Crooked Knight: How It All Went Wrong For Ieq

“Beware of the fury of the patient man.” —John Dryden

OoB

Publishers since 1997 Origin of Books ™ 101 Troughton Road Charlton London SE7 7QF Tel: (0800) 321-3802 Fax: (0870) 385-1891 www.originofbooks.com [email protected] If you purchased this book without a cover, you should be aware that this book is stolen property. It was reported as “unsold and destroyed” to the publisher, and neither the author nor the publisher has received any payment for this “stripped book”. Copyright © 2004-2008 by David Alexander All rights reserved, including the right of reproduction in whole or in part in any form. ISBN 0-9747936-0-4 1st Edition January 2004; 2nd Edition June 2006; 3rd Edition January 2007; 4th edition September 2008 Library of Congress Control Number: 2004101151 Printed in the United States of America www.crookedknight.com This is a true story. The facts are as seen and experienced by the author. The identities of three of the characters were changed to protect the innocent. Some details where amended to make the saga more palatable. The imprint Origin of Books ™ and the OoB logo are trademarks of Greg Smith, Charlton London - (0785) 845-6978.

“Facts do not cease to exist simply because they are ignored” —Unknown

“It takes two to speak truth... One to speak, and another to hear” —Henry David Thoreau

Crooked Knight: How It All Went Wrong For IEQ

David Alexander

Origin of Books ™ Published by Greg Smith Charlton, London England

“Bankers who hire money-hungry geniuses should not always express surprise and amazement when some of them turn around with brilliant, creative, and illegal means of making money.” —Linda Davies (former US and UK investment banker)

To those shareholders who understand that there’s more than one way to trap a rat. Often, the resolution you seek is staring you right in the face.

David Alexander 1 January 2004

CAST OF CHARACTERS The Rt. Hon Sir Richard Francis Needham Jonathan Wordsworth Wright Anthony Lindsay Caplin John Sebastian Mackay Keith Reginald Harris Christopher Kenneth Foster Richard Clive Desmond David Alexander Adrian Murtagh Henry Jackson Clive Bradley Peter Maurice Crystal Viscount Robert Francis John Newry Nigel William Wray Jim Brown John Richard Shaw Jane Angela Jales

Each person listed above contributed in their own special way to the writing of this book. Knowing each of these people as I do, they will attempt to assign some relevance to the order of their names…

1 “They may forget what you said, but they will never forget how you made them feel” —CARL W. BUECHNER

T

he girl in the shimmering red basque was entwined with the dancing pole, her black stockinged legs clasped around it as she leaned back and slowly gyrated to the beat of the music. It was early in the private club in London’s Clerkenwell. The City hadn’t finished its business: trading still continued with Wall Street. She saw him tucked away in the corner of the booth, but pretended she hadn’t. It had to be him. Tommy, the seedy gaffer who ran the club had told her the big boss across the river wanted her to give the man in booth five the works. She’d only ever seen the big boss once, 13

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when he came to show someone around who had one of those names you get from the Queen. She slowly unwrapped herself from the pole, giving it a final caress with her leg and proceeded to dance provocatively around the stage. She then looked directly at him and her movements as she came towards him were slow and sensuous, dancing for him, drawing it out. As she slowly circled, her arms leading her long legs across the stage, the disco lights threw a myriad of pulsating colours across her long blond hair. She knew she was the club’s best dancer. She stood in front of the man who graciously lifted his glass to acknowledge her. Tommy said he had millions, was dead rich and could fix anything, so she’d better be good. She moved closer and saw his eyes glinting with excitement as he took in her body. She spun round, bent over and thrust her buttocks out at him, then pivoted back round, throwing her basque away to reveal a red bikini thong. 14

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Legs apart, she thrust her firm breasts out and looked down at him, slowly circling her mouth with her tongue. He was repulsive.

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he BMW’s air conditioning was unhappy. The car had been sitting gridlocked for over an hour on the UK’s notorious M25 motorway. John Mackay knew all his immediate neighbours by now: the screaming child in the car behind; the blasting music from the wreck alongside. He reckoned the music system cost more than the car. The travel news only gave out brief details confirming what he already knew. There had been a fatal accident near junction nine. He began to curse the mechanic who hadn’t fixed the air conditioning properly. He decided to turn the engine off and roast in the South’s ninety-degree heat wave. He also cursed the driver in the accident. “Bloody inconsiderate,” he muttered.

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The mobile rang; the number showed Keith Harris, long-time friend although never confidante. In the City you didn’t confide. “Yes, still jammed,” he said. “Wish I’d gone down to Guildford and along the A25 to your place.” Harris said something at the other end, the car alongside turned the volume up and its driver with the baseball cap decided to have a singles party, punching his arms out and shouting along with the music. John Mackay was near exploding. He blasted his horn. The youth laughed and went on singing. Mackay then got out of the car and walked the few feet over to the battered Ford Escort with no tax disc, thrust his face through the open window and hissed “If you don’t shut that racket…” The youth shrieked with laughter, “you’ll do what mate? Call the cops? We ain’t going nowhere, man. Just chill out and listen to the best music.”

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Mackay got back in the car and turned over the engine to let what was working with the air conditioning flow over him. He couldn’t call Harris back, so he opened his briefcase on the passenger seat and pulled out some working papers.

H

e knew little about why he’d been summoned to Keith Harris’s Sussex home, but he had been told the Belgian-based investor Nigel Wray and solicitor Peter Crystal had also been invited. He had been asked to bring information about a company called Talisman House plc. He noticed brake lights ahead and with relief saw the traffic was moving again. He threw the papers back in the case. It was barely ten minutes before he turned off at junction seven and sped along the M23 towards Keith’s home. After several miles driving through country lanes the BMW turned through a set of wrought iron gates with cameras guarding them that protected the long driveway to 17

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Keith Harris’s luxury home, set near Gatwick Airport’s flight path. The other guests had arrived, but even with three parked cars, the gravel parking area set in front of the imposing two-story eighteenth century home with magnificent chimneys had room for another three. Mackay caught a glimpse of two women playing tennis, one looking much younger than the other. He admired their legs. Behind was a swimming pool with half a dozen tables and some half-finished drinks sitting on one. He rang the doorbell. Keith Harris opened it, greeting him like a long lost friend. “We wondered if you’d ever make it,” he said, banging Mackay’s back playfully. “A fatal, you know. Motorcyclist. But then how many times do you see them wandering all over the road? One overtook me once when I was doing a ton up the M6 in my Merc sports. Ridiculous.” He steered Mackay through the oak-panelled house to the large kitchen. 18

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Waiting were Nigel Wray and Peter Crystal, a pile of papers strewn over the large wooden table. They shook hands. Mackay didn’t know the other two very well. He was offered a beer.

K

eith Harris looked hard at them and said: “How much do you know about Talisman House plc?” Their expressions told him they knew very little. He went on: “I met Stephen Barclay, the company chairman, after a meeting last week. He’s not very wealthy anymore and wants out of the broker game. His return from a small investment died on him. However, I think we could assist him and help ourselves even more.” A spark ignited in Peter Crystal and he raised his eyebrows as he watched Harris’s face intently. He smelt the chase and his adrenalin began to kick in. He was beginning to enjoy his afternoon. Mackay glanced at the two tennis players now walking past the window and wondered if the younger one was a virgin. 19

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Stephen Barclay put the phone down, a smile releasing the wrinkles brought about by his many failures in trying to make his investments work. His brokerage company, Talisman House plc, had become a millstone with successive critical market mistakes plunging it down to a zero return. He was tired of facing the investors’ endless questions. Why wouldn’t they just shut up and go away? For a brief period he and his directors had enjoyed a life of luxury. It wasn’t easy telling the wife she’d have to cut back. She didn’t understand, but then women never did. He blamed the US market, the government, and the Far East for his demise. Recession, he mused, had caught him out. None of it was his fault. He reflected on the telephone call, subconsciously doodling on the desk pad. Keith Harris had offered him and his directors a large sum of money to let him take control of his board. Did he have any sentiment for the company? None. It really was a good deal he was being offered. 20

2 “All that is gold does not glitter; not all those that wander are lost” —J.R.R. TOLKEIN

J

ohn Shaw was on an important errand. He took a deep breath, inhaling the early autumn air as he walked across a sunlit Russell Square towards the Southampton Row offices of Memery Crystal, solicitors. His old friend Keith Harris had asked him to set up the September appointment, although he grimaced slightly when he remembered how it had sounded like an old favour being called in. Like Harris, he had worked his way up in the financial world although he didn’t compare against the wheeler dealer skills of his friend. Harris had given him bridging loans when he needed them in the old HSBC days. He had also shared 21

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his hospitality, but hints about one or two murky deals always made him toe Harris’s line. John Shaw had spent a long day the previous week at Harris’s home near Crawley. Nigel Wray, a houseguest he’d never met before, seemed clued-up on everything, and John Mackay’s name was also mentioned. His host, Keith Harris, had been CEO of HSBC Investment Bank plc from 1994 to 1999. He was currently a director of Oxygen, a company offering company development over the Internet; he chaired Sports Internet; Radio First plc; CLS Holdings plc; and many other companies. He planned to turn Talisman House plc into another media and Internet-focused boutique. It would be ideal for his many investments. He would chair it, and Stephen Barclay would be moved to chair Clifton Financial Associates plc, one of Talisman’s subsidiaries along with a small stockbroker called Ellis and Partners.

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Shaw was on his way to ask Jonathan Wright of Memery Crystal to incorporate a new investment company. Suggested names were bandied about but it was eventually Shaw’s suggestion that prevailed. A couple faxes had been sent from Shaw’s company, Clifton Financial Associates, to the solicitor and it was agreed the company would be called Intermediate Equity plc, intermediate being the operative word as it didn’t have any intended shelf life. Shaw felt a surge of satisfaction run through him. The world looked better. He could smell good dividends for himself. Iran, the UK, US and Europe were talking to each other now, which meant the markets would have confidence and he could even foresee the expensive house move his wife wanted. John Shaw entered Memery Crystal’s offices and shook hands with Jonathan Wright, who guided him through to the small windowless office. Shaw patted down all of his pockets and looking up, gave the lawyer a knowing smile acknowledging that he didn’t have any money on him. 23

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Instead, he pulled out his pen. Intermediate Equity plc would be incorporated with just £2, which he’d have to owe for now. North Korea sent a missile whistling over Japan’s head. The City became jittery.

I

t had been snowing hard around the M25, circle of the Home Counties, but the December meeting in 1999 at London’s Park Lane Hilton Hotel was important, so all the potential board members were struggling in; and in the case of Keith Harris, behind a snow plough. The option of taking a train didn’t exist. The points were frozen. They met in a private room on the Hilton’s top floor overlooking Hyde Park and signed the necessary papers to form a new company, The Keith Harris Partnership Limited, with Harris, John Mackay, Nigel Wray and two other puppets on the board. Talisman had by now taken over Ellis and Partners and Clifton Financial Associates, John Shaw’s company. Stephen Barclay, Talisman’s founding chairman, prepared to stand down. 24

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O

n a bleak January morning in 2000, Talisman House plc acquired The Keith Harris Partnership Limited which, according to published company records, was dormant, newly incorporated and claimed to have £1.7 million in cash. Furniture and other company assets were stated at £20,000 and goodwill was set at £36.5 million, an unusually high figure for a dormant company. It didn’t matter, the auditor had already given the nod and their fees were now assured. Talisman paid in shares, issued equally to the Partners. A complicated Call and Put deal was structured thus ensuring the Partners would remain in control. Whilst Cherie Blair, the prime minister’s wife, had a £10 fine slapped on her for boarding a train without a ticket as she rushed to her debut as Luton Crown Court’s new Recorder, two of the Talisman directors humped away on two different girls in two different locations as they let the stress burst out of their systems. 25

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In what might have been thought a rash moment, but was quite the opposite, Keith Harris, as Talisman’s new chairman, changed the company’s name to Seymour Pierce Group plc and authorised a special dividend payment to shareholders that included his Partners. By coincidence, the amount payable to them was almost exactly the same amount of cash The Keith Harris Partnership Limited claimed to have at the time of the original deal. Much speculation followed, raising questions as to whether the company ever had the cash or if it was merely been paid back to them. Harris disliked shareholder meetings as a rule, but this one, held at what had become Seymour Pierce Group’s head office, was positively relaxing. With his friends as the largest shareholders he never felt more confident. A good lunch at his club had set him up for his main speech. He was toying with buying a motor yacht and keeping it at Chichester, but the price wasn’t right yet. He would need to see if he could run it through the company as entertainment. 26

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What he had in mind was something else. All things offshore reap dividends. The meeting wasn’t well attended, although some business press reporters were there. To date Harris had refused to issue any statement about the Talisman name change and the acquisition of The Keith Harris Partnership. He felt he could now control the press. He was all-powerful, untouchable.

S

eymour Pierce Group’s chairman’s statement for the annual report almost had a touch of Disney about it. Harris mentioned many of his latest acquisitions but skimmed over the most important one. Top billing was given to the special dividend payment, really a bribe, made in order to ensure no one complained about the considerable dilution that resulted from his Partners gaining control of the company. The entire report was dressed up in woolly camouflage by setting out the company’s aim to become an investment adviser to Internet companies. 27

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Harris had a lot of Internet interests that almost made it appear he preferred to remain behind the scenes. It seemed to have slipped his mind that neither the Seymour Pierce nor Talisman shareholders had ever received a dividend in either company’s previous lives. It therefore came as a surprise to everyone that a dividend was being paid, and a handsome one to boot. It was also overlooked that Harris had never been voted in as chairman by the shareholders, but let in the back door by Stephen Barclay and Richard Feigen. Shareholders where too busy counting their loot to notice that they had just given their company away. Barclay and his directors left to enjoy their cash spoils after selling their inflated shares, which had risen from 5p to 80p when they sold them to an unnamed institutional investor. Stephen Barclay left on a high, nearly £5 million richer. Richard Feigen, a former Talisman director, received a £1 million payoff with his shares and two other directors grabbed a half a million by selling their shares to the same mysterious investor. 28

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Their reward ensured Harris was appointed chairman. The meeting finished early and Harris pulled his other directors around the table, setting out their roles. He remained by the window looking at the early evening commuters scurrying towards Blackfriars Station. He had another meeting to go to not far away in the West End involving a meal at the RAC Club in Pall Mall with an Italian woman. He was looking forward to it. He had heard she was a firebrand as well as owning fashion houses in Milan. He fancied some sparring. He eyed each one of his directors, seeing acquiescence in their faces. He couldn’t resist applying pressure, bullying them to accept his demands. Basically, he despised people. None of them could be trusted and he played with them as if they were footballs. He glared at them and said: “If I ever catch one of you talking to anyone about our private company business there will be a price to pay; and if that person is a member 29

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of the press, you’ll never work again. Anywhere. Do you understand?” Hesitantly, the row of suits nodded. He went on: “We’ve done well so far; your pockets are full and there’s more deals in the pipeline. Don’t rock it.” Nigel Wray looked at him with a secret smile. They both had a long history, not least in the Leeds United takeover negotiations in 1996. Wray had the looks and the charm, but deep down he had the need to go for the jugular. He’d never call Harris his bosom buddy, but he was useful. A male cunt.

T

he small man came out of the steam room then stood in shock as the cold water shower rained down, snapping closed all his open pores. It was difficult to tell if he was in a rage or whether it was the effects of the steam room. He strode redfaced along the poolside until he reached the massage room and barked orders at the trembling masseuse. He didn’t like men touching him. It always had to be a woman. 30

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The health club knew they had to get it right or four-lettered expletives would rip through reception as the man left. The club’s mobile phone ban had also fallen on deaf ears. He told them to “go fuck themselves.” None of the club’s management dared challenge him. Perhaps he got wound up because his fellow members cold-shouldered him. He knew he was as good as, if not better than them. The masseuse worked her fingers firmly over his shoulders, easing the blood flow through knotted muscles. She ran her hands down his back, working her fingers down his spine towards his hips. She gently grabbed a lump of hip flesh and began to massage it. It was like massaging a beached whale, she thought; it was as well he couldn’t see her face. Richard Desmond was the King of Porn. He tried to play it down, but the title stuck. He’d made a dubious fortune, selling 17 worthless magazines to United News & Media after he duped them into a distribution agreement they couldn’t afford. Afterwards, he used some of the money to build up the highly respectable OK magazine to take on its 31

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competitor Hello head on. However, there was an entire portfolio of porn magazines such as Asian Babes, Big Ones and Crusader that he couldn’t disguise. His company’s porn movies such as Gina’s First Ever video and Incredibly Naughty Asian Ravers and Xrated TV station the Fantasy Channel reinforced the fact of how Desmond had made his money and that it enabled him to come into contact with powerful names. His company, Northern & Shell, was renowned for heavy-handed tactics, including bullying employees. Rumour abounded that Desmond had forced a female PR executive to spend a meeting in a closed cupboard because she arrived late. He was ambitious. The press fascinated him. It felt powerful. The thought of achieving editorial control by being a newspaper magnate was almost orgasmic. He had to make it happen, and sitting waiting for a buyer was the UK’s ailing Express Group Newspapers. Ridiculed as the “daily gets much worse” in the satirical weekly Private Eye, the group’s advertising and newspaper sales had plummeted. It was losing credibility. 32

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Desmond wanted it badly, but the price was just out of his reach. He dialled Keith Harris’s number. The two men met in Desmond’s Millwall Dock Northern & Shell headquarters in London’s docklands. He came straight to the point. “I need to borrow a further £10 million to buy the Express,” he told Harris, who appeared relaxed about the request. He and Desmond knew each other well enough to know they wouldn’t nor couldn’t shaft the other. “No problem,” Harris replied, although he knew the Seymour Pierce Group that he now chaired didn’t have enough assets to cover it. Desmond was delighted with the commitment. They shook hands firmly. Harris went on. “I’ll need a back guarantee.” Desmond offered Seymour Pierce a cross guarantee, making it technically legal for Harris to offer the guarantee the bankers 33

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wanted before they would loan Desmond the money. Had the lender known Seymour Pierce did not have sufficient assets to back up that guarantee, or that the person from whom they needed the guarantee was actually providing the guarantee to Seymour Pierce so that they could offer the original guarantee, they would have thought differently. Desmond broke open the champagne at Millwall House on hearing about his successful Express Newspapers bid and promptly called Harris, who was at his golf club. Desmond promised to repay his goodwill as arranged. A few days later, £7 million was transferred to Seymour Pierce’s account in gratitude for all the time and trouble taken over the Express deal. He followed this up with selling Express Newspapers Financial Services Limited, now Seymour Pierce Financial Services Limited to Seymour Pierce Group plc, for a snip of a price of £500,000 in cash.

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The company's more than 9,000 customers had investments worth more than £300 million. Desmond had boasted the Express would make Harris a billionaire and he was setting out to do just that.

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3 “The heart of a fool is in his mouth, but the mouth of the wise man is in his heart” —BENJAMIN FRANKLIN

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he investor stood on London’s Blackfriar’s Bridge alongside the spot God’s banker, Roberto Calvi, chairman of the Banco Ambrosiano, had been found hanging from an orange noose under the bridge in 1982. Seven bricks were stuffed in his pockets and his feet were dangling in the swirling waters of the Thames. Substantial sums were missing from his bank’s many subsidiaries, including the Vatican accounts. A first Coroner’s inquiry jury was succeeded by a second, which disagreed with the previous verdict of suicide. They gave a verdict of murder or suicide. It was an unsatisfactory affair.

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The investor gazed at the tidal rip in the whirlpools below and mused that the suspicions over Calvi having been killed by the mafia were probably correct; but there was more than one mafia, as he was just beginning to realise. He walked over the bridge. Ahead of him was the Express Newspapers base at Ludgate House. Richard Desmond had an axe to grind and again sought advice from his friend Harris at Seymour Pierce. He had sold several domain names to Seymour Pierce, including the online business of ‘express.co.uk’ for £1, but to this day the domains remain registered in the name of Express Newspapers plc. The slick move enabled him to get rid of a number of employees who had openly expressed their opinion of him. The problem was that the paper still had a number of good journalists who then decided to jump ship. This didn’t faze Desmond, as he thought he could always buy and bully people anyway. 37

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In a wild outburst, he threw a chair at his editorial director Paul Ashford. However, despite the incident, Ashford defended Desmond, saying the man’s problem was thinking he was invincible and unstoppable, and he needed a restraining hand that he, Ashford, had offered. The meeting between Keith Harris and John Mackay in the boardroom at the Seymour Pierce Group office was tense. The whisky decanter remained open as they pondered the company’s acquisition. They had to move quickly and further their plans whilst they had total board control. They pored over their business plan to set up an investment company that would raise public funds and invest in Seymour Pierce clients with the resulting increase in their brokerage fees. Seymour Pierce acted as stockbroker and nominated adviser to Alternative Investment Market (AIM) companies. Harris and Mackay were nervous.

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“We’ve got to be doubly careful,” Mackay said, rising from the chair and stretching his legs. He pulled a concerned face. Harris answered his thoughts. “That upset with the Financial Services Authority was embarrassing. How they ever thought there was a conflict of interest with Seymour Pierce Ellis Limited is beyond me. Even Memery Crystal was amazed we were fined.”

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he FSA had fined Seymour £70,000 for conflict of interest and breaches of code in respect of its subsidiary, where Richard Feigen, who founded Ellis and Partners in 1990, was a director in charge of its operations. Harris had contested the charge bitterly, but for the first time he couldn’t squeeze away from the might of the FSA. The company’s being defended by Memery Crystal solicitors was in itself a conflict of interest. The two men looked hard at each other before Harris broke the silence.

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“I’ll set up an appointment with Jonathan Wright at Memery Crystal. He’ll set things up tight for us.” Mackay gazed out the window and wondered if he should phone his regular girl. He needed relief. On 1st June 1999, an army of campaigners protesting against genetically modified crops forced major seed company CPB Twyford, based at Thriplow, Cambridgeshire to stop producing the crops after fields were sabotaged.

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n the same day, Memery Crystal’s solicitor Jonathan Wright signed a false declaration to Companies House stating that Intermediate Equity plc, which had been lying dormant since September 1998 with an initial capital of £2, had not less than £50,000 in capital, of which 25 per cent was paid, thus meeting the minimum requirements for incorporation of a UK public limited company.

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Not only did this constitute an appalling intention to deceive, but the signed declaration was witnessed by an adjacent firm of solicitors. The 1st June date is critical because it was upon that intent to defraud that IEQ’s future was cast. There was no £50,000, nor was there any cash sum of £12,500, the minimum amount required to obtain a Certificate to Trade & Borrow, a document required by all UK public limited companies before they can trade or offer their shares to the public. All that existed was £2 and there are doubts even if that amount existed, as the figure never showed up in either of the company’s bank accounts. The truth was more obscure. An agreement was made between the company Intermediate Equity plc and errand boy John Shaw ensuring that if the company was not able to raise the minimum capital from the public, he would pay the £50,000 needed, less the £2, which he presumably paid upon the company’s incorporation in 1998. This move was illegal. 41

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Unconditional was not the operative word for Intermediate Equity’s share allotment. UK Companies Act, the set of laws governing the incorporation and operation of all UK companies, clearly states that an allotment of shares is made when a person obtains the unconditional right either to shares or to be added to the ‘list of members’. It is clear therefore that shares cannot be issued conditionally. The agreement between Intermediate Equity and Shaw was a conditional agreement where he agreed to pay for the shares that were issued to him on 1st June 1999 only if the company could not raise funds from the public. Solicitor Jonathan Wright declared on a Form 117 that the company had allotted 5,000,000 1p shares to John Shaw and that they were at least 25 per cent paid, meaning the company had received a minimum of £12,500. A second form, Form 88(2), showing Shaw, in care of Seymour Pierce’s office, as the registered holder of 4,999,800 ordinary shares at 1p, also signed by Wright on 1st June 1999, was delivered to Companies House. 42

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These two forms made it possible for Intermediate Equity plc to acquire the coveted Certificate to Trade & Borrow, which was needed for the company to have its capital and shares listed or traded on the AIM ‘market’ of the London Stock Exchange.

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ichard Needham looked in the bathroom mirror and carefully combed the few strands of hair over his balding pate. He stared at his hawk-like features and decided he needed a photographic makeover. His comb set the final tinted hairs in place. People had recently seemed surprised meeting him for the first time, blustering out little phrases like “you look nothing like your photograph” or “you are keeping well”. Photographers are clever these days; after all, they work wonders for all those silly pop singers who have their acne touched over. But he must speak to the London Speaker Bureau. The web photograph supporting his speaker profile couldn’t stand up to his real image much longer. Born in 1942, Needham was the 6th Earl of Kilmorey, although he didn’t use the title. 43

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He was educated at Eton and had the distinction of having been overheard talking on a mobile phone about the then Prime Minister Margaret Thatcher saying, “I wish that cow would resign,” to which Margaret Thatcher responded by saying if that was the worst her colleagues said about her, she was lucky. In the many profiles of Richard Needham, no references appear regarding his directorship of Intermediate Equity plc. A former Conservative Minister for Trade, Sir Richard Francis Needham was on his way to an important meeting. He loved moving to new ground. He had a low boredom threshold. He had spent some time rebuilding Northern Ireland and was excited at being able to control the actual reconstruction. His vision had not included the traditional Irish style of building. He insisted on using glass and steel along with other state of the art materials, and was heavily criticised as having taken a risk. His calculation that there would be no more bombings in Belfast that would have sent the glass from ‘his buildings’ flying into people’s bodies like razors showed remarkable 44

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foresight. He was fortunate no bombs were set off and the city now has one of the best waterfronts in the UK. That risk earned him a highly privileged invitation to become a Privy Counsellor in 1994 and a knighthood in the election year of 1997, just before the Conservatives lost power. Today he was on his way to Memery Crystal’s offices in London to sign a deal to become an Intermediate Equity plc (IEQ) director and shareholder. He straightened his tie and left his detached house surrounded by orchards for the railway station.

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urther along the M25 corridor on what promised to be a blistering hot morning, Anthony Caplin and Clive Bradley were also preparing to leave their homes. Caplin held numerous directorships, some of which required some delving to ascertain what they were and what they did. He held positions as MD of Manchester News Ltd, President of Pacific Telesis, European Division Chief Executive of First City GB and Chief Executive of Hunterprint plc. 45

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Clive Bradley was relatively undistinguished; his claim to promotion was earned more by keeping his head down and moving along the career path rather than seeming like management material. All three men met at 11a.m. in Memery Crystal’s offices and were appointed directors of Intermediate Equity plc by the existing directors’ solicitor Jonathan Wordsworth Wright and EMCEE Nominees Limited. Consider the spelling of EMCEE. MC for Memery Crystal? These two directors, one being a UK private limited company, stepped down and the three new directors were in control of IEQ on 3rd June 1999. There not being any company business to bother with, they walked down to Covent Garden to bag a table for an Italian lunch before the Drury Lane theatre crowds set in. They agreed to meet in Memery Crystal’s offices the next day. On the following day, 4th June, the new IEQ threesome board met again at Memery Crystal’s offices and this time the solicitors’ 46

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senior partner Peter Crystal was in attendance. Needham was in a jovial mood. He had a number of directorships and just couldn’t resist accepting another. At a time when the government was asking politicians to cut back their board positions, Needham could have filled a theatre with his posts. Caplin sparred with the solicitor and Needham, but Bradley on the other hand seemed quiet and sat watching what was really quite good theatre. Crystal indicated where all three directors, Needham, Caplin and Bradley should sign on the thick legal documents that included copies. At that moment of signing, all four individuals had authorised and signed a Prospectus document for a Placing of shares on AIM. The Placing was for 27,999,800 ordinary shares of 1p each. Now reflect back. John Shaw had allegedly purchased the initial £2 capital, being 200 1p shares on incorporation. That meant 28,000,000 ordinary shares would be in issue after the Placing. 47

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But according to Companies House, he owned 5,000,000 ordinary shares of 1p, which were at least 25 per cent paid. After shaking hands, Richard Needham turned to Peter Crystal and asked how they should tackle the content in the Prospectus with regard to the conditional allotment. Surprisingly, this did worry him, having already gone down the road to deceive, but he probably just didn’t want to be implicated. His public image was paramount. He blew his nose noisily.

