City & Business: Fighting Black

EVERYONE loves a public slanging match, and Conrad Black's run-in with Cazenove is as entertaining as they get, though rather one-sided. While Mr Black sounds off in public, his former corporate stockbroker maintains a lofty silence.

Mr Black, chairman of the Telegraph, accuses Cazenove of doing 'the maximum possible damage to our reputation as a company' when it resigned as broker last month. Cazenove, you'll recall, bought Telegraph shares from Mr Black and sold them on to institutional investors just weeks before the group announced its price cut. The share price collapsed. The institutions felt duped. And Cazenove, deeply embarrassed, resigned.

A cut-and-dried instance of Cazenove doing the honourable thing? Not according to Mr Black, whose version of events shows the firm in a less favourable light. He says Cazenove was fully briefed ahead of the price cut announcement and had assured the Telegraph that it would not be particularly embarrassed by it. Even after the announcement, Cazenove at first promised it would not do anything provocative. But then, after being on the receiving end of institutional shareholder outrage, it quit, giving just two hours notice.

'This famous firm just scuttled out the back door into the tall grass,' Mr Black told the Financial Times. 'That is not the behaviour one would expect from Cazenove.'

These are serious allegations, especially for mighty Cazenove, which prides itself on bending over backwards to support its corporate clients. Its list of blue-chip clients is the longest in the Square Mile. Many's the institutional arm twisted by Cazenove on their behalf.

But Cazenove has another group to keep sweet as well as its corporate clients. Institutional investors accept new issues, rights issues, placings and other paper offered by Cazenove because they trust the good old boys from Tokenhouse Yard. They get lumbered with some lousy paper sometimes, but overall they do fine.

There was no way Cazenove was going to jeopardise that relationship for the sake of one corporate client, even a client whose boardroom is crammed with the City's great and good.

Although he was exonerated by the Stock Exchange, a cloud will hang over Mr Black long after it has dispersed from above Tokenhouse Yard. His outburst last week will only serve to remind the City of how they lost a bundle. And his rehabilitation will take all the longer.