Due Diligence: A Thriller (32 page)

“I was just about to go,” said Libby. “I didn’t know whether to call again.”

“No, thank you,” said Rob. He tried to sound natural, in case the others were listening, but he felt wooden.

“I didn’t find much, which is why I didn’t e-mail.”

“Yes,” said Rob.

“Rob, can’t you talk?” asked Libby.

“Not really.”

“Shall I just tell you what I found?”

“That would be a good idea.”

“Okay,” said Libby. “The only Grogon I could find is some Hungarian company. I believe it’s connected in some way with a company called Louisiana Light here in the States. Do you know that company?”

“Go on,” said Rob.

“Well, there does appear to be something that looks from the description like a prospectus, but I think it’s in Hungarian. It’s from a few years back. Took a lot of digging to find it. I couldn’t find any accounts, though. Would the prospectus be of any use to you? I could try to get it, but I couldn’t guarantee it.”

“If you can,” said Rob. He glanced around at Sammy and Cynthia. They appeared engrossed in their work. “What about the other one?”

“I found a company registration by that name out of Delaware. Nothing else, I’m afraid, just the bare minimum. I don’t think it’ll be of much help. It’s online, so I could e-mail it if you like.” Libby laughed. “At least it’s in English.”

“That would be good.”

“You want me to e-mail it?”

“Yes.”

“Okay, I’ll do that now.”

“Thanks,” said Rob.

“That’s it?”

“Yes. Thanks.”

Rob put the phone down. The others were still working.

The e-mail hit his in-box two minutes later. He didn’t dare open it there in the war room. When he left that night he took his laptop with him.

He got in a cab and gave the driver Emmy’s address. As the cab started moving, he opened the laptop. He had left it on, but for some reason now it shut itself down. Rob fired it up again. He watched it as the cab took him uptown, impatiently waiting for it to start.

Finally he was able to open the document Libby had sent him. He scanned it, all concentration, oblivious to the city going past outside the cab window. It was as uninformative as Libby had intimated. Just a basic document of registration. Date, place, list of directors.

He read the names of the directors.

He stared. No, thought Rob. That would be too much of a coincidence.

Catherine Gelb. Gelb? That was Leopard’s CFO’s name, wasn’t it?

“Hey, mister,” said the cabdriver. “Here we are.”

*   *   *

Emmy opened the door. “Hey, baby,” she said, and put her arms around him.

Rob gave her a kiss. “I just need a minute, Emmy. Do you mind?”

He sat down and pulled out his computer. Working quickly at the keyboard, he opened the file for Louisiana Light’s annual report, then went to the directors page. Lyall Gelb
was
the CFO. He opened the document Libby had sent him on ExPar. Catherine Gelb. There was the name, one of the ExPar directors. That had to be Lyall Gelb’s wife. His wife? You don’t have your wife on the board of a company unless for some reason you want to avoid having genuinely independent directors.

He remembered Murdoch’s voice in the data room. Grogon and ExPar. That was where the bodies were buried. Murdoch would know. He was on the Louisiana Light board, the same as Lyall Gelb.

Rob still couldn’t work out why Murdoch had chosen him, but that didn’t matter. He had.

Rob read the document on ExPar again, going through it carefully, hoping to find something he had missed. There was so little in it, so little to go on. He studied every word.

He wasn’t even aware of Emmy’s voice the first time she spoke.

“I said, would you like me to leave?”

Now Rob looked up. “Sorry, Em. What was that?”

Emmy was standing where he had left her, arms folded. “Do you want me to leave? I don’t want to get in your way. Maybe I’ll just go to bed so you can get on with your work. Help yourself to food, by the way.”

Rob saw the way the table was set. Candles glowed. A bottle of wine stood open. He had been so caught up with his own thoughts, he hadn’t noticed it before. Emmy had gone to some trouble.

“Emmy, don’t be like that.”

“Like what, Rob?”

“There’s just some stuff I’m trying to work out.”

“That’s what I said. Go ahead. I’ll get out of your way. I’ll go to bed. Actually, you can let yourself out.”

“I don’t want to let myself out.”

“Then what do you want, Rob?” She stared at him, eyes narrowed in anger. “You go off to London, you come back, you’re too tired to see me last night—which is okay, I understand—then tonight you come over, but you’ve got stuff you’re trying to work out, so maybe, actually, it would just be better if I got out of your way and you can deal with your stuff and that’s just great.”