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eter Crystal waved his hands confidently, hunched over his desk, took in each of the directors and said: “Look, we’ve inserted a paragraph skimming over the conditional allotment. We know that AIM doesn’t vet prospectuses, or at least hasn’t to date.” Clive Bradley moved uneasily in his chair.

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Crystal went on: “Each one of us here knows that AIM relies upon the company’s nominated advisor to verify the correctness of their AIM admission documents. We officially act for Seymour Pierce; the market has known all of us for a long time and we have impeccable standing. No one’s going to challenge the Prospectus when we’ve dressed it up because they would never challenge any one of us in this room. A former Cabinet Minister? No way. Leave it to me.” The Southampton Row office collectively breathed a sigh of relief. Caplin stood up first and shook Crystal’s hand, then Needham and finally Bradley, who offered a damp palm. A Placing means that on admission to AIM, the shares must be sold. IEQ’s Prospectus claimed that a Certificate to Trade & Borrow had been granted by Companies House. In fact, IEQ’s was not issued until 9th June 1999. This leads to no other conclusion than that the Prospectus document signed and dated 4th June 1999 was a false document. 49

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This document was the one filed with Companies House and the London Stock Exchange. No other one exists. On 9th June 1999 the Certificate to Trade & Borrow was finally granted, in error. The threesome had time on their hands and decided to walk together down to their private club in the Strand. Bradley walked slightly behind the other two, missing out on most of the deep conversation. Needham and Caplin had already moved on to other business topics. They never dwelt on a success. They needed the next adrenalin surge. They also assumed they would never be found out. Later in June 1999, the Turner prize jury short-listed foul-mouthed British artist Tracey Emin, saying her work asks the very basic questions about the making of art and life. Previously, Tracey had had an exhibition of her ‘Naked Photos – Life Goes Mad’ selection, a series of naked photographs of her working in the studio. At a Channel Four interview she ran out, saying she wanted to be with her mum. 50

4 “Many attempts to communicate are nullified by saying too much” —ROBERT GREENLEAF

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n early June 1999, due to concern over the strength of the British Pound, the Bank of England cut the cost of borrowing to its lowest level since the ’70s. The depressed manufacturing sector felt a lift at the 5 per cent base rate and said it would help fill their order books. Across London, barely three miles away from where the base rate statement was being made, the sound of a whip slashing against bare skin could be heard through the door of number five in a block of flats off London’s Marylebone Road.

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Miss Chantelle, her black nipples peeking out of a cropped white PVC top decorated with linked gold chains to match her crotch level skirt, had chained the man to the wall and was giving him ten of her best. He whimpered and pleaded with her. She took a studded dog collar and put it around his neck and clipped on a leather lead. She breathed into his ear as he sagged against the bonds. He had to do her bidding or he knew what was coming. The man nodded and shuddered, his balding head glistening with sweat. Chantelle suddenly cracked the whip against his back and he cried out he’d had enough. She lowered the whip and went up to him rubbing her black thigh against his shoulder, reassuring him he had been a good boy. He ejaculated and at the same time blubbered he wanted his mummy. The millionaire left the flat on a light cloud. He mused there were advantages in leading a sexless life with the wife because she would never see the whip marks.

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A

secretary stuffing the contents of a chocolate roll into her mouth at Memery Crystal’s offices sent a fax to the London Stock Exchange on 11th June 1999. Nominated as IEQ’s advisor, Seymour Pierce Limited claimed that all 27,999,800 ordinary shares at 1p had been Placed - meaning sold and requested that IEQ’s capital be permitted trading admission to AIM. Clive Bradley felt a bit off colour. His nerves were getting to him over the new IEQ set-up. He thought only pregnant women suffered morning sickness, but he was waking up with the IEQ share issue glaring at him from the bedroom ceiling and his stomach turned over. He decided to take a day off. On the same day, Caplin, Needham and Jonathan Wright held a telephone conference that ignored Bradley. They drew up a list of purported shareholders that was collated by Wright of Memery Crystal and signed by Anthony Caplin. The list covered 13 shareholders, most of whom never appeared on the official ‘list of members’ 53

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held by the company’s registrar. A similar practice used to take place in the 1980s in Fleet Street, where the printers signed in with fictitious names such as Mickey Mouse. Clive Bradley, Richard Needham and Anthony Lindsey Caplin were shown as having purchased 300,000 ordinary shares of 1p at the listing price, but in fact Caplin’s shares had always been held by a nominee. Now, assuming these directors were numerate, it didn’t take a Member of Parliament to compare the actual register of members with this list provided to the London Stock Exchange and Companies House on a Form 88(2), which is an allotment of shares form, and to conclude that the numbers didn’t add up.

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eter Crystal made sure that the company’s registrar had been informed by Seymour Pierce Limited that all 27,999,800 shares were owned and held in Seymour Pierce’s nominee account PSL982, with Pershing Keen Nominees Limited.

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According to this new list, John Shaw owned just 200. An inspection of the shareholder list proved that the names mentioned on the Form 88(2) dated 11th June 1999 were false. They were used only to justify the Placing, to prove to the London Stock Exchange that the shares had been Placed, when in fact they had not been. When contacted later, the company’s registrar stated that those shares held in Seymour Pierce’s nominee account were not actually sold and were not in the names of the true owners for at least three more months. The obvious conclusion to be drawn is that Seymour Pierce provided false information to the London Stock Exchange, which was confirmed, despite being false, by IEQ’s directors Needham, Caplin and Bradley, the latter by virtue of his directorship, although there is no evidence that he was part of the telephone meeting or that he had ever agreed to sending the false form 88(2) to Companies House and the London Stock Exchange. 55

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Clive Bradley’s health began to get the better of him. His increasingly tight chest forced him to see a doctor. Much later, he confirmed to the author in a telephone conversation that he had not agreed with Needham and Caplin’s actions. He eventually resigned his directorship and tried to put matters behind him, or so he thought. However despite all the crookedness, nobody twigged or admitted anything was wrong, and IEQ’s shares were granted admission to AIM on 14 June 1999, just 5 days after the company’s Certificate to Trade & Borrow had been granted. Seymour Pierce wasted no time in pushing the ‘traded’ shares on to their clients and numerous investment funds. The business press gave the launch good coverage and that persuaded hundreds of members of the public to purchase a stake in IEQ. Before the end there would be more than 1,650 shareholders with an average investment of £250, with one having invested more than £600,000. 56

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N

eedham and Caplin became even closer business partners. Needham was deputy chairman of Dyson Appliances Limited and was virtually allowed to run the entire operation as James Dyson’s righthand man. He was also chairman of the London Heart Hospital and once took a strong stand against the PPP health insurance company, saying it had been trying to prevent ‘his hospital’ competing against its own clients. PPP, he claimed, was refusing to list the hospital as an approved clinic. He claimed there was “clear unfair competition and market rigging,” and that PPP was guilty of “a blatant abuse of market power. After all, the hospital had carried out the UK’s first heart transplant.” PPP responded, saying it had not included the Heart Hospital in its list because it offered restricted facilities. This “holier than thou” attitude on Needham’s part was extraordinary considering the deceit in which he was involved with the setting up of IEQ. 57

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T

he London City workers poured out of their early morning Canon Street and Liverpool Street trains. A bystander along the Kent commuter train routes could guess pretty accurately which train was taking who where. Male City travellers had a habit of discarding their jackets on the trains. Everyone also tended to bag the same seat for each journey, but no one spoke to one another. It was basically a cattle train plodding the same route, day-in day-out. The markets never missed a beat, that was for sure, and they were clever people who worked in the Square Mile, a professional elite. So it is difficult to imagine that Needham and Caplin, two of the most experienced UK businessmen, would ever have taken on their directorship roles without having first checked the company records thoroughly, making themselves fully satisfied that everything was as it should be.

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So why did they ignore the fact the company had not received the Certificate to Trade & Borrow until 6 days after their appointments and 5 days after they had committed to paper the untrue statement that IEQ was authorised to sell its shares? The obvious conclusion is that they knew IEQ did not possess this critical document when they signed the Prospectus on 4th June 1999. They would or should also have been advised by Memery Crystal, which acted for both Seymour Pierce and Intermediate Equity plc of this fact. As the company’s solicitors, Memery Crystal would have known IEQ hadn’t received the certificate when the directors signed the Prospectus prepared by the very same firm of solicitors. Bradley’s conscience was troubling him, so he called Jonathan Wright who purred out some bluff, saying the deal was perfectly safe and that there was “no problem”. Everything had been done properly. However, Bradley was right to be concerned. 59

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The result of not having the critical document was extremely serious, as it made the entire transaction unlawful, even despite the fact they later obtained the certificate albeit only a couple of days before the company’s capital was actually admitted to AIM. The fact remained that if the shares were sold as they had claimed, then IEQ was not permitted to do so at that time. It is now known that IEQ did not have the certificate and that the directors and their solicitors Memery Crystal knew the company did not have the minimum capital requirements. No other conclusion could be drawn other than to say they were all guilty of fraud and breach of their fiduciary duty owed to the company and indirectly to the public from whom they had sought funds. It is sheer arrogance that makes such people so confident when they believe they are untouchable. It is only greed that drives them. The Crooked Knight smiled at his profile in the Bond Street shop window. 60

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So deep in thought was he that Sir Richard Needham jumped when what he thought was a clothes dummy sprang to life. He hadn’t even noticed the window dresser. He had been thinking about his friend Keith Harris who had actually invited him to join what he considered one of the best directorships he’d seen for a long time at Intermediate Equity plc. It was the team effort of his friends that impressed him. Everyone had kept their mouths shut, even Bradley, who had worried him, as he didn’t seem to be quite onboard. Needham’s vanity meant he could never see beneath the surface, and it didn’t dawn on him that wide-boy Harris had brought him into the arena only to give the operation credibility. Needham’s name would also convince the public it was safe to invest in IEQ.

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eter Crystal was enjoying an excellent dinner of guinea fowl with John Shaw in a small selective restaurant off Kensington High Street. Seymour Pierce’s confidence in him had paid off, as no one had scrutinised them. 61

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They had been able to raise just under £1 million in the first round of public money. He had asked Shaw to dinner to give him the good news that it would not be necessary for him to pay the £49,998 he had agreed to pay if they had failed to raise the public money. They raised their wine glasses. They all thought they had gotten away with it.

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he 110ft yacht bobbed quietly at anchor off the Caribbean Island. The crew were waiting for the owner to return with a guest and his family. The vessel gleamed in the brilliant sunshine. The crew had scrubbed the deck down and cleaned the bedrooms after the previous night’s party. No one on board had awoken with an original partner. Some didn’t even know their partner’s names. The boss was worried about the stabbing of two Leeds fans in Turkey and the effect it would have on the world football scene. He had invited a close friend with a titled name to spend a few days with his family cruising around the many islands. 62

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The crew had been told to be on their best behaviour and nothing of the previous night’s activities was to be mentioned. A distant hi-speed launch sliced across the bay towards them. When it came alongside, the crew helped the rather unfit guest onboard. He teetered briefly on the deck, looking uncomfortable on the water, although the rest of his family were bright enough. That day American-based Wal-Mart bought the UK supermarket chain ASDA for £6.7 billion with a warning they had now landed in Britain. Shares in competitor Safeway leapt on the news and the group onboard the yacht felt comfortable, as the market was ticking along nicely whilst they enjoyed themselves.

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5 “The problem is not that there are problems. The problem is expecting otherwise and thinking that having problems is a problem” —THEODORE RUBIN

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he little girl in the blue and gold dress stood on the top of the windy hillside digging her heels into the ground to stop herself being blown away by the kite she was holding. Her laughter rippled over to her somewhat ageing father who had been showing her how to make the kite weave in loops and whirls. In the next field there were dozens of Belgians taking part in the Ostend annual kite festival. The seaside town also sported an Olympic-sized swimming pool where the little girl swam each day with her parents for the five days of their visit. Her mother had taken the 20minute train ride to Bruges that afternoon for some shopping. 64

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She knew daddy had to see an important man on business in that place they called Brussels, ‘like the sprouts’, she thought. She had seen the man once and didn’t like him. She didn’t think he liked children much. Daddy worked in the City, in London, but why it was called the City she couldn’t understand, because that would make it two cities. Maybe her teacher had got it wrong? Her father came over and cuddled his daughter. She loved it when he did that. He looked at her innocent eyes and felt very protective towards her. She asked him why he was making his face go all crinkly. He tousled her fair hair. His daughter was right. He was a worried man. Papers had come across his desk about a company being set up that he was invited to join. His gut had tightened. He loved his daughter so much and the prospect of being involved in anything ‘not quite right’ made him shudder. He arranged the meeting with the Belgian to talk to him about what was going on, although deep down he felt certain it would be a waste of time. 65

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Anthony Caplin had just flown in from a Canadian skiing holiday. It was a late arrival home, but he wasn’t prepared to leave opening the post until the next day, even though it was 2 a.m. He walked through to the cool wooden beamed lounge that normally contained a hearty log fire. He flicked through the usual service bills, then his heart missed a beat when he saw the Seymour Pierce stationery. The new company had seemed to be taking a long time to get its funds. Of course, as Caplin knew, Seymour was fronting for the shares having been Placed, so the money had not yet arrived. He gave a whoop reading the letter telling him that Intermediate Equity plc had now received over £800,000 after ‘reasonable fees’ had been paid to both Memery Crystal and Seymour Pierce, of course. A hurried board meeting was set up between the directors, excluding Bradley, whom the others had written off. They met at Seymour Pierce’s office to discuss a proposed investment with the funds they now had on hand. 66

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Richard Needham was very keen on the idea of investing in Redstone Telecom, a national telecoms network. He argued the case well and the board agreed to make the company’s first investment since its admission to AIM in June. They staked £250,000 in convertible loan notes to Redstone Telecom plc (Redstone Telecom) as part of Redstone’s offer of £5,600,000 in convertible loan notes. The three-year old company brought IEQ a good return when it doubled the investment. In hindsight, it was the only legitimate investment they made. This meant that in a short time the company had around £1.5 million to invest. Needham was being applauded for his good judgement and that’s when other opportunities began to unfold in front of him, but he had to be crafty.

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he Crooked Knight had a son, Robert Francis John Needham - Viscount Newry - who wasn’t as bright as the father, but thought he was. He worked in Hong Kong, his name and title giving him a limited status there within the ex pat community. A career man he was not, but an opportunist, yes. 67

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Byron Constable was an old school chum of Viscount Newry’s. His business partner and pal Micah Truman was pacing in their Hong Kong office. Truman stopped pacing, looked at his partner, and said: “there’s nowhere else to turn.” Constable lifted the phone and called Newry. After the preliminary exchanges he came to the point. He was in serious financial trouble. His company, MadeForChina (MFC), registered in the Cayman Islands and allegedly based in Beijing, of which he was a co-founder with Truman, had a serious cash flow problem. The company offered a marketing service under the unwieldy title of a permission email marketing system. They transmitted advertising messages to millions of consumers. Some might call it SPAM, or junk mail. It was of no consequence to Newry that Constable was supposed to be something of a commodity forecast analyst expert yet hadn’t seen the writing on the wall in his own company until the last minute. Newry then said to his friend: “Look, leave it with me. 68

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Dad’s got fingers in a lot of pies and mum’s just told me how well his latest company’s doing. A large pile’s just gone into it. I’ll ask him to give you a loan,” adding without any comprehension of IEQ’s role, “That’s what the company does anyway. Gives firms in trouble loans.” Constable relaxed, but urged his friend: “It’s on the brink and I need the money fast Robert. Can I leave you to work out the details with Micah?” What little Newry knew of his friend’s partner made him feel sick. Truman was young, brash and American, but the bond forged at public school was strong. Newry turned away from the phone and sent an email marked high priority to his father. In it he described - more like embellished the attributes of MadeForChina . He was disappointed by the initial response. Newry then sent a couple more emails with ever increasing urgency, as Micah was calling him almost hourly. Newry tried to sell Micah’s background by saying what a fluent Chinese speaker he was and how that would be very advantageous to the company’s future 69

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development. It didn’t matter that skill hadn’t done much to date. The next email from the son in Hong Kong to his father said MFC was prepared to pay 8 per cent repayment interest. He also called his mother, Lady Needham, a rather oldfashioned county sort who liked to be called ‘Sissy,’ and began to work on her. Needham met his other director Caplin for lunch at the RAC Club in Pall Mall and put his son’s ideas to him. Clive Bradley, the other IEQ director, hadn’t been invited. Caplin showed restraint and not much interest. He didn’t have time for spoilt sons of rich fathers whingeing for money, and had little respect for Needham’s son anyway. Caplin was more a smoothed out ‘muck and brass’ man. He shook his head. Needham felt disappointed, but more because he was beginning to get it in the ear from his wife at home. Needham emailed his son to say Caplin wasn’t happy about his idea. Then Newry turned to more desperate measures dressed up in a series of lies. He kept phoning his mother, who had 70

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experienced a lifetime of his harping on until he got what he wanted. Newry really knew how to play hot and cold with his family and as a young man had resorted to screaming with tantrums. It was often the line of least resistance that made his parents give in but he knew they would eventually. The telephone line between Micah Truman and Newry was also red hot. It was an interesting friendship, but few knew the full reason why Constable was able to apply such pressure on his friend. After all, most people, no matter how well they knew them at school, do not phone up and ask for three quarters of a million dollars. There must have been more to it. He emailed his father, adding more pressure by saying that MFC had been approached by a serious Caribbean based investor, but he, Newry, wanted to give Dad the first right of refusal on what he said was a fantastic ‘entry into Asia’. He went on to extol the advantages in the new Chinese markets now opening up. 71

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Needham knew how his son operated, but did concede the Chinese markets were looking good. Deep down though, he was already wishing the entire saga would disappear. He couldn’t be bothered with all the time being wasted and the endless pathetic calls. It was fast developing into a case of “give him the money for peace and quiet” at home. Needham put this to Caplin, who was also becoming fed up with hearing about the whole saga. He was a man with a short fuse and slammed a fist onto his desk at Needham shouting, “It’s time someone asked the little bastard if he knew what he was doing.” For the first time, Needham tetchily suggested that Caplin contact his son directly. “What guarantee do we have that we will get our money back?” Caplin wrote in his email to Newry. The straight answer, by return from Newry was “none”. He also replied that “neither MFC nor its directors had funds or sufficient 72

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security for such a loan.” This was sheer effrontery. A stunned Caplin went straight to Richard Needham showing him his son’s response. Needham was quite startled and edgy, probably because he was being battered from all quarters, home and Hong Kong. He caved in and emailed his son saying okay, but they would charge 20 per cent interest for 12 months and that as it was a short-term loan, they should have the right to convert to equity if they wanted. It was really quite amazing that given the lack of MFC company information that no one investigated if the company might have been trading whilst insolvent. Newry was delighted, because he had yet again persuaded his father, as he always thought he would. In many ways, the lad was a chip off the old block. Throughout the exchange of emails, Bradley had not been informed of the loan request nor the terms set by Needham. 73

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In fact, no meeting of directors, no minutes, no document of any kind approving the considerable advance was recorded. Within seven days Needham sealed the deal with Caplin’s connivance. His wife Sissy called her son. “Darling, daddy’s arranging for you to have your 750,000 US dollars, but your friend has got one or two little things to do. Now where are we?” She went on rummaging for the notes her husband had left her. “Ah yes. Here we are. God, where’s my glasses.” More background sounds of papers falling on the floor. “That’s better. Now this is what we have to do. Daddy’s left me a note to wire your dollars, darling, from ‘his new company’ IEQ. Funny name isn’t it? Now could your friend send us a little note when he’s got a moment that he’s received the money I sent?” Sissy Needham was not an IEQ director, but her husband had set up a bank mandate for her signatory on IEQ’s current account with Barclays Bank for just such occasions. 74

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So she instructed the company’s bankers to move the funds. Micah Truman certainly did respond when he received the funds. It was an extraordinary email. He introduced himself and his company MFC to Richard Needham, chairman of the company that had just lent him US$750,000, for the first time. Wild celebrations followed Newry and his chum Micah Truman’s hoodwinking of Richard Needham. It had been a brilliant coup for them. Life at their level was expensive. In some circles it is referred to as selling your family down the river. It has to be said though, that Sir Richard Needham did not employ any caution in the affair and that in his eyes the cash had to be expedited as quickly as possible. It was as good as giving his son a cheque from his own bank account, he thought, only it wasn’t his to give. It was the company’s; and he had acted without shareholders’ and all of the directors’ knowledge. 75

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Caplin and Needham were beginning to behave as if Bradley and IEQ’s shareholders were of no consequence. IEQ was their baby to do with as they pleased. But even they had a boss.

D

uring the same period, Wall Street was being forced down as the US consumer index showed that energy and transport costs had risen sharply. The report gave the Federal Open Market Committee the opportunity to raise interest rates by half a per cent. One London dealer said: ‘the market was becoming nervous about market levels’. Many were predicting that the tough trading would last for the whole of the second quarter. Prophetically, selling had becoming increasingly indiscriminate, driven by emotion rather than common sense. The technology and communications markets were taking a hammering and that should have rung some bells for the IEQ duo, Needham and Caplin.

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Meanwhile, in a part of Spain where UK crooks enjoy the good life, M25 murderer Kenneth Noye, otherwise known as Mr Gold because of the excessive gold jewellery draped about his tattooed person, was about to have his freedom brought to an abrupt end. Kent police officers nabbed him in Tarifa whilst he was sipping some Rioja before being served some local seafood delicacies. Noye had committed the ultimate act of road rage by stabbing an innocent motorist, whom he had cut up on the M25 slip road near the A2. He had been on the run for some time. Noye didn’t waste his time robbing people. He was a highly successful fence. He’d previously lived near Wrotham, Kent, beside a lot of his former business acquaintances and not too far from Keith Harris.

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6 “The measure of success is not whether you have a tough problem to deal with, but whether it's the same problem you had last year.”—JOHN FOSTER DULLES

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t the same time MadeForChina was trying to turn itself into a real company with IEQ’s unauthorised loan, property entrepreneur Nigel Wray, bosom buddy to Keith Harris, was riding rough waters. Amongst his many appointments was that as deputy chairman and part owner of the ill-fated Columbus Group. When his problems began to surface, the group was in the throes of taking over Highbury House Communications, a smallish publisher with a number of leisure activity magazines.

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During 1999, the Department of Trade and Industry (DTI) raided the firm three times and spent the next five months carrying out their investigations. Wray, who is one of the City’s most inexhaustible directors, had the Midas touch for buying and selling at the right time. At the time of the DTI investigation, Wray made an instructing phone call to his broker and sold five million Columbus shares at 56p each, netting himself £2.6 million. It also emerged that just three short weeks after the share sale in September, Columbus Group’s finance director issued a profits warning. Despite his directorship and role as deputy chairman, Wray consistently denied any knowledge of the DTI investigations. As Wray was sitting in Keith Harris’s kitchen, with John Mackay, plotting the takeover of Talisman House plc with the help of Stephen Barclay, the DTI was camped out in the Columbus Group office in North London, collecting documents relating to one of its businesses, Chart Search. 79

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The following month, whilst Keith Harris was dreaming of buying a motor cruiser, the DTI again invited themselves to Columbus’s offices and removed documents relating to another of their ventures, UK Prize Club. That visit was followed by an investigation into a mail order company Columbus fronted, which sold a rather bizarre product called ‘Our Lady of Lourdes Water.’ Finally, and rather begrudgingly, the group’s MD, Jeremy Issac conceded in a press statement that there had been an investigation. Nigel Wray, who only liked good press about himself, eventually agreed to make a personal statement, saying: “I sold my shares having obtained the board’s permission. Then in early September they came to see me and told me something was wrong.” It was interesting to note that Columbus Group’s former finance director Iain Gilchrist resigned after a series of rows with Wray and company secretary Bruce Law. 80

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Gilchrist had actually issued the profits warning in June, but it seems little heed was paid. Wray’s lack of personality is renowned. He is credited with one of the most uninspiring sports quotes, uttered with reference to his Saracens rugby club dealings: “We need to act and not sit like rabbits trapped in headlights.” Another enterprise that gave Wray a few headaches around the same time was his directorship of the restaurant group Hartford that owned an upmarket US-style diner called Pharmacy that sported Prozac in the window and suppositories in the toilet. The restaurant had become stock market listed with a £13 million valuation when it was reversed into the AIM-listed Hartford Group. It seemed the group was in need of some vitamin injections.

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he atmosphere in the dimly-lit Hong Kong nightclub was muggy, as the air conditioning hadn’t been fixed properly. 81

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It was around 9.30 p.m. and the evening hadn’t quite got into the swing of things. A few scantily dressed dancers shimmied around the small stage. Young girls were almost competing with each other trying to encourage the few guests to buy a bottle of whisky to share with them at an inflated price. The girls were under orders to slide into the chair next to the guest and strike up a conversation. They had to stay with that man until the end of the evening. It was optional whether they left with him for the night. In a corner booth Viscount Newry and Byron Constable were deep in conversation. “It’s all gone wrong,” Constable said. “ Micah’s reporting problems.” Even in the darkened room it was clear Newry’s face had gone chalk white. He almost rasped, “What?” The former forecast analyst went on: “I had a call from him this afternoon and he was in a state. 82

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Said creditors are pushing him.” “But it’s only two months since mother sent the money. I thought Micah was supposed to be a fucking expert on the Chinese Internet,” Newry responded in a trembling voice. “I don’t know the ins and outs. Micah’s a law unto himself,” Constable went on. “Maybe I wasn’t told the full story about how bad the finances were when I first contacted you. I’m a busy guy, you know. I can’t keep tabs on everything. There’s more to my life than MadeForChina, and I left all the day-to-day with Micah. You’ve got to trust people to get it right haven’t you, mate?” The last word was added for effect and it worked. “Christ, what am I going to tell dad?” Newry’s face had sunk towards his chest. “He’s going to go ballistic, and his partner Caplin, he’s a tight arse. Probably has the first quid he ever wrestled out of his mother’s purse. You know I was actually joking when I told him your company was unlikely to pay the money back. 83

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I’m a dead man, Byron. I suppose you’re wanting me to do the dirty work and tell them, aren’t you?” he added angrily. “Well, I could ask Micah to send an email to your dad, I suppose,” he said, pausing as if he hadn’t given it any thought, which was quite the opposite. “I mean, best we do it now because there’s no way they’re going to get them their money back within the twelvemonth repayment period. Not a hope in Hell.” “But that’s company money, Byron, not dad’s personal dosh.” “Surely they’ve got tons of it? That’s what you told me.” “Yeah, the company did, but dad would never give a penny to anyone out of his own pocket. Talk about tight. That’s why Caplin and he get on so famously. This is a big problem and I wish I’d never become involved. I’ve been shafted. How has it come to this anyway?” 84

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“Seems slow paying clients created a cash flow problem, and you know Micah’s lifestyle. Nothing but the best in our office. He enjoys the best of everything.” The cryptic comment was meant for a knowing friend. Newry began to wonder if IEQ’s money hadn’t gone to support Micah’s fast lane lifestyle anyway, and perhaps that of his friend to boot. He recalled that his pal had some unsavoury habits, although they did indulge in them together sometimes. A girl came over to ask if they wanted more drinks, at the same time brushing her hip against Constable’s shoulder. Any other time that would have provoked an immediate response. This time he slid his hand around her bottom and patted it longingly. “Not just now, sweetie,” he smiled. “We talk business. Okay?” The girl smiled and withdrew, casting a lingering glance over her shoulder. 85

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Newry had become agitated. He could just see the scene back in the UK. Caplin raging with dad, and mother sobbing at the thought of all the shame her son’s friend had brought upon their good name. It would be difficult at the parties. They might be shunned. Christ, the prospect didn’t bear thinking about. Constable broke his thoughts. “Remember your dad gave us an option that if we fucked up, then ‘his firm’, this Intermediate Equity plc, would have the option to convert to equity? Then we just do that, mate. No one will lose out. Problem sorted.” Deep down though, Newry knew someone had to tell his father and it had begun to look like his unlucky day. “I’ll phone him,” he told Constable. “That’s a good idea, since you know him better.” A rather crass remark, Newry thought. 86

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The whole MadeForChina saga seemed to have been a bit of a piss-take since day one. It had become an obvious case of bail us out with a bob or two. He suspected they never intended to repay the loan in the first place.

