Merrill's fury over sex bias case delay

Merrill Lynch, which is fighting the biggest ever compensation claim for sex discrimination from a former senior female employee, erupted in anger yesterday after it emerged that the bank would not be able to officially challenge the allegations for more than two months.

Merrill Lynch, which is fighting the biggest ever compensation claim for sex discrimination from a former senior female employee, erupted in anger yesterday after it emerged that the bank would not be able to officially challenge the allegations for more than two months.

The move came after the case brought by Stephanie Villalba, who is suing Merrill for £7.8m, was adjourned until 31 August because Ms Villalba's barrister has become ill.

Tim Cobb, the head of international communications for Merrill, said: "We are extremely disappointed that we will now have to wait several more months before having a chance to tell our story and repair the damage caused by Ms Villalba's baseless assertions."

Ms Villalba's case, which is being heard in Croydon, south London, has been extremely damaging for Merrill. She has alleged that her superior and one of the bank's most high-ranking employees, Ausaf Abbas, asked her to sit in the stewardess's seat on a flight during a business trip and serve drinks to her male colleagues.

Ms Villalba, whose salary reached $1m before she was sacked last summer, also said she was constantly bullied and undermined by Mr Abbas, who was brought in above her to be in charge of Merrill's European private client business, and by other male bankers.

Banks and other City institutions often settle sex discrimination cases out of court to avoid adverse publicity. But management at Merrill decided to brave the publicity because they felt they had a strong defence. Mr Cobb added: "For the last two weeks, Ms Villalba has had the opportunity to present her allegations to the tribunal without challenge. The allegations are without merit and attack the reputation of Merrill Lynch and the character of a highly respected manager. We were looking forward to having the opportunity to set the record straight and present the facts of the case to the court."