“Emmy, don’t.” He got up and tried to take her hand.

She pulled away.

“What am I, Rob? Since you do happen to have a moment right now, why don’t we just look at that? What am I, huh? Your girlfriend? Your partner? Maybe I’m just someone you fuck every so often. When you can find the time. When we happen to be in the same city. When you don’t have anything better to do. When there’s no
stuff
you have to work out.”

“Emmy…”

“I missed you, you know, over the last few days.”

“I missed you, too.”

“I was looking forward to seeing you.”

“I was, too.”

“Were you? I don’t think you were. Is this a chore for you, Rob? Tell me if it’s a chore because I’d
hate
to think you have to do something you don’t want to do.”

“Emmy, Jesus, it’s not a chore. How can you—”

“Then what is it, huh? What is it exactly you planned for us when you came back from Cornell? You gonna live in your own apartment forever? You at your place, me at mine? Is that how it is, Rob? Is that the kind of relationship you want? How long does it go on like that? How long do you expect me to wait? Another year? Two years? Five?”

Oh God, thought Rob. Oh God, oh God. Not now. Please, not now.

“Well, Rob?”

“Emmy, I can’t deal with this now. I’ve got too much on my mind.”

“So have I!” yelled Emmy, and she stormed into the bedroom and slammed the door with a bang that sent a tremor through the wine and the food and the candles she had prepared so carefully before Rob arrived.

33

“Emmy,” he said.

She was lying on the bed in the dark. Curled up. Facing away from the door.

“Emmy.”

“Leave me alone.”

He went farther into the bedroom.

“Emmy, don’t do this. I feel terrible.”

“How do you think I feel?”

“I was preoccupied. I’m sorry. I didn’t think.”

There was silence.

“Emmy, come on. I need you. You know I do.”

“Do I? I’m not sure about that anymore, Rob.”

“Emmy.” He sat down beside her on the edge of the bed. He reached out and touched her hair. Her long, dark, lovely hair.

“Don’t,” she said.
“Don’t!”

“Okay.” He drew back his hand. “Will you at least listen to me?”

Silence.

“Will you?” said Rob.

Still silence.

“There’s some stuff I’ve discovered—I mean, stuff I’ve been told. That’s what I was trying to figure out.”

“You don’t need to tell me. It’s none of my business. You’ve got a right to do whatever you want. You want to look at your computer, that’s fine.”

“Please, Emmy. Don’t.”

Suddenly she turned to him. Her eyes blazed with anger. “I don’t need anything from you, Rob! Understand me? Don’t do me any favors. I don’t need your protection, I don’t need your help. If you don’t want to be here, go! Who’s stopping you?”

“I do want to be here.”

“Then behave like you do!”

Rob nodded. “You’re right. I’m sorry.”

Emmy stared at him. “I’m angry. Do you understand? I feel like I have to pretend nothing matters to me, where you live, what’s happening with us, anything. And it does matter to me. I can’t pretend anymore. I just can’t do it. We need to deal with this!”

“We will. I promise.”

“Now.”

“I can’t. I just … not tonight, Emmy. Please. I’m too tired. I can’t do it. I’ve got too much to deal with.”

Emmy looked at him. She shook her head disbelievingly.

“Please, Emmy. We will. I promise we will.”

“When?”

“As soon as I can.”

“That’s a copout. That’s what guys say, Rob. It’s a copout.”

“It isn’t. I swear.”

She continued to watch him. Then she turned away again.

Rob sat on the bed. She had a right to be angry, he knew. He had evaded the question. But he just couldn’t deal with it now. He didn’t know when he would be able to deal with it—maybe when this thing with Louisiana Light was over. But he couldn’t do it now.

He waited, hoping that her anger would lessen.

“Can I tell you about it?” he said eventually.

Emmy didn’t reply.

“What I found out in London.”

There was silence.

“You know my client, Louisiana Light—”

“You don’t need to tell me their name,” said Emmy.

“I want to.”

“Why? Why now? Why not before? You don’t tell me anything, Rob. I don’t know what to expect from you anymore.”

But he did want to tell her. He wanted her to know.

“Emmy, will you listen to me? Please. I need you to listen.”

There was silence for a moment. Then she turned around. “We’ll deal with it? You promise?”