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ewry made the call to the family home at Cirencester. His mother had answered and initially thought it was a Sunday morning surprise call home. She became more fixed to the wooden hall floor as she listened to what her son told her. It was ghastly, she had thought. What had those nasty people in China done to her boy? He seemed ever so upset. She wished she could give him a cuddle. As Newry kept repeating it wasn’t his fault, his mother snapped back, saying, “I’ll put you over to your father.” The wailing from his wife on the phone had brought Needham in from the garden. He had taken the phone and remained riveted as the story was delivered. 87

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“I’ll call you back,” he hissed, as he closed his eyes in despair. His wife fussed around him, but he shrugged her off and dialled Caplin’s mobile number. He then called Peter Crystal, who had mentioned he was just back from his health spa, and set up a meeting for the next day.

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t was a sombre meeting on a brilliantly sunny day outside Memery Crystal’s Southampton Row offices. Wimbledon was in full flow and Needham’s wife Sissy was talking about nothing else. She and her friends had secured debenture holder tickets for the afternoon women’s singles games and the air in their Gloucestershire house had been heavy with perfume and chattering women, something Needham couldn’t abide. It all seemed so trivial to him set against the problem he was going to have to sort out that morning. He remembered his right to convert to equity, a suggestion he had made to his son’s friend, but thought it would never come to that stage. It was not going to be an easy one to resolve. 88

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Crystal broke the silence and looked at Caplin and Needham. He really wanted to be elsewhere, as there was a new investment company his firm might get sight of if the lunchtime meeting went well, so he was somewhat distracted and his mind wasn’t really on the current job of sorting out the MadeForChina mess. He sat with his hands clasped in front of him and reiterated the facts as he had heard them from Needham in a controlled voice: “So this MadeForChina outfit can’t repay IEQ’s loan? Money loaned to your son’s school chum. Supposed to be a quick fix and a good return for IEQ’s shareholders. Cayman Island company, based in Beijing, with little or no assets and the officers haven’t anything. Right?” Then, as he glared at both men, Crystal’s voice raised as he nearly shouted: “Why did you wire $750,000 to your son’s friend as a bailout in the first place? It was barely three months ago. How well did you know these men in China?” 89

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Needham shook his head as Caplin’s face became redder. Crystal stared straight at Needham, his flabby jaw moving up and down like a hound’s. “Why didn’t you come and see me?” he said more quietly. “You know I could have sorted it in the first place. Haven’t I always managed to?” “It wasn’t that easy, Peter,” Needham protested. “Robert’s friend was desperate. What could I do? And I did talk to Anthony here.” He looked at Caplin who suddenly erupted, slamming his fist on the oak table. “That son of yours, Richard, is a spoilt brat who has never wanted for anything, who doesn’t know what a full day’s work is and seems to think money grows on trees. All through his boring little life, Daddy always paid, didn’t he?” The word “daddy,” spat from his mouth, resonated in the closed office. Needham went quiet. He knew his son wasn’t a shining example of business acumen.

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He also knew he himself had made one of the biggest mistakes of his life in giving them the money. It was all going horribly wrong. It was then that Needham added, “I didn’t wire the money, Peter.” “Go on,” Crystal managed. “Sissy sent the money to MadeForChina. I added her to IEQ’s mandate at Barclays months ago to relieve some of the strain from my daily schedule. And to keep her busy,” he added, almost as an afterthought. With the last bombshell, Crystal intervened, letting a steaming Caplin calm down, and said quietly, a wry smile emerging, “I don’t think there’s much we can do Richard, with this one. You must have known you shouldn’t have made the loan. Having made it, you should have made provision against the loan in full. It’s standard practice. Looks as if your boy’s friend’s business is about to hit an iceberg and I’m not sure if there’s a lifeboat handy for you.” 91

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“So how do we get out of this?” Caplin had quietened slightly despite the fact the veins in his head were still pulsing. Crystal sat back and looked at the top of the window over the shoulders of the two directors. He stared absently, shrugging his shoulders, then looked at both of them and said: “I’m sorry Tony, this one is for Richard to sort out. I can’t help you. No one can.” Caplin exploded again, sending glasses flying along the table. He stood up, almost foaming at the mouth. His enraged face glared at Needham. “You’ll pay for this, Richard. Your stupid boy’s dropped us in it.” Then he stormed out of the office. The other two sat looking at each other for a few minutes until Crystal remembered his lunch appointment and stood up to see Needham out. They shook hands, but both knew that the meeting had started a change and things with them would never be the same again.

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he Crooked Knight went back to his office and called his secretary in. She sat primly, taking his instructions to convert MadeForChina’s loan into equity. There would be no directors’ meeting and she was not to copy anyone in. She quietly closed the door behind her. The markets were in a downslide. Reuters, Sage, Baltimore, Blue Circle, Fortis and a host of other blue chips didn’t rally well that June day in 2000. The Royal Bank of Scotland called in its £20 million overdraft to Huntingdon Life Sciences after its own staff had been threatened by animal rights protestors. The bank had acquired the account when it took over the NatWest bank. The Labour Party also pulled its investment in the company after pensioner David Braybrook, who was one of the 1,700 investors, opened his front door to find protesters on his doorstep.

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7 “Sometimes, the hardest decision made is the right thing to do…” —YANNY NATASHAM

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n November 2000, the UK took a hammering when the world turned its back on any British blood products donated by people with residency in the UK of longer than six months. The excuse was to stem the spread of the human form of BSE. The EU Commission waffled as usual, saying it didn’t like interfering with member states’ health policies and reckoned they had brought in enough BSE and CJD controls. The Department of Health in London was unsure whether outright bans would make blood safer. A spokesperson said: “The risk remained theoretical and it was for each country to balance out the risks.” The reality was that some of the carcass disposal plants were less than hygienic. 94

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The markets started fluttering. They continued in that vein in New York, where fears of an advertising slowdown brought shares in major media groups such as Disney and News Corporation down with a wallop. The market downturn was generously assisted by Merrill Lynch’s highly influential media analyst Jessica Reif Cohen, who considered it prudent to downgrade both groups’ prospects; an unusual move on her part, as she normally supported Rupert Murdoch’s News Corporation empire.

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n Intermediate Equity plc board meeting had been called for that same day in November. Needham, Caplin, John Mackay, John Shaw, Christopher Foster and Jonathan Wright all met at Memery Crystal’s Southampton Row offices. A strange delusion prevailed that somehow meeting there would be more impartial. Their mutual hallucination couldn’t have been further from the truth. It was a sombre meeting and they all looked absorbed in their own thoughts. 95

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News of the MadeForChina affair had leaked out and all those in attendance had an idea as to where it had sprung from. Viscount Newry and his loose mouth was rated at odds of six to four on. They were all wrong. It was Sissy and her bleating about how awful and stupid the Chinese were that rang all the alarm bells. She just couldn’t keep quiet to her friends, who were, of course, wives of other City investment traders. Neither could she see that her son lacked business sense preferring to believe that he had been ‘played’ by his fair-weather friend. She received polite, sympathetic noises, but as ever with people who move in certain circles, when someone’s tainted they become unwanted goods, the result being that fewer social invitations were received in Gloucestershire for a while. Caplin, as usual, broke the silence impatiently. He had given himself the minimum of time for this meeting, a predictable sign of his total lack of interest. He and Needham didn’t even exchange glances as they seated themselves around the large conference table. 96

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Caplin didn’t forget nor could he forgive, believing that Needham had breached all the boundaries by moving the MadeForChina loan into equity. He felt that he should have been consulted at the very least. The other directors and advisers didn’t matter. “Right, let’s get on with it,” he snapped at the assembled group. “I’ll let you tell them what’s happening, Richard.” He barely glanced at his long-time friend. Sir Richard Needham looked around the room and took a deep breath. Weighing his words very carefully, he said quietly: “Tony and I are resigning; effective immediately.” Both Shaw and Foster looked surprised. John Mackay didn’t. He had visited Needham at his house in Cirencester for the weekend and heard all about the MadeForChina fiasco, first from Sissy over drinks in the conservatory whilst Needham was changing upstairs, then from “The Old Man,” as Mackay liked to call him when he 97

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wasn’t within earshot. She had beaten her husband to offering any sensible explanation, but then there wasn’t really one to give. Mackay was aghast and wondered how the man could be so stupid. Do these people live on the same planet as the rest of us? For someone who had held a Cabinet post, had been a Member of Parliament and held umpteen directorships, this loan was a blundering mistake. Incredible. And what in Hell was Sissy doing writing out cheques without an official position within the company? The two weekend evenings that rolled well into the early hours were spent planning just how to get Needham out of this mess with minimal - preferably nil - press exposure. The prospect of bad press gave the Crooked Knight the shivers. The conclusion they both kept returning to was that he and Caplin would have to resign, and in many ways that suited Needham. He didn’t like to face hassles, preferring to dodge problems. If that dropped others into the quicklime, then so be it. 98

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However, in the case of IEQ there were such lucrative gains he didn’t want to lose out on entirely. He wanted to retain some sort of stake. So the two men plotted to ensure he could bite all sides of the cake. As they schemed, they inevitably realised they would gradually be turning IEQ into a front, basically using it to launder millions of pounds for the benefit of Seymour Pierce and those inside the circle of trust. A smiling Needham and Mackay parted company on a sharp, frosty Monday morning, having solved their problem.

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hristopher Foster was another old friend of the original IEQ board members who had been introduced by Keith Harris, although he wasn’t told everything that went on. He was expected to follow the boss’s dictates. He asked the room, though his question was directed at Caplin and Needham, “So with you gone, where does this leave the board, because none of us are currently directors.” 99

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Caplin snapped: “Well you are now.” “What, all three of us?” Foster meekly returned the blank stares of both Needham and Caplin. Sometimes he appeared as if he didn’t deserve to better himself, constantly displaying an obvious self-esteem problem. “Yes, got it in one,” Caplin retorted sarcastically. He couldn’t stand brown nosers. “So where do we go from here and what about your MadeForChina screw up?” John Shaw asked. “Are we supposed to face the press and IEQ’s shareholders on your behalf?” Needham came in quickly. “Yes, you will, but with the two of us gone, it should simmer down quickly, if it gets a notice at all.” Shaw didn’t feel reassured by that remark. He wasn’t happy facing the shit on behalf of someone else, but knew he had little option. 100

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Refuse this and future directorships might not be offered. That was one of the rules of their game. Needham and Caplin then went on to explain that although officially resigned from the board, they would be feeding suitable companies with investment potential to IEQ. When asked by Shaw where they might come from, Needham replied that he would find them. Redstone had been his only major investment hit to date, but being a good one, this seemed to satisfy the new board members. Mackay smiled quietly to himself because he knew just how big the pot of gold was likely to become. Caplin then added: “And we’ll get £25,000 each as severance, for our trouble.” Despite the fact that the amount was more than three times their agreed annual salary, and despite the fact that they were resigning, he felt entitled; after all, without his and 101

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Needham’s ‘good names’, IEQ would surely have remained Harris’s and Mackay’s pipe dream. The new IEQ directors, plus Needham, Caplin, Harris, Wray and their adviser, Peter Crystal, were almost an unofficial holding company in their own right, united in their collective skulduggery. Either one or a group of them were always working behind the scenes on any number of investments. It is really quite amazing, as well as being illegal, that there had never been, with only one or two exceptions, any minutes taken at any IEQ board meeting. It was almost as if these men felt IEQ wasn’t a proper public limited company, but merely a tool to suit their plans elsewhere. It was fortunate for them, but unfortunate for so many IEQ shareholders - members of the public who had invested what was for them a lot of money on false promises - that these men were protected by a system that prevents most people from pursuing such crimes, and they knew it. 102

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nthony Caplin was particularly interested in dreaming up company names to fit the empty shells he had created, then offering them to IEQ to raise capital.

One such company was called 2020Me Limited. There is a rather interesting letter dated 13th March 2000, together with a share subscription application attached, relating to that company with many pencilled alterations throughout. The document reads “You have agreed to subscribe for 500 ordinary shares of £1 (nominal value) each in Pro Arbiter Associates 2020Me Limited at a subscription price of £500 per share.” The problem is that the “Pro Arbiter Associates” title is consistently scored out throughout the letter with the name “2020Me Limited” written in next to it. The letter then asks the punter to send a cheque for £250,000 made out to Pro Arbiter Associates 2020Me Limited. The letter is signed by Tony Caplin on behalf of Pro Arbiter Associates 2020Me Limited. 103

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Underneath the signature are some notes saying, “because the shares are not currently listed on the stock exchange it may be difficult for the investor to realise his investment in Pro Arbiter Associates 2020Me Limited.” That mess of a letter was sent to Richard Needham. There follows an application for shares form dated 20th March 2000, signed and posted by Sir Richard Needham from his home - or was it? - because the address read “care of” an address in the West Country. Needham purchased 500 shares on behalf of Intermediate Equity plc for £250,000. Scribbled on the original letter are the words “cheque sent to Tony 22 March” and then another scribble, “sent to Tony’s home.” All very cosy and personal, but not what one would consider correct business procedure for a public limited company, traded on AIM. On behalf of the board, since Clive Bradley had long since resigned in spirit if not officially, Needham and Caplin failed to disclose within IEQ’s accounts or to the 104

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London Stock Exchange, that Caplin was a director and a major shareholder of 2020Me Limited. It wouldn’t take long, however, to discover that the company was merely another scam through which more than £9.5 million disappeared with neither assets nor product to show for it. The MD, Colin Frost, sped off to Australia. IEQ shareholders never saw their money again. In time, Caplin resigned from 2020Me Limited, refusing to comment on the company’s management, bleating as he so often does that he was just a non-executive director. That excuse is consistent for all of these crooks. Solicitor Paul Taylor of City firm Faegre Benson Hobson Audley fronted for the remaining “real” directors, denying that anything was wrong and promising that the affairs of the company would be disclosed to shareholders. But after nearly three years without a word, it’s safe to say they won’t be filing any more accounts. 105

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In the UK, there is no legal distinction at Companies House for a non-executive director. You are either a director or you’re not, and if you are then you face the same responsibilities as any other director. Luckily, all directors are equal under the law. Other companies, IEQ investments made by the Crooked Knight and his associates, which rose and fell like the tide, included Wise & Lovey Information Services Limited (perhaps someone with a theatrical interest dreamt that one up). Bibliotech Holdings plc was another one, a public limited company which never gained or even dared seek admission to AIM, and one in which Caplin was also a director. Again, he failed to declare his interest to IEQ shareholders and again another £250,000 was advanced from IEQ’s coffers. Those shares were eventually sold for 1 per cent of what IEQ had paid. No return on investment there. Object Group plc underwent a couple of name changes, but was eventually put 106

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forward as a good buy by Jonathan Wright, who had left Memery Crystal as a practicing solicitor by then and jumped right into the thieves’ den with a directorship at Seymour Pierce. He advised IEQ to buy the shares for £250,000 after the company’s planned IPO through respected City broker Williams de Broë was aborted at the eleventh hour. The reason for their pullout remains uncertain, although the person dealing with Object Group moved to a job with Seymour Pierce. The question of whether he jumped or was pushed springs to mind. Using Seymour Pierce’s stationery, Wright sent a memo to Irene Redman, who also worked at Seymour Pierce at the time. Wright claimed Object Group plc was “profitable,” that it had a “pre-money valuation of £4.5 million” and that it (the company, but he really meant John Linney) would “give up” 10 per cent of its equity for £500,000.

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Wright went on to describe what a great investment Object Group would be for IEQ and, as expected, a cheque arrived the same day from IEQ’s account for yet another £250,000. Object Group was never admitted to AIM. As soon as IEQ’s cheque was banked, Object Group plc - then Object Group Limited changed its name to Object Support, and another UK company, previously called Object Support, began trading as Object Group Limited. Then, Object Support, formerly Object Group, the company in which IEQ had invested on the advice of Jonathan Wright and with the approval of John Mackay, was placed into voluntary liquidation a short time later. Confused? You shouldn’t be - there can be only one explanation for the name swapping. The bluffing continued until Object Group’s MD John Linney said that Object Group (formerly Object Support) had never been a 108

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wholly-owned subsidiary of Object Support (formerly Object Group), despite the reference within the Prospectus document, previously prepared by Williams de Broë, which Jonathan Wright had used to support the investment proposal to IEQ. Incidentally, John Mackay arranged for Seymour Pierce to receive twice as many shares as IEQ in exchange for merely advising on the IEQ investment - or maybe its just that his mathematics were better than both Wright’s and Linney’s. BuyIndiaOnline.com, based in Delaware USA, can only be described as a ‘mystery investment’. No documents relating to the investment and no trace of the company, its directors or its assets – if ever they existed have been located. This time, however, just £125,000 was paid over by the former IEQ directors. That company vanished as soon as IEQ’s cheque was banked. The Isle of Wight Cable and Telephone Company Limited, a name with a John Wayne western feel about it, was 109

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experiencing a serious cash flow problem. Seymour Pierce agreed to organise a £7 million syndicated loan. Of that total, £277,000 was contributed by IEQ on John Mackay’s say-so. A further £373,000 had been invested by IEQ through the purchase of shares, so that in the end, £650,000 was invested - and at risk - by IEQ. The loan and equity was authorised by Mackay at the same time Seymour Pierce was adviser and merchant banker to the company. No mention was made that Seymour Pierce also had been granted a floating charge over the assets of the company. Neither was it revealed that unless Seymour Pierce was successful in arranging the entire £7 million in loan, it would have to find the money itself, since Harris and Mackay had agreed to underwrite the syndicated loan facility in the first place. An added incentive was the £500,000 fee being paid to Seymour Pierce for arranging the loan. A motivating amount.

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True to form, barely 60 days after the money was paid over, the company defaulted, and all of it was lost. IEQ was able to sell its loan note for £100,000 to someone who then passed it on to Seymour Pierce. In the end, the baddies won and they acquired the lot, which was reborn as a Phoenix company now called Wright Cable Limited. In total, more than £5 million was lost by creditors, except Seymour Pierce. Shareholders lost everything, except CLS Holdings plc, one of the original major shareholders, who got that holding back recently for a nominal sum after Seymour Pierce began systematically disposing of its assets. Interestingly, Keith Harris is a director of CLS Holdings plc. Radio First plc was one of Keith Harris’s babies. Football mad, he dreamed of creating a network of radio stations targeting supporters throughout the UK. As ever, he was the chairman and major shareholder personally as well as through Seymour Pierce. 111

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Again not bothering to inform IEQ’s shareholders of the obvious conflict of interest, John Mackay and his fellow directors authorised a £200,000 investment. Much later, after the baddies were gone, IEQ began selling those shares as soon as the connection was made, but recovered just £25,000 before it went down the pan. Eventually, the company was struck off AIM and liquidation followed a short time later. Video Networks Limited was a private limited company that did well to raise more than £200 million from UK investors, including many big names like Sir David Frost and Lord Owen, the former British Foreign Secretary. After running up massive debts trying to outmanoeuvre British Telecom (BT), the company was seized by its largest creditor, Chris Larson of Microsoft fame, and the investors’ money went down the drain. John Mackay had a hand in the Video Networks’ investment because of his role as corporate representative for PSL Nominees Limited, the company that held shares for Jersey-based Baron Bentinck. 112

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Mackay was an IEQ director at the time he authorised the £450,000 payment for the benefit of Bentinck and that was the last IEQ ever saw of the money. For his trouble, Mackay was gifted a directorship to Video Networks, but even that didn’t last long after Larson seized control. Seymour Pierce was churning these companies through its machine for IEQ to invest in and it was taking huge fees to boot. The number of new acquisitions associated with Memery Crystal and Seymour Pierce, when added to the number of AIM flotations, became the talk of the City. In short order, more than £3 million of IEQ shareholder funds where lost through the investments made by and through Seymour Pierce. However, other companies also associated with one or more of the former directors reported losses far exceeding those of IEQ. There is no telling how much Seymour Pierce and Memery Crystal earned in fees for their services or how much the directors earned through their private buying 113

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and selling of shares piggybacked onto the IEQ deals. What is known is that there seemed very little that could stop these men, or so they thought.

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he King of Porn, Richard Desmond, now Daily Express Newspaper Group owner, was purring in tune with his new Daimler. A smallish man, he had to peer above the steering wheel, his tubby figure straining to see where he was going. He was wallowing in the success of having bought the Express for £125 million with the help of his old mate, Keith Harris. He was now quickly working through his plan to shed staff. He had at least 130 journalists to kick up the arse and out of the building by early next year. Teach them a lesson about writing shitty things about him, the scumbags, he mused. After all, he was a publisher of leisure magazines, not porn. It wasn’t quite true, he thought, that he called his butler into editorial conferences with a banana served up on a plate. It was a “fuckin’ silver platter!” he muttered to no one. 114

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He had recently taken David and Posh Becks up to his penthouse office suite overlooking London. As they entered the impressive room, an assistant left standing near the door, he turned down the lights so they could see the city better and said: “Fuckin’ Hell, I own the Express. And David, you're the best footballer in England. Fucking brilliant. Victoria, you're the most famous pop star in England. Fucking brilliant.” The coarse newspaper magnate in the luxury motor car was on his way to the Prime Minister’s country retreat, Chequers. The house, dating back to the 16th century, is set in rolling Buckinghamshire countryside - a jewel of the Home Counties. It had been donated to the nation in 1917. Desmond pulled up at the front gate and spoke rudely to the guard. The massive gate swung open after what seemed like several minutes and he drove slowly up Victory Drive, along which Sir Winston Churchill had planted Beech trees in the 1960s. Desmond wanted to savour each moment. 115

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“Fucking brilliant,” he said to himself. The invitation to the small intimate dinner had included a partner, and he thought for a moment that the blonde with the big tits would have liked to come, but he had had second thoughts, feeling she wouldn’t fit in. He was moving up a class or two and it had only cost him a few hundred grand in the Labour Party donation box to get him there. The money had caused some friction in the Party ranks because of his porn connections, but he knew they would accept the money. They always did. Member of Parliament Claire Short had once whipped his publications off the top shelf. The invitation he now held in his hand seemed to be putting the magazines back on to the lower shelves. Life was good. He thought again about the blonde, felt a hardness coming on and blotted her out of his mind as he reached the front door.

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8 "You can buy a person's hands but you can't buy his heart. His heart is where his enthusiasm, his loyalty is.” —STEPHEN COVE

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arrived in London by EuroStar from Paris on Thursday 24th May 2001. It had been an experience speeding through the Channel Tunnel, a journey taking only 20 minutes to complete from Calais to Folkestone in Kent. I hadn’t tried the train before, but was persuaded by friends on the French side to give it a go, and apart from the final slower leg from Ashford in Kent, the trip was smooth and pleasant. Having time on my hands, I decided to go for a drink in one of Waterloo Station’s numerous watering holes. I took out the early evening edition of the 117

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London Evening Standard I had just bought and buried myself in that day’s news. I lived in Paris with my French wife Marie. Her family had a number of business interests spread throughout France; from hotels to car rental agencies, but mostly tourism related. We lived in a small flat, they had given us as a wedding gift, not far from the city centre, which meant its value had more than tripled since we got it. They say London is the centre of the universe, but I reckon Paris comes a very close second. I love the buzz of both cities, but culturally they’re poles apart. London always seems to have more foreigners than anywhere else bar New York City, possibly. I scanned the business pages. The main headline was about Rupert Murdoch’s complicated bid to take over satellite television station DirecTV, a move being scuppered by a counter bid from its American rival, EchoStar. Murdoch’s problem was lack of cash for DirecTV’s parent company’s shareholders at General Motors. 118

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Turning back to the general news, the lead story was that Britain appeared to be dying of boredom caused by a lacklustre general election. It looked to an outsider like me that the Conservative and Liberal parties didn’t have enough leadership inspiration and the electors were seeing the entire event as a foregone conclusion. Blair would get in again. Glancing over to the empty table adjacent, I saw a spare Daily Express. I pulled it over. I had read about Richard Desmond taking over the paper because all the French papers were vying with each other to expose his porn connections and were speculating on his intentions with the Express. No one took him seriously. Finishing my drink, I carted my suitcase out to the front of the station. I considered catching a bus as the traffic looked heavy and a taxi was expensive, but opted for a cab anyway and arrived at the Meridian Hotel in Piccadilly, just along from the Circus and almost opposite the Ritz. 119

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I was in London to meet up with a firm of brokers to buy shares in a company that had caught my interest as I did my daily cruise of the world’s financial markets. The meeting was next Tuesday the 29th, a special day in my calendar it being my wedding anniversary, and I thought I would surprise my wife with some shares. The way this company called Intermediate Equity plc had sized up from its recent set of accounts, made it a money-spinner, as it appeared to be undervalued. The figures showed £1.2 million in the bank and more than £3.5 million in investments at book value. I lay down on the large double bed that counted as a single room. I thought I’d have a snooze, a shower, and then try the restaurant for dinner. Then I suddenly felt alone and picked up the phone and called my wife in Paris. Her voice always sent a glow through me. Yes, everything was fine, she told me. She was just waiting for her girlfriend to come round for a girls’ evening in. She was preparing the salad when I called. I forgot Paris was an hour ahead. Marie and I were best friends as well as 120

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husband and wife. She would listen to my moans and then cut right through them with a sensible alternative. Despite our closeness, we both needed our own space and were never heavy on one another.

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had a meeting the next day with my London solicitor about a commercial property deal I was considering investing in, then the weekend would be free for me to become a typical tourist, something I’d never had time to do. I thought that as the weather was good I’d try one of those open top red buses that go around all the top tourist sites. I’ve always found that weekends in London are the friendly times, unlike weekdays. I was swept up in the cold, impersonal rush hour the next day as I made my way to my solicitor’s office in Moorgate. I caught the tube by a hair at Green Park near my hotel and travelled to Victoria then changed on to the eastbound Circle Line, travelling through ten stops to my destination. I stared back at the impassive faces of my fellow passengers. 121

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I loved trying to guess what people did with their lives and why they might be travelling and to where. As the tube rolled along, I kept thinking about Tuesday and how I might be about to make a quick killing with the shares I intended buying. I felt happy. Jim Brown, my personal solicitor, gave me a big bear hug when we met. Being American, he isn’t as reserved as we Brits. We had some history between us with our love of rugby, and we’d shared the same soggy, cold Saturday afternoons on various terraces cheering our team, the Saracens. We exchanged rapid news snips, and then I asked him if it was true the Belgian guy Nigel Wray was buying into our team? “Yes,” Jim replied, “and in a big way. He wants to be Mr Big with it and run it from the front.” I went on to say I’d heard many tales about Mr Wray. That made Jim laugh, saying I’d probably not heard the best ones yet. He showed me the searches he’d made on the property I was interested in, which was on the edge of the City near Blackfriars. “Not far from Seymour Pierce,” he said. 122

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I raised my eyebrows. “Why mention them?” I asked. He looked hard at me and told me they were practically joined at the hip with the directors of this company I’d mentioned I might be investing in, or so he had heard. A ripple of uneasiness travelled through me. There was a lot of speculation about the people behind Seymour Pierce at that moment. Jim saw my expression and patted the back of my hand. “No worries old friend,” he laughed, “it was just a throwaway remark. It’s just that everyone’s been talking about IEQ recently and the successes Seymour Pierce has been having with its investments. Personally,” he went on, “I think you’re doing the right thing.” We spent all morning talking about the property, then adjourned for lunch in a small, very old, traditional English pub that served the best bitter and fish and chips. I returned to his office on Monday and concluded the deal then decided to walk back to Piccadilly. I totally misjudged the distance, succumbing at Holborn and finally 123

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jumping on a bus travelling back along pretty well the same route I followed on Tuesday to see my new broker, my laptop strap weighing my shoulder down. I didn’t want to miss any opportunity to view a website that might be offered at this meeting. This one would be more formal. We weren’t best buddies.

