On the Road Again

London, Thursday, 27 April 1995

Robbie sat in his swivel chair feeling elated. He was still thinking about the call he had received from Julia on his private private line two hours ago.

‘Robbie, we’ve… I mean, I’ve… Oh damn, I don’t give a shit, we’ve bloody well done it! I just spoke to the last broker. He’s just bought back all those thousands of tonnes of futures things that we… er, I mean, I sold without having them. Robbie, we sold at an average of $300 a tonne and bought at an average of $200 a tonne, which means that on 50,000 tonnes we’ve made $5 million! Robbie – $5 million! That gives us your drop dead money twice over not to mention the other bits and pieces we’ve managed to tuck away. You can tell Clyde and bloody Clyde together with all your horrible trading clients to go to hell and retire today. Robbie, just think of it… five million…’

Robbie, was silent for a few seconds.

‘Robbie, are you still there?’ demanded Julia, wanting him to share in her excitement.

‘Yes, sweetie, I’m here. J-just thinking about it as you said.’

‘So will you tell Charles to go to hell today?’

‘No, not yet.’

‘You’re crazy. Why not? I don’t think you should stay in that office a moment longer than you need to.’

‘It’s not that simple, love. First of all, when this Indonesian deal is all through I should get a bonus of anything up to half a million quid. I certainly won’t get that if I tell Charles to eff off’ Robbie hesitated and Julia jumped into the conversation with cold scientist’s precision.

‘And secondly?’

Robbie hesitated again. ‘Well, love, it’s not that easy to explain… and I don’t want to get into it over the phone… But there’s another big reason why I’ve got to see this deal through…’

‘Robbie, you’re talking in riddles…’

‘I know, love. But I promise, I won’t stay any longer than I need to. Honest. Trust me.’

They talked for a few minutes more and then Julia rang off, completely fed up that Robbie was putting such a dampener on her enthusiasm.

On a couple of occasions during the past week Robbie had allowed himself a daydream about how to deal with the money they hoped to make on their futures dealing. He had hardly dared to believe the cash would really be theirs. But now it was and he had to act fast. He would have to be extremely careful how he played his cards. Whatever happened he didn’t want people asking any awkward questions. Everyone knew he didn’t come from an affluent background. When he finally quit, the official line would be that a rich relation of Julia’s had just left her a chunk of money. This combined with the bonus he had received from the Indonesian deal gave them enough to live on.

His conscience would just about allow him to live with the fact that he had used Clyde and Clyde’s weight in the market to allow him, or at least Julia under his direction, to take a position that had made them a fortune. At the end of the day, their little flutter was peanuts compared to the total amount being bet by Clyde and Clyde. And anyway, he had made Clyde and Clyde twenty times as much as he had gained on the whole exercise. An investigation from the firm’s compliance officers, however, might not take such a liberal view. No, he would have to be extremely careful.

He had discussed all this at length with Julia last night. Today he would start putting their plan into action. He picked up his private private line, dialled Banque du Rhone, turned his back to the dealing desk and spoke quietly into the phone.

‘Hello, Victor. How’s life?’

On the other end of the line Victor de Gruchy quickly tried to think of all the possible bad reasons for an unsolicited phone call from Robbie. On the spur of the moment he couldn’t think of any, which annoyed him and put him on the defensive.

‘Well, I was all right until I received a call from one Robert Smith, tycoon of the sugar trade. You know how unrequited phone calls from you always make me nervous. Put me out of my misery; what’s up?’

Robbie grinned to himself. ‘I never knew I had such power over bankers. I’ll have to use it more often in future. Anyway, this isn’t a call from a sugar tycoon, whatever one of those is. It’s from a rich husband.’

Victor felt lost. ‘Glad to hear it. I’ve been trying to become one of those for ages; however, my wife always gets in the way!’

