The City Diary: When is a loan not a loan? When it's from Cantor
Slackbelly exposes the good, the bad, and the ugly of The Square Mile
Sunday 29 August 2010
I'll begin with a case that has just hit the High Court, which gives an intriguing insight into the workings of the City.
Cantor Fitzgerald, the broker that seems to have a taste for trips down the Strand, is suing a former employee, Benjamin Koskas, for the repayment of an £87,827 "forgivable" loan.
These loans are common enough in the City as an alternative bonus payment and are "forgivable" in the sense that if you work for a company for an agreed period, then they get written off. If you want to leave before you've served your time, however, then you have to repay the lot, and the loans are seen by many as a cunning, even draconian, method of staff retention. Cantor, which is led by Howard Lutnick has the reputation of being more attached to this tactic than most.
Still, court documents show that Koskas did trouser the cash, handed in his notice before working the agreed three-year period, and has so far failed to repay his former employer. His defence revolves around restraint of trade and technicalities regarding his February resignation.
Chris McGrath, the lawyer defending Koskas and a longstanding adversary of Cantor, declines to comment on the case – as does the broker itself. So I'll take a wild punt and guess that this case will end up being settled, adding more weight to the oft-used line about legal departments at broking firms: they are profit centres.
Banned Greystoke is still laying down the law
What news of Andrew Greystoke, the Atlantic Law founder and solicitor who was banned for life from the City in May for his role in assisting share pedlars to rip off at least 130 people in a "boiler-room" scam?
That punishment from the FSA also prompted the Solicitors Regulation Authority to institute disciplinary proceedings against him – but the body seems to be taking its time as Greystoke is still listed as a solicitor. He's also quietly changed the name of his firm to Stanwick & Bond (although it's yet to be registered with the Law Society).
"Andrew Greystoke is not back in the office until next week," blocks one Julian at S&B – who refuses to reveal his own surname. "We are not at liberty to discuss with you when we changed our name".
Still, despite not taking any action thus far, the SRA insists: "We have him in our sights."
It's the quiet life for Leech – on doctor's orders
Greystoke was also once a director and major shareholder in First London Securities, the defunct investment bank that attracted attention last year due to its links with a convicted insurance fraudster and its role in the short-lived takeover of Notts County, the Football League's oldest team.
The bank also boasted former Conservative environment minister Tim Yeo and Nicholas Chance, Prince Michael of Kent's private secretary, as directors, while a former shareholder was one-time Jersey bankrupt Kevin Leech.
Leech, I note, has just resigned from the board of Devilfish, a listed poker group, on the grounds of ill-health. I'm told the 67-year-old is suffering from high blood pressure, which has prompted doctors to instruct him to retire. Associates are sceptical that the old rascal will obey the orders for long, however.
There was gold in Polly Peck's window sills
The return of Polly Peck boss Asil Nadir just about gives me enough of an excuse to retell a witty observation about the old fugitive. David Stoddart, highly regarded retail analyst at finnCap, and former Polly Peck worker, once recalled: "It was the only company I've ever been at where the fixtures and fittings appreciated."
Von Finck Jnr moves into the West End
Property industry aficionados will know that O'Callaghan Properties scooped £48m last week by selling 20 Grafton Street to a "private German investor", in one of the priciest office deals in the West End this year. So who was the mysterious buyer?
Step forward Baron August von Finck Jnr, one of Germany's richest men. Forbes estimates he is worth £5bn. His family trust has interests in property around Munich, a shareholding in hotel group Mövenpick, and stakes in fast-food chains. Still, much of the wealth originates from great-grandfather Wilhelm von Finck, who founded insurance giant Allianz and private bank Merck Finck & Co.
The bank was then expanded by Baron August von Finck Snr – a controversial figure as a leading Nazi supporter and one of a group of industrialists who met Hitler in 1931 and promised financial support in the event of a successful putsch against the Weimar Republic.
Von Finck Jnr sold Merck Finck to Barclays in the 1990s.
1. Open mouth 2. Close brain 3. Insert golf club
Comb-over king Donald Trump does not like the Chinese at all. He blogs: "From the gymnasts caught cheating at the Olympics to the singer caught lip-synching on international television, I don't have the highest esteem for their ethics. It's all a charade. I also don't like the fact that we look like fools. I know for a fact they laugh at the stupidity of our leaders, and for good reason. They can't believe they're getting away with what they're getting away with and we're allowing it."
Simultaneously, bosses at Aberdeen Airport say they are in talks with Chinese airlines about new services to the Granite City. Their big selling point? The new £750m Balmedie golf resort being built by, er, Donald Trump.
Bannatyne gets Red Molotov's T-shirt treatment
Following my story that Red Molotov, the T-shirt firm, was selling designs featuring the BBC's Robert Peston comes another business-inspired garment.
The craggy features of Duncan Bannatyne, star of the BBC's Dragons' Den, can now be enjoyed by T-shirt wearers. The marketing bumf reads: "Everyone's favourite Dragon. Well, apart from Peter Jones maybe. And that James Caan seems a nice bloke. Deborah Meaden frankly scares us though." The shirt itself reads: "I don't like the product, I don't think it would sell, it's not a viable business, and I'm not so keen on you ... and ... I'M OUT!" I'm sure it's ironic.
Men in suits: Has Gordon Gekko gone out to lunch at last?
The initial online reviews for Money Never Sleeps, the soon-to-be-released sequel to Oliver Stone's Wall Street, starring Carey Mulligan and Shia LaBeouf beside Michael Douglas, have been pretty positive. But might the studio be controlling things a little? My man at an early viewing reckons Gordon Gekko's latest showcase has "lost its edge", with many "punch lines coming from the old film". Who'd have thought it?
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