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waited with the secretary, an officious sort. After a few minutes, I was shown in to see Mr “it was” Myers.

“Delighted to meet you at last, Mr Alexander,” he said, his six-foot plus frame looking down on me with a smile like Ali Baba’s. He sat me down opposite his desk with the light shining on my face through the window – an old trick. He was watching my every expression, but it didn’t unnerve me. “Yes, I’ve been looking at this company’s accounts and for the short period they’ve been in business, they appear to have done very well, but it looks to be undervalued.” 124

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Myers mouth smiled, but his eyes did not. Sounding like the Dickens character Uriah Heep, he replied, “I could not wish for a better investment.” I said I expected to turn a sharp profit on the shares very quickly and he agreed with me, albeit a bit hastily, on reflection. The papers for signing were at the side of his desk and he slid them slowly over to me with his well-manicured hands, maintaining eye contact the whole time. He looked disappointed when I leaned back and started reading them. I couldn’t see anything wrong, so I reached for my pen and signed them on behalf of my company, of which my wife and I were directors. He called in Miss Frigid, his secretary, from next door to witness the document. I actually detected a feeling of warmth between those two, but couldn’t believe it might be anything other than years of working together. We shook hands and I decided to throw caution to the winds and take a cab back, 125

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despite the long, slow journey. I needed to unwind. Near Shaftesbury Avenue I asked the cabbie to drop me off, and I walked into The Palace theatre and booked the best possible single seat for that’s evening’s performance of Les Miserables. Might as well brighten myself up. Uriah Heep had gotten under my skin.

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arrived wearily back at the Meridian and slung my unused laptop on the dressing table. Hanging my jacket across the chair and looking wistfully at the bed, I pulled myself together and thought I’d better plug into the Internet and see what my emails were saying. First I called my wife Marie, wishing her a happy anniversary and telling her I would more than make up for it when I came home. I then told her I had signed the share documents and she was going to be a rich lady. She was over the moon, but reminded me in her native language, that she already was a millionaire several times over. I could almost visualise her arms waving around. I really missed her. 126

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I opened the laptop, logged in and began pulling down my emails. It was the usual scroll and delete, short replies to some, save to my briefcase to others. There were a lot. I then reached an unknown name and stopped. It had an attachment. You always get the wind up when you see a new name in that format. Virus? I convinced myself that McAfee would have done its work and clicked on the name. It was from one of Intermediate Equity’s directors, suggesting I might be interested in shares in various companies elsewhere. They weren’t on AIM yet as they were still at the incubation stage, but they would give me a good turnaround profit. I gazed at the screen, then either through instinct or anger I banged the delete button and wiped it. I could only imagine Uriah Heep had tipped this guy off at IEQ, thinking I was made of money, as I’d indicated I might be up for more shares. I sat back against the hard-backed chair and thought about the IEQ shares. I decided to adhere to my plan. If anything, I was even considering buying more. 127

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I pulled the telephone wire out of the laptop and let the screensaver fall over the inbox list. I had an hour and a half before the theatre performance, so I lay down on the bed. My back felt like it had been on the rack. Tie loosened, top button undone, I eased into a light sleep. In another hotel less than a mile away, the rent boy had just finished giving the client a bloody good rogering in his fourth floor suite. He liked foreigners because they tipped well and even better when they offered those little extras. He was a clean boy. His clients were top bracket quality and he had his reputation. The hotel porter would get his cut for pushing this business his way. He was choosy whom he shagged. He preferred shunt and grunt, not the other way around. He recognised this client from the papers. Drop dead gorgeous, he thought; and he always felt lucky when the other guy had looks as well being a good shag. Most of his clients had dreadful bodies. Viagra was one of the best pills ever made for guys like him. The client was taking a long shower, but didn’t invite him to share. 128

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That was his signal. He slipped out of the suite and made his way to his next client one floor down, slipping into the gents for a tidy en route. I returned to Paris the next day on EuroStar convinced it was a good way to travel. I couldn’t shake the contents of the deleted email out of my mind; or, more likely, I couldn’t shake off the name of the sender, John Mackay.

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9 "It's not stress that kills us, it is our reaction to it." —HANS SELYE

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n what seemed a short time, I was on a roll buying up more shares in Intermediate Equity plc. I eventually ploughed in £600,000, meaning I had acquired 29.9 per cent of the company. All the time I was being encouraged to invest by good business press reports and by my broker. My intention was to start selling the shares within a couple months, for a return on our investment of as much as £1.5 million within another 60 days. They were exciting days for Marie and myself, as we were right in the thick of it. In May, the UK was under siege from a major foot and mouth outbreak that began with a Northumbrian farmer illegally feeding his beasts tainted offal from a nearby Chinese restaurant. 130

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The offender was unrepentant throughout the entire slaughter of millions of sheep and cattle. Accusations were being made that farmers were deliberately infecting their animals for compensation, and in some cases it was proven that the movement orders were being breached. The markets were jittery.

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he property I had bought in April had now been renovated, and my first tenants - a small firm of accountants were moving in. Jim, my solicitor, had extracted a good deal out of that one. I continued to stay in Paris and monitor my investments. The Internet had moved the business world into real time and news had become instant. You could live anywhere. At this time the wires were humming with whispers that newly fledged newspaper owner Richard Desmond had made a secret deal with Manchester-based media agency MediaVest, in which the agency would receive a percentage of advertising deals it 131

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steered toward the newspaper group. In a letter dated February 2001 and sent to MediaVest’s managing partner, Andy Jeal, Express Group’s MD stated he wanted to make Jeal a rich man and that only he, the financial director and Desmond would know about the arrangement. The agency at that time managed clients such as Abbey National’s Internet Bank, Cahoot, Marks and Spencer’s Financial Services and the Northern Rock Building Society. Things were going well with my IEQ investment until I sent some of my accountancy papers to our old friend and accountant Henry Jackson, of Jackson & Son, based in Kent. It was time for him to prepare our holding company for its annual audit. Henry was meticulous, and aside from being a great guy, he was an incredible skier, although I once had to help him off the piste in northern Italy when he was too ambitious and broke an ankle. He called me in Paris whilst Marie and I were preparing to take the train south to the Côte d'Azur for a week’s visit with Marie’s 132

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ageing parents. I knew it was serious when he suggested I postpone the trip and return to the UK. My wife’s face had that women’s intuitive look when I tried to tell her everything would be okay. Why do men try to deceive women? It was obvious that if our trip had to be cancelled, it wasn’t because a minor debit figure had gone into a credit on our balance sheet.

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stuck with my newfound love - EuroStar and caught the one just before noon from La Gare du Nord, arriving in London at 1:30 p.m. A quick tube transfer to Victoria and I was on a train to Kent that had seen better days. One of Henry’s clerks met me in a rather battered Ford Escort and we made our way through Westerham, near Churchill’s former residence, Chartwell House, with its apple orchards; through Oxted, past strawberry fields ripening for Wimbledon, until we came to a small village near the Sussex border. 133

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In England, even the small town supermarkets have to keep a façade in harmony with the area. No brash neon display signs are permitted and even the local takeaway has to have a ‘Ye Olde Worlde’ appearance. We swung in behind Henry’s office, set in a cul de sac of 18th century houses. He had moved into a former florist’s business, deciding to leave the shop front window open plan, with a short set of vertical blinds. His female assistants used to joke they felt they were sitting in an Amsterdam knocking shop, or words to that effect. My accountant was delighted to see me again, and after asking after each other’s families, we got down to business as he pulled out a pile of papers and newspaper cuttings. “I’m worried about this IEQ investment you’ve made, David. It’s considerable.” I looked surprised. After all, he was used to me buying and selling advantageously in 134

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deals involving large amounts of cash. “Why?” I asked. “The companies these guys are investing in are not bearing fruit, David. In fact, they resemble egg shells.” I began to go cold despite my heart quickening. I was feeling bad vibes. “What have you found, Henry?” my voice faltered. “Well, they seem to be feeding cash into Seymour Pierce, for a start, and then they go bust.” “Is it fraud?” I asked looking at him. Henry was a typical accountant who never liked to give opinions. He gave facts. “We haven’t got proof of anything, David, but it looks as if money is vanishing into thin air. Their valuation of these IEQ investments doesn’t add up.” 135

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“How thin?” “Anorexic.” He hunched over the desk towards me. “Shit,” I replied, stunned. I didn’t believe it could be happening to me. Marie and I had £600,000 in that investment, and anger flashed through me. I looked at Henry, who was looking at me sympathetically. “So what do we do?” I asked helplessly. “Jim’s your lawyer over here in the UK, isn’t he?” I nodded. “Let me have a talk with him.” I nodded again, like one of those toy dogs with the head that bobs up and down. “You staying locally?” I nodded again. “Near Maidstone,” I replied, thinking stupidly as you do upon hearing bad news that I wouldn’t be in the mood to use my hotel’s health club facilities. “Henry,” I said, “how bad is it?” 136

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He shook his head. “Come and see me tomorrow at 11 a.m. I’ll have spoken to Jim. Mike will give you a lift to your hotel.” Seeing the likelihood of lots of back and forth appointments, I thanked him, saying I intended hiring a car at my hotel. In the end, I did go down to the Marriott leisure pool and sat in the Jacuzzi until my skin resembled a prune. The brain goes into a limbo with bad news and tries to shut down. I had to clear it. My fellow Jacuzzisoakers realised I was in my own world and gave up trying to make conversation.

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ext day I met Henry after he had briefed Jim. He agreed something needed to be done and that no more investments were to take place for the time being. Could I go up to Jim’s Moorgate office that day to discuss what I should do? I agreed and drove the few miles to Maidstone East station, not noticing what a beautifully sunny day it was. I took the tube from Victoria to Bank station and decided a walk would do me good. 137

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I looked up at the numerous offices, wondering if they contained any of the bastards who were playing with my family’s money. I was becoming a very angry man and knew I wouldn’t get off their case until the bitter end. I had chosen not to tell Marie until I returned to Paris. It’s always better to discuss something like this face to face.

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im shook my hand and patted my shoulder. He came to the point quickly. “Henry’s filled me in, David. I’m very sorry about the way it’s turning out. However, we have tried to put together a plan of action and we’d value your view.” I trusted both my solicitor and accountant implicitly. Jim went on to say the best way to recover any losses that might exist and were as yet unproven was to take action before the next AGM scheduled for 23rd July 2001. Jim went on to say there were three IEQ directors: John MacKay, Christopher Foster and John Shaw, and they had to be ousted. 138

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Our company was the largest shareholder with 29.9 per cent and the support of some of the other 1,650 shareholders, I should be able to assume control of IEQ easily. Jim said: “We’re going to remind those directors that they needed to be appointed by the shareholders, not gifted their positions by friends.” To date those friends had done what they pleased. But not any more. Jim reminded me that if I was to go down this road, it would take up a lot of my valuable time and he knew I had other business matters needing constant attention. It would become yet another full-time career, he warned. I realised the truth of what he was saying, but couldn’t see any other way of dealing with it. Reading between the lines, I knew Jim and Henry were of the same view as me, that the existing directors together with the former directors including Needham and Caplin, were guilty of breach of fiduciary duty and quite possibly fraud. 139

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There was a great deal we needed to do before IEQ’s AGM if these thieves were to be removed from their posts. I felt dejected and in many ways helpless, knowing this was likely to take a long time to resolve. I returned to Paris. A few days later, we received our notice of the AGM. Just the normal stuff: appointments to ratify and re-appointments as usual. One or two odd requests regarding share allocations and voting rights, but it was all just wishful thinking for these directors. As Jim had counselled, in the days leading up to the meeting, we needed to remain quiet about our plans. There was no capital in showing our hand until the “judgment day.” I felt a surge of anticipation run through me. Marie, on the other hand, had taken the whole thing very well, and, with typical female logic, shrugged her shoulders and said we would “just have to stand firm and get rid of these crooks.” I was ready to lynch them and tear their eyes out, but as usual she acted as my stabiliser, and I eventually calmed down. 140

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his time Marie came with me to London to see the showdown at Seymour Piece’s offices at 29/30 Cornhill, a stone’s throw from the Bank of England. Only a handful of the smaller shareholders had turned up. It was all going to be down to me, as usual. The board was already in place when we arrived and although they looked innocent on the surface, there was constant shuffling of papers and nervous faces that told me these men were guilty as sin and afraid of being found out. I was a new face and that made them even more nervous. I was in my element. This is how I like to make people feel. It keeps them honest, usually. A confident Peter Crystal was present, though he sat in the back of the small meeting room. John Mackay was in the chair, seated between John Shaw and Christopher Foster. Mackay coughed nervously and opened the meeting. A statement of the company’s trading affairs was read out and it went on and on. 141

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I began to wonder how many lies could be squeezed into the small piece of paper in Mackay’s hand. I noticed his hand quivered slightly. I looked around at the small band of shareholders. They looked like retired people, those with a modest pension having an interest in the stock market to fill their days. It was much more fun than shoving a £1 into the pub’s fruit machine, and with much better winning odds, or should be. Mackay finished reading, then came to the first resolution relating to the board appointments. John Shaw took over the chairman’s role briefly, because the first appointment related to his long-time mate. A vote was held on Mackay’s re-appointment on a show of hands. The room was against me and so I stood up demanding a poll of the shareholders present. I’m not sure if I was shouting, but Marie was lightly tugging my trouser leg trying to calm me down. All my anger was spilling out and the great British reserve of the men at the board table was stifling their urge to respond. Boy was I angry. 142

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I remember shouting that the only bastard on that board who had shares was John Shaw, and it was trifling at 200 for 1p, compared to our own company, which owned 17,984,850. I briefly apologised to the other shareholders around me, remembering they had invested small amounts and I needed them on my side. John Mackay was looking like a candidate for St Barts Hospital, near Smithfield, as his face grew cherry red. He was seething, and he wasn’t going to be moved off that board. His eyes were brimming with sheer hatred. Mackay spoke again: “I am reassuming the chair,” he said. “It appears that we will need to circulate ballot papers on the request of Mr Alexander here. We will therefore briefly adjourn this meeting whilst those papers are distributed.” Peter Crystal, who also looked likely to explode all over the room, spoke for the first time, only through his teeth. As I stood to stretch my legs, Crystal quickly moved towards me, and as he positioned himself, 143

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close enough to exchange saliva, he muttered that he’d had “more hostile takeovers than I’d had hot lunches.” The crooks were totally on the defensive now. The meeting resumed and Mackay spoke again. “The board having reviewed the ballots intends to adjourn the meeting for a brief period.” Mackay then asked me to come outside with him. Was this a punch up, I wondered, because he was outmatched if that was the case. I clenched my fist. I glanced over at Marie, who looked as if she’d turned to salt like Lot’s wife. We met in the hall outside the room where my wife and the other shareholders were looking at each other, not knowing what in the world was going on. All three directors and Crystal assembled in a small semi-circle and I stood before them with my hands by my sides, readied if needed. I faced Mackay, our eyes meeting for the first time, and noted from this close proximity that his breath stank of alcohol. 144

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Funny things happen at moments like these when the going gets rough. You think of the silliest things, and I nearly offered him one of my breath mints. Close up, his eyes had a yellow tinge. Liver problems, I thought. He breathed heavily over me: “You’re not going ahead with this poll are you?” his spittle sprayed over me. I drew back screwing my face up. “You bet I am,” I said, sounding more confident than I felt. I had written on my ballot paper that I intended to vote against the appointment or rather, re-appointment of each director. In fact, the only resolution that I agreed with was that the company’s accounts should be accepted as read. With hindsight, I should have refused that one as well. Mackay suddenly crumpled and begged me not to go ahead. He said: “Surely we can come to some accommodation, can’t we? I mean…”

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I cut him off as I shook my head in amazement, thinking, as if that would change my mind. We’d possibly lost our £600,000 and this arse had the audacity to ask me to give that up for an appointment to his board. What did he think I was? A rent boy? I shook my head. Mackay took a few paces back as the reality of what I said hit him as hard as if I’d smacked him on the jaw, which was precisely what I would have done had he and I been alone. Without a word, he turned and went back into the meeting room. As he and his two shadows sat at the card table that doubled as a board table, MacKay spoke again: “This meeting is reconvened. A shareholder has indicated that he intends to vote against each resolution proposed by your board and the result would leave your company without directors. So that we may consider the impact of this act, we will adjourn this meeting for thirty days.” As the last word was uttered, all three men stood and exited the room, followed by Crystal and two women who had previously gone unnoticed by me. 146

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As it happened, the polling cards had been collected and viewed by the board, meaning that Mackay was out, but he wouldn’t stand down. He was becoming like the worm whose head was chopped off but just kept going. By adjourning the meeting, he had held onto power, but just barely. Marie and I didn’t say much on the train back to Paris, but she held my hand the entire journey.

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ugust is always a dead month in the business world. The British were becoming increasingly like the French, who more or less shut down for a four-week annual holiday. My solicitor’s main problem was trying to get a hold of anyone to sort out our IEQ predicament before the scheduled AGM. The reconvened AGM was held at Seymour Pierce’s office for the second time. Again the meeting was opened by John Mackay and adjourned ten seconds later without any explanation. I had taken my solicitor with me this time, as I intended to punch through the outstanding business from the previous meeting. 148

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No chance. Mackay was swift in denying me any opportunity to recall the remaining resolutions. My hackles were raised. I stood up and jabbed my finger towards Mackay, who was ready to spit back at me. I shouted angrily, telling him that I had the right to poll his motion to adjourn as well. Mackay banged the table with his fist and said: “the next meeting, the AGM, will take place at a future date,” and then he stood up and walked out. I sat there seething. Jim patted me on the arm and suggested we go for a drink. Over two bitters, we thrashed out what needed to be done. The IEQ directors were taking liberties now. Jim assured me he was in regular contact with the company’s solicitors, Memery Crystal, but he said: “Peter Crystal is a shady character. He and Jonathon Wright had been the main movers and shakers in all the dirty deals at IEQ.” How could we deal with people with those values? I felt very depressed at that point. 149

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I went back to my hotel room, ordered room service and switched the TV on. The news hadn’t gotten any better, either. In New York, some paraglider called Terry Do, if you can believe that name, had crashed into the torch of the Statue of Liberty and remained dangling there for nearly 45 minutes over the 300-foot drop until he was rescued and then put in handcuffs. Financially troubled AOL said it was laying off more than 1,000 employees from its Internet division and Andrew Lloyd Webber was pulling his rollerskating musical Starlight Express after 7,000 performances. I made a mental note to go see the play on one of my trips. I checked out of the room the next day and returned to Paris and updated Marie, who had a lot of confidence in Jim, our solicitor.

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im spent a lot of time arguing with Memery Crystal about their clients’ (the three wise monkeys, as Jim called them) inappropriate behaviour, finally persuading them that the most honourable way out of the current situation was to resign, implying we had rumbled them. 150

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They must have realised we meant business because Jim phoned me a couple days later, when I was at Paris’s Longchamp racecourse with a client who had a horse running in the 3.20 race. “They’ve agreed to stand down.” I faintly heard the sweet words against the roar of the race-goers as the horses galloped past the winning post. “Jim, you’ve done a great job,” I congratulated him. “They knew they were beaten, David, believe me. I put the pressure on with thumbscrews,” he said. I was really enjoying the afternoon now, and followed up the call with a winning bet on the next race. Jim had told me that the next and hopefully final meeting was scheduled for 14th September 2001. He had arranged it so that an Extraordinary General Meeting (EGM) would immediately follow a 151

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reconvened AGM and our new board would be voted in after the previous directors had stepped down. Notices were sent out to every shareholder. Everything was in place.

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he blonde with the big tits had been told she was to go and satisfy the millionaire’s ego. She didn’t quite understand what that meant, but felt experienced enough to have a go. Maybe he’d just want a blow-job instead of the usual full sex this time. She didn’t mind. He was crap in bed anyway, but a BJ would be less hard work. She put on her hold-up stockings edged with white fur, decided to forego wearing her thong and hoped she didn’t slip anywhere and show her shaved pussy. She liked to go without. She finally cupped her artificially inflated breasts into a minimal see-through cup. She looked out of her council flat, saw that the Daimler was waiting for her and flounced out the door. A short run into the city took her to his penthouse suite. She took the lift up, and as he opened the door his hand slid between her legs. Shit, she thought, I should 152

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have worn my panties. She was still wondering where his ego was. Walking into the room, she saw it. Another girl sprawled over the white settee wearing nothing more than crotchless panties, suspenders and black stockings with a shiny black bra. The blonde wondered what the fuck he was up to, although even her dim brain was working it out. The millionaire went through to the en suite bathroom and came out wearing a skimpy jockstrap under his paunchy belly. The blonde, who was already fed up, wondered how long it had been since he’d seen his dick below that stomach. He told the girls to stand up. He reached out and drew them together, feeling each bottom, and steered them towards the enormous bedroom with its famous kingsized bed. The room had been leased out many times to film producers. He lay on the bed and invited the girls to play with him. They briefly glanced at one another, 153

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exchanging a sad, knowing look. But they got down to work all the same.

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eptember 14th was a day when the world was still reeling from the World Trade Center horror, and none more so than in the City of London, where firms had hundreds of colleagues in the towers presumed lost in the disaster. People were still clinging to the hope of finding a loved one, as the holocaust had hit only three days earlier. I remember watching the disaster unfold on CNN, as most of the world also remained glued to the news, and said to Marie: “When will they learn that they bring this upon themselves with their ‘we run the world’ attitude?” Returning to Seymour Pierce’s office, Marie, Jim and I were seated alongside John Shaw and Christopher Foster, who looked as though he hadn’t slept for a month. Peter Crystal was seated in the audience, but gave the impression that he wasn’t paying attention. His comment about having “had more hostile takeovers…” seemed to have left more than a little egg on his face, which 154

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appeared grey and drawn. Mackay demanded a seat at the board table because he believed that he remained chairman until the AGM was concluded, even though he had been voted out at the first AGM in July. After the meeting was reconvened, IEQ’s existing directors simply resigned. Meeting over. The EGM was convened and Marie, two of our company’s executives and I were immediately appointed to the board. Peter Crystal, without a glance in my direction, stated that his firm would no longer represent IEQ on legal matters, which merely saved me the effort of having to sack him. Everything was going according to plan, or so I thought. In addition to an accountant, an auditor and a solicitor, one of the many requirements placed upon a company whose shares are traded on AIM is the need to appoint a nominated adviser, or NOMAD. Officially, the nomad is there to oversee the operation of the company, but the investing punter sees an implied role of ‘protecting’ the investment 155

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in some way or other. It’s supposed to give you a warm cosy feeling that such an experienced member of The Establishment is there watching the directors. In reality, they do nothing, cost the company £25,000 or more each year and act as a non-executive shadow director. The mere suggestion that one might resign can cause a director to change his or her position on any subject. Without a nomad, a company’s shares are suspended and, if not replaced within 30 days, the company stock is de-listed. They are the devil, but must be tolerated if one wishes to belong to The Club. On 25th January 2001, London-based Grant Thornton was appointed by John Mackay after the company’s former nomad raised serious concerns regarding a number of investments made by the board, including MadeForChina. As I walked out of Seymour Pierce’s office, my cell phone rang. It was Grant Thornton. A representative of that firm told me that he would agree to continue representing IEQ for 156

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the purposes of the AIM requirement, but that he wanted to inspect the company’s investment documents and meet with the new board before giving a formal commitment. I agreed, but knew that it would take me some time to obtain the records, inspect them, and then deliver copies to Grant Thornton’s office. Despite that verbal commitment, before the end of the day, Grant Thornton and the company’s broker, Seymour Pierce Limited, had informed the London Stock Exchange of their joint resignation at 4:30 p.m. It was now official. The company had just 30 days to replace its nomad. This was John Mackay’s and Peter Crystal’s handiwork. It was obvious to me that I was being set up.

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n the recommendation of a friend, Marriott Harrison, a boutique-styled law firm based in Great James Street near Russell Square, was appointed as solicitors to the company. 157

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We also changed the name to IEQ plc (IEQ having been the company’s EPIC code on the London Stock Exchange) and the company’s registered office moved to Henry’s base in Kent. The company’s new solicitor, Jane Jales, a senior partner with Marriott Harrison, had been left in no doubt by me that they had to get to the bottom of what had been happening to the company’s assets. She seemed capable enough and she talked a good talk. Marie and I decided that a holiday was in order. Although we had just 30 days to appoint a new nomad, until the former directors delivered IEQ’s documents to us, there would be very little for anyone to do. Leaving Jane and Henry to arrange introductions with one or two prospective nomads and to obtain and then inspect the company’s documents, Marie and I took a richly deserved break in the Canaries. The sun split the heavens and we ran along people-free beaches, hired bicycles and 158

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pedalled to picnic spots around the island. The outside world simply ceased to exist. Switching your mobile off for pleasurable purposes has a lot of advantages, but when I returned to the real world there were a pile of messages waiting for me and they were worrying. When I finally spoke with Henry, he said: “Marriott Harrison has found it difficult to move forward due to obstructive moves by Seymour Pierce and Barclays Bank.”

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hen I returned home I made several calls which may have been considered threatening depending on what your perspective was at the time. The result was that we would need to find new bankers for IEQ. Seymour Pierce was simply refusing to hand over IEQ’s statutory documents. These included the company’s banking records. On behalf of their long-time client, Barclays Bank plc also refused to provide the account details, balance details, or to allow the new 159

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board access to IEQ’s funds. What either of them thought might have been achieved by delaying our requests remains incomprehensible to this day. It merely created more suspicion and eventually they must have realized any mischief would have had to come to light. On 15th October 2001, with no more time and despite the added cost of nearly £70,000 in legal fees, the company’s documents were still in the possession of Seymour Pierce. I made the decision that we would have to request that the London Stock Exchange terminate IEQ’s listing. I preferred my deliberate act rather than to have the exchange eject the company for noncompliance. To the other shareholders, however, there seemed little difference. Shortly after the company’s shares ceased trading on AIM, Seymour Pierce delivered all of the documents. On the same day, Barclays Bank informed our solicitor that they had approved the mandate that would now allow the new board access to IEQ’s bank accounts. 160

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Seymour Pierce had gotten their own back and the City closed ranks to protect itself. It had taken nearly two months of bullying to get the records handed over to Marriott Harrison. It left no time for getting to the bottom of their skulduggery.

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decided to keep hotel bills and travelling expenses down to a minimum, so I rented a small flat near our auditor, Henry, in Kent. Marie came over from Paris every other weekend. I was in a small former market town with dozens of friendly pubs and I reckon I tried each one whilst living there. Often our business took place over a ploughman’s lunch, with huge slabs of Kentish cheese and local wine from the Lamberhurst vineyards. One might be excused for thinking that a one-man painting and decorating business might lumber his accountant with a mass of papers and receipts and hope to receive a set of audited accounts from them, but a public limited company? 161

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Once we saw the IEQ documents and records, Marriott Harrison, Henry and I ultimately discovered an abomination of negligence. The former directors had kept neither accurate records, nor written documentation of the various investments, nor minutes of meetings, nor resolutions approving millions of pounds in investments, nor supporting documents that would have been required of a UK public limited company. Maybe they wrote details on the back of cigarette packets? At least that would have been more entertaining than the mess we discovered. The IEQ board and its advisers needed to have a major “pow-wow” to discuss our options. Things were far worse than we had feared.

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y wife and I, along with our other directors, Henry and Jim, met in London at Marriott Harrison’s offices. It felt like a wake. Even the coffee tasted bitter.

