Morgan claims `disloyalty' led to suspension

Robert Smith, the newly installed chief executive of Morgan Grenfell Asset Management, was adamant yesterday that he had evidence that Nicola Horlick had been attempting to poach key staff to move to another firm. He disputed her version of events point by point.

He said the evidence of poaching was the reason why he suspended her from her pounds 1m-a-year job on Tuesday, even though only the previous Friday he had offered her the promotion she so clearly wanted. Mr Smith saw her as his obvious successor as soon as she returned from maternity leave in October, and had discussed this with her on a number of occasions.

The job offer last Friday came after a meeting between Mr Smith and the six top members of her staff that day. At this meeting it emerged that the staff believed she was planning to leave, and wished to take some of them with her.

"They alleged that she was planning to take a team out, and the members did not want to go," Mr Smith said. However, it was not this alleged attempt to persuade staff to follow her that led to her dismissal. Rather, it led to an offer of promotion to keep her and the team.

Mr Smith offered her a job as his number two - managing director of Morgan Grenfell Asset Management - and they shook hands. The offer was not in writing but, said Mr Smith yesterday, "My word is my bond."

He went back to his Scottish home that weekend believing he had defused the situation. But he took a phone call which aroused his suspicions that she was still approaching senior managers about moving en masse to a rival firm.

Mr Smith refuses to say who made the phone call but it was clearly from someone he knew and trusted.

"The caller gave me information which suggested she had a hidden agenda," Mr Smith said. He spent the weekend following up the leads, and pursued his enquiries on Monday. By Tuesday he knew he had no other course of action than to suspend her.

He said he followed all the official internal procedures, which give the person under suspension the chance to reply. They agreed that she would attend a disciplinary hearing which would take place yesterday.

"I was quite convinced there was a case to answer," he said. But that hearing did not take place. Mrs Horlick instead visited Mr Smith on Wednesday to talk over the events and on Thursday her resignation was faxed by her lawyer to Morgan Grenfell's lawyer.

In a memo to his 700-strong staff yesterday he said he stood by his actions. "We are completely satisfied that we have acted properly throughout. MGAM is a great business. I have received wholehearted support for the management team in dealing with this matter.

"We are looking forward to continuing the development of the business in 1997 and beyond. No one individual is bigger than the institution."

Mrs Horlick had been playing key role in rebuilding client relationships and staff morale after the Peter Young fiasco last year. Morgan Grenfell insiders admit she was furious about Michael Dobson's handling of the Keith Percy affair but are reluctant to say that they agreed with her.

Asked whether MGAM in general or the pension fund business would be hurt, Mr Smith said: "It's not very pretty reading, of course... but I don't think it will do lasting damage."

All in a busy day: `Superwoman' flies from London to Frankfurt

8am - Holds impromptu press conference outside her Kensington home. Dashes off to the City in bright red Alfa-Romeo for showdown with management.

10.30am - Storms into MGAM's Finsbury Circus offices in the City with media entourage in tow. Sweeps past security guard, and strolls into her old office to confront chief executive Robert Smith.

10.35am - Robert Smith is not in the office. Staff greet her with stunned silence and then she is asked to leave by Martyn Drain, head of personnel. She heads off to Deutsche Morgan Grenfell's head office, round the corner in Bishopsgate, to try to see Michael Dobson, chief executive, but is refused entry.

Noon - Gives interviews to BBC TV and radio.

Lunchtime - Flies to Frankfurt to seek meeting with management board of parent company Deutsche Bank.

Early afternoon - Makes two phone calls on arrival at Frankfurt airport, told Deutsche management will not meet her, and then books return flight.

Mid-afternoon - She pushes on regardless. Meets senior legal and personnel officials from Deutsche, accompanied by a reporter from Reuters to act as her witness. Emerges after two hours, claiming she had a fair hearing and heads back to London. On her return, she phones the BBC demanding an interview.

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