Marcel Ospel, the Swiss chief executive, unleashed a storm of changes at the meeting, sweeping aside most of the Warburg corporate finance old guard.
Piers von Simson, a former board member of the old SG Warburg, who is among those being sidelined, outdid even his formidable reputation for forthright speaking with a vituperative attack on the changes. He ended with a fierce declaration that he was resigning - something he has not done.
Herman van der Wyck, former deputy chairman of Warburg, followed with an exposition of his achievements, railing against the new regime. "It was a catastrophic miscalculation by those two, they made complete fools of themselves," said one SBC participant.
But the high drama had still to peak, as a long-time Warburg executive declared the clear-out long overdue. Why is it, he asked the astonished assembly, that the same people who had so mismanaged the once great corporate finance business were still around with big offices and chauffeur-driven cars.
Having initially stood back respectfully from Warburg's corporate finance elite, the Swiss have now switched tack, taking a tight grip on a department which is in a state of turmoil.
"Internally the place is in tatters, morale is low. For many, the meeting on the 12th was a cathartic event," confides another close observer.
Still in the throes of fusion, SBC Warburg presents a split personality. The equity side has settled down quickly. Warburg's cash skills combined with SBC's risk management expertise and capital resources have produced an impressive operation that is increasing its market share. With Colin Buchan still in charge it enjoys some continuity. The contrast with corporate finance, which traditionally was considered the repository of Warburg's prestige and authority, could hardly be more striking.
The unwieldy Investment Banking Board, whose main remit is to oversee corporate finance, is being drastically pared down, with younger executives displacing most of the former Warburg grandees. Sir David Scholey, still non-executive chairman of SBC Warburg, is to cease chairing the banking board. Most of the old notables, like Derek Higgs, Nick Very, Edward Chandler, and von Simson, are moving away from management roles. The full changes are expected to be announced in about a week.
"Things had to happen. But it needed an outsider to take a look at the problems and make some tough decisions," said one source. The trigger for the changes was Mark Nicholls' mid-August departure from the top position in corporate finance after suffering a nervous breakdown. "Until then the Swiss had trustingly just let the old Warburg lot carry on. What they found absolutely appalled them," said a Swiss insider.
Marcel Ospel took charge with George Feiger, only recently recruited from McKinsey. "Feiger's words were 'it stinks'. There was no real management, just an amorphous layer of big egos. Croneyism was rampant," said another source.
One recent Warburg departee said: "It was clear the Swiss had not known what they were buying. The degree of suspicion is now intense."
The changes came quickly, most of Mr Nicholls' team being pushed aside at the 12 September meeting." For the first time, there will be streamlined, professional management, allowing the experienced deal-getters to do what they should be doing," said a source.
The moving aside of the old guard appears to have met with a generally positive resonance, according to insiders. But with morale extremely fragile, there are worries that the corporate finance relationships, which depend so much on individuals and confidence, could be at risk.
"There is a sense that more business is going Schroder's way than has otherwise been the case," said Martin Cross, analyst with UBS.
"It's a race now to get things to settle down, and allow the talent to rise above all this bad feeling," said a Swiss insider.Reuse content