‘Well, mine did until her great Aunt Min, or whatever the wonderful woman’s name was, popped off and left Julia a chunk of money. My plan is to put it somewhere safe before she gets stuck into it. Mind you, she would have to try pretty hard to demolish the whole lot.’

‘Congratulations, I never knew Julia was such a catch,’ said Victor, fishing.

Robbie started to tell the story that he and Julia had rehearsed the previous night, hoping it sounded credible.

‘Well, actually…’

God, never use ‘actually’; it’s a dead giveaway, Robbie thought as he heard himself talking.

‘… Neither did I. Nor, for that matter, did she. Its not one of those t-t-total mysteries where the lucky person is phoned up out of the blue by a solicitor to tell them that they have been left millions, but it isn’t far off.’

‘You’re kidding!’

‘Happily not.’

‘So what happened?’ said Victor sounding genuinely interested but noting that Robbie was beginning to stutter. He had known Robbie for years. The stutter only appeared when he was under stress. He guessed that receiving a fortune out of the blue was stressful, But still…

‘Well, great Aunt Min is actually Aunt Shirley who is, or was bless her, Julia’s mother’s elder sister. She married an older man who had made a lot of money in the East after the war as a r-r-rubber broker. Anyway, they never had children and rather adopted Julia when they were home in England during their long holidays.’

Victor groaned. ‘Don’t tell me, let me guess. Hubby pops off a long time ago and Julia, quite innocently, keeps in touch with her rich, widowed aunt who finally falls off the perch leaving her all to Julia.’

‘You’ve h-h-heard it before!’ said Robbie, hoping that the trite story was sufficiently plausible through its simplicity.

‘Lucky bastard,’ said Victor with feeling.

Robbie smiled to himself. Success: Victor was hooked.

‘Go on,’ said Victor, ‘make my day thoroughly miserable. How much was it.’

‘Gross or n-n-net?’ asked Robbie beginning to enjoy himself but wishing to God his stutter would go away.

‘You know, I could really get to dislike you,’ Victor paused. ‘Net, of course. To be honest, I don’t really care that the tax man has put his hand in the till.’

‘In round figures, five million.’

‘Pounds?’

Robbie winced at his stupid mistake. Of course Aunt Shirley would normally leave them a fortune denominated in pounds. He quickly tried to patch over the inconsistency in his story.

‘No, unfortunately n-n-not, it’s in d-d-dollars. The old man got so fed up with the UK when he returned from the East that he shifted all his portfolio into dollars.’

‘Oh well, that’s okay then. I’ll still talk to you. If it had been sterling I’m afraid my jealousy would have been too great!’ said Victor, only half joking. ‘So I guess the good news for me is that you’d like to employ the services of Banque du Rhône to look after your newly acquired fortune and to ensure that Julia doesn’t spend all of her money. By the way, isn’t that a bit unfair? After all, it is her money!’

‘Don’t worry, I’m not hijacking it,’ laughed Robbie. ‘She will happily fill in any forms you want. To be honest, I think she’s more worried about keeping the cash than I am.’

‘Honest woman!’

‘Yes, and honest cash too,’ said Robbie seizing the opportunity to ram home the point. ‘I would guess that the origins of the money are slightly more straightforward than some of the cash you look after.’

‘No comment,’ said Victor sounding stern. ‘Why don’t the two of you pop over here for a day soon to sign a few bits of paper? In the meantime, I’ll set up an account for you so we can look after the cash as and when you get your hands on it. We’ll look after it carefully. Along with all the other money from quite legitimate sources that we care for!’

Robbie winced as the banker delivered his last line, signalling that in his heart of hearts he didn’t believe Robbie’s story. However, Victor had enough background on file to justify keeping the deposit, which was all he was required to do. There was no need to be more royalist than the King.

*

Robbie sat back in his chair, stared at St. Paul’s and wondered whether he could trust de Gruchy. Or indeed whether he had any other option but to trust him. Bloody bankers. They were a nuisance when you wanted to borrow money and almost as much of a pain when you wanted to deposit it. The cut-throat world of sugar trading was far more straightforward by comparison! Robbie was jolted out of his daydreaming by his private line ringing. James was on the other end sounding unusually agitated.

