CITY AND SUBURBAN
It takes a golden key to escape from City bondage
CHRISTOPHER FILDES
Two leading City banks have gone to the lawyers to settle their differences. What is under test is the strength of that characteristically Citified instrument of bondage, the golden handcuff. It fits on the wrists of stockbrokers who sell their firms. The banks and other outsiders who are now allowed into the Stock Exchange are buying up almost all of the biggest firms, and face a familiar difficulty: how can you buy a business whose stock in trade goes up and down in the lift every day? How to avoid being left with an empty office, a City lease, a huge telephone bill, and the distant prospect of a number of rich ex- stockbrokers living on their newly bought farms? Hence the golden handcuff. The buyer makes it a term of the deal that a partner who sells his share in his firm will take a salary and stay on. But can these handcuffs hold? Contracts of employment tend in practice to be one-sided arrange- ments, protecting the employee, but diffi- cult to enforce against him. You can lead him to the City but you can't stop him drinking. Besides, the courts tend to look beadily at restrictions on the right to move from job to job: contracts in restraint of trade, they can be called. Now Lloyds Bank, on one side of the argument, and Hill Samuel, on the other, are effectively Putting all this to the test. Hill Samuel bought a 29.9 per cent stake in stockbrok- ers Wood Mackenzie, with agreement to raise that to ltk per cent. Among the Partners who sold was Robert Openshaw, Who has been looking after Wood Macken- zie's interests in financial futures (spot his team on the market floor — they all wear Mackenzie tartan jackets). Now Mr Open- shaw proves to be Lloyds Bank's choice to run its new business which will make a market in government stock. Can the handcuff hold? The banks are saying no- thing, but the best market information is that Hill Samuel, not so much desolate as nettled, has taken counsel's opinion. So, apparently, has Lloyds in its turn, and it is hoped that the two learned friends, be- tween them, can come to terms. Lloyds would presumably make an agreed pay- ment to Hill Samuel. There would be what the Civil Service calls a de-briefing period for Mr Openshaw — a suitable time between leaving one post and taking up the Other. And if Mr Openshaw were minded to take some of his team with him, that, I.00, would be the subject of agreement. So It looks as though the golden handcuff can be opened — but that it takes a golden key.
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