Best Kept Secret

'Do you think the public might still have the fate of the Titanic fixed indelibly in their subconscious, making them wary of sailing on a new luxury liner?' asked Fisher.

'That's a fair point, major,' replied Sir William, 'but Cunard's recent decision to add another vessel to their fleet would rather suggest that a new generation of travellers have noticed that there hasn't been a major shipping accident involving a luxury liner since that tragic disaster in 1912.'

'How long would it take for us to build this ship?'

'If the board gives the go-ahead, we would put the contract out to tender immediately, and hope to appoint specialist marine architects by the end of the year, with a view to the vessel being launched in three years' time.'

Alex waited for another member of the board to ask a question he didn't want to ask himself.

'What is the estimated cost?'

'It's hard to give an exact figure,' admitted Sir William, 'but I have allowed for three million pounds in our budget. However, I would consider that to be an overestimate.'

'Let's hope so,' said another board member. 'And we'll need to inform the shareholders what we have in mind.'

'I agree,' said Sir William. 'I will do so at our AGM next month, at which I shall also be pointing out that our profit forecasts are most encouraging, and I can see no reason why we shouldn't pay our shareholders the same dividend as last year. Even so, the board must face the possibility that some of our shareholders may be wary of this change in direction, not to mention such a large capital outlay. This might well cause a fall in our share price. However, once the City realizes we have the resources to cover any short-term difficulties, it should only be a matter of time before our shares fully recover. Any more questions?'

'Have we settled on a name for the new passenger division of the company, and for its first ship?' asked Fisher.

'We're thinking of calling the new division the Palace Line, and its first liner the Buckingham, signalling the company's commitment to a new Elizabethan era.'

On that, the board were in full agreement.

'Explain it to me once again,' said Virginia.

'Sir William will announce at the AGM next Thursday that Barrington's is going to build a luxury liner to rival anything Cunard and P&O currently have on the high seas, with an estimated cost of three million pounds.'

'That sounds like a rather bold and imaginative step to me.'

'And risky to others, because most investors on the stock market are neither bold nor imaginative, and will be anxious about the construction costs rising and the difficulty of selling enough cabin space to cover the capital expenditure. But if they were to check the accounts carefully, they'd see that Barrington's has more than enough cash to cover any short-term losses.'

'Then why are you recommending that I sell my shares?'

'Because if you were to buy them back within three weeks of selling them, you'd make a killing.'

'That's the bit I don't understand,' said Virginia.

'Allow me to explain,' said Alex. 'When you buy a share, you don't have to settle your account for twenty-one days. Equally, when you sell a share, you don't get paid for three weeks. For that twenty-one-day period you can trade without having to pay out any money, and because we have inside knowledge, we can take advantage of that situation.'

'So what are you suggesting?'

'Barrington's AGM will open at ten next Thursday morning with the chairman's annual report. Within a few hours, I anticipate the share price will fall from its present level of just over four pounds to around three pounds and ten shillings. If you were to sell your seven and a half per cent holding as soon as the market opens at nine o'clock that day, it would cause the price to fall even further, possibly below three pounds. Then you wait until the price has bottomed out before moving back in and repurchasing any stock available at the lower price, until you've replaced your seven and a half per cent.'

'Won't the brokers become suspicious, and tell the board what we're up to?'

'They're not going to say a word as long as they get a commission when they sell the stock and another one when they buy it back. They can't lose either way.'

'But can we?'

'Only if the share price rises after the chairman's annual report, because you'd have to pay more to buy your shares back. But frankly, that's unlikely to happen once the company announces that it's putting three million pounds of its reserves at risk.'

'So what do I do next?'

'If you give me the authority to act on your behalf, I'll place the business through a broker I know in Hong Kong so it can't be traced back to either of us.'

'Giles will work out what we're up to. He's no fool.'

'Not if three weeks later the records show that the ownership of your seven and a half per cent of the company hasn't changed. In any case, he has far more pressing problems to occupy himself with at the moment.'

'Such as?'

'I'm told he's facing a vote of confidence from the local Labour Party executive committee, after they found out about his relationship with Miss Gwyneth Hughes. There's even a chance he won't be contesting the next election. That's assuming you still haven't signed those divorce papers.'

'Can you assure me, Major Fisher, that this investigation has no connection with Sir Giles Barrington or Mrs Harry Clifton, because I've represented both of them in the past, and that would create an unacceptable conflict of interest.'

'My enquiries have nothing to do with the Barrington family,' said Fisher. 'It's simply that the local Conservative Association has shortlisted two candidates to be their representative for Bristol Docklands. As secretary of the association, I want to be absolutely sure there's nothing in their backgrounds that might embarrass the party at some future date.'

'Are you looking for anything in particular, major?'

'With your contacts in the force, I need you to find out if either of their names appears in police records.'

'Does that include parking fines or other non-custodial offences?'

'Anything that the Labour Party could use to its advantage during an election campaign.'

'I get the picture,' said Mitchell. 'How much time do I have?'

'The selection process will take a couple of months, possibly three, but I'll need to know if you come up with anything long before then,' said Fisher, passing over a piece of paper with two names on it.

Mitchell glanced at the two names before placing the piece of paper in his pocket. He left without another word.

Fisher phoned a private number in Hong Kong at nine o'clock on the morning of Barrington's Annual General Meeting. When he heard a familiar voice come on the line, he said, 'Benny, it's the major.'

'How are you, major? Long time, no hear.'

'There's a reason,' said Fisher, 'and I'll explain everything when you're next in London, but right now I need you to carry out a sell order for me.'

'My pen is poised,' said Benny.

'I want you to sell two hundred thousand shares in Barrington Shipping at spot price the moment the London Stock Exchange opens.'