“I promise.”

“And not like in another ten years?”

“Not in another ten years. Five max.”

Emmy stared at him coldly. It wasn’t the time for jokes.

“Soon, Emmy. Soon. I promise.”

She nodded. “Okay. I just can’t pretend anymore. Okay? You understand that?”

Rob nodded.

“All right.” She paused. “So, what is it, this thing you found out in London?”

“This client of mine, Louisiana Light—well, we call them the Leopard.”

“The what?”

Rob shrugged. “It’s a code. We’re Leopard, they’re Buffalo.”

“You guys…” Emmy shook her head. “What kind of a world do you live in?”

“Yeah, I know. Remind me to introduce you to Phil Menendez one day. Or should I say, the Shark? Anyway, the Leopard, I think it’s been doing some bad things.”

“You told me that in the park,” said Emmy bluntly.

“No, now I’m pretty sure.”

“Because of something that happened in London?”

Rob nodded. He told her about the data room, about Stan Murdoch, about what he had said. The way he had said it.

Emmy listened. “What do you think they’ve been doing?”

“Whatever they could. Booking revenues they haven’t actually got yet, or one-offs as repeatables. Claiming operating expenses as capital expenses. Hiding debt.” Rob shrugged. “Those are just the things a novice like me could think up. There’s any number of things you could do if you know what you’re doing. It can be unbelievably complex, Em. I don’t know enough about this stuff even to tell you what I don’t know.”

“And you think these two companies you mentioned are related to all that?”

“I think so. I’m sure they are. You need to have entities, companies, to do this stuff.”

Emmy frowned. “I don’t understand. If they’re in such trouble, what’s this deal about? How can they buy another company?”

“They have to. That’s their only way out. Buffalo has a strong balance sheet, so—” Rob stopped, seeing Emmy’s uncomprehending look. “What I mean is, Buffalo’s hardly got any debt. That means when you put the two companies together, Leopard’s debt doesn’t look so out of proportion, even with the extra debt they have to take on to actually buy them. And if they’re expecting more debt to come back from wherever they’ve hidden it, they need the strength of Buffalo’s balance sheet to absorb it. If they don’t, they could go bankrupt.”

Emmy looked at him doubtfully.

“Seriously, Em. The banks get skittish, start to call in their loans … they’re finished. It can happen overnight. It can happen in a matter of days.”

“So, they’re not a solid company? They’re not making a profit?”

“No. It looks like it, but the profit isn’t really there. It’s all on paper. They only look solid because people are prepared to keep lending them money. And people are only prepared to keep lending them money because they’ve lied about how much money they’ve already borrowed and how much they earn. They’ve used a bunch of tricks to hide the truth. I’m guessing a little here, but if that’s true, and the banks realize it, they’ll be calling in their loans faster than you can imagine. That’ll be it. Curtains. Unless, of course, the Leopard can find another company that has hardly any debt on its balance sheet and manage to get hold of it.”

“Like Buffalo?”

“Exactly. They can go back to their banks and renegotiate. And here’s the other thing. They do a deal, and it’s like no one can see exactly what’s going on. A big deal like this, it’s hard to compare the companies before and after. Say the Leopard’s income is about to go south, they’re about to book a big bunch of losses—they do this deal and suddenly no one can see it anymore because it’s mixed in with the Buffalo’s numbers. Mike Wilson can say, you know what? Our operations are still fine, but the Buffalo’s haven’t been going as good as we expected. And the market won’t know. You don’t have to be that specific in the filings, you don’t necessarily have to give that much detail in the breakdown. So no one will know from the numbers where the problems lie.”

“So this deal’s like camouflage? Like a diversion from the problems?”

“It’s a solution and a diversion at the same time. It acts as a diversion to buy time for the solution to work.”

“Then why would Buffalo want to do it?”

“Because they don’t know.”

“But you know.”

Rob thought about that. He tried to see it from the BritEnergy perspective. They’d know about the weakness of Leopard’s balance sheet, but nothing else. They wouldn’t have seen the red flags. They wouldn’t know Mike Wilson had never used Dyson Whitney before. Or that he was paying forty bips. Or that he had offered a price above the top of the valuation he had received. Or that Stan Murdoch had said to look into Grogon and ExPar. Especially that Stan Murdoch had said to look into Grogon and ExPar.