‘Robbie, thank goodness I got to you.’

Robbie tensed. Perhaps sugar trading wasn’t so easy.

James, what’s happened?’

‘It’s that bastard Hartono, he’s reneging on the contract.’

‘Wha’d’ya mean?’

‘Exactly what I said. He’s ratting on the bloody contract.’

‘He can’t – he represents the Indonesian Government. Governments don’t default just like that.’

‘But that’s just it,’ said James sounding beside himself with anguish. ‘As far as Hartono is concerned, he says he’s just an agent of the Indonesians. And the Indonesian Government is pretty unimpressed about paying $350 a tonne for their sugar when the market price is one hundred and fifty. They say that Hartono had no right to bind them to a contract of such size and at such a price without their specific instruction or agreement. Furthermore I’m bloody sure they’d swear blind that Hartono isn’t their official agent as such – which is probably quite true as far as the letter of the law is concerned.’

‘James, what do you mean…’ snapped Robbie.

‘It’s quite simple, Robbie. When Clyde and Clyde sign a contract with Hartono that’s just what it is – a contract with Hartono. There is never any mention of the Indonesian Government.’

‘But everyone knows he’s the s-s-same thing as the Indonesian Government. He’s been representing them for years. We’ve done millions and m-m-millions of dollars worth of business with them through him…’

‘I realise that, Robbie. But that’s not the point…’

‘Well, what the hell is?’

‘The point is that, like it or not, when Clyde and Clyde sign a contract with Hartono, you’re dealing with him as an individual, not the Indonesian Government. If the Government choose to buy from him, that’s their business. Same as if they choose not to buy from him. Which is what’s happening now. Catch twenty-two.’

‘Like bloody hell it is,’ snorted Robbie. ‘They’ve been doing bb-business this way for ages. They can’t just change the r-r-rules when it suits them.’

‘Well…’ said James nervously. ‘I know what you mean but I think you’re viewing the problem from the Western end of the telescope. From their point of view, I think they would say that it’s unrealistic to expect their Government to pay millions of dollars more for sugar than they would have to pay if they bought at today’s price. And the fact that Hartono is in the middle gives them the almost perfect excuse for not going ahead with the old contract. In fact, from their point of view there isn’t an old contract. The only contract that exists is between you guys and Hartono. Finito.’

Robbie exhaled slowly and tried to think. He must take it slowly. No point in becoming over-emotional.

‘James, do you have any evidence on file linking the Indonesian Government with H-H-Hartono. Anything at all?’

‘I think so… as far as previous deals are concerned.’ James went quiet for a little and then continued ‘But then, I’m not so sure. You know how it’s always been before. Hartono has always performed. We know he’s been paid by the Indonesian Government. But I suppose we’ve never had any hard evidence where the money’s actually come from. Neither do we have any agreement between him and the Government. I mean, it never seemed necessary…’

‘Jesus, James…’

James continued, ‘And what’s more, even if we had asked for one we wouldn’t have got it. Everyone knows how the system works, how Hartono fits in, and that he’s the conduit we have to go through. That’s it. Ask no questions.’

‘But tell a shitload of l-1-lies.’

‘I guess so.’

Robbie closed his eyes. This was the scenario that the auditors always pointed out and against which he had always argued so vehemently. Of course, on paper this was the risk. But it was only a risk because they as little bureaucrats didn’t understand how the business worked. Now if they would kindly get out of his hair and let him continue running his business he could go on making millions for the company like he had always done… That bastard Hartono… now perhaps the little bureaucrats would have a chance to get their own back!

