Trading Reality (11 page)

‘It’s a possible line of inquiry,’ said Donaldson. ‘But you can’t tell us anything about him?’

I shook my head. I wanted to help. I wished I had listened more closely when Richard had spoken about BOWL. But I hadn’t. It had seemed so far away then. So remote from my everyday life.

‘We’ve followed up your brother’s suspicions about manipulation of FairSystems’ shares,’ Donaldson continued. ‘The Stock Exchange are looking into it now, and they are consulting with the authorities in America.’

‘Oh really? Have they found anything?’

‘They’re still gathering data. But to go back to the evening when Richard Fairfax asked you to look into FairSystems’ share price. Did you?’

‘Yes. Or rather Karen did.’

‘Karen Chilcott. Your girlfriend?’

‘Yes.’

‘And she discovered nothing?’

‘That’s right. FairSystems is such a small stock that it’s only really traded by one firm, Wagner Phillips. When she checked with a friend of hers there, they didn’t know anything. It seemed to us that there was nothing funny going on.’

‘I see,’ said Donaldson. ‘Have you traded in FairSystems shares yourself?’

‘No. At least not since the company went public.’

‘You haven’t sold any?’

‘I’m not allowed to. Not for two years.’

‘Do you know anyone else who has been involved in the shares?’

‘No. Just Karen. And she operates under the same restrictions as me.’

‘And does she have any contacts who are involved in FairSystems shares?’

‘Of course not!’

‘Calm down, Mr Fairfax. Just answer the questions.’

‘Let me save you some time,’ I said, successfully controlling my temper. ‘I had no inside information about FairSystems at all. I know virtually nothing about the company. Neither does Karen. In fact, she knows even less than me. So we would have had nothing to tell anyone, even if we had wanted to. In any case, why should we? The shares went down, not up. What would be the point of getting anyone to buy them? If we’d told someone to buy, they’d have lost money.’

I looked from Donaldson to Kerr, and back to Donaldson. His grey eyes held mine. I knew what I said made sense, and so, I could see, did he.

‘All right, Mr Fairfax. But we may have to make some more inquiries.’

I relaxed. He believed me. And I did want to help. In a way I was pleased he was asking difficult questions. ‘That’s fine with me,’ I replied.

‘Thanks for the tea,’ he said, getting up to leave. ‘By the way, make sure you don’t touch anything in the boathouse. There are a lot of technical papers there that we want to go through with Rachel Walker later this week.’

‘Fine,’ I said, and saw them out. The last thing I wanted to do was go back in there, anyway.

I drove fast to Glenrothes. The more I thought about it, the less likely it seemed to me that Donaldson’s suspicions of insider trading would lead anywhere. To be an insider trader you need to have inside information. I had had none, until perhaps Richard had hinted that FairSystems was running out of money again. But that had been only a few days before he’d been killed. Karen had known nothing either.

I was still a little nervous. In the City, even a hint that you have been involved in something dodgy doesn’t do your reputation any good. I hoped Donaldson wouldn’t ask too many questions.

I thought about strange movements in share prices. From what little I knew, they were usually moves up, just before a takeover was announced, as people with inside knowledge bought shares in anticipation of the announcement. But FairSystems’ shares had moved down not up. Despite Richard’s theories, I saw nothing mysterious about that.

I arrived at Glenrothes just before lunch. The town sprawled beneath three low hills. It was ringed with industrial estates, each containing blocks of rectangular, windowless metal factories. Grey cloud hung low overhead. There was very little movement, noise or smoke. Whatever machinery there was, was humming away quietly to itself under those metal cocoons.

Richard had told me a little of Glenrothes’ history. It had been set up as a New Town in the 1940s and had grown with miners flocking from the west of Scotland to exploit the giant Rothes coal pit. This had turned out to be unworkable, and had been closed down after only a few years. Since then the town had enthusiastically embraced the concept of Scotland’s ‘Silicon Glen’, and had managed to attract large sums of foreign investment, much of it in high-technology industries. The biggest employer was the American company, Hughes Electronics.

