Coming soon to Southwark: Libor, the director’s cut


Inevitably, one day, there will be a Hollywood film about the rigging of Libor. “In a city where cash is king,” you can almost imagine the trailer voiceover beginning, “one man’s greed dwarfs all others.”

Hang on a minute, though: that might not work because, according to the Serious Fraud Office, there was more than one bloke trying to fiddle with the benchmark interest rate. So, following its successful prosecution of former UBS trader Tom Hayes in August, the SFO is back for a sequel.

This week Southwark crown court will be showing Libor II – the story continues, with a second trial of City folk accused of being involved in manipulating the interbank rate. The trials of Darrell Read, Colin Goodman, Danny Wilkinson (all former employees of Icap), Terry Farr, James Gilmour (both formerly at RP Martin) and Noel Cryan (from Tullett Prebon) are due to begin on Tuesday. Watchers will need to bring a large bag of popcorn, as it’s scheduled to last for between 12 and 14 weeks.

Anyway, as this page is keen to avoid getting any closer to contempt of court, we’ll simply leave you with one of the best lines from trial one, which included Hayes’s view of how to get things done in the City. “Just give the cash desk a Mars bar,” he was once recorded saying, “and they’ll set [Libor] wherever you want.”

Confidence scarce at Glencore

And now in our regular “PR problem to beset Glencore this week” slot, we bring you the purchasing plans of Leonhard Fischer, a non-exec at the commodity trader who will (surely?) be investing his own cash in the embattled company this week.

You’ll recall that Glencore is in crisis after the City didn’t believe boss Ivan Glasenberg’s assessment of the firm’s finances. Shareholders then forced the trader into the humiliating U-turn of unveiling an impromptu plan to cut debts, only for the market to turn its nose up at the detail of that plan too, so the shares got routed again.

This led to last week’s parade of Glencore directors buying shares – in which it only remains for Fischer to cough up. He’s lagging behind even fellow non-exec William Macaulay, whose £1.5m purchase on Friday may fail to convince as a vote of confidence.

Macaulay’s investment firm, First Reserve, has dumped almost £400m of Glencore shares over the past year – which, a Glencore spokesman impatiently explains, is “completely different”. Of course it is. Macaulay is only the chairman and chief executive of First Reserve, so not in a position of any seniority.

Waiting for Tesco to come good

We are approaching the first anniversary of one of the most memorable interventions by a retail analyst of our times: the classic note penned by Sanford C Bernstein analyst Bruno Monteyne after months of Tesco’s share price being in the dumps.

In November 2014 he broke ranks from the gloomy consensus and wrote that there was little Tesco “can do wrong in the next two years that isn’t in [the share] price”, a point he followed up by telling the Times: “The discussion now is whether we’ll merely see Tesco stabilise or whether this is the start of a major recovery.”

Sadly for Monteyne, those final sentiments appeared in the paper on the same day that the supermarket chain unveiled another massive profits warning, which triggered a further dip in the share price. Still, as the City marks the anniversary of his corker (gala dinner, guest speaker Michael Fish, that kind of thing) it seems his reputation has itself stabilised, along with Tesco’s shares, which have maintained their status of being at their lowest level since 2003.

Which brings us to Tesco’s interim results this week, which are expected to unveil an underwhelming package of improving margins but falling same-store sales. Maybe Monteyne was (half) right.

Powered by article was written by Simon Goodley, for on Sunday 4th October 2015 09.00 Europe/ © Guardian News and Media Limited 2010


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