Robbie reviewed the situation quickly. It really looked as though they could be losing their buyer. Or, at least, at the price previously agreed. As far as James knew, this left Clyde and Clyde exposed to a loss of one hundred million dollars. They would have to resell one million tonnes of sugar for a price of $150. Sugar that they had finally bought from Somboon at the price of $250 that he had negotiated in Bangkok earlier this week. No wonder James was wetting himself. But what James didn’t know, and must never know, was that Clyde and Clyde was already sitting on a cool $100 million got from riding the roller coaster. The last thing Robbie wanted was to lose this money, and along with it his bonus. On the other hand, it did mean that the little games being played by the Indonesians would at worst have no impact at all on Clyde and Clyde. If they really defaulted, there would be a lot of lost potential profit – but that was all in theory. In practice, he was buggered if he was going to let the Indos off the hook so easily. It was just too simple for them. Now was the time for James to start earning his commission. Robbie spoke slowly.

‘James, you know what this could mean?’

James thought carefully how he should answer what on the face of it was a simple question, but in fact opened a Pandora’s box of repercussions. He decided to go for the straightforward approach. ‘Yes, one hell of a big loss.’

‘Not just that, my friend. Clyde and Clyde goes bust, I l-l-lose my job and my bonus and you don’t get a cent of commission. Somboon loses his sale and the profit, which he fought for so much in B-B-Bangkok. The Chinese lose their rake-off for putting the deal through their shady Hong Kong Company. As for you, in addition to losing your commission from us, you also lose whatever share of Somboon’s profit you have negotiated behind the scenes…’

Robbie paused. Time to get tough. He continued, ‘Together with whatever kickbacks you were supposed to get from the Chinese and H-H-Hartono. Not only that, but you might want to consider increasing your life insurance premiums as far as the Chinese are concerned. They seem to have a major sense of humour failure as far as losing m-m-money is concerned.’

James started to protest and then decided not to. Now wasn’t the time to protect his reputation. In any event, bloody Robbie was absolutely right. This guy was more Chinese than a Chinese. All James was interested in was somehow keeping the deal afloat, at least for the first shipment.

‘Look, Robbie, I know the situation looks bad but I don’t think it helps to get personal.’

Having made his position clear, Robbie could afford to back off. ‘No, James, you’re right. Sorry. But I think you get the p-p-point. At the end of the day, the only way I can see of salvaging any of this is to negotiate something with Somboon and the Indonesians. We can and will make all sorts of aggressive noises towards the bastards about d-d-defaulting, but the bottom line is that I don’t think we have much of a leg to s-s-stand on. Our only hope is to come up with a reworked deal that gives them enough of a price reduction to make them feel they are not getting ripped off, and at the same time make them able to honour their purchase contract.’

‘Yes, but that price will have to be pretty near today’s market,’ butted in James. He knew what Robbie was driving at but didn’t want him to make it sound too easy.

‘Look, James, basically the bottom line for Clyde and Clyde has to be performance at a price that allows us to pay Somboon and receive enough money from H-H-Hartono to more or less cover what we owe. I’m sure we can put our hands in our pockets a little bit. But not to the tune of $100 million. You are really going to have to earn your commission talking to both Somboon and the Indonesians. The Chinese won’t care what price the contracts are fixed at – they are only getting a fixed commission anyway.’

Robbie paused, waiting for James to respond.

Finally James said quietly, ‘Do you really think it can still work?’

‘Yes, provided we all give a bit. And that means you too, James. Just think of all the commissions you and your father have earned from our d-d-deals over the years. Now it’s pay day. As far as I can see, for the moment the main problem isn’t going to be any of Somboon, the Indonesians or the Chinese.’

‘What do you mean?’ asked James, truly perplexed.

‘It’s going to be the Swiss. Imagine what Banque du Rhône is going to say when they discover that because of the Indonesians falling out of the picture, they’ve just lost most of their collateral! They’ve opened l-l-letters of credit to buy sugar for $250 a tonne that is now worth only one hundred and fifty. Shit!’

‘Oh God. I see what you mean. What can you do about that?’