FairSystems’ factory was in the midst of an industrial estate just like all the others. When a big local computer company had gone bust three years earlier, Richard had been able to rent its facility cheaply from the local development corporation.

It was a large, rectangular grey metal box, bigger than most of those surrounding it. The company logo was placed at various points round the exterior, an orange rising sun with the word
FairSystems
running across it. The only windows were clustered round the front of the building.

I pulled into the car park, and walked across the tarmac past a newly planted garden in front of the factory. Scrawny young trees poked up from scantily planted flowerbeds. On two sides were similar featureless factories, and on the other was some wasteland stretching towards a small hill grazed by cows.

Inside, the reception area was brightly decorated. The receptionist had very short red hair, and was wearing a simple black dress. I saw a chunky copy of
Anna Karenina
lying opened on the chair next to her behind the desk. When I said my name she gave me a sympathetic smile. She asked me to take a seat and wait for Mr Sorenson.

So I sat down and waited. I was curious to see the factory. It had played such an important part in Richard’s life, and probably ably his death.

The receptionist was staring out of the doorway, looking bored.

‘Carry on with your book,’ I said. ‘I don’t mind.’

She smiled guiltily, and picked it up. She read a paragraph or two, and then looked towards me.

‘Mr Fairfax,’ she began nervously.

‘Yes?’

‘I’m really sorry about your brother’s death.’

I smiled weakly.

‘So are all of us here,’ she went on. ‘He was a good man. We all liked him.’

I was getting used to receiving condolences. But her sincerity was obvious, and suddenly touching. My eyes stung, and I swallowed.

‘Thanks,’ I said simply.

She smiled quickly and went back to her book.

Two minutes later Sorenson rushed into the reception area, followed by a man I didn’t know. ‘Mark. I’m glad you could make it. Good day yesterday, wasn’t it? Boy, that’s a great course.’ He held out his hand and I shook it. ‘I’ll be tied up for most of the day, today, so I won’t be able to show you round. But that’s probably a good thing. So David, here, and Rachel will give you the tour.’

David Baker held out his hand. ‘Welcome to FairSystems, Mark.’ His accent was a strange combination of mild Scottish with an American intonation. He was in his early thirties, medium height, thin, with his dark hair plastered back over his head with oil. His small eyes peered at me down a long, pointed nose. He wore an Italian-looking suit, and brown shoes. A Hermes tie was held in place with a silver tie pin. Red braces peeked out beneath his jacket. He looked out of place in this grey Scottish factory. But then I probably looked that way, too, in my City suit.

‘I’m really sorry about your brother. He was a great friend of mine. It was a terrible shock. No one here can quite believe it.’

‘Thank you,’ I said, politely.

There was an awkward pause. I was getting used to these, too.

‘Right, well, come upstairs,’ David said. ‘I thought you might like to have a chat with Rachel Walker and myself first. Then I can show you around the factory, and take you on to Willie Duncan, our finance director.’

‘I’ll catch you later,’ said Sorenson. ‘I’ll be in Richard’s office if you need me.’

We moved out of the daylight, and into the factory. We were in a long corridor. There was glass on both sides, and through it I could see a jumble of plastic and electronics, with men in bright blue overalls moving about. Posters of VR systems covered the walls; the orange FairSystems logo was much in evidence. A radio played pop music somewhere in the distance. We walked up some stairs to a similar corridor, but this one was lined with more familiar office spaces. The carpets were light grey, and most of the furniture was black, although there were the odd flashes of blue or orange plastic. It was a world turned inside out. The external walls had no windows; all the internal walls were glass.

David showed me into what looked like some kind of conference room. There was a large screen against one wall, and a computer with a headset, 3–D mouse and keyboard next to it. A long oval table stretched the length of the room, and a side table held two more computers. Embedded in the ceiling was a series of tiny cameras, pointing down at the seats below.

‘This is our board room,’ David explained. ‘We use it for demonstrations. You can even have a virtual meeting here with half the people in the room, and the rest at other locations. It’s not always practical, but it looks flashy. Have a seat.’

