UK - The Ice Maiden may have a reputation for being tough, but in court she has almost cracked under the pressure.
Merrill Lynch Investment Managers co-chairman Carol Galley has met her match with Unilever barrister Jonathan Sumption QC and particularly Mr Justice Colman, the high court judge.
Known for her hardline approach in the City, Galley has struggled to concentrate on the questions asked by Sumption and has often had to ask him to repeat them.
But Colman has been quick to point out when Galley has often answered politically. On one occasion, she was asked by Sumption to compare levels of risk between Mercury Asset Management fund managers and particularly Alistair Lennard. Lennard is the former fund manager accused of taking excessive risks in managing the Unilever UK equity portfolio.
After Galley replied, Colman said: “Miss Galley, I do think, as I have said to you before this morning, one has to distinguish, in answering Mr Sumption's questions, between numerical comparisons and the purpose which Mr Lennard might have had in mind for deviating from that with which his risk level is being compared.
“If you just keep in mind, on the one hand, the purely analytical exercise in identifying numerical divergences in questions that are put, and, on the other hand, the possible purpose, which Mr Lennard or others in Mercury may have had for achieving those divergences, I think you will be able to deal with the questions much more effectively and more accurately.”
Sumption has focused in his questioning on trying to prove that MAM -which was bought by MLIM in December 1997 - was negligent in allowing Alistair Lennard to create a concentrated portfolio that contained greater risk than any other by peers on the Select team he worked on.
He asked Galley why Lennard in September 1996 was allowed to sell all of his banking shares in the Unilever portfolio even though the rest of the Select team had guidelines to go 15% underweight on the index.
Sumption also queried why Lennard invested 12% in property even though it only comprised 1.9% of the FTSE All-Share index and why he bought three times the amount of general industrials compared to the index.
But Galley maintained that: “the way the market behaved from that period of late 1996 onwards resulted in a performance outcome that was completely unexpected relative to the positions that we had taken in the portfolio.” By Paul Sanderson
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