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There was no option now. We had to instruct Marriott Harrison to prepare a letter of demand stating that IEQ plc would sue its former directors; Needham, Caplin and the others for breach of their fiduciary duty in respect of the MadeForChina investment. We added that we would be inspecting each and every investment ever made with a fine tooth comb and “expected to amend IEQ’s claim in the fullness of time,” as Jane had put it. There was nothing left to do but await the outcome of the solicitor’s letter. There was an outside chance that the former directors would simple cop to the crimes and repay our shareholder’s money. I recall Jane’s sympathetic look when I first suggested such nonsense. Marie and I walked down Chancery Lane to visit Simpson’s-in-the-Strand for lunch. Suddenly she stopped and turned her head as if to look in a shop window. I looked at her reflection and saw tears pouring down her cheeks. I turned her towards me, gripping both arms firmly and told her everything would be all right. 163

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She shook her head in disbelief, the tears now pouring down. This was so unlike her. The strain had built up. I held her tight and asked her to remember when we first married how I told her I would make sure she would never be harmed. A muffled nod of the head confirmed she remembered the occasion. I went on to say things were no different and to remember all our eggs hadn’t gone into the one basket. We would be okay. She could stay in Paris and just let me sort this mess out over here. That was my mistake. The head shot up from my shoulder and she looked at me, eyes blazing, and said: “Don’t you dare carry this one alone. I‘ll be coming over here with you. We see this through together, okay?” I was nearly in tears myself by this time. Only a couple of restaurants along from us in The Strand, a jovial lunch was taking place in a Club’s private side room. John Mackay, Peter Crystal, John Shaw, Keith Harris and Sir Richard Needham looked as if they were celebrating. They were. They all thought they had slithered out of the IEQ mess and were free at last. 164

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The claret glasses touched as they toasted each other. They even joked that helping Richard Desmond gain control of the Express had been a good move. He could dredge some dirt up when needed on the man from Paris. Little did they know what Postman Pat was bringing for them the next day. Christmas and New Year’s came and went but we didn’t seem to care. Even the wonderful Parisian lights barely lifted our gloom.

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n 10th January 2002, Marriott Harrison filed a lawsuit on behalf of IEQ against the following defendants: Sir Richard Needham, Anthony Caplin, John Mackay, John Shaw, Christopher Foster and Seymour Pierce Private Equity Limited, a company run by Keith Harris, John Mackay and Jonathan Wright. The original claim was for nearly £1 million, which was later amended to include all of IEQ’s investments, totalling more than £3 million. 165

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The reply was vicious. The Porn King’s daily rag the Express published a derogatory and libellous article written by one of its second rate hacks accusing David Alexander of doing a runner with the money from one of his companies. Had they not noticed he was regularly in England? This was typical behaviour by a newspaper owner who didn’t know the first thing about either the law of libel or accurate reporting, but then all the good journalists had left him.

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11 "Simplicity, clarity, singleness: these are the attributes that give our lives power and vividness and joy." —RICHARD HALLOWAY

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was in the bathroom shaving when the morning post arrived. My first glance outside our Paris flat as I awoke was of a major February snowfall built up against the pavements below and our adopted pigeon tapping on the windowpane for attention. The snow ploughs and roadgritters would have been working since the first flake fell. The city seldom misses a beat. Marie was in the kitchen pouring coffee, a croissant stuffed into her mouth in a holding position. She sorted the mail and handed me a large envelope sent by registered post. Setting the coffee pot down, she looked quizzically at me. I opened it to discover it 167

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was a letter with attachments from IEQ’s solicitor, Jane Jales. My heart lifted and I showed the letter to Marie. She was ecstatic. “That’s great news, David. You’ve worried them.” I replied excitedly, “I never thought Needham and Caplin would pay the £55,000 into the court so quickly.” I took another sip of coffee and scanned the letter again, looking for a downside because I’d become that type of person. Mixing optimism with pessimism. “So they’ve both paid back the £25,000 they were paid when they resigned from IEQ over that MadeForChina scam, plus interest of ten per cent?” Marie raised her eyebrows as she calculated it out. “Yes, but here’s the catch. I can’t work out why they received that payoff in the first place. They resigned, but weren’t fired as far as we know. They had no contract of employment; and their salaries, according to 168

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the audited accounts produced at the 31st December, stated that they were entitled to just £7,500 each. Why did they take more than three times their salary? Surely when one resigns one doesn’t receive severance pay?” I queried. “No, but perhaps it had something to do with UK employment law. I’ve heard of companies paying out large sums of money to potentially aggrieved employees in less questionable circumstances than what we have here. Although the “dynamic duo” couldn’t have called this constructive dismissal, meaning they were pushed out against their will, it probably was on the face of it, but without a written contract they wouldn’t stand a chance at an Industrial Employment Tribunal. After all, they were the directors in charge of IEQ. Imagine Needham and Caplin trying to explain to a Hearings Officer that they were forced to resign by IEQ’s shadow director - John Mackay.”

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Marie really had a way of cutting clean through to the real issues. Her clarity of thought sometimes worried me. She didn’t allow outside interference to affect her line of thinking. Finally, taking a generous mouthful of the steamy croissant, she said: “There are conflicting references within IEQ’s documents referring to their resignation and termination, so perhaps…” “They were fired and that’s why they received the money?” I posed the question, cutting her off in mid-sentence, allowing her to finish what she had started to chew. All of a sudden Marie’s munching stopped, her bright eyes stared into my own and she said: “Quite honestly I think they just helped themselves. You know they’re both crooks.” Staring back at her in amazement I didn’t know whether to laugh or cry at the simplicity of her statement. Of course she was right. “I’ll bet it’s as simple as that, ma cheri. Just as simple as that.” “Jane is pushing them to put £10,000 in the kitty for legal costs,” I added. 170

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“It will cost a lot more than that to sort this mess out,” Marie responded categorically. “Think on it, David. Our family’s solicitor plus Marriott Harrison won’t come cheap.” I agreed with her. The prospective legal costs were an obvious concern, but you had to employ a firm of solicitors for a mess like IEQ’s. We had more than £600,000 invested, and on the face of it, that investment was now worthless. Marie began to rush about getting ready for the day and pulled on her large snow boots. She reckoned she’d be the only one in at the family’s office. Her dedication and sense of duty was never-wavering. I lifted the phone and called Jane first who had “little to add” from her letter and appeared quite unsettled, given the apparent victory. Then I called Henry, who always had his ear to the ground, and he informed me there was City-gossip to suggest that Needham, Caplin and John Mackay were squabbling amongst themselves as to who 171

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had done what with the so-called ‘IEQ investments’. I would have expected Peter Crystal to come in on that tack with them as well. He was one of those types who would sell his grandmother as a spy to save his own neck. But in reality, they were each as bad as the other and would have stepped over each other trying to be the first off the sinking Titanic. It was beginning to look like this was the first time any of them had been rumbled at their money games and maybe panic was setting in.

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pring and summer came and went and the legal issues were still log-jammed. A few months later, in late November, I met Jim with his English wife off EuroStar in Paris. I’d turned him onto it and now he was hooked as well. It was going to be a weekend celebration for their twelfth wedding anniversary. Driving away from the station, past Sacre Coeur, covered in an early snowfall and through the narrow streets where you seemed to visit one country after another with the endless different cultures, Jim 172

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brought me up to date with recent IEQ developments and it wasn’t good. “Marriott Harrison screwed up,” he said. “But let’s talk later, ” he added. Because of our uncertainty over these new solicitors, Marie and I had asked Jim to keep an eye on their movements. We reached our picturesque snow-lined street. The trees were holding the recent blizzard on their branches and laughing children were rushing off to the nearby park, skates thrown over their shoulders and carrying small spades to build snowmen. Marie settled Jim and Sue into their room. The flat had two bedrooms, but I used one as an office, which we had converted for their comfort. I got the drinks ready and we settled down for a further update. Jim looked sympathetically at me as he related the tale. It appeared that Marriott Harrison’s senior partner, Jane Jales, had been unaware - or so she said - of the precise particulars concerning IEQ’s claim against 173

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Needham and Caplin. I found it difficult to understand how she didn’t know something. Her assistant, a junior solicitor called Adrian Murtagh, had written the particulars of the claim, but he had been on a skiing holiday here in France when the £55,000 had arrived at the court. The law firm had been subsequently notified by the court, as is normal procedure. Jane Jales apparently thought the money was full and final settlement of the claim against Needham and Caplin, so she ticked the appropriate, though incorrect, box on the court form. That foolish act had the devastating effect of wiping off more than £377,000 from IEQ’s claim against Caplin and Needham. Marie and I just sat stunned. That feeling of everything having just gone down the pan came flooding back. After quite a long period of silence, the questions suddenly rushed out, bombarding Jim, who put his hands up as if to say “whoa.” Why hadn’t Adrian Murtagh delegated his work to another solicitor with a full briefing about the case? Why had Jane Jales not 174

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thought about asking someone to confirm whether this was full and final settlement? Why hadn’t she simply read the particulars of claim before completing the form? Surely she should have if she wasn’t sure of her ground. It stank of incompetence and I was very angry. Poor Jim was at the receiving end, but he was a good mate and just let me get everything off my chest. I called them every name under the sun. Marie added a few terms in French that even I had not heard and then calmly said: “We’ll get to the bottom of this.” When I had relaxed somewhat, Jim said he agreed with me. It wasn’t good enough. He then gave a deep sigh and said there was more and that the worst was yet to come. I screwed my eyes tight, opened them, and then saw Marie was watching me, concerned. I must have had that “going to kill look,” as she referred to it; a reference to my youth when I might have “gone hunting” if someone was found to have lied to me. “Go on,” I said. 175

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Jim paused for a brief moment then he dropped the bomb. Apparently Marriott Harrison had known about the mistake months ago and tried to cover it up. I couldn’t believe what I was hearing. Jim nodded. It appeared that when Murtagh returned from holiday he immediately became aware of Jales’s mistake. At first he wanted to hide, but eventually he knew it was only a matter of time before he would have to explain the problem to the client; a client he found it hard to discuss matters with at the best of times, and one who had little patience for fools and even less for the incompetent. Murtagh had urged Jales to come clean, Jim explained, but she was against what she referred to as “drastic measures,” reminding her colleague that this was her last year in practice, that she had a long, blemish-free career to protect and that he worked for her and not the other way around. According to Jim’s source, Jales had coached Murtagh and eventually convinced him that there was still a chance of recovering the amount from John Mackay, Christopher 176

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Foster and John Shaw, since there were mirroring claims against the three men. Similar amounts were sought from Needham and Caplin and so she advised her colleague to “keep shtum” over her error. As the months passed, Murtagh repeatedly played down the lack of contact from the dirty-duo - Needham and Caplin. They were not responding to the rest of the particulars, nor attending court hearings. Clearly they knew they did not need to deal with any IEQ matters anymore. Jales and Murtagh had been playing both ends against the middle, hoping their client would not discover the error whilst at the same time hoping that a settlement would be agreed that might bring an end to the case and hide the error forever. In the end, their hopes and dreams had come to nothing. Moving closer to both Marie and I, Jim’s voice became softer, though his words became slightly clipped, suggesting that he was attempting to control his anger as he said: “It’s not time to let Jales and Murtagh 177

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know that we have discovered their dirty lies. We need to bide our time on this one; to look for the right opportunity. I have found that in such matters, the opportunity usually finds you.” As always, Jim was right.

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uring those intervening months, not a million miles away from the City, near the Old Street roundabout, Anthony Caplin had been feathering his own nest whilst IEQ’s walls of Babylon were tumbling down. After a very brief period - five months to be precise - as a new director of Durlacher Corporation plc, he was appointed chairman of the group. Between his appointment as director and becoming chairman of the London-based investment bank, he had received notice of IEQ’s lawsuit being filed against him and his fellow directors for their involvement in the loss of nearly £3 million of shareholders’ funds through dubious loans and questionable investments. Strangely, or perhaps not, Caplin had wiped himself clean of any directorship 178

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involvement with IEQ, on paper at least. It was not listed anywhere, but there was no escaping his stewardship of the AIM-listed equity management company, since it aligned itself perfectly with his position at Durlacher. Whether it was personal shame he felt or just a hope that no one would remember his involvement remains to be seen. In the final analysis, no one will ever forget that he conspired with Needham, Mackay and others to raid the coffers of a public limited company.

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n London, the housing market had gone sky high during 2002. It was becoming almost impossible to buy reasonably priced housing and the result was that people were moving out into the sticks - the outer fringe of the City. These areas were a considerable distance in traffic to commute. An average flat sale in London was worth around the £500,000 mark, whilst in Devon and Cornwall that amount could buy a small farm. Marie and I decided to jump onto the investment bandwagon and so we bought a small cottage near Westerham in Kent. It had less than an acre of garden, but no one 179

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overlooked it and it was ideal for just chilling out each evening. I also found the locals very friendly and even enjoyed quiz evenings in the local hostelry, previously something totally out of character for me. Henry popped by now and again to talk about our other business dealings, but the conversation inevitably found its way back to IEQ. As a major investor, I felt totally shafted by the former directors. They were perfectly happy frittering away the company’s money, with no consideration for the people who had entrusted them with their positions of responsibility in the first place. All Marie and I could do was await the next legal move and try to get on with the rest of our lives.

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n another part of Kent there is an artificial lake where the colour of the water changes from bright blue to sea green depending on the sunlight. The surrounding area is very chalky and not what you might call the “Garden of England.” A dog walker taking a spaniel for his afternoon constitutional in the field 180

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surrounding the lake noticed some clothes floating near the surface of the water. He edged a bit nearer, fearing he might fall down the steep shore wall. The lake wasn’t tidal, but like all deep water, it had undercurrents breaking the surface with gentle circular whirlpools. The clothing was moving in one such spiral pattern. He stared at the shape for a while. He picked up a stone and threw it. He missed, but created little waves that rocked the clothes from side to side. It was then he saw to his horror it was a body lying face down. The emergency services workers pulled the young woman out of her watery grave, her blonde matted hair dripping a chalky milk, her bloated face almost black. She had been in the stagnant water for some time, but few people ever visited the place because of the pollution. A post mortem revealed she had been strangled, possibly during or after a sexual assault, and although her body was badly decomposed, the pathologist noticed she had 181

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mutilation marks as if she’d been tortured. He also marked down in his report that she had silicone breast implants. The blonde with the big tits was put into the mortuary freezer cabinet, where she would remain until someone claimed her body. No one ever did.

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12 "Only in growth, reform, and change, paradoxically enough, is true security to be found." —ANNE MORROW LINDBERGH

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eymour Pierce’s chairman Keith Harris was having a very uncomfortable year in 2002. It was leaving a large dent in his image after his wheeling and dealing in the football scene had backfired badly. He had taken refuge in a pub near the office and was putting back his second beer. He needed a game of golf, or a cruise onboard his new gin palace. He longed for a place where he could lick his wounds anywhere he could hide. Harris’s failed attempts to secure an ITV Digital deal rebounded, forcing him to resign as chairman of the FA leaving football clubs with a £131 million collective shortfall. 183

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A number of the clubs were put on the edge of bankruptcy. When it became clear that ITV Digital was itself close to bankruptcy, its parent companies, Carlton and Granada - the TV giants, refused to honour the remaining multi-million pound contract with the Football League. Even the UK Government’s Sports Minister Richard Caborn slammed Harris’s tactics. After the resignation in response to media pressure over Harris and his sidekick, chief executive David Burns, Caborn was quoted as saying that “the two top men have gone and that has been a decision by the league. “It's like any other business - if people are seen to have made unsound decisions they have to pay the price. “There needs to be a more realistic assessment of football to avoid the situation that has occurred with the league. A lot of people had been warning the bubble was going to burst, but in the event it did so 18 months sooner than was expected.” Most of the club chairmen blamed the ITV 184

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Digital collapse on its shareholders, Carlton and Granada, but an increasing number had begun to criticise Harris and Burns for rushing into a new four-year £95million Sky Television deal, which had a disastrous knock-on effect. The whole matter ended with Carlton and Granada being defeated in the High Court, the judge ruling that the league had failed to secure shareholder guarantees on the money it was owed. May Day was auspicious when, at 7 a.m., ITV Digital actually pulled the plug on its pay TV channels while they were on air and went into administration. Outside the arena, the press slated Harris and Burns, accusing them of being ‘incapable of running a kebab shop.’ In typical fashion, Harris pointed the finger of blame at everyone else. During an interview with Radio Five Live, after he and chief executive David Burns had resigned from their posts, Harris insisted the ITV Digital fiasco was down to other people’s errors. 185

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He said: “Let's face it, the mistakes were other people’s, really strongly other people’s. “What we tried to do is clear up other people’s mess. When you haven’t been the one creating the mess, that’s quite tricky.” Harris added that in quitting, former chief executive Burns said: “Keith, just think, you’ve given the asylum back to the lunatics.” It was clear that Mr ‘Fix It,’ as Harris had been regarded by many, was coming unstuck.

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arris also knew of the IEQ plc claim against Seymour Pierce Private Equity Limited and wasn’t a happy man. The name David Alexander stuck in his gullet. Had it not been for him, the other IEQ shareholders would have quietly melted away. He gave a loud chuckle over the Marriott Harrison gaff of signing off on the court document. That thought lifted his spirits, because he’d been told by Anthony Caplin that the solicitor’s error would stop this upstart Alexander in his tracks. They’d just have to quietly wind the company up 186

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and that would be the end of it. It had happened many times before, with other investments in which he had been involved, and it would happen again. He and the former IEQ board members were all singing from the same hymn sheet and they’d be damned if they’d be beaten. The football debacle, some had referred to as his ‘own goal’, was beginning to chip away at his huge ego, as he had loved being involved with the game and being FA chairman had given him what he thought was ‘ultimate power.’ Everyone had fawned over him. Harris stared into his beer as he thought about Seymour Pierce. He had decided it would be better to try and find a buyer for the firm’s investment banking business and Alchemy Partners was coming up into the frame rather nicely. He looked up at the painting of an old London scene behind the bar and thought it must have been grim in Victorian times if you were on the wrong side of the tracks. 187

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He reckoned he could sell the banking business for around £7 million and throw in the name ‘Seymour Pierce.’ The deal would have to include a few crumbs for Richard Feigen, who would come along for the ride, but he would retain his interest, so it didn’t matter to him who he had to pay off in order to get the deal done. At this stage of the game, it was literally life or death for Seymour Pierce. Thinking about the shareholders - but only briefly - he decided they didn’t really need to be bothered about the sale. Peter Crystal could find a way around the need to ask their permission. The other matter worrying him was the hedge fund business, Pavilion Capital, which was in need of a good capital injection itself. It was really struggling in a fiercely competitive market and couldn’t make much progress. When the figures finally came out there would be a furore. It would be posting major losses. He needed to find a buyer. Seymour Pierce was also going to try and sell Pavilion Asset Management, which managed more than £3 billion in funds. 188

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MGM Assurance was one of its largest clients, and was particularly sensitive after the Robert Maxwell scam. Harris suspected they might try to throw a spanner into his plans. They worked to the book. He didn’t; and if he wasn’t careful, they would turn out to be a fly in his ointment. He nodded at the barmaid, noticing for the first time that she had a pretty face as she pulled him another beer. He sat on the bar stool staring into the colourful bottles behind the bar. He felt a shiver run through him as a name popped into his head: Radio First. He sighed. That name conjured up a nightmare, because David Alexander had been on his case there as well. He had been chairman of Radio First plc and one of its principal supporters, both personally and through Seymour Pierce. He had spoken to John Mackay discreetly at a speakers’ forum they had both attended and that discussion had resulted in Mackay and his fellow IEQ directors approving the investment. They ploughed in £200,000. 189

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They didn’t feel compelled to reveal to IEQ’s shareholders the links back to Seymour Pierce Group nor Harris’s involvement - it was all very cosy. David Alexander had just managed to recover £25,000 before the company was struck off AIM for failing to comply with reporting regulations. In the end, as with so many other IEQ investments, Radio First found its way into liquidation with creditors and shareholders losing the lot. Keith Harris reached for an aspirin and swilled it down with his beer. He thought it was time he looked at that latest Mercedes sports car he had seen last Saturday in his local showroom. He thought he needed—no, checking himself, he deserved to treat himself.

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t was a showery day when the mailbox rattled in my new Kent cottage. I left Marie softly sleeping in the king-sized bed we had just bought and shuffled to the front door. The rain-spattered envelope was from Marriott Harrison. I stood reading it in my worn dressing gown that I’d loved since we 190

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got married eleven years ago and went slowly to the kitchen to put the coffee pot on. I couldn’t believe what I was reading. I switched onto automatic: reaching for a cup, pouring the coffee, adding the milk then flip-flopping through to the lounge. The letter said that Memery Crystal, IEQ’s former solicitors, had filed an application for ‘security’ on behalf of their clients, Mackay, Foster, Shaw and Seymour Pierce Private Equity Limited. This was pretty well their response to IEQ having filing a lawsuit against them. They now had the audacity to request that we place £527,000 with the court on the basis that IEQ had no money and that its investments were worthless. I was in shock and just sat there next to the empty log fireplace, re-reading the letter. After we had taken control of the company in September 2001, I had instructed Henry to perform an audit - to draw a line under the previous director’s record, so that we could move forward positively. That act was now being used against me. 191

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If only I had left the accounts as they were, the figures would have shown the former director’s inflated valuations, and their false accounting practices would have pre-empted their current plan. For heaven’s sake, Memery Crystal was the company’s former solicitors! Clearly that had to be a conflict of interest - something the Law Society would frown upon. To add pain to misery, Keith Harris, through Seymour Pierce, had the nerve to request that IEQ lodge funds with the court because investments he had fronted only months before had gone belly up, thanks to his poor judgement and incompetence. A used car salesman at heart, he knew how to sell people on his ideas, but in the end, he never made a dime for the public shareholders of any company of which he was the boss. Thankfully it was a weekday and Marriott Harrison would be open. I glanced at the walnut-cased wall clock. They would just be opening. My coffee looked stagnant so I trotted through for a fresh cup. Marie was wandering about with tousled hair, making 192

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her look very sexy. Not now, I thought. I showed her the letter and her fiery blood gave rise to expletives that even in French still made sense to me. I called the solicitors and it annoyed me that I was kept hanging on the line. Eventually Jane Jales answered in a very soft, almost meek voice. She explained that Memery Crystal was working on the basis that, according to UK law pursuant to the Companies Act, if a company appears unable to pay a defendant’s costs should they be unable to prove their case in court, the court may order security. Jane said she had attempted to show the court that IEQ was without funds because of the defendants’ previous actions. However, the court did not consider the merits of the claim in arriving at its decision, and so it ordered IEQ to pay £85,000 to the court in three instalments. Jales considered it a victory. She would say that, wouldn’t she? It was getting worse. Why should victims have to put up with crooks trying to rob them 193

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yet again? IEQ plc had no money. None. I instructed Jales to appeal, adding that I would “take this to the European Court if necessary,” since the UK court was ordering the company to do something it was unable to do. That, I considered, was a violation of its human rights. The company had a right to a fair trial and a right to seek to recover its money from these defendants. I could imagine her nodding, but her heart wasn’t in the fight. In her last year, Jales was looking for an easy exit, but deep within her, there was a solicitor. If only I could inspire her to recall why it was that she had become a solicitor in the first place. Dressing quickly I called Jim and Henry. They both agreed Memery Crystal was acting improperly by not disqualifying themselves from the case. I moved about the house like a bear with an open wound. Marie kept well clear of me. I was never one for taking walks, but I felt that might be a good option at the moment. I wanted to be away from people and problems. 194

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Walking up the public footpath to the top of a hill where the view over the Kent countryside was stunning, I was pleased to see that Urban development hadn’t marched into this area yet. It was still preserved, with a character from a couple of centuries ago. I was able to walk through rough boundaries of wild damsons, cherries and ripening conference pears. The sun was pleasantly warm so I just kept going. Three hours later I returned home footsore to a message from Jane Jales. The follow-up call told me they were going to force the issue about Memery Crystal’s conflict of interest. It flitted briefly across my mind that there was, on the face of it, a friendly contact between our solicitor and the opposition’s. I pushed Jane on the matter, but her stock reply was not to “fall out” because it might “hamper our chances of getting a reasonable out of court settlement.” Such was my cynicism, I felt by now that they were all up each other’s backsides. The seed of doubt was forming in my mind and I wasn’t happy. 195

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I called Jim again and he called Marriott Harrison. It wasn’t long before he came back to me. He gave a chuckle. “Now we’re getting to the bottom of it, David. It’s called ‘saving your bacon,’ and there’s some truth in it. Our legal system says that if a client is unable to pay security, then that client must, by assumption, be unable to pay legal fees. If the solicitors are aware of these circumstances, they must resign or notify the other side that the firm has agreed to a conditional fee. And here is the crux of it: In certain circumstances, the law firm could be held liable to pay the other side’s costs should they fail to prove their case. You can be sure Marriott Harrison won’t be willing to take the risk.” There was a long silence. “So where’s British Justice throughout all of this, Jim?” “I know. It’s crap, isn’t it David?” I put the phone down. Everywhere I looked there were obstructions. Everything seemed 196

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to be loaded against us. The defendants had been allowed to drag matters out and IEQ’s solicitors had screwed up with signing off the £55,000 as full and final settlement. Now IEQ had to come up with £85,000 it didn’t have… What would come next? Marie and I had more than £600,000 invested in IEQ, through our family’s company. Despite this, there was a limit to our generosity. We were simply not willing to support the mounting cost of IEQ’s litigation. I suspected the defendants thought that given enough time, we would run out of money and the thorn in their backside would disappear. Whilst it was true that we had made the decision not to contribute financially to IEQ’s litigation, and we would not waver on that subject, what the defendants hadn’t reckoned on was my honesty and need for justice. I’m known for being tenacious and for never letting things go. Never.

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had obviously kept the pressure on at JimMarriott Harrison to hound Memery

Crystal about their conflict of interest. I think he felt if he could break that little gang up it would weaken the others. Numerous letters passed through Mount Pleasant sorting office between the two sides. Memery Crystal refused to acknowledge there was a conflict of interest and that according to the rules they should resign. At one stage, they actually said that if my solicitor wanted to file a complaint with the Law Society then they should do so, but it would make little difference. Jim confirmed that was probably true. “The Law Society had lost its teeth long ago,” he said. Not many solicitors were pulled up in front of the disciplinary committee these days. The mistakes being made were like a growth industry. Going against the grain, I banged my fist against the wall. I was one angry man. Patience was one of my strong points, but that quality was truly being tested here. 198

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T

he millionaire was having a Hellish nightmare. He had decided to stay overnight in his penthouse office suite near Blackfriars Bridge as he had an early flight to Amsterdam from London’s City Airport at Docklands. Images of him whipping the blonde girl, her enlarged breasts quivering with fear, snatched his sleep from him. He kept awakening to the vivid scenes of bloodspattered skin dancing in front of him and he started to cry. He didn’t mean it to happen, but she just seemed to want more by just standing there not telling him to stop. He liked a fight. Her body was covered in lashes and it was one particular crack of the long lunge whip that caught her under her left breast. She fell like a stone. He knew how to feel a pulse and put his fingers over her neck. Nothing. He withdrew his hand, away from the sticky blood smeared over her neck and shoulders. Then he panicked. Shaking, he lifted the phone, staring out the window and fixing his glance on Tower Bridge, as if 199

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to will the other person to answer. He did, and the voice said he would be along with the van to pick up ‘the package’. The result of the deal was that the millionaire now owed someone a favour, and he knew the bargain would be kept.