‘I honestly don’t know,’ lied Robbie. ‘But what I do know is that I had better t-t-talk to them before they find out from the market what’s going on. These guys have ears everywhere. In the meantime, you’d better start working on your dear cousin Somboon to explain the facts of l-1-life. I can tell you for nothing that if Clyde and Clyde goes bust then Banque du Rhône is going to go over any documents that Somboon submits to them in order to claim under the letters of credit with the finest of fine-toothed combs. The chances of him getting any money out of them, letter of credit or no, is probably less than zero. In this game no one wins but the b-b-bank.’

‘Same as usual,’ grumbled James. ‘Give me a couple of hours to work on Somboon and I will get back to you. Wish me luck.’

‘As always. Just think of your commissions. That should help.’ The line went dead and Robbie started to plan the conversation he was about to have with Victor.

*

‘Robbie – twice in one day. Don’t tell me bad health and good luck is beginning to run in the family!’

‘Victor this is s-s-serious,’ said Robbie. It was important that he kept the banker where he wanted him.

‘I told you I didn’t like your uninvited calls. What’s the matter?’

‘The Indonesians are r-r-reneging. They say the contract never existed.’

‘And does it?’

‘Sort of.’

‘Robbie, stop jerking me about. Is there a bloody contract or not? You swore blind to me over the phone the other day from Bangkok that the deal was structured like all the others and that you had sold to the Indonesians through Hartono as normal. Gordon sent me copies of all the documents.’

‘We did sell to Hartono. It’s just that Hartono has decided not to honour his contract. He’s arguing that he didn’t have the right to s-s-sign a contract on behalf of the Indonesian Government in the first place. So all we have is a contract that begins and ends with H-H-Hartono himself. No Government backing. And there is no bloody way Hartono can or will perform if the Government isn’t in the picture.’

‘Bastards.’

‘Agreed. But at the end of the day we d-d-don’t have anything in writing direct with the Indonesian Government. If they or Hartono want to shaft us they can.’

‘And are!’ said de Gruchy angrily. ‘God, what a fucking mess this could develop into. You realise that I virtually forced the board to approve opening your letters of credit based on the backing of the Indonesian Government purchase. They will go completely bloody crazy if they discover that I was having them on, albeit inadvertently. Holy shit! I’m dead meat! Christ almighty…’

Robbie was taken aback at the way Victor was losing control. This was completely out of character. What was the matter with him?

‘Look, Victor, it needn’t be as bad as all that.’

‘Are you completely bloody mad? What could make it better?’

‘Cash collateral.’

‘Robbie, give me a break. Your dubious Aunt Min left $5 million. Here we are talking about $250 millions. Unless you have fifty more Aunt Mins lurking around, or are preparing to tell me the truth about where your money really came from, I don’t see it.’

‘Victor, keep Aunt Min out of this,’ said Robbie sharply. ‘That’s my private business and has absolutely nothing to do with Clyde and Clyde.’

‘If you say so… Anyway, Robbie, you’re quite right. Sorry. I’m getting a bit worked up…’ Victor breathed deeply and tried to get a grip on himself. It was getting well past the time for his next fix.

‘It’s just that… it’s the thought of going to the board with news of misleading them about $250 million.’

Robbie was becoming more and more puzzled by de Gruchy’s erratic behaviour. He was almost glad to be able to let the poor guy off the hook.

‘Victor, you won’t have to. But this has to stay between you, me and the board. Is that clearly understood.’

‘Yes, yes, of course. What are you talking about?’

‘Okay, you remember I told you we were making out like bandits by taking a position against Somboon?’

‘Yes…’

‘Well, we’ve closed out and made $100 million.’

‘My God.’

‘Obviously Somboon doesn’t know, otherwise he would blow a fuse.’

‘I can imagine!’