I sat down on one side of the table and David sat on the other. He placed a smart leather folder on the table. Inside was a gleaming white pad, and some business cards. He handed one to me.

‘These are old,’ he said. ‘It should say “Managing Director”. Rachel will be here in a moment.’ He looked quickly at his Rolex just to confirm that Rachel was, in fact, late.

‘I thought you and Rachel were joint managing directors?’

David looked at me suspiciously. ‘Oh, that’s right. But I’ll handle all the business side of things. Rachel has a great technical brain,’ he said, ‘a great technical brain.’ He managed to make it sound as if this was an unfortunate state of affairs, and would explain why Rachel could not use her brain for anything useful.

Just then the door opened and Rachel ambled into the room carrying a cup of coffee in a plastic cup. She pushed long frizzy brown hair out of her eyes, and offered me her hand.

‘Hi. Rachel Walker. How are you?’ She had a pleasant soft Scottish accent and a low husky voice.

‘Mark Fairfax. Nice to meet you,’ I said.

She sat down at the other end of the table to David Baker, and pulled out a packet of Marlboro. She began to light one, and then looked over towards me. ‘You don’t, do you?’ she asked, nodding at the packet.

I shook my head.

‘I didn’t think so,’ she said. ‘I can always tell.’

I realised now where the huskiness in her voice came from.

David coughed. Whether to express disapproval of the cigarette, or to attract my attention, I didn’t know. ‘How much do you know about FairSystems?’ he began.

‘Not much. Richard told me a bit. I read the placing document, but that was a few months ago. And I have used a system.’

‘That was Bondscape?’

‘Yes. I was impressed.’

‘It’s good,’ said Rachel matter-of-factly.

‘But assume I know very little.’ This was in fact the truth. I wished I had listened harder to what Richard had had to say about his company and about virtual reality. I was all ears now.

‘Fine, let me tell you something about us,’ said David. He clicked a remote control, and slides appeared on the screen behind him. He made a professional presentation. He talked about FairSystems’ history, its market, its products, forecasts for the virtual reality market, and gave an outline of the company’s strategy. I listened very closely, following every word.

It seemed absurd, David in his carefully ironed cotton shirt, his cuff-links and Hermes tie, making a slick presentation to me, a twenty-eight-year-old trader. But it was a wise thing to do. I was now the single largest shareholder in FairSystems; my half of Richard’s forty per cent stake, together with my existing 3.75 per cent, made almost twenty-four per cent. I was important to the company and to David himself, and I was getting the red-carpet treatment to justify it. It was an excellent effort.

When he had finished, David smiled at me. ‘Any questions?’

‘Yes,’ I said. ‘I’ve heard a lot about all the different applications for virtual reality, and FairSystems seems to be involved in most of them. But sales are only, what, three million pounds? Is there really such a large market out there?’

‘Definitely,’ said David. ‘Right now, the only major spending on VR comes from the US military, followed by those machines you see in arcades. That will change. Once the technology is there at the right price,’ at this he paused to look tellingly at Rachel, ‘and people are used to the concept, no one knows how big the total market will be. But it will certainly be numbered in the billions.’ He flipped back a few slides to a virtual portrayal of an office block in Frankfurt. ‘It’s always going to be cheaper to build a virtual building, try it out, and improve it, rather than build a real one and live with the mistakes.’

I nodded. He had a point.

‘Anything else?’

I had a hundred questions about the business, but for the moment I thought it was more important to find out about the people. ‘Yes. Could you tell me something about yourself? How do you come to be working for FairSystems?’

David’s face became serious; his career was a very serious topic.

‘Certainly. I’m an economics graduate from LSE. I spent several years on the fast-track management programme at IBM.’

‘Was that in sales?’ I interrupted.

David smiled. ‘Sure. I’ve been at the sharp end selling to dealers. But I was also responsible for developing strategy, project implementation, production-marketing interface, divisional resource allocation, as well as some high-level general management responsibilities.’