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13 "Good people do not need laws to tell them to act responsibly, while bad people will find a way around the laws." —PLATO

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arriott Harrison solicitor Jane Jales was beginning to dread going in to work each morning. It was taking all her strength to walk the short distance to the railway station. The IEQ nightmare wasn’t going away and she knew deep down it never would. She took a final look in her hallway mirror and couldn’t be bothered making an effort to give her dark hair a final comb. She noticed she was also becoming forgetful and was writing more ‘Post-It’ notes to herself, even at home. Her husband, Andy Hartland, hadn’t a clue what was going on at her work; he never really asked. They had an unwritten rule that work 201

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shouldn’t be brought home, whenever possible. The rules were sometimes broken. Andy had noticed Jane had changed; she was becoming more snappy and preoccupied and she wasn’t interested in sex, which seemed quite odd, since their nocturnal activities had always been the best part of their thirteenyear marriage. He didn’t like what he was seeing, particularly when his efforts to seek an explanation fell on stony ground. He couldn’t abide moodiness, and she seemed very moody at the moment. He thought perhaps she was ‘having it off’ with another man. When she spoke at all about her work now, she talked about a new client, David Alexander, a former barrister who had invested heavily in a company but then it had all gone pear-shaped. He thought about this for a few minutes and then thought his wife might be giving this Alexander bloke something more than ‘a little legal advice.’ Jales stared at the damp countryside as her train sped towards London. By now people were standing and even the guards van had customers. The cattle prod commuter route. 202

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She vaguely noticed the overweight man, whose flab overlapped into the adjacent seat and who stank of onions. As the train neared London it went into its regular stop-start routine then finally stopped outside the station, awaiting a free platform. She walked to her office and was almost knocked down by a courier cyclist as she stepped onto the road. She stopped and bought a lunchtime sandwich and a Danish pastry: some comfort food. Sitting down behind her desk, she wished that she could lock the door and keep all the problems and the people with them out in the corridor. She had to try and salvage her IEQ mistake. Doodling on a notepad, she thought about what David Alexander had said when they last spoke. IEQ had no money and the existing shareholders would not contribute any more funds towards her firm’s fees in what appeared to be an endless litigation. She stabbed her pen at the pad, piercing several sheets of the yellow legal pad. Her problem was enormous. 203

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There was no escaping the fact that she shouldn’t have accepted the £55,000 as full and final settlement. If her firm stepped down, another solicitor might accept the case on a conditional fee basis. That option had been discussed recently with her client because IEQ couldn’t pay. He had made that point very clear. The result might be that the new solicitors would, if they were worth their salt, expose her error. She was on the verge of an excellent career, but it was likely to vanish before long. She felt a headache coming on and reached for some pills in her desk drawer. She stared at the growing stack of IEQ papers. There was really very little chance that Alexander would drop the matter. She had to find a resolution as there would be little chance of Marriott Harrison recovering the fees owed for both billed invoices and work in progress, unless the litigation proceeded to trial. The latter sum was fast approaching £100,000. She was in a quandary. Should she tell the client about 204

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her mistake? Should she tell her managing partner, Tony Morris, or should she spill the beans and come clean to them both? She felt her eyes beginning to sting with sudden tears of self-pity. She couldn’t tell anyone what was going on, so the lies continued. She would have to pull it together and somehow force the other side to settle IEQ’s claim so that her mistake could be put to bed at last.

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rustration was an understatement of how I felt about the entire IEQ fight. It shouldn’t be as difficult as this to get answers. What I didn’t realise was that Jane Jales was playing a totally different game and was actively working against us. However, I did eventually begin to twig that something was wrong. She didn’t appeal the order, although I couldn’t have known this was for her own personal reasons. She made application after application for delays and postponements. Whatever means Jales could employ to push the problem further away, she used to her own advantage. Her excuse to the court was that her client IEQ needed 205

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more time to realise some of their investments and raise funds. Jim was also becoming concerned. He chased up the excuses Jales was offering and paid Marie and I a visit one weekend at the cottage after we had returned from Paris. I was becoming used to commuting and, as always, the EuroStar was where I found peace and quiet, away from the stresses of IEQ. We took a trip down to Leeds Castle near Maidstone and, after walking around the magnificent grounds and castle, found a shady corner near the aviary full of exotic birds. “Jales is playing a stalling game, David,” he said to Marie and myself. “Something’s going on. I checked up on one of her postponements and her excuse is that you are trying to raise funds.” The IEQ recovery programme had now come down to a one-man band - me. The other shareholders seemed to think I’d sort the whole thing out for all of us. 206

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I laughed in disbelief. “But she knows we haven’t got any investments left to sell. We haven’t a hope in Hell of raising £85,000, if that’s what they want. In fact, IEQ would be hard pressed to pay for the bus fare to your office. What’s going on?” “I don’t know, David, but I’ve got a meeting next Tuesday with her. I’m having it out with her then. I agree we cannot let this go on any longer.” As promised, Jim called after his meeting with Jane Jales. It hadn’t taken place at her office, but at a small wine bar near Canon Street. “She’s cracking up, David. She’s a total nervous wreck and she’s drinking too much. She won’t give me straight answers, pretending to be surprised when I tell her IEQ’s cupboard is bare. I’m going to contact her again next week and keep up the pressure.” I thanked him and then decided to call Jales myself anyway. At first I had problems 207

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locating her, then I rang her direct line, blocking my number before I dialled, and she picked up the phone on the first ring. Although she was surprised to hear my voice, she tried to reassure me she was doing everything possible and that the court extensions were reasonable. But I knew she realised I wasn’t happy. She was talking way too fast and was too pat with her answers. I was becoming worried. About a month later the phone rang and Jales was at the other end. Could we meet up discreetly? I invited her to the cottage. She looked terrible. Her coat had stains that matched her bad hair day framing a very pale, drawn face. She was shivering, although it was a pleasant sunny day and I was in my shirtsleeves. She waited for me to open the conversation, probably because she was trying to stave off the impending doom - or more likely my well known wrath - but as I began to speak she beat me to it anyway. Breathlessly, she blurted out, “I want to do a deal with you.” 208

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I raised my eyebrows, thinking a deal was about the last thing I would do with her. “I’m in a mess,” she said tearfully. “I know,” I replied testily. “Aren’t we all?” “No, I mean a real mess.” She went on to tell me things had come to a head, admitting she had been responsible for the extensions. The problem was the legal bill had now doubled. I listened with scepticism as she laid out her scheme. She explained there was no way she could go to her firm’s partners with any of the IEQ mess; she was carrying nearly £150,000 in legal fees, much of it work in progress and not recorded within the firm’s billing system. “If Tony Morris knew how bad things really were,” she said, “he’d sack me in a heartbeat.” Finally looking into her eyes, I asked: “What’s on your mind Jane?” “I’ll cover the security order. But I need you to confirm my story, which will be that IEQ 209

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borrowed the money from your company,” she said. Didn’t she think that was ambitious, even considering she must be well paid? After all, £85,000 was a lot out of taxed income, even a senior partner’s. “Are you sure?” I asked. She nodded her head vigorously. Jane was convinced this was her way out. It certainly appeared to be the only one, but I didn’t like becoming involved with it and that’s exactly what she had intended. I knew she wouldn’t care where I landed, either. We talked a bit longer to work out the details, before I brought the meeting to a close. I didn’t want it to go on much longer, almost because she might bring bad luck to my happy cottage home. Jales was biting her nails again, a Jane habit she had broken in childhood. She

knew she was a physical wreck at the moment, drinking more than she should; but she thought it was only for a short period until she sorted the IEQ debacle out. She sat 210

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hunched over copies of the IEQ court papers at her small desk at home. Alongside lay her bank statements, or rather the joint ones with her husband. With a shaky hand, she lifted the phone and called her bank manager at Coutts Bank - the Queen’s bank - asking him to wire the amount of £30,000 to David Alexander’s account. She couldn’t pay it into the court herself, of course. The next day, David would pay the same amount into Marriott Harrison’s client account and then she would arrange for Marriott Harrison to pay the first instalment of the court ordered security. At least that bought her some more time, even if it had cost her and her trusting husband £30,000. Jales then took a bold step and told Adrian Murtagh at Marriott Harrison that IEQ had borrowed the £30,000 from one of our private companies. This was confirmed by his email to me, sent immediately after his conversation with Jane, in which he expressed relief that we had been “able to organise the money.” 211

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If only he knew, I thought, that his boss was lying to him - someone he’d known for years, who was present at his wedding only last year, and someone he considered to be a close friend.

T

here were only a couple of investment scraps remaining in IEQ’s portfolio, if you could call it that, and so I had no compunction in flogging Wise & Lovey Information Services for just over £30,000. Within 45 days, IEQ paid Jales back with an additional £450 in interest, which Jim had suggested would be a nice touch to our plans for her - after all, “paybacks are a bitch,” he said. Each day when Jane Jales awoke and looked at her pale green bedroom ceiling, she felt physically sick. Her nights were so broken with tossing and turning she couldn’t remember if she’d had any sleep at all. Every effort was made by Jales to extend and even reverse the order that required the payment of a second instalment of $30,000 into court. It was like a dam about to burst. 212

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She was desperate to ensure the lawsuit continued because she saw it as the only way to recover the fees owed to her firm. But she had overstepped her authority in allowing matters to go as far as they had, and now she was way past the point of no return. Christmas 2002 was the worst in living memory for Jales as she acted out the pretence of joviality at the office party. She just wished the whole seasonal celebration would disappear under an avalanche of snow, but it never came. Consumers were spending like there was no tomorrow, a symptom of the nervousness British people were feeling over a possible war with Iraq that the vast majority were solidly against. It was two weeks of living Hell, and those days were spent at home with her husband, from whom she had hidden the secret bank transactions.

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here was nothing else Jales could do as another payment day approached. In January 2003, she paid a further 213

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£30,000 to David, who in turn paid it into Marriott Harrison’s account, who again paid the court and the legal fees continued to mount. Every attempt to slow down the payment process was pushing that legal debt up further. Adrian Murtagh thought IEQ was just a slow payer. Not an unreasonable assumption when a company is on its knees. A few weeks later, after dismissing the idea of pulling a Monday sickie, Jane Jales saw the note on her desk as she arrived at work and wished she had done. She had been summoned to her partner’s office, no reason given, but it didn’t take much working out. She lifted the phone and quietly told his secretary she would be coming along now for the meeting. Her feet felt like lead, resisting each step as she made her way along the corridor. By the time she got to the door her legs were like jelly. Even her hand knocking on the door was shaking, her palms sweating. She entered to find two senior partners in the office, a glum look on their faces. After asking her to take a seat, one of them asked 214

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how the IEQ case was coming along. Flustered, she rambled on about the company trying to raise funds through the disposal of its remaining investments. This was a lie, of course. The other partner then broached the subject of their fees, which were spiralling up at a rate of knots. Not a penny piece had been paid towards the unpaid balance since August 2001, when the court had ordered the £85,000 security and David Alexander had told Jales that he would not put another penny into the investment. True to his word, he had not. But Jales had. They noticed she had been in court more than usual trying to defer various dates. Jales blabbered that again this went back to attempting to get IEQ much needed time to raise the money, but she was sure they would. She left the office only marginally relieved that they had swallowed her argument that it was all a temporary cash flow problem that would relieve itself soon. The relief rushing through her behind the closed door almost made her faint, and a secretary walking along the corridor 215

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expressed concern, asking if she needed help. “No, I’m okay,” she replied. She slid into her office and admitted quietly to herself that no, she was not okay. She had nowhere to go. The future was one massive dark room, void of any light, in which she was trapped and there was no way out.

T

he Crooked Knight was in a bad mood and his driving reflected it as he hammered down the outside lane of the M3, headlights on high beam, carving up anyone in his way. The Irish end of his family had been embarrassing him with their antics over the water and he was praying the press wouldn’t pick up the shenanigans in the UK. September 2002 wasn’t a good month for him. In Northern Ireland, Marion Scarlett Needham Russell, a relative of Sir Richard Needham, alias the Earl of Kilmorey, was sent to prison for defying a court order to return various family antiques worth more than £250,000. The heiress had hidden the twenty-eight items of furniture and paintings after a ten-year family feud. 216

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Despite the judge giving her a final chance to hand over the antiques that she had removed from Mourne Park House, the family mansion in Kilkeel, County Down, that belonged to her brother and sister, she stood firm and was sent to Maghaberry Prison, County Antrim, for contempt of court. The application to have her committed to prison had been made by lawyers acting for her sister, Mrs Debonair Norah Needham Horsman, of Banbridge, County Down and her brother, Philip James Anley, of Mourne Park in Kilkeel. The feud had arisen over an argument as to whether the estate should have been kept in private hands or opened up to a paying public. She alleged that her late father had wanted her to open the property up. An unrepentant Mrs Needham said, “I will not tell where the antiques are. I have lost enough.” She went on to say she had spent a large six-figure sum renovating the estate. The house was falling apart and taking the items was her way of preserving what little 217

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was left before everything was destroyed. She said she had only taken what was hers. Her lawyers had advised her to separate her interests from her brother and sister’s, and four years later she had run up legal bills of £400,000. The court again ordered her to return them, because a planned auction organised by her brother and sister wouldn’t work without the antiques. Sir Richard crunched through the car’s gears as if the gear stick was a sword and swung into his estate. “If there are any press near the front door, they will be under the wheels,” he muttered to himself as he thundered up the drive.

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14 "If you think you're too small to have an impact, try going to bed with a mosquito in the room." —ANITA RODDICK

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ane Jales had started coming into work late. She had to ensure she managed to snatch her bank statement at the precise moment the postman appeared, so that her husband wouldn’t open it and ask why there were £60,000 worth of unusual transactions on their joint account. Although there was a set day each month when Coutts posted statements out to their privileged customers, the leeway on timing from then until the moment Jane’s might drop through her letterbox could be up to five working days. At Christmas, only a month previously, she was driven frantic by the seasonal postal 219

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delays, and the magic envelope didn’t appear until Christmas Eve, a half-day at work anyway. She called in sick as she’d done many times before, and with greater and greater frequency. Jales could almost hear the staff at work groaning about her being off yet again. She did feel ill anyway, she said to herself by way of justification. Her nerves were in shreds, her nails broken, her hair breaking. She reflected on her previously impressive career, the experience she had acquired, how she had obtained substantial recoveries on behalf of international clients, and now how her experience in fraud recovery was assisting her as she strove to stave off the day of reckoning with IEQ. Jales had often said that you needed to think like a crook to catch one. You needed to know how to lie to recognise one. The problem was that she had crossed the line now and there was no turning back. Deep down, she knew her career was over; she was simply waiting for the knock on the door. She was good in court, of that there was no 220

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doubt, but she was increasingly leaning on me for support and I wasn’t giving it - not any more. Not since I discovered that she had lied to me. I simply couldn’t get my head around the business with the bank statements. Meeting the postman, for heaven’s sake! How old was she? I would have owned up ages ago. Jales’s lies had compounded themselves until she couldn’t separate fact from fiction. Her husband was still clueless as to what was happening with their joint account. I had lost all respect for her, and as far as I was concerned, she was no better than the crooks we had set out to expose. 2003 was a strange month. Not January only was IEQ in the throes of unnecessary additional court actions, but Fox News Channel had made the unusual decision of inviting the late Princess Diana’s love rat James Hewitt to become a war correspondent for a reported sum of £100,000. Hewitt, who had tried to tout Diana’s private love letters to almost every newspaper to no avail, had no journalism 221

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experience, although he was a veteran of the first Gulf War in 1991. He was due to fly out to cover the anticipated Iraq conflict. Iraq was also making the markets jittery, with talk of weapons of mass destruction (WMD) being able to be easily launched at western European targets on short notice. George W Bush and Tony Blair had both mentioned 45 minutes. People were psychologically tightening their money belts after the Christmas free-for-all and none more so than the senior partners at Marriott Harrison. Three months passed by until I received a letter through my post box in Kent from Marriott Harrison’s senior partner, Tony Morris. It was early April 2003, and at first I thought it was an April Fool’s joke. I was being told fair and square that unless IEQ’s legal bills were cleared by 16 April - only two weeks away - Morris would withdraw as IEQ’s representative. That was a blow because I thought everything was in hand through the deal I had struck with Jane. 222

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I called Jane, who seemed distant. I suspect she had received a Hell of a talking to from the senior partners. I then called Tony Morris, who although his main expertise was in media and entertainment, when it came to the fees issue, he wasn’t prepared to budge one inch. I suppose I could understand why. He hadn’t a clue what had been going on with his partner, Jales. He made me feel as though I had done something wrong, when all I was trying to do was recover £3 million owed to IEQ’s shareholders. His voice was cold and calculated. I suspected that he was still in shock, having just learned that his trusted partner was a lying cow who had risked the future of the firm to further her own career. Still, he showed no compassion, and he deserved whatever happened to him, his partner and the firm. I am a man of my word. Having told Jane Jales that we would not contribute any additional funds to support IEQ’s plight, I let the threatened 16th April date come and go to see what would happen. I was basically putting the onus on Jales. 223

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She had messed up in the first place, so let her sort it out, I thought. I was becoming fed up with the entire bodge-up anyway. Marie and I had other business affairs to deal with and knew they were being neglected while we wasted our time with what was being referred to as ‘the IEQ saga.’

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he next day, 17th April, Jales had decided to go back to court, thereby signalling that the threat to abandon IEQ’s claims had passed, if only for a short while. She had been working it all out mentally for days on her bedroom ceiling, through her many sleepless nights. She filed a new lawsuit against Jonathan Wright, Memery Crystal Solicitors, EMCEE Nominees Limited, Peter Crystal’s shelf company and John Shaw, in respect of IEQ’s initial capital. By now, Jales was staking her entire personal and professional life on a gamble. Her objective and prime need was to force the parties she’d filed against to cave in and pay up. However, what emerged was that Adrian Murtagh, a dapper sort who didn’t like strong language, began losing the plot as he 224

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drafted the Particulars of Claim, just as he had done previously in the original lawsuit— confusing the amounts being claimed. The second lawsuit claimed negligence against solicitors Memery Crystal for advising the founding IEQ directors that they could go public with just £2 capital and a conditional allotment to John Shaw. It had already been confirmed that their advice was contrary to the Companies Act. The investigation division of the Department of Trade & Industry (DTI) had already confirmed that IEQ’s Certificate to Trade & Borrow should not have been granted on 9th June 1999, based on the false declaration by Jonathan Wright. Then, for good measure, Murtagh added a claim against Shaw for the £49,998 theoretically owed to the company in respect of the shares allotted to him when Form 88 (2) was signed on 1st June 1999 and filed with Companies House. Paradoxically, this meant that if IEQ won, it would also lose, bearing in mind that it was impossible for the company to be correct on both claims. 225

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Either they were correct on the first or they were correct on the second, but not on both. Murtagh seemed to have had a problem grasping the basic concept of this new claim. He was an assistant solicitor in the firm, but even so, Jales should have checked his work. Taking her anxiety into consideration, I would have thought she might have taken more care to ensure no more errors were made. She was going for shit or bust on the case - she had to. The problem was that she simply wasn’t up to the challenge.

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ay 2003 brought more problems for Fox News Channel. The company appeared to be on someone’s hit list. British television regulators received nine complaints of bias over the Murdoch-owned channel. It seemed British viewers objected to the pro-US stance the broadcaster took, accusing it of bias during the recent war on Iraq. Remembering that the majority of Brits had been against it, it seems incredible that viewers couldn’t just switch to another 226

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channel. On the other hand, a crass remark was dropped into the fray by Julian Petley, the chairman of the Campaign for Press and Broadcasting Freedom who said: “Impartiality is not required in every programme, as long as the broadcaster can show impartiality over a period of time.” In the City, Iraq and the Middle East in general became the blame factor for everything that went wrong in the markets during May. Even Keith Harris couldn’t allow the opportunity to pass - using the potential crisis to justify his miserable performances of late. UK pensioners were also becoming increasingly concerned about their investments upon finding their compatriots were receiving a good deal less than promised or expected upon retirement. Indeed, one noted financial adviser based in Exeter said: “pensions are a waste of money for anyone below a £35,000 income. They 227

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would be far better setting aside cash in the bank each week.” It was also in May that Henry invited Jim and I to a cricket match at Kent County Cricket Ground at Canterbury. We were enjoying a drink in the bar, looking at all the photographs of former teams hanging along the walls when Henry posed a question. Did I know there might be a way around the current IEQ debacle? He and Jim were bang up to date with all of the dodges Jales was using to avoid the truth. “Do the Marriott Harrison senior partners know yet what she’s been up to, David?” he asked, looking over my shoulder at a 1952 photograph. “No,” I replied, “but her husband does and it doesn’t look like a happy family from what she told me.” husband Andy had finally Jales’s demanded to see all of the recent bank statements, after checking the balance online, as he wasn’t sure how many 228

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transactions had gone through or when they had gone through and for what purpose. Without offering the documents, Jales was ready to counter anything he asked about the first payment of £30,000. He still didn’t know about the second £30,000. His voice sounded more puzzled than angry, and he simply shrugged his shoulders when she explained why she had loaned the money to a client - lying again - but adding quickly that the original payment had been repaid within 45 days and that they’d earned £450 interest. He asked her if that was it, the end of this silliness, as he called it. “Yes,” she replied. Another lie. Jales felt relief flowing through her at having got through the worst of the confrontation, and poured herself a drink. She had escaped. She looked at her husband. He was too calm and she tensed up. Maybe it was seeing the drink in her hand that was upsetting him. He had recently become concerned at the amount she was putting away. 229

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But then it happened. He went ballistic, shouting at her, accusing her of ‘having it off’ with her client. He ranted and raved and smashed some furniture and then told her to get out of the house. Jales had never seen this side of Andy, but instead of leaving, she just sat on the couch, with tears in her eyes, and her knees pulled up to her chest, she quietly chanted: “this really is the end, it has to end now, it has to end now, it has to end now.”

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he following week I received a call from Jales. “Could we meet up?” she enquired. Again I suggested that she come down to the cottage. I was spending most of my time in the UK now and that worried me. I didn’t like being away from Marie and it wasn’t fair on her. She didn’t seem bothered, but it’s too easy to fall into a routine. I think that’s why I was becoming tetchy myself. I felt I had to be in England to see this saga through, yet I knew I should be back home. I was pulled between two poles and much of it was due to this (what I would now call) rather silly woman. It wasn’t worth risking my marriage for either her or IEQ. 230

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We met on a very hot day and I had organised a table of drinks with a sunshade in the garden, but Jane was too nervous to sit outside. She told me you never knew who might be watching. I looked around and couldn’t see anyone. Smiling at her, I said almost as a joke: “Just because you’re paranoid, doesn’t mean they aren’t out to get you, Jane.” Glancing around the room, she said in all seriousness, “I’m glad you understand,” It was clear this woman was troubled. I felt edgy simply being in her presence, so unpredictable was her manner. She kept her jacket on as if she were cold, and her hands were continually moving, fussing, smoothing the couch, brushing the coffee table. I asked how her husband had reacted to the revelation concerning the payments and she just shook her head, tears welling up. I didn’t pursue it. I then asked if the partners knew and her whole body shook with the word “no.” 231

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When I suggested she should tell her partners, or offered to do it for her, she erupted into her broken woman routine, pleading with me not to tell them. “You have to, Jane,” I said firmly. “No, not yet,” she pleaded. She went on, “You know it was illegal for me to have paid the money?” “Yes, and I also know there are several Witness Statements, made by both of us, attesting to the source of the funds. On your advice, we told the court that the money had come from my private company when it hadn’t. You really dropped me right in it, but then I’m not a solicitor and you are. Why should I do you any more favours?” I looked hard at her. She grabbed both my hands and held them cupped in hers, imploring me again not to tell anyone. She would fix it, she promised. I knew she couldn’t. I let her go on and on - a pitiful sight - then landed my bombshell, which I had been 232

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holding onto for nearly a week since Jim had told me. “You seem to have forgotten to tell me Justice Patten has just ruled that because I’ve paid the £60,000, as we both have falsely claimed, that I should now be required to pay the remaining £25,000.” “How did you know that?” she asked meekly. I literally roared with anger as I blasted out at her. “Don’t think you’re my only bosom buddy, lady. A good friend, one who wouldn’t let me down, told me because he was in court at the time. I think it’s time to draw a line under this crap, Jane. It’s gone too far.” She looked horrified. Again she didn’t want anyone to know about the payments, the Witness Statements and the lies, and despite being told that “one day everyone would know, regardless,” she begged for my cooperation. She was making it worse for herself with each word. 233

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“You know, David, even if IEQ or I paid the last £25,000 required by the original order, there would only be another application for security and then another order.” “Why?” I asked, puzzled. “Because the defendants, Shaw, Wright and the others, feel certain that IEQ can’t pay and the court would require payment as we’d shown ourselves able to pay all along.” I looked at this weak excuse for a lawyer with disgust. “You will recall that I told you in August 2002 to appeal the original order. I told you that IEQ could not and would not pay that order, and yet you ignored my instructions,” I said. What a fuck-up; and all because this silly little bitch tried to save her own bacon. She had placed IEQ in a far worse situation than it had been, simply because she needed to recover the money owed to her firm and now to her personally. She was a selfish, self-centred woman who deserved to be struck off the solicitors’ register. Her time was coming. 234

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She looked at me with strong eye contact and saw just how much I now despised her. She also knew I was now her most dangerous adversary, far beyond her partners and her limp-wristed husband.

