Hands' nemesis takes the stand in EMI trial
Tuesday 26 October 2010
The banker accused of betraying private equity kingpin Guy Hands over the purchase of EMI took to the stand to defend his integrity last night, saying he had always been as truthful and honest as he could.
Citigroup's David Wormsley, one of the City of London's most influential dealmakers, is accused of lying to Mr Hands, his former friend to make him pay a higher price for EMI in 2007, the basis of the £7bn corporate dispute.
Mr Wormsley faced a barrage of questions from Mr Hands' attorney, David Boies, over how he had persuaded Mr Hands of his trustworthiness and integrity in the first place. "It was my general demeanour towards him," Mr Wormsley said, "to always be as truthful and honest as I could be."
Citigroup made an estimated $375m in fees from financing Terra Firma's purchase, Mr Hands testified earlier, but the deal has now gone sour, requiring repeated infusions of Terra Firma cash to prevent the company from falling into the hands of its bankers.
The jury was also shown video footage of Mr Wormsley giving evidence in a deposition earlier this year, being asked if he thought he had succeeded in making Mr Hands trust him.
The banker is accused of tricking Mr Hands into believing there were other bidders for EMI and therefore encouraging Terra Firma to pay a higher price and take on more debt than the music company could ultimately bear.
Yesterday's procedings in the US federal court in Manhattan also featured a cameo from Simon Borrows, co-head of investment bank Greenhill, which – like Citigroup – advised EMI on its sale, provided an insight into how bankers play potential bidders off against each other.
In his video deposition, Mr Borrows was shown discussing how he had been upset by press reports at the time suggesting Greenhill had set a firm deadline for bids. "In terms of managing bidders," he said, "it is useful for them to have as much uncertainty in their minds as possible." He also said that Mr Wormsley had been kept out of the loop when the only other likely bidder, Cerberus, dropped out as the Citigroup grandee was known to be close to Mr Hands and Greenhill didn't want the information to leak. "It was a need-to-know piece of information," Mr Borrows said, "and the people who needed to know that were a very small number."
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