The ancient Hong Kong hong, Jardine Matheson's dispute with one of Asia's best paid investment bankers, which erupted over the luxury property he is renting from the group, finally reached the end of its long and dramatic road yesterday.
The property in question is No. 15 Shek O and the banker is Marcus Everard, the man who allegedly made the biggest bonus in Asia in 1999.
Everard was then CSFB's global head of emerging markets, and had based himself in Hong Kong. And even though he spent most his life on a plane, he decided that his Hong Kong residence should reflect his status and power.
Accordingly he rented No. 15 Shek O from the Mandarin Hotel Group. For those that don't know, these Shek O residences are among the most exclusive in Hong Kong.
Their exclusivity derives from their small number, and the fact that of this small number, the Jardine Group controls so many of them. As well as No. 15, Jardines owns No. 1, No. 2 and No. 9 - the latter being traditionally called the Taipan's Country House, a place of tranquility where the current Jardines' taipan can retreat at weekends.
Mandarin Group (which is Jardine controlled) had bought No. 15 Shek O several years ago for its CEO, but the existing holder of that position, Edouard Ettedgui decided not to use it, and thus a private tenant was sought in the interests of shareholder value. Why leave vacant a property that could command rents of HK$250,000 ($32,134) per month?
Enter Everard. Indeed, he was so happy living there that he decided in April this year that he wanted to renew the lease.
At this point the story gets a bit hazier, but the gist of the matter is that Everard thought an agreement had been reached to renew (at a higher rent), only to discover a few weeks later that Mandarin had suddenly decided that it wanted the property back.
What now emerged was a standard Hong Kong rental dispute surrounding CR101s and CR102s.
The bottom line is that, in Hong Kong, tenants are favoured by the law (as long as the tenant pays their rent) and it is very hard to get a tenant out. Thus one might have suspected Everard would keep his nest in Shek O.
Jardines initially decided that the best case it could make was to complain to CSFB, which was the guarantor of the lease. Indeed, as is normal, the lease had been arranged on a corporate-to-corporate basis.
The gist of Jardines' argument was that Marcus Everard had left CSFB in January and therefore the corporate-to-corporate lease was null and void.
Letters were sent to CSFB, with one even going to Allan Wheat, who did not get a chance to act on it, as he was subsequently fired for issues totally unrelated to employee housing.
Events took an unlikely twist, however, when it was subsequently discovered that Everard was still an employee of CSFB - as a consultant. Thus the lease remained valid - from a corporate point of view. Back to square one for Jardines, it seemed.
But why was Jardines so keen to get its property back when it has a super-rich banker paying top dollar to rent it?
Well, it seems that Jardines had made the snap decision to give the house in Shek O to its new strategic director, Brian Keelan, who was forecast to descend on Hong Kong in September after a long and distinguished career with UBS Warburg.
Rumour has it that Jardines eminent shareholder, Simon Keswick had extolled the clean air of Shek O and suggested a house would be available for Keelan. What horror then when HQ suddenly discovers that James Riley has recently moved into No. 2 Shek O, and James Watkins is in No. 1 and the only other house, No. 15 is being rented out.
Naturally, No. 15 must return to the fold. Ergo, all the fuss, with people in Hong Kong scurrying around to make this happen, and letters flying between different corporate headquarters.
You will not be surprised to hear that Everard decided that he was being treated rather shabbily for a man who was forking out HK250,000 a month to Mandarin shareholders.
In a show of true disdain he disappeared to Japan for the Summer and left the house vacant, even though he was paying an enormous rent to a landlord that wanted to evict him. You have to say the man has class.
Then the ante was upped as Jardines engaged legal counsel. Everard retorted by hiring Hong Kong's leading tenancy law expert, Malcolm Merry.
The stakes were raised as Jardines hired a QC (Huggins) 10 days ago and then Everard replied with his own (Bunting).
Legal costs were rising dramatically for a case that was set to go to the Land Tribunal.
Adding a bizarre twist to the whole affair was the fact that since Shek O properties cannot be held by companies, the house is held in trust by Jardines legal director, James Watkins. Thus in the legal records the case says that Judge S Chow of the Hong Kong SAR would hear Everard versus Watkins in court number two of the Land Tribunal.
Why was this bizarre? Well, Everard and Watkins are friends, with their children going to school together.
All was set for a day of drama on Monday October 15 as the lawyers for both parties assembled in the court on Kowloon-side, a location that seemed a million miles from the Shek O house in question.
In the immediately preceding cases, a number of irate Cantonese landlords could be seen waving documents and shouting loudly, presumably about violations by tenants in Mongkok, Jordan and Wanchai. What counsel they had was minimal, making the scene about as far removed from Ally McBeal as McDonalds is from Tour D'argent.
What a difference then when counsel for Everard and Jardines marched with their charcoal grey suits and laptops. Although neither Everard nor Watkins were present, their seven lawyers more than made up for it.
Alas drama soon exited stage left. Everard's lawyer told Judge Chow that both parties had come today out of respect for his jurisdiction, but they wished to inform him that the two parties had settled at the eleventh hour, the day before (a Sunday).
Everard, by this point, was out of the country, flying towards the UK, and his lawyer explained that he would give up the property after all.
A statement was read by his lawyer to this effect.
The Judge appeared a little nonplussed that perhaps the first decent case he'd received in his court for weeks was evaporating before his very eyes. Pertinently, he noted that the written version of the statement he had just heard was incorrect in that a full stop was being used at the end of the first page where a comma should have applied.
Both counsels checked their written statements and were inclined to admit that the Judge was almost certainly correct. Both agreed that they would change the offending punctuation mark.
With that - a good eight, perhaps nine minutes into the hearing - events were concluded, and an overwrought Chinese landlady was wheeled in to plead her case and return the Land Tribunal at 38 Gascoigne Road to its normal state.
In the event, the Keswicks of Jardines had won the Battle of Shek O and returned this small rural idyll to the fold. Brian Keelan would be able to live there after all.
It was agreed that Everard would stay in the property till Christmas, then vacate. Rumour has it that he will receive compensation for agreeing to move and will also stay in Hong Kong.
Everard is currently in London, defeated by the weight of the Jardine Matheson legal machine, and unavailable for comment.
It is thought that he eventually gave up due to the manner in which costs were escalating and the strain the whole affair was putting on his family.
And that is that, as they say.
It remains, however, a pertinent corporate governance issue to ask, why all these legal costs were incurred on the part of a Jardine subsidiary (Mandarin) to get rid of a perfectly good tenant paying market rates?
When asked about such issues, Jardines, as is their tradition, refused to comment on the case, saying that it was a "personnel matter".