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he Mercedes purred along at a crawl around the side streets alongside King’s Cross Station in London. It went up York Way, then Caledonia Street, then back to Euston Road. There were fat girls, slim girls, lots of girls - and they all wanted him. They wore knee-high leather boots and short miniskirts and most had their cleavage slashed low. Their faces were hard and very young, under fifteen in some cases, and looking at them was giving the millionaire a hard-on. Since the blonde managed to force herself into the lake in Kent he wanted to up the ante. This was dangerous, coming out into the open, kerb crawling. He could be recognised. But the thrill of this hunt and the risk of exposure was his pleasure. All the girls invited him to stop. He selected the one he wanted, dark-haired this time and 235

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wearing an all-PVC mini-skirted outfit with chains looped under her small breasts. She lifted her leg and pressed her foot up against the lamppost so he could view the goods even better. He stopped the car. She bent over through the open window and asked him if he wanted some business. He asked how much; she asked how much he wanted. They settled on a £25 hand job. This was his first time picking up a prostitute in an open street, but he knew he would come back. She satisfied him very quickly, too quickly, he thought. He had been desperate. After she left, he considered cruising the area again, but he couldn’t have raised anything so quickly,

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15 "Every step you take is a step away from where you used to be." —BRIAN CHARGUALAF

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arie and I decided to take a long weekend in Berlin, a city we’d never tackled, and were pleasantly surprised by its development since East met West. You cannot help but be overwhelmed by its history, so many armies having marched through the Brandenburg Gate and along Under der Linden. We spent quite a lot of time at the Charlottenburg weekend flea markets and walking along the Kurfurstendamm to the upmarket Kaufhaus Des Westens (KaDeWe) in Berlin's City West. In the old days of the divided city, the store was a stamping ground for the elite East Berliners, with its smart top floor restaurant and expensive Western clothes shops. 237

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Marie’s browsing resulted in a hefty dent in our cards, but I didn’t mind. Retail therapy isn’t a bad thing. She had a few more days’ holiday due, so she came back with me to the cottage in Kent. We’d had enough lonely nights apart. We had a late morning lie-in and just sat in the conservatory, peacefully scanning the daily papers. Turning to the business section, I noted speculation on the demise of Prudential’s Mark Tucker was rife, as the company’s shares had slumped. It was suspected he’d left on account of the company restraining its growth to maintain a higher dividend. Analysts see that as a fundamentally unsound policy. The phone broke our comfortable silence. It was our personal solicitor, Jim Brown. Could he come down? Marie looked at me pulling a face. “More problems?” she sighed at me. into our gravel driveway and I Jimnotedskidded he had a bounce to his step. He 238

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wasted no time. “Guess what?” Marie and I nodded in unison. “I think I’ve found a way out of your mess. I’ve spoken to Jane and she’s up for it.” That bit was worrying. Cynical as I was becoming, I thought if it met with her agreement it could only be to improve her position more than ours. Yes, I was beginning to dislike the woman. Jim went on. “There’s a scheme called FIRS run by the UK Insolvency Service that makes it possible for claims against former directors to be pursued through a liquidator who obtains adverse costs insurance.” My heart was just beginning to lift. It did sound good. Jim was looking hard at both of us. “This means the defendants are protected, with the result it removes IEQ’s need to pay money into the court to satisfy these never ending security orders.” 239

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I could just picture it: pathetic Jales crying all over Jim when he told her about it. I must admit it sounded like the answer to our prayers as well, but there was that nagging question in my mind that if Jales knew her job so well, why hadn’t she know about this scheme anyway? Why hadn’t she suggested it from the onset? She couldn’t have known about it unless she’d mentally flipped and willed all the hassle she’d endured. No, there was something professionally lacking with her. I asked Jim if I should call her immediately. He nodded and Marie agreed, so I dialled her direct line, which I knew by heart. I held the phone at arm’s length as her excited voice echoed around our lounge. When I came off, Marie, a smirk on her face, said “I take it she’s happy then?” I explained that obviously pound signs had rung up in Jales’s eyes when she looked into the scheme further, which she had done since speaking with Jim. IEQ, she had said, could now pursue its former directors for their unlawful behaviour and easily recover 240

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the more than £3 million. She shrilly repeated that figure, which was the amount being claimed after the recent amendment to the original complaint. “So, what’s the next move?” Marie asked. I’m going onto the Internet to see what I can find out about these insolvency people. I walked over, switched it on and found the web page Jim had mentioned. A firm of chartered accountants, Kingston Smith, seemed to be running the scheme. About “FIRS” - an abbreviation for Forensic Insolvency Recovery Scheme - the blurb said “FIRS brings together a specialist team comprising insolvency practitioners, solicitors, enquiry agents and counsel to assess, investigate and pursue insolvency related claims (particularly corporate insolvency) in an effective and cost efficient manner. With the use of a special cost structure and conditional fee agreements, the FIRS team ensures that the funding requirement is kept to a minimum.” 241

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A typically dry accountant’s description, but it sounded just the ticket for our problem. I lifted the phone and asked to speak to Tim Bramston, who was named on the web site, but was put through to Ian Defty. He explained that he had joined the Kingston Smith corporate recovery and business construction side of the firm in 2001. His experience over the past 14 years had been with the Insolvency Service, which included the Company Directors Disqualification Unit. He had also qualified as a certified accountant. He sounded very confident that he could pursue our claims on behalf of the shareholders and creditors - an encouraging start. He also suggested the other legal arm of the company would be brought in, namely Kingston Smith & Partners LLP. Defty said he should first speak to Jane Jales, to make sure that he had all of the relevant facts concerning IEQ’s claim. was in an upbeat mood, after Jales speaking with Ian Defty. 242

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Her calls to me were now full of optimism. The woman was like a yo-yo, but I suspected her prescription had recently been filled. She joked about how great it would be when this was all behind us. She seemed to have blanked out that she was the perpetrator of this entire wrangle. Her advice had been minimal and she still couldn’t get away from the fact she’d paid monies from her own personal bank account to the court, albeit indirectly through me, to cover her tracks. The considerable sum of money IEQ owed to her firm was the result of her time wasting pursuit of delays, postponements and extensions relating to the security order, which I had instructed her to appeal 9 months before. She just didn’t get it. As is the way with fairy tales, a tinge of concern began to fall over me. The alarm bells were muffled, but ringing all the same. Jales and Ian Defty were working hard on IEQ’s case, but what they had in mind didn’t quite equate to a professional way of working. 243

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I went to Defty’s office near London’s St Bart’s Hospital and Smithfield Meat Market. I guessed correctly that Jales didn’t want me anywhere near her offices in case the partners pounced on me for the IEQ fees. Defty opened the conversation. “We have a problem with the money owed to you and your company. We need you to provide us with another claim for an unsecured debt.” My mouth hung open. “You want what?” More lies, involve me even further. Wasn’t I caught up deeply enough in Jales’s schemes? Did anyone work legally in the UK? “Why?” I asked, breaking my stunned silence. Defty went on to explain that since the money was owed by IEQ to me, and my company was secured, the court wouldn’t make an order to wind up IEQ on a claim Petitioned by a secured creditor. “So what are you asking me to do?” I directed the question at Jales. 244

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She said: “You need to fabricate a further, say, £18,000, which we will claim is owed to you personally and then we can petition the court on your behalf.” In for a penny, in for a pound, as Jim always said. I agreed then and there and noticed signs of relaxation on both their faces. If they wanted to stake their reputations on this IEQ mess, then who was I to argue with these so-called ‘professionals’? The idea behind the new arrangement sounded better once I understood the angle Defty was coming from, but the word ‘fabricate’ still stuck in my throat. When I left that meeting having agreed to go along with their suggestion, I decided to walk back to Blackfriars, but I changed my mind and swung up and cut through various streets, coming out in Fleet Street. It was very different from the old days of drunken hacks and copy deals being struck with editors. I walked up past the Law Courts to the Strand and popped into the Strand Palace Hotel for a drink. I needed some thinking time. 245

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I ordered a beer and picked up a discarded copy of the Evening Standard and turned to the City pages.

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he pharmaceuticals giants GlaxoSmithKline and AstraZeneca had had weak showings, and popular web site Lastminute.com was buzzing with gossip that TUI, Europe’s largest tour operator, was thinking of making a bid for the company. I turned back to the general news section and came across a pro-European band of former ministers, business people and sundry others who were starting a “let’s go for the Euro ASAP” campaign. Prominent in that was James Dyson’s right-hand –man, the Crooked Knight, Sir Richard Needham. He was quoted as saying, “Many foreign companies are moving their operations out of the UK, and we are failing to gain their higher value-added opportunities that are now going to Euro-zone countries. Ruling out membership of the Euro in this parliament is likely to turn a problem into a disaster.” 246

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No matter what your view on the Euro, Needham still managed to get some headlines. I asked for another drink and on the spur of the moment and against the grain, decided to go on a pub-crawl. This I did exceptionally well, ending up sleeping through several stations on my way home, being wakened at the end of the line in Hastings. So I just crossed to the other platform and slept my way back up, and more by good luck awoke as the train drew into my station. I felt better for having had a blow out, but the following day was dreadful and I ignored the ringing phone, thinking if it was that bloody woman Jane Jales. I might say something to make her burst into tears again. Well, there was always hope. We were beginning to row over the phone to the extent of slamming it down on one another.

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hen I had discovered her initial screwup of signing off the £55,000 I was very angry, but our entire relationship was now built on a succession of lies, and it 247

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was all down to one woman. She lied, but Jim had told me the truth, and I kept my knowledge of her deceit to myself, sharing my true feelings only with Marie and Jim. You reach a stage where enough is enough, and I was there. I decided it was time to kick back. Thinking about it, IEQ had a very good case of suing Jales and her firm and I had now reached the stage where I would start to get tough. The lies had gone so far and Marriott Harrison’s legal bills were now so far off the scale, inflated to more than £280,000, that I felt I had the upper hand. Her partners still didn’t know about her previous stalling efforts; her husband now knew some, but not all, about her money diversions from their joint account, and her personal and private life had become one that no one would envy. In reality, no one could sustain the pressure, but I now had no pity for her. From my angle, I saw there was more than £3 million at stake (by her calculations) and she’d better get it for us. 248

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Jane Jales called me later that week to say she had filed the Petition, even paying the court fees and publication costs. She was now using every available means to recover the fees IEQ owed to her firm and the money she had paid so that IEQ could meet the court-ordered security. She had jumped straight into the quicklime.

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ir Richard Needham stopped at his hall mirror and made minor adjustments to his recently tinted hair. It has to blend with your skin tones as you mature, the stylist had said, and she’d done a pretty good job, although he didn’t like the word ‘mature’. He’d worn rather well, he thought. Better than many of his contemporaries, and he could still get away with using a photo from his youth on the London Speakers’ Bureau web site, though there were a few surprised looks when he turned up looking rather older and with a good deal less hair. His appointment at the hairdresser’s en route from the train station was always out of hours. That was because he’d now succumbed to having a facial and his 249

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eyebrows touched up. He did enjoy having the facial after a hard day, and his tip to the beautician kept her mouth shut as to who her client had been that day. As he closed the front door, his wife called from the kitchen. Anthony Caplin had called a few times. Could he return the call? He frowned. He and Caplin needed each other, but he didn’t like him. Far too coarse. He didn’t like his Northern etiquette. Anything north of Watford wasn’t very twee. He recalled one of his friends even asking where Watford was and laughed to himself. He called Caplin, who was heading for a dinner in the City. It was the IEQ business again, he snarled. Needham closed his eyes, thinking God wouldn’t it die a death. The good news had been the company’s solicitor had messed up. Their mutual friends at Memery Crystal and John Shaw had celebrated being let off the hook. However, Caplin was now telling him it was back on track and that was worrying. That David Alexander chap was sticking to the case like a leech. He had to sit down and think out his 250

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next move. Needham had never felt comfortable with mobile phones since the unfortunate though true comment about Maggie Thatcher, but used them out of necessity. He was sitting in his study when the text message ring went off. The words hit him like a bullet. A voice from the past had texted “need to meet up, soonest.” He cursed not changing his mobile number. His wrinkled brow deepened even further. This was a bad omen. He slumped down in his chair, an increasingly large cloud of depression falling over him.

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n the other hand, 2003 had been a buoyant year for Keith Harris. On 11th April he had turned 50 and he had had his big party at Langan’s Brasserie near Piccadilly with all who considered themselves a celebrity. It was a glittering affair with all his cronies and plenty of girls to add to the glamour. He was stunned when his old friend, Express Newspapers owner Richard Desmond, gave him silver replicas of three trophies. 251

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They were of his much-loved Manchester United’s wins in 1999: the European Champion's League, the Premiership and the FA Cup. The year had finally seen the £7 million acquisition of Seymour Pierce’s investment bank arm, giving him a bigger slice of the pie and fewer regulators to deal with, as the new company was private. Always a deal maker, Harris’s focus was now on pulling off the Chelsea Football Club sale, advising Russian billionaire Roman Abramovich. Roman was subsequently investigated by the Russian authorities for tax matters and cleared. It was reckoned that if he received payment at the usual City market rates, Harris’s Russian deal would probably be worth £1 million for the new private limited company Seymour Pierce, of which he was now chairman. Had he consulted with the company’s shareholders before he sold the bank, there would have been a lot less for him. Of his company he was quoted as saying that “it was possible to make money as long as you kept control of costs, such as turning off the lights and saving on paper clips.” 252

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He went on to say that he had been “greatly helped by his company’s willingness to manage its cost control.” Fine words indeed, but bullshit all the same. The press were also making a number of comments at this time implying that Harris had a second-rate record as a serial dealdoer, and that all his so-called “deals” were merely to support his football interests. “Del Boy has never got off the terraces,” one City insider said of Harris when he had moved out of earshot. The year’s downside so far had been his ongoing negotiations with MGM Assurance. Headed by ex-Merrill Lynch dealer Christopher Reeves, Harris’s firm Seymour Pierce was being given a hard time. Still, everything was going right for him and he had been hearing rumblings that Black’s Telegraph Group was running into trouble and he loved new challenges. He sighed, feeling like a happy man, and decided he should buy or commission more football 253

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paintings for the office. The reception already sported a number of mediocre prints, but his office was rather lacking in mementos befitting a champion of football.

254

16 "The only real valuable thing is intuition." —ALBERT EINSTEIN

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he Crooked Knight was walking with leaden feet from Cannon Street tube station along Fenchurch Street to the offices of Dresdner Kleinwort Wasserstein. Even the morning June sun was failing to brighten his spirits. He felt like a doomed man walking to the gallows. His best description of himself was that he was ‘feeling his age’. To the business people streaming past him towards their appointments he looked an old man, unrecognisable, as he used younger photographs of himself - to inflate his ego. Both Sir Richard Needham’s body clock and the events of the past year and a half were catching up with him.

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He was heading to an Extraordinary General Meeting of Biocompatibles International plc, a medical device company for which he was a director and chairman. The meeting, to be held after the main AGM, was to seek shareholder approval for a capital reduction. He was expecting fireworks. The company was going to say that there was no guarantee that the conditions for the repayment of capital would be satisfied. This meant that even if the resolutions were passed, there could be no assurances that payments would be made to shareholders, and that was the obvious sticking point. Biocompatibles had a chequered history. Some suggested it was a ‘bad bet’, comically referring back to company director Andrew Shortall, who had lost nearly £250,000 in a series of spread bets with Cantor Index on Biocompatibles in early 2002 - punts from £250 to £500 on every penny movement of the share price. Shortall could have made a fortune, but when Biocompatibles announced that 256

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human trials of a major drug in the US had failed, the share price plummeted. Shortall called Cantor and told them to close his bets, hoping to limit the damage, but it was too late. Shortall lost £241,000. Cantor then took legal action against Shortall to recover money owed on his delinquent account. In that same month during 2002, when Biocompatibles’s share price dropped, the market was puzzled. Selling a business generally produced a share price rise. Not in the case of this company, though. Its development of stent technology for keeping the arteries open had been highly acclaimed, making it a market leader. It was therefore quite surprising that with this breakthrough came the news that the company was selling out to its US marketing partner Abbott Laboratories for just £164.7 million. It was reckoned that Biocompatibles had been sold on the cheap, having negotiated a royalty deal for an undisclosed value. Fingers 257

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were pointed at Needham to answer a number of questions. Needham’s stride remained constant as he pounded the hard London pavement. He thought about dropping into a coffee bar, but time was tight. In addition to the shareholder approval, the AGM’s original notice asked for the re-elections of himself, Peter Stratford and James Hambro, although the latter had resigned abruptly the previous month after a 27 per cent Biocompatibles staked owned by J O Hambro Capital Management, North Atlantic Smaller Companies Investment Trust and Oryx International Growth Fund was placed by Nomura International with a number of unnamed investment institutions. This suggested all was not well with board members and that there was infighting or certainly disagreement concerning the future for the company. Needham unconsciously nodded to himself as he reflected on the bitter rows late in the evening at the company’s offices. He hated them and he hated working late as well. 258

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A beggar sat hunched, wrapped in an old tartan blanket against the wall of Dresdner Kleinwort Wasserstein’s offices as he approached. He asked if Needham had ‘any spare change, mate.’ The beggar’s mongrel dog eyed Needham, who in turn made eye contact with the animal and both knew where they stood. Needham brushed past, thinking lazy louts like him should be put down. Scroungers, that’s all they were, living off our taxes on top of the handouts from lesser men.

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he meeting was sparsely attended, but Needham recognised a few the diehard, ‘troublemaking, pain in the arse shareholders,’ as he called them. He felt irritated by them. If he could have got away without any such meetings he would have done so. He had in the past at IEQ. He took his seat as chairman and worked his way through the AGM agenda almost at a racing turn. Were he honest, he had only made the effort to come up for the EGM that would follow. 259

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It seemed too easy. Without any quibble they bought the EGM special resolutions regarding the proposed return of £22 million of capital, equivalent to 50 pence per share. He stood up and read out his Chairman’s Statement. “We have successfully sold our contact lens business, divested our stent business.” No one questioned that one. He explained that 27 per cent of the company’s shares had been acquired by high calibre investment institutions - that was the Nomura transaction - and told his audience that the company was much stronger than it was a year ago. Was it? And so he droned on. They believed him. An application to the High Court to confirm the reduction would be made once the conditions described in the shareholders’ circular dated 12th May 2003 had been satisfied as set out in that formal document. He walked out the office with a positive spring in his step that upset the beggar’s dog, which snarled as Needham approached. He cursed the man, calling him a lazy scumbag. 260

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The dog bared its teeth savagely. Needham scurried along past the Bank of England. He felt invincible. Even that silly nonsense in Northern Ireland with the family heirlooms had found its place in the deep, deep recesses of his mind. His cousin had taken 28 items out of the country so they couldn’t be touched and spent just 14 days in jail for contempt. “It was worth it,” she had said. The remaining items had been sold at auction, raising nearly £1 million, most of which was swallowed up in legal fees amounting to £750,000 for the brother and sister’s fight against their sister Marion. Needham thought they were silly bats anyway. He walked towards Moorgate to catch the Circle line westbound tube to Paddington Station for his homebound train. His mobile rang. He stopped, looked at it and froze. It was another message. “Remember me?” To most that would be meaningless. To Needham a name had leapt into his mind producing utter fear. 261

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round the same time as Needham’s meeting in London, I arrived back in Paris with my head bursting with tension. I needed to chill out and the Kent cottage was becoming too close to the heart of my problems. It was nice falling back into a regular domestic routine with Marie. After a morning picking up my emails and sorting out the snail mail I decided to take the Metro a couple of stops along and do what Marie normally loved to do: window shop.

I ended up walking for miles, albeit in a broad circle. My mind had shut down and it was quite pleasant strolling along the wide streets. The Bois de Boulogne had its usual catchments of prostitutes parked in small camper vans along the roadside. Legs akimbo, draped over the steering columns, I couldn’t help but think that France should really get its act together and ban this type of behaviour. A licensed brothel would be preferable. Not a good tourist image, I thought. Then mused at the sight of one very respectable businessman struggling out of one of the vans, having just been serviced. 262

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Returning to the flat there was another hour before Marie arrived home, so I put the time into work. I turned on my computer again and began to pull more emails down. Jane Jales had sent a few messages. We had agreed to inflate the amount IEQ owed in legal fees to compensate them for their continued support - they now claimed more than £280,000; if only her partners knew the truth. She had obtained a winding-up order for IEQ plc and in accordance with our agreement, ‘the creditors’ - meaning Jales on behalf of Marriott Harrison and myself on behalf of our private company - appointed Kingston Smith to act as liquidator. It was beginning to look a more orderly process now and I turned off the computer a happier man as Marie sailed into the room looking gorgeous, even after a hard day at the office. I told her we were going out for dinner. No dish washing for us that night. Over dinner I brought her up to date and she too felt more relaxed that matters were moving towards their conclusion. But were they? 263

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an Defty, Jane Jales and myself had been in almost continual contact over the past couple of weeks. His reassurances that it would be impossible for his firm, Kingston Smith, to be unable to obtain adverse costs insurance put us all at ease, although in hindsight, he perhaps protested too much. So we all felt confident that we had cracked IEQ’s ‘intermediate’ financial problems and that we could now pursue IEQ’s claims against the former directors and thus get the whole tawdry mess over with once and for all. Prior to my return to Paris, there had been a meeting with Jane Jales and Adrian Murtagh at Marriott Harrison’s office and Marie had taken a day’s leave from work to join me. Jales seemed relaxed about us attending her offices, probably on the gamble that as things were working out, we would still keep our mouths shut. I had no idea whether she had come clean with her partners yet. She hadn’t. 264

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The outcome of the meeting meant that Marriott Harrison would continue to represent IEQ, but on a conditional fee. Jales said that the firm wanted a written undertaking from Marie and myself which stated that we “would personally pay Marriott Harrison’s legal fees regardless of the outcome of any litigation.” Marie protested. She was seething. The way this whole saga was turning was just plain nasty. We had been shafted by one of their partners for long enough and now they wanted it both ways. I questioned why the new fee agreement with Kingston Smith wouldn’t suffice and was told it just wasn’t enough security for them. That rang a major alarm bell, but I had to keep it to myself until I had rummaged around a bit more. I mean, how watertight did they need it? My understanding of a conditional fee agreement was that if they did not prevail on behalf of IEQ, then they did not receive their fee. Kingston Smith, the company’s liquidator, would reimburse Marriott Harrison for disbursements, but apart from 265

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that, they were now taking a punt just like the shareholders had. Now they wanted Marie and me and our company to provide written undertakings to pay their fees, even if they didn’t win. Furthermore, they wanted a 100 per cent uplift in fees, payable to both Kingston Smith and Marriott Harrison on success, which was described as a judgement in favour of IEQ, or settlement. In the end, we agreed. If they failed, all that business about Jales and Murtagh having lied to us, the lies to the court and the false witness statements would have to be used. I am quite a patient man. The partner at Marriott Harrison waited until he saw us walking away from their office then lifted the phone to Kingston Smith. He quietly told the accountant we had given them almost a carte blanche to charge what they liked regardless of the outcome. They laughed with one another and agreed to meet for a celebratory drink the next time Ian Defty was in the City.

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t was late July and a much-needed thunderstorm was breaking up the stifling 266

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summer heat-wave. I was working in my study at the Kent cottage when the phone rang. It was Ian Defty. After the usual pleasantries, Defty came straight to the point. His voice was very subdued. “I can’t get the insurance company to cover your case, David. I have really tried,” he added hastily. I sat rigid. “What?” I replied. “No one? You told me you used three insurances companies and that it was ‘impossible to be turned down given your firm’s reputation’ and your 100 per cent success record.” “No, I’m really sorry David,” the quiet voice at the end of the phone said. “So where’s your personal guarantee gone? Or don’t you remember you told us it was impossible not to get coverage through your firm?” Silence. I repeated myself. I heard him drawing his breath. 267

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“It was difficult, David. IEQ’s not a good risk. You know that…” I reacted angrily. “I repeat, that is not what you told Jane Jales, Marie and I when we met. What has Jane got to say about this? Have you told her?” “Yes. She said it was regrettable.” I nearly choked. Regrettable? Is this all this wanker could offer? It was much more than regrettable. Politicians have that same irritating habit of understatement. Regrettable? I heard Defty’s voice whinging away on the phone plying one more excuse on top of the other. As he waffled on it was becoming clear to me that we’d been fit-up on this from the beginning. It was then that I really went for him. Did he not recall that I had told him that Keith Harris was a director of one of the UK’s largest reassurers, or that his friends at Marriott Harrison represented Durlacher Corporation plc, where Anthony Caplin was 268

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chairman, whilst they acted for IEQ plc? They never chose to admit that fact to IEQ’s shareholders nor myself. The build-up of the past two and a half years was spilling out of me now. I raged on. “The bottom line is,” I explained to him tersely, “that IEQ’s shareholders have lost more than £3 million because of the actions of the company’s former directors.” He sympathised, but didn’t care. He was in damage control mode now and simply wanted to get off the phone. I seemed to be talking to the wall. It was like water running off Defty’s back. He bid me goodbye and put the phone down. I paced the cottage floor, far too angry to think properly. Every time we tried to advance, something would come along and pull us back down. I suspected Defty knew full well from day one we’d never get the insurance he kept blabbing on about. They were all con-merchants. They may well turn their noses up at the actions of other less graceful mortals who 269

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end up in prison for their actions, but the entire lot who had previously managed and advised IEQ should have had first option of prison sentences when they were dishing them out. The City was being run by an efficient mafia gang that laundered money and operated on a system of ethics that meant they grabbed the money and ran. They were also very powerful. It was inevitable. IEQ’s shareholders had lost the opportunity to recover the £3 million because the company had been milked dry by its former directors and therefore now couldn’t afford to pursue its claims. Jane Jales had screwed up the case from the beginning and Adrian Murtagh had helped her cover their tracks. Now this corrupt liquidator had lied through his teeth to get his appointment, only to fail at the expense of IEQ’s shareholders. I knew I was near the end of the road. The grip these thieves had on the London markets and the legal system was incredible. They didn’t deserve the confidence investors gave them. They were morally bankrupt 270

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criminals who operated with impunity because they were well and truly up each other’s backsides and there was no separating them. I went over to the cabinet and poured myself a drink. I then called Jane Jales. Not answering her calls. I then dialled our phone at home in Paris and left a message for Marie. She’d know by my tone how low I felt. I was disgusted with the UK in general by now. It seemed that once you became a victim your position was doomed to become worse. I absently switched on the news to take my mind off our misery. Another mafia, the British Government, was blaming a number of its members for the apparent suicide of weapons of mass destruction expert Dr David Kelly. Tony Blair’s spin-doctor Alastair Campbell was blaming the BBC’s role in the affair, maintaining it had spilt the beans by naming the scientist. The Corporation had been 271

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under attack throughout the Iraq war from politicians who said that the BBC had showed bias against the war despite the fact that many of their reporters were present in combat situations and some were killed. Dr Kelly, in many people’s eyes, had become a scapegoat. He had been put under severe pressure during cross-examination in a televised Parliamentary committee meeting in quite an unpleasant manner. He was hounded by the press and had been pushed into the spotlight. He too had found there was no way out. I understood how he must have felt, but I didn’t buy the suicide story.

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hilst I had been recovering from my latest shock, the millionaire had picked up another busty blonde a few miles away, near King’s Cross station. She was straddled across him on the passenger seat, his dick fully inserted inside her and he was in ecstasy. He pushed his face between her enormous breasts and yelped like a dog. The girl thought nothing of it. From his car, she knew she’d picked up a good tipper. The fact that he wasn’t too well endowed wasn’t 272

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going to prevent her from trying for a large tip. He felt her hips thrusting in time with his. He came quickly. Further south, in a health club near Gatwick, Keith Harris was enjoying a full massage after his sauna and steam session. He had had an altercation with a fellow swimmer who objected to his diving into the shallow pool despite the notices. The other swimmer was told to “fuck off”. Although very relaxed, he never really switched off totally and was working out where to invest next. He had been told about the latest IEQ news and thought Alexander could go take a hike. It wasn’t his problem. He relaxed under the masseur’s fingers.

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17 "Once we realize that imperfect understanding isthe human condition, there is no shame in being wrong, only in failing to correct our mistakes." —GEORGE SOROS

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ctober 2003 was a very bad month for IEQ plc, but a great one for the crooks who had brought about the company’s demise. Anthony Caplin was now imbedded as non-executive chairman at Durlacher Corporation plc. His profile for that company states that he “is specialised in assisting with turning around loss-making businesses into profitable businesses.” That is an extraordinary statement for the former IEQ director after he blindly handed out US$750,000 to MadeForChina without ever having met or directly communicated with the management of that company. The statement is hard to accept as “truthful,” 274

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given the number of companies that have failed in his wake. Caplin had doled out funds to several companies in which he had undisclosed interests, such as 2020Me and BiblioTech, without any consideration for the shareholders of IEQ. The total absence of fiduciary duty was simply astounding, but then few would challenge him and fewer still could do anything about it. The Crooked Knight, Sir Richard Needham, was also happily earning a crust as deputy chairman of Dysons, the cleaning appliance company. He and Dysons were Gloucestershire neighbours, so his commuting time had been reduced. Dysons, one or two smaller companies for which he was a non-executive chairman, and his chairmanship of Biocompatibles made the former Tory minister a busy man. And it looked as though that nasty IEQ affair was nearly over. Richard Desmond, on the other hand, was experiencing a dreadful month. He should have consulted his own newspaper’s 275

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astrologer for October. He had been pulled in front of Gerald Kaufman’s government select committee and admitted that there had been times when he had been prepared to pay reporters for writing stories. He told the committee: “there have been times when I have been prepared to pay reporters for writing stories. But I would like to make it clear that this is very much the exception and not something I normally approve of. It's only done when there is no other option and in the public interest.” In fact, Desmond had a reputation for obtaining copy for free off the Internet. He told reporters before giving evidence to the committee, “It’s the only moral way. If proprietors like me start paying for stories all the time then it’s a slippery slope towards an Orwellian nightmare scenario. Hacks will end up just writing what we want them to and where's the journalistic independence in that? When people talk about having a free press that’s what I imagine it means.”

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One of his companies, Express Newspapers, was also suing its solicitor, Linklaters, for negligence, claiming more than £2 million in purported damages relating to tax issues surrounding his purchase of the group. On top of that, he was still reeling from the fallout after being accused earlier in the summer of inflating his profits in comments to a journalist from the Wall Street Journal. Desmond had told the WSJ that his main holding company, Northern & Shell, would report profits of £60 million. However, accounts prepared by his auditor, Price Waterhouse, and filed at Companies House showed that his company only made an operating profit of £8.8 million, down from £24 million the previous year and a far cry from the £60 million he predicted. Desmond attempted to explain matters by saying that he had paid himself £21 million that year, although under pressure about a deficit within the Express pension fund of a similar amount, he muttered that he had paid £20.4 million back into his fund, which 277

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should be considered a shrewd tax move. The employees’ pension fund, however, showed a deficit of £22.6 million after receiving a payment of £11.4 million, so perhaps all was not as he wanted everyone to believe. Operating a privately held company, Desmond’s reporting requirements were greatly reduced. Had he followed through and floated his company, as he’d once threatened, he would have been in breach of Stock Market regulations. The media persisted with their almost daily enquiries concerning Northern & Shell and sources close to Desmond, who was the company’s only beneficial shareholder, failed to come up with any explanations. Meanwhile, an auditor said privately that the Inland Revenue would be most interested in such profit posting discrepancies. People throughout the City were filing complaints and providing tips. Richard Desmond was not a well-liked man and he knew it.