‘Well, that money is sitting in cash and can be moved to your bank on the strict understanding that it backs up the letters of credit. Since the market price of the sugar is currently about $150 million, this, plus the cash deposit of one hundred, gives you dollar-for-dollar cover for your purchase commitments of $250 million. Something even your credit committee should find attractive.’

It was some time before Victor de Gruchy spoke. His voice was thick with emotion. ‘Robbie, I… I don’t know why you’re doing this… but thanks. You know without it I would be for the high jump.’

‘Let’s just say we’re friends. Remember it’s just between us girls.’

As Robbie hung up he heaved a sigh of relief. This deal had to go through. More than just his bonus depended on it.

*

The line between Bangkok and Singapore sizzled, as James explained to Somboon why he shouldn’t have to worry about accepting a much lower price than originally agreed. To James’ amazement, Somboon finally accepted the logic regarding the money they would make from the first shipment and therefore the importance of preserving the structure of the whole deal. Why had he changed his mind all of a sudden? This was most unlike his pig-headed cousin. Anyway, changed it he had.

*

‘Robbie, I’m still not really sure why he agreed to take a cut given all the fuss he was making the other night. In fact, he hasn’t fully agreed yet. He wants to talk to you first…’

I bet he does, thought Robbie, And I bet I know why he agreed to the cut.

‘You mean to hear me crawl?’ Robbie asked sharply.

‘Don’t put it like that. You are asking him to give up a profit of several million dollars in order to keep the deal afloat and to prevent Clyde and Clyde going bust. The least you could do is to ask him personally.’

‘I suppose you’re right. How much is he prepared to come down?’

‘He wants each party to lose equally. If we assume that there’s a difference of about $200 a tonne between the price the Indos originally bought at…’

‘It’s not what they originally bought at,’ interrupted Robbie, ‘it’s the real price they bought at – before they bloody well defaulted. You’re beginning to sound like them!’

‘Look, Robbie, it’s no good getting on your Western high horse. The reality of the situation is that they aren’t going to back up the original deal – whichever way you bloody well want to look at it.’

Robbie tensed. ‘I know, I know. It’s just that it makes me bloody well puke to think how easily they just default and then we all run around like idiots trying to make things nice for them. Bastards.’

‘Reality of business in Asia,’ said James coldly. ‘You should be happy we aren’t trying to deal with the Vietnamese! Then you’d really find out what a contract wasn’t worth.’

‘Don’t even think about it, James.’

‘Right, so the loss between the first price and today’s market is about $200. Split three ways this comes to about $66 a tonne each.’

‘It should be four ways. What about your share?’

‘Don’t worry… I’m having to subsidise Somboon in this.’

‘Hmmmm… What do the bloody Indonesians say?’

‘I’ve had a word with Hartono. I reckon he’ll put his hand in his pocket – or at least in the Government’s – for his share. If they can get a reduction of $120 million they will reinstate the contract. That means that you will have to cough up the same. What do you think?’

Robbie went silent. That would reduce their extra roller coaster gain to less than fifty million. Still not a bad haul in the circumstances. Plus, if the deal stayed alive, they would still make their original profit from the deal itself – that was another fifty million.’

Robbie spoke thoughtfully. ‘This whole thing really makes me sick. It’s not just what I think, the board will have to agree. They’ll go berserk… I can’t promise anything, but I suppose it will have to be acceptable…’

‘Right. It’s better than going bust.’

‘That’s the argument I shall use to the board,’ said Robbie flatly. I just don’t know. Anyway, I’ve sorted the bank out. Don’t ask me how, but I wouldn’t approach them for a loan for the next few days.’

‘Robbie, you’re a genius.’

Both men went quiet. James spoke first.

‘I guess that means that the deal is probably still on the road?’

‘Yup. But I don’t want another day like today!’ He hung up.

Robbie closed his eyes, leaned back in his chair and breathed deeply. On the road, but where to? He thought to himself as he prepared to make one final call on his private private line before leaving for home. It was time for him to talk to Slade.