant at the time. I understood, though, what he meant when I faced without him a task which lay untouched on his desk: a request for financial backing for a series of animated cartoon films.
It was too easy to turn things down... and perhaps miss Peanuts or Mickey Mouse. A large slice of the bank’s profits came from the interest paid by borrowers. If we didn’t lend, we didn’t earn. A toss-up. I picked up the telephone and invited the hopeful cartoonist to bring his proposals to the bank.
Most of Gordon’s projects were half-way through, his biggest at the moment being three point four million for an extension to a cake factory. I had heard him working on this one for a week, so I merely took on where he had left off, telephoning people who sometimes had funds to lend and asking if they’d be interested in underwriting a chunk of Home-made Heaven. The bank itself, according to Gordon’s list, was lending three hundred thousand only, which made me wonder whether he privately expected the populace to go back to eating bread.
There was also, tucked discreetly in a folder, a glossy-prospectus invitation to participate in a multi-million project in Brazil, whereon Gordon had doodled in pencil an army of question marks and a couple of queries: Do we or don’t we? Remember Brasilia! Is coffee enough?? On the top of the front page, written in red, was a jump-to-it memo: Preliminary answer by Friday.
It was already Thursday. I picked up the prospectus and went along to the other and larger office at the end of the passage, where Gordon’s almost-equal sat at one of the seven desks. Along there the carpet was still lush and the furniture still befitting the sums dealt with on its tops, but the view from the windows was different. No fountain, but the sunlit dome of St Paul’s Cathedral rising like a Fabergé egg from the white stone lattice of the City.