Crisis deepens at Morgan Grenfell

Sparks fly at fund management firm as Nicola Horlick goes on publicity offensive to win her job back

Deutsche Morgan Grenfell plunged deeper into crisis yesterday after Nicola Horlick, the City's ``Superwoman'', threatened to take legal action against the firm and jumped on a plane to the bank's head office in Frankfurt to demand back her pounds 1m-a-year job.

Two diametrically opposed versions of the events of the last week were issued yesterday by the DMG and Horlick camps, as Mrs Horlick confronted a senior legal official of Deutsche Bank at the group's Frankfurt head office.

Mrs Horlick, who has just turned 36, earned her title ``Superwoman'' for her reputation of being able to combine a hectic family life - she has five children and an investment banker husband - and her demanding job as head of Morgan Grenfell's pounds 18bn pensions fund business.

Her hitherto unblemished career was thrown into the limelight on Tuesday when Robert Smith, the new chief executive of Morgan Grenfell Asset Management, suspended her for alleged breach of contract after suspecting she had been attempting to poach staff to move to a rival fund management group.

"She has claims for unfair and wrongful dismissal," said John Farr, her solictor at Herbert Smith, the law firm. She is receiving public relations advice from Anthony Cardew of Cardew & Co. The claim is sizeable, running to at least pounds 1m.

She denied the accusations by the firm that she had been in talks with another employer and was trying to take her current team with her.

"There has been a very large misunderstanding. They should have asked me, they decided to suspend me on the basis of hearsay," Mrs Horlick said as she arrived in Frankfurt yesterday afternoon, by then calm and collected. She had earlier charged into MGAM's London offices in Finsbury Circus, accompanied by photographers, demanding to meet Mr Smith.

She failed to find him or Michael Dobson, chief executive of Deutsche Morgan Grenfell, the investment bank of which MGAM is a part.

So, at lunchtime, she rang BBC2's Working Lunch programme from Heathrow airport to announce her intentions to meet the board of Deutsche Bank in Frankfurt. "I'm going to go and say this is the case, these are the facts, I think it is unfair, I've built you a very successful business.

"I'm very keen to stick to my team and do the best I can for my clients," Mrs Horlick said.

Mr Smith said the remaining 30 fund managers at the firm had written yesterday to the 350 UK clients and confirmed they all intended to stay with MGAM.

Her actions prompted anger among colleagues in leafy surrounds of Finsbury Circus in the City, where there has not in living memory been such a public dispute about a resignation.

"As a result of all this she's lost a lot of friends," said one source who had been speaking with sources inside MGAM.

Her departure has added to the problems of the Peter Young affair and are likely to raise serious questions in Frankfurt about the management in London, headed by Mr Dobson. After the Peter Young affair, Rolf Breuer - soon to be the chairman of Deutsche - investigated the London operation but left it more or less intact, and it did not affect the career of Mr Dobson, a main board member.

With the second fiasco, a senior investment adviser said: "If you were sitting in Frankfurt you would be pretty concerned about this."

Comment, page 23

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