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was feeling unsurprisingly depressed at the way the IEQ case had panned out. 278

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I was also very angry. The regular calls between Jane Jales and myself had ceased. I had nothing pleasant to say to her and so we spoke only when it was imperative for IEQ’s claim, and that was becoming less and less the case. I would never forgive her for lying about the mistake she had made. The blunder wasn’t as bad as the lying. She could have been honest and admitted that she’d screwed up when she had first accepted the £55,000 as full and final settlement in relation to the amounts IEQ had claimed against Needham and Caplin. Adrian Murtagh, who discovered her error as soon as he had returned from his skiing holiday, could have come clean as well. They were as bad as each other. Jales’s firm, Marriott Harrison, had insurance, as all solicitors are required to have, but Jales once told me she’d never made a claim against her insurance and it was her last year in practice - pride prevented her from admitting the truth, even to herself. She had lied to me, to her partners, to the court, and to her husband, 279

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but worst of all she had lied to herself by ever thinking she could get away with it. We were about to go into court again and I trained it back from Paris. I hadn’t made it to all of the previous hearings, but I wanted see justice done in person. Being there was important for me. Somehow, I hoped that by being there I would be able to change matters. I was wrong. Marie wasn’t with me this time. I think she secretly didn’t want to witness the death of IEQ. Also, she wasn’t as aggressive as me. In her mind, she had already written off the £600,000 we had invested. I, on the other hand, wanted the bastards strung up. I had made it my sole purpose to obtain recompense, for me and for the other IEQ investors. When my train arrived at Victoria Station I caught a number six bus, and overshot the stop deliberately: I got off at the bottom of Fleet Street. I wanted to see what it really looked like now that the main press offices had moved to the Docklands and 280

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Kensington. There was only one newspaper group left. D C Thompson, which ran the English end of a Scottish paper, The Sunday Post, which still had an office at 185 Fleet Street. I stopped for a glass of wine in a nearby bar filled now with legal wizards and business people. Up to the 1980s the same pubs were packed with steadily drinking hacks. A lot of business and jobs had been won and lost in those hostelries. As I continued up towards the High Court, located in the Strand, I saw the impressive set of buildings where history had frequently been made and wondered how many other companies the Crooked Knight had run roughshod over; how many other families’ savings he had plundered. Television cameras were outside, but, I correctly assumed, not for our case.

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he Kingston Smith front man, Ian Defty, was waiting with their solicitor, Justin P Fletcher, and he gave me a brief handshake and terse smile. I felt like breaking his bony fingers. Fletcher was a weak man who said nothing and just stared at a spot on the pavement, never offering his hand. It wasn’t long before we were called and entered court. I noticed that no one from Marriott Harrison had bothered to attend. It took around ten seconds to throw the claim out. I stood stunned. The claim had been struck out in one fell swoop because IEQ had failed to provide the adverse cost insurance cover and/or the £25,000 court-ordered security. I had offered the Court a written statement regarding the source of the initial £60,000 Marriott Harrison had paid into court. The cat was well and truly out of the bag now, and Jales would have to face the music. I attempted to get the court to reconsider the order by Justice Patten, who was of the opinion that because I had paid the first two payments, I should be required to pay the final £25,000. 282

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If only he had known the truth at the time. If only Jales had followed my instructions in August 2002. If only. In the end, my statement wasn’t even considered. I knew it had been received, but IEQ’s claim for £3 million was simply struck out on a technicality. Ian Defty, that little bastard standing next to me, must have known what would happen. He couldn’t return eye contact with me as I turned and glared at him. I could see a flush of red working its way up from his neck to his cheekbones. Quivers were setting around his mouth and his eyes and even from my side angle I could see his eyes moistening with fear. Had we not been there in that courtroom, a crime most foul would have taken place. But now was not the time. I remained staring at him and eventually he turned, drawing himself up in a brave attempt to counter my stance. He just lamely held out his hand and said: “I’m sorry it didn’t work out, David.” I didn’t accept the handshake. 283

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Coming within inches of his garlic-smelling breath I hissed at him: “You are going to be sorry, believe me.” He fell back, looking like a rabbit caught in car headlights. I turned and walked out of the court. It had started to rain, which matched my mood, but I didn’t care how wet I became. I started to walk aimlessly along the Strand, past Stanley Gibbons, the postage stamp experts, and up towards Trafalgar Square. I found a pub in Duncannon Street and plonked myself down on a stool at the bar. It was pre-lunchtime and I almost had the place to myself and that was how I wanted it. My nerves were shot. I didn’t notice the first drink going down, so I ordered a second. I looked up and there reflected in the bar mirror in front of me was Jane Jales with someone I’d never seen before. I swung round on my stool. She now saw me and stopped, then pretended she hadn’t noticed me and gave her full attention to her companion. Oh no, I thought, you don’t get away with that one. 284

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I walked over to their table and right up to the point I reached them, Jales ignored me. “Hello Jane, forgotten me so quickly?” I asked. She finally looked at me; her male friend was looking rather irritated. “No, David, of course not,” she flustered. “Do you know about the court result?” She nodded affirmatively, dropping her head and fussing with her scarf. “Before or after?” I added sarcastically. Her head shot up. I nodded at her and went on. “I think you must have known what would happen, Jane, both you and your friend from Kingston Smith. In fact, for a long time I’ve thought you both knew exactly what the outcome would be and you just strung me and the other shareholders along.” I could see her palms were moist as she played with her hands. 285

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“There’s another case coming up on the twenty-third of this month, isn’t there?” she was struggling badly now. “What’s that got to do with it? Maybe you can tell me what that will be as well? After all, you’re dealing with it aren’t you?” She nodded vigorously, but couldn’t find the right words. I turned and walked out with a parting warning shot that she’d “better get it right this time.” I couldn’t call Marie yet as I was so steamed up and needed to cool off. I walked into Trafalgar Square with its fountains. To my right was the National Portrait Gallery. I’m not an arty sort, but I saw it as one possible way to lower my blood pressure. An hour or two wandering around the galleries might be just the ticket to clearing my befuddled head. I was ultimately going back to the Kent cottage, so before entering the gallery, I made a couple of calls to Jim, my personal solicitor, and then to IEQ’s accountant, Henry. I needed a lads’ night in. They were both up for it. 286

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ctober 2003 also saw Conservative leader Iain Duncan Smith backed up against a wall as his party drew its knives. Despite improving the party’s showing in recent Parliamentary by-elections and the May council elections, members felt he lacked the oomph needed to win the next general election. He tried to stand up to the growing pack of baying wolves, but they were circling for the kill and he decided to back down and let a leadership contest take place. Folkestone MP Michael Howard QC became an uncontested front-runner for the job. Duncan Smith was on the way out. Henry had brought to my attention news of the final outcome of the Isle of Wight Cable and Telephone Company (IOW) when we met up. During his tenure as director and chairman of IEQ, John Mackay had authorised a £650,000 loan and equity investment in the failing company whilst he was also CEO of Seymour Pierce Group plc. He failed to mention, to the IEQ shareholders either that 287

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Seymour Pierce had a floating charge over the assets of the company or that Seymour Pierce earned £500,000 for arranging the £7 million bridging loan, or even that IOW was just 60 days from failure - something the directors must have known. And Keith Harris, who was chairman of Seymour Pierce, was also chairman of IOW. Harris was also a director of CLS Holdings plc, one of the largest IOW shareholders. The bottom line was that unless Seymour Pierce was able to arrange the loan, it would have to make up the difference. IEQ’s money was so easy for him to take; he simply dipped into its account for the final top up. In the end, IEQ lost all of its money, bar the £100,000 I was able to recover shortly after I have taken over control of the company. As Keith Harris was now disposing of all the Seymour Pierce assets, he sold its interest in the new Phoenix company - Wight Cable Limited - to CLS Holdings. The original investors, really the company’s management, had borrowed £7 million, defaulted, and got back their investment for a nominal sum from Seymour Pierce. 288

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It was really a sweet deal for them. The bonds they had forged with Harris were strong and those that belonged to The Club looked out for each other. Harris was simply returning a favour.

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must have subconsciously gone into a defeatist mood because whilst I sat at my desk every day in the cottage study, the thought of selling the place was gaining momentum. On the other hand, I was also trying to work out how I could get even with those crooks and liars. For me, it was more than the loss of the £600,000 Marie and I had invested in IEQ. It was more than the lies we had been subjected to at the hands of the defendants, our solicitors and even the liquidator. For me, it was a challenge to recover the investments on behalf of the 1,650 smaller investors, many of whom had bought only £250 worth of shares. For many of them, their £250 stake was akin to our £600,000 punt. The problem was that it seemed everything was set against us. There is no British 289

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Justice. The victim, in this case, a company and its shareholders, faces an uphill struggle. Few solicitors will accept a case on what is called a “conditional fee,” and even then, defendants are entitled to apply to the court for security intended to cover their costs should the company fail to prove its case in court. IEQ didn’t have sufficient funds because the former directors had raided the company’s bank account, leaving no money with which to mount a claim, and they knew it. I remained determined, however, to do something to justify the last two years’ efforts; to obtain some form of redress. And I had both Marie’s backing and that of my two closest friends, Jim and Henry. To kill time, I decided to take my hired car for a day trip to Calais through the same tunnel that would eventually take me home to Paris. The people of the South-East and Kent in particular have become quite blasé about shopping over the Channel.

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It was a beautiful autumn day when I went over. I was surprised at the lack of passport interest on the part of the authorities, but that was their problem. The journey only took thirty-five minutes. I drove off the train and made my way towards Boulogne on a secondary road rather than the main A16. Motorways have always bored me. Calais is quite under-developed along the coast road and it’s easy to feel you are miles away from anywhere, despite being able to see the white cliffs of Dover over the water. French traffic also seems to disperse quickly from the ports and you can drive in comfort. I passed the two Caps and wound my way down towards Wimereux, an old-fashioned seaside resort with houses painted in bright pastel colours and most wearing smart shutters. Rather than go on to Boulogne, I stopped there for lunch. I wasn’t disappointed. My love affair with seafood was satisfied in full 291

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and I returned back along the coast road relaxed. At the Eurotunnel Terminal at Coquelles, an area that is technically a part of Kent if you want to be historically accurate, I stopped off for a duty free browse. I was scanning the red wine bottles when a familiar head caught my eye on the other side of the stand. It was Nigel Wray, who was, as ever, immaculately dressed. He lifted his head and we briefly made eye contact. I don’t think he really recognised me, but as I looked at him he briefly responded. It was then I noticed he had people with him, a man, woman and young girl. What struck me was the hatred the young girl appeared to have for Wray. She seldom took her eyes off him and when she did it was only to caste an anxious eye at the other man. I took a closer look and recognition began to dawn. He had briefly been involved with the Talisman House, Intermediate Equity business. He looked old. His face was ravaged with wrinkles and he didn’t look happy. 292

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Suddenly my train number was called, so I had to rush to the duty free checkout desk.

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igel Wray had just driven from Brussels and was sick to death of these people, who seemed determined to stick to his jacket tails, following him around the terminal shopping area. He’d had the business meeting with the guy. He wasn’t moving an inch on him. The deal had been made. As far as he was concerned, it was tough if he’d lost his job because of it. Not my problem, he thought; but it was that girl. How she hated him. He presumed her father had spun some great stories about him. At one point she dared to stand directly in front of him, glaring with steely eyes. He had to admit it unnerved him, though. She was far too young to understand and should be enjoying her Enid Blyton books, instead of watching him. He was about to tell her to go away when her mother called. Relief flooded and he strode to the checkout and went back to his car. 293

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There were a couple of messages on the mobile. One was from his secretary, wondering when he’d arrive in London, but the other was a strange one from a young man he couldn’t recollect ever meeting. Strange the man had his mobile number. That was very private. He shrugged his shoulders and deleted the message.

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18 "I have not failed. I've just found 10,000 ways that won't work." —THOMAS ALVA EDISON

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t was a gloomy autumn day to match my mood on 23 October 2003 when I returned to the High Court for a hearing, that dealt with the second lawsuit. I was almost resigned to it not turning out in IEQ’s favour and I was spot on. The court struck out the claim. Kingston Smith had failed to defend Memery Crystal’s solicitor’s application for additional security. I remained sitting in the courtroom long after everyone had left. I didn’t even want to look at my brief. I felt sick. After a while, I called Jim and asked to see him. He always had an open door. After listening attentively to my sorrowful tale, my 295

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trusted friend put forward ideas on what he thought I should do. As usual, I agreed with him. Originally, Marriott Harrison had been asked to recover money that was rightfully owed to IEQ, the result of serious breaches of the Companies Act and a total absence of fiduciary duty on behalf of the company’s former directors. It was thought that within a very short time all of the defendants, terrified of their fraud being exposed in open court, would offer a settlement to keep their misdeeds a secret. We were wrong. They had realised very quickly that our solicitors were incompetent when Jales had accepted the £55,000 as full and final settlement. The problem was that we didn’t know until it was too late. Collectively, the defendants admitted to having spent in the region of £170,000 merely trying to make IEQ pay the last £25,000 in security. Now that beggars belief if you think about it. In fact, they had been so sure IEQ couldn’t pay the £25,000 that it 296

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was worth £170,000 to stifle the claim rather than having to face a potential £3 million judgement or an embarrassing public trial. Had we paid the £25,000, they would simply have used that payment against us and repeated the need for more security. It was hopeless. During the entire legal process, the UK system of justice did not live up to its reputation of fair play. It fact, the system was continually used against us.

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was sitting in my favourite chair, gazing vacantly at the television set at the cottage in Kent, reflecting over all the hassles we’d been through in the past two years. I had put the house up for sale although I didn’t really want anyone coming to see it. I suppose I just wanted to be left alone. Marie had seemed relieved it was all over, perhaps hoping we could resume a ‘normal life’. I decided it was time to open Pandora’s box. Crime had paid off for these crooks who had cost us so much money and time (and part of 297

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that cost was emotional). They had gotten away with corporate murder by conning IEQ’s shareholders. But the con didn’t end there. These men represented many other companies and the shareholders of those companies had also suffered at their hands, though many weren’t even aware of it. This was their power. The City fronts for these thieves. I logged onto the Internet and looked up Kingston Smith’s web site to see if they had posted any news of the case. I think I was being naive. Of course they hadn’t. What I did see was all of the promises they were attempting to sell an unsuspecting public, about the FIRS project in which they were still involved, and their alliance as practitioners with the government-backed scheme run by the DTI. The picture they painted was that they could and would do almost anything for companies whose directors had been ‘naughty’ and milked them dry, thereby leaving no funds to pursue litigation. Not in IEQ’s case, however, that was for sure. 298

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In fact, all that Kingston Smith was capable of were hollow promises and outright lies. One small victory was that as a direct result of my complaint to the DTI regarding their obvious favouritism toward Kingston Smith and the way that they actively and exclusively promoted the firm, they removed the entire contents of their web page located at: http://www.insolvency.gov.uk/information/ firs.htm They replaced it with the statement: “Sorry, this page is currently unavailable.” Indeed.

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few days later, I lodged a complaint with the Law Society, the English and Welsh solicitors’ governing body, against Marriott Harrison but Jane Jales in particular. They promised to proceed with an investigation. Naturally, given the track record of the British courts, that dialogue has not reached any conclusion so far. There have been numerous other complaints against that professional body accusing it of losing its teeth. 299

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I wrote again to Justice Patten of the High Court, who had been on the receiving end of Jales’s lies, presenting the facts regarding the true source of the £60,000 paid into the court by Marriott Harrison. Perhaps he would have ruled differently had he known that IEQ was unable to pay the security he ordered. Perhaps he would have varied the original order had he known that Jales was funding the litigation and lying about it. At the time of IEQ’s final death knell, Keith Harris went into the name changing routine again after losing yet another £7 million of Seymour Pierce shareholders’ funds. These guys lose their - or, rather, other people’s millions like sweet wrappers. Seymour Pierce was to be given yet another name ‘subject to shareholder approval’. Harris had chosen “Investment Management Holdings plc.” That was rather ironic given that he had spent a great deal of the year doing what he does best, shedding off Seymour Pierce Bell and Seymour Pierce Green and other company assets for peanuts when compared to the amounts he had paid for those 300

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businesses just 2 years before. Recording massive disposals of goodwill, more than £70 million in all, and posting huge losses, it was just another day for Harris. The Crooked Knight had an interesting autumn looking after himself and his family. His son Andrew invited Sir Richard and brother Robert Francis, now returned from swanning about in Hong Kong, to join him on the board of Fenix (obviously spelling was a problem) Media Limited, a “youth” publishing concern based in Reading. The company claims to advise on marketing strategy, implementing field campaigns and providing research on the youth market, with much of this undertaken via its web site. They also publish a city youth guide, “Inside+Out,” focusing on twelve UK towns. It makes you wonder where the expertise has come from to run a company like that, but then, Richard Needham was a former Tory government minister, his son Robert Francis, also known as Viscount Newry, lied through his teeth over the MadeForChina loan 301

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needed to bail out his friend Byron Constable and his buddy Micah Truman, so bullshit runs pretty deep in that family. Needham also accepted a patronage of the Clifton Scientific Trust alongside some prestigious names such as Lord Jenkin of Roding and Professor Colin Blackmore, no doubt all unaware they were sitting alongside someone who had committed such a huge fraud.

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o as we enter 2004, what are these crooks up to? Jane Jales has gone missing, wiped off Marriott Harrison’s website. It’s as if she never existed. Tony Morris, managing partner of the law firm, confirms that Jales left ‘to pursue other interests’. Although he is vague about her departure date, she left shortly after I filed the complaint with The Law Society, towards the end of November 2003, though he seems to have forgotten to inform them. Adrian Murtagh is still with the firm, his only crime having been that when he was faced with the choice, he chose to protect his boss 302

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rather than to tell the truth. Typical lawyer. John Mackay and Christopher Foster are tucked up nicely as a non-executive and corporate director respectively with the Wiggins Group plc, now called Planestation Group plc. Nigel Wray has been property dabbling in the Docklands. The Columbus glitch and the Notts County football club share debacle appear to be well behind him. Richard Desmond is still learning how to run a second rate newspaper, but ambitions to buy the Telegraph may be snookered as the billionaire Barclay Brothers come into the frame, although they all have links to the millionaire’s island of Jersey, as has Keith Harris, now having hit the buffers with his shareholders. A large Seymour Pierce Group plc shareholder Andrew Campbell is leading a call for an independent solicitor to investigate claims the company may have 303

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against current and former directors and advisors. Sound familiar? The basis for his letter to other shareholders was Seymour Pierce Group’s continuing slide in a market where quoted brokers have rallied with strength. It could be that 2004 will turn out to be the year of retribution for Keith Harris, who is Seymour Pierce executive chairman with old Talisman House mate Richard Feigen as executive director and his right hand man. I recall Harris’s friend Richard Desmond comparing me to Asil Nadir in the libellous Express article. Imagine that? That’s the pot calling the kettle black. Anthony Caplin is still looking after Durlacher Corporation plc, but has managed to spin a yarn setting himself up as “Mr Holier than the rest” and covered his tracks so well that the new Conservative leader Michael Howard MP invited him to sit on an “expert team” to root out waste in the public sector. Well, he’s certainly rooted out IEQ’s bank account in the private sector. 304

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Caplin was described by Howard as a ‘City company doctor.’ Had he been a medical doctor he would have been struck off long ago. The Crooked Knight is the real thorn in the crown. Sir Richard Needham is still sucking up praise at Dyson and he is chairman of Biocompatibles. We’ll see what another year brings with those companies. In the end, we have now done what we should have done at the beginning of this saga. Jim Brown and I have hired a private investigator who is tracking each of them; watching, taking photographs, making sure we know where they are and what they’re doing. It’s interesting to see how well they recovered from the IEQ debacle, with no desire to compensate the shareholders they screwed, no remorse, no intention to ‘make things right.’ It’s interesting to me to observe them, to see how they actually believe that one can steal more than £3 million and simple walk away without any consequences. 305

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One must remember that what goes around comes around, and now it’s my turn. I am a patient man. Author’s 4th Edition Note Without very much space available in this 4th edition, I am able to report that since first penning this tome, Jane Jales is no longer a solicitor in the UK—her name having been removed from the Law Society’s list of solicitors. Additionally, after much effort, the Law Society agreed that Jales “acted in a transaction where her interests conflicted with her those of her client”. Sir Richard Needham is constantly whining to his solicitor, Ms. Jo Keedie, of Dawsons of London about the contents of this book and numerous articles published on OfficialWire, but he doesn’t dare sue; primarily because this book is true and also because should he ever work up the nerve to sue the author or publisher, a counter-suit will follow and the entire IEQ saga will finally get its day in court. Please sue, please sue.

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Where are these people today? The following publicly available information was provided by Companies House in the United Kingdom. This list includes only “active” UK directorship/secretary appointments and does not include any directorships outside the UK. Neither does it include a myriad of dissolved and former directorships, for each person shown below: The Rt. Hon Sir Richard Francis Needham The Croft House, Somerford Keynes Cirencester, Gloucestershire GL7 6DW 1. 2.

Dyson Limited United Kingdom – Japan 21st Century Group 3. Richard Needham Consultancy Limited 4. NEC Europe Ltd 5. Tartan Check (Holdings) Limited 6. Tartan Check Limited 7. Merlion Healthcare Limited 8. Biocompatibles International plc 9. NYNE Limited 10. Network Programs (Europe) Limited 11. Fenix Media Limited 12. Hansard Group plc 13. Newfield Information Technology Limited

Jonathan Wordsworth Wright Flat 1, 58 Coolhurst Road London N8 8EU 1.

Seymour Pierce Limited

Anthony Lindsay Caplin 22 Elm Lodge London SW6 6NZ 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.

Easynet Group plc Global Sealing Technologies Ltd Norprint Labelling Systems Limited Irevolution Group plc (Liquidation) Tadpole Technology plc Hansard Group plc Northamber plc Alternative Networks Limited Dynamic Commercial Finance plc Hand Picked Hotels Limited Durlacher Corporation plc Webdraw Limited Syncforce Limited Ant Ltd The Family Holiday Association

John Sebastian Mackay Blemheim House, 137 Blemheim Crescent London W11 2EQ 1. 2. 3. 4. 5. 6. 7. 8. 9.

Public Network plc Swan Enford Limited Jarvis Investment Management plc Planestation Group plc Notting Hill Preparatory School Limited Mount Street Investors Limited Mount Street Advisory Services Limited Mount Street Investment Management Limited Mount Street Modus IBI Limited

Keith Reginald Harris 14 Eaton Row London SW1W 0GA 1. 2. 3. 4. 5. 6. 7. 8. 9.

Radio First plc (Liquidation) Benfield Holdings Limited Seymour Pierce Limited Wembley National Stadium Limited Isle of Wight Cable and Telephone Co. Limited (Liquidation) Keith Harris & Associates Limited Investment Management Holdings plc UBC Media Group plc Pavilion Asset Management Limited

10. CLS Holdings plc 11. Seymour Pierce Ellis Limited Christopher Kenneth Foster Springwood House, The Avenue Ascot, Berkshire SL5 7LY 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22.

Planestation Group plc Wiggins Homes (South) Limited Wiggins Management Services Limited Wiggins Castle Wharf Limited Duskwave Property Limited Kent International Business Park Limited Tomorrows Leisure Limited Wiggins Lancaster Limited Kent International Travel Limited Wiggins Leisure Limited Wiggins Lifestyle Limited Wiggins Investments Limited Wiggins St Johns Limited London City Racecourse Limited Wiggins (Burford) SPV Limited Wiggins (Liverpool) SPV Limited Wiggins (Killingworth) SPV Limited Wiggins (Hellaby) SPV Limited Kingsbury (Cinema) Limited Wiggins Fairfield Limited Wiggins Kingsbury Limited Wardtown Limited

23. 24. 25. 26. 27. 28. 29.

Norham Multi Leisure Limited Norham Investments Limited Emptico Limited Selltime Limited Charles F. Hunter (Leisure) Limited Caldwell & Davies Limited Wiggins City Clubs Limited

Richard Clive Desmond The Badgers, White Lodge Close The Bishops Avenue London N2 0BL 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16.

Badger Finance Limited Northern & Shell Properties Limited Export Magazine Distributors Limited Sightline Publications Limited O.K. Magazines Limited The Green Magazine Company Limited Northern & Shell plc Sorse Distribution Limited The Northern & Shell Tower Management Services Limited Northern & Shell Distributions Limited Tower Magazines Limited Northern & Shell Videos Limited Northern & Shell Services Limited Northern & Shell Group Limited O K Magazines Trading Co Limited Northern & Shell Titles Limited

18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39.

Northern & Shell Investments Limited 17. Portland Investments Limited Burginhall 677 Limited Newco Three Limited RCD1 Limited Northern & Shell Network Limited Northern & Shell Media Holdings Limited Northern & Shell Media Limited Northern & Shell Nominee Limited Sunday Express Limited United Magazines Publishing Services Limited Express Property Management Limited Broughton Printers Limited Express Printers Manchester Limited Beaverbrook Newspapers Limited Blackfriars Leasing Ltd Daily Express Limited Daily Star Limited Express Newspapers Properties Limited Express Newspapers (Unlimited Liability) Scottish Express Newspapers Limited Northern and Shell Finance Limited West Ferry Printers Limited

Clive Bradley 8 Northumberland Place Richmond, Surrey TW10 6TS 1. 2.

Feltsted School Trustee Limited Age Concern Richard Upon Thames

Peter Maurice Crystal 46 Conduit Mews, Paddington London W2 3RE 1.

Sports Injuries Clinics Limited (company secretary) 2. Crystal Business Training Limited (company secretary) 3. Crystal Media Training Limited (also company secretary) (Liquidation) 4. Cablefree Solutions Limited 5. TUV Product Service Limited 6. Babt Product Service Limited 7. Axcelerant Group plc 8. EMCEE Nominees Limited 9. Marshall Zoing Limited 10. TUV Suddeutschland (U.K.) Limited 11. Crystal Media Training Limited (Liquidation)

Viscount Robert Francis John Newry 6 Lattimer Place, Chiswick London W4 2UA 1. 2. 3.

Newfield Information Technology Limited (also company secretary) Network Programes (Europe) Limited Fenix Media Limited

Nigel William Wray Avenue Brassine 30 1640 Rhode-St-Genese Brussels 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.

Carlisle Holdings Limited Investment Management Holdings plc Invox plc Electric Word plc Moneypitch Company Limited Brendon Street Investments Limited Domino’s Pizza Group Limited English Rugby Partnership Limited Domino’s Pizza UK & IRL plc Wilink plc Syncbeam Limited Saracens Limited Urbium plc Brendom Street Securities Limited Prestbury Investment Holdings Limited

16. 17.

Extreme Group Limited Spin SPG Limited

John Richard Shaw Garden Flat 4 Camden Terrace London NW1 9BP 1. 2. 3. 4.

City Financial Associates Limited (also company secretary) CFA Capital Group plc (also company secretary) Abinger Investments Limited (also company secretary) Talisman House Limited (also company secretary)

Jane Angela Jales 40 Bradmore Park Road Hammersmith London W6 0DT No current appointments

About the Author David Alexander, an English barrister, was called to the Bar in 1975 at the Inner Temple, having eaten his required number of dinners, listened to Michael Crystal give tutorials at Oxford, and took his law degree flat on his back, totally pissed but very eloquent. He now resides in Borneo with his family.