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The NatWest Three case lacks common sense, proportion — and a victim

The NatWest Three case lacks common sense, proportion — and a victim

A head of steam is building up behind the campaign to halt the imminent extradition to the US of the NatWest Three, the trio who face trial (and two years in a tough Texas jail before trial) for an alleged $6 million ‘wire fraud’ against NatWest in connection with the sale of a joint venture between the bank and Enron. Attention has focused on the unequal extradition terms to which the Blair government agreed in its eagerness to be America’s best friend in the War on Terror, allowing US prosecutors to summon British suspects for trial without first having to present evidence against them. But what is really offensive is not the fact that we do not have equal powers to extradite Americans, but that the whole case for throwing the book at Messrs Bermingham, Darby and Mulgrew (who could face Texan sentences ten times longer than the same offence would attract here) is so lacking in common sense and proportion. The alleged crime was committed by British citizens against a British company, and comes within range of US justice only because some of the telecommunications involved passed through US territory. The Texans only pursued the case in the hope that plea-bargaining by the trio would incriminate senior Enron executives. NatWest (now part of Royal Bank of Scotland) never claimed to be the victim of fraud. Our own Financial Services Authority looked at the case and did not instigate a criminal inquiry — apparently reassured by RBS that the joint venture had been sold at a sensible, rather than fraudulent, price. But RBS has refused to release documents that might assist the trio’s final plea to the Home Secretary, John Reid, to review the extradition. Unless Reid decides that now is the moment to stand up to the Americans, lives will be ruined, transatlantic trade and investment will suffer, big-time fraudsters will go about their business undeterred — and Justice will surely blush to see her powers so absurdly misapplied.

Dressing for success

An Institute of Directors’ paper called ‘Reflections on doing business in China’ has introduced me to the ‘third shift problem’. This is a widespread practice in Chinese factories which have contracts to manufacture branded goods for Western clients, but operate extra shifts making identical goods to be sold illicitly at a fraction of the ‘branded’ price. It is just the sort of thing you need to know before closing your garden gnome factory in Stoke-on-Trent and switching production to the Pearl River Delta. Fortunately, advice on China is now available from many sources: I can also recommend One Billion Customers by James McGregor (Nicholas Brealey, 2005). More worrying, however, is the quality of guidance being offered, particularly in etiquette, to Chinese businessmen visiting Britain. A City friend of mine attended the banquet hosted by the Queen at Buckingham Palace last November for President Hu Jintao. ‘Chap opposite me,’ he reported indignantly, ‘had his laptop on the table and was wearing some sort of track suit.’ Other factory-owners and party officials along the glittering table occupied the Queen’s speech and Hu’s interminably dull response by texting each other and transmitting mobile-phone pictures back to Guangdong. Perhaps the author of ‘Reflections on doing business in Britain’ for the Chinese Institute of Directors is a satirist. ‘The British are so economically backward that on formal occasions they wear tribal costumes inherited from their ancestors. Do not draw attention to their plight by imitating them. Instead, follow the example of renegade Party faction leader Gordon Brown, who visits the ill-educated bankers and merchants of the City of London each year to show them how to dress for success in a global economy.’ Still, cultural contacts are a two-way street: the text of Brown’s recent Mansion House speech suggests he may now be modelling his style on President Hu.

Train of thought

While King’s Cross station was closed by a fire last week, what might have been a tiresome journey from York was enlivened by chance encounters with two old friends, whom I introduced to each other as we left Peterborough on a stopping train to Finsbury Park. One is a mining financier, currently prospecting for zinc in Greenland; the other a former banker now big in Spanish mineral water, which he sells for cooler machines in hospitals and offices. By Huntingdon, it was clear that neither was about to come on like a Dragon’s Den judge and offer cash for a stake in the other’s business. By Hitchin, however, they had spotted an angle: Greenland may or may not have enough zinc to light a rocket under the mining man’s share price, but it has more than enough melting ice for all the water coolers in Europe. At Stevenage, a joint venture was in view which the water man thought we could swiftly sell on at a fat profit — most likely to Nestlé, owner of Perrier. As we rattled past Hatfield, I wondered which hedge fund I might entrust with my share of the proceeds. Capitalism may be a dangerous game, but it certainly helps to pass the time.  

Ink plot

Here’s a puzzle. An Epson 26ml black ink cartridge for my Epson printer costs £20.81. If 81 pence is enough to pay for the little plastic tank and the packaging, that means the ink costs £20 for 26 millilitres, or £769 per litre — about the same as Château Pétrus 1953. What’s in this exquisite, perfumed liquid? Is it secreted from the glands of Amazonian monkeys, or crushed from rarest orchids? And how can an online supplier called Inkcycle sell me a ‘compatible’ cartridge — so alike that it might be the product of a ‘third shift’ — for £1.40? The answer, of course, is that low-wage Asian manufacturers have so driven down printer prices that Epson cannot make a profit on the machines themselves, but only on the ink. The consolation for this sting is that at least it saves trees by discouraging printing: before I discovered Inkcycle I hardly ever printed anything, but now I consume forests of paper every day. I even printed out Gordon Brown’s Mansion House speech — but only because I like the smell of the ink.

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