Icap will not pay Prebon’s £2m damage claim
Icap has no intention of recognising rival broker Prebon’s £2 million claim for damages after a dispute over the employment of three Icap coal brokers, according to its director of corporate affairs Mike Sheard.
The £2 million damage claim is, according to a source close to Prebon, “largely to cover the expected profits of the team had they fulfilled their three year contracts with Prebon". The source said Prebon would be looking for £1 million from Icap and £1 million from the brokers themselves.
"Prebon is pretty upset” said the source. “Rather than build a coal team from scratch, [it] hired the top ranking brokers in the field. It now has nothing”
The Icap coal team, led by Dranganoudis, topped RiskNews' sister publication Energy Risk's coal broker rankings – the benchmark for energy trader and broker excellence – in 2004. Joint second place was awarded to Amerex, although a source said Prebon was not interested in hiring these brokers. “The Icap brokers were at the end of their tenure,” he said. “Prebon would not itself incite people to break their contracts.”
While no Prebon source was able to divulge the offers Prebon had made to the three brokers, Energy Risk has learned Dranganoudis was offered £350,000 plus bonuses, with the junior brokers offered around £150,000. And a source said, "The team would have shared an [annual] bonus of around £1 million."
While it is not known what, if anything, Icap offered the brokers to encourage them to stay, Verrier said he is sceptical about Icap's ability to put a more attractive offer and continue to make money.
However, a source close to Icap said, “Uncertainty over the state of Prebon’s balance sheet has been an important factor in the decision [for the team] to stay.” Managing director Paul Newman said, “The team recognise that a well-capitalised, stable environment provides the best conditions for growing the business, and for providing a first rate service to our clients.” Icap’s Sheard also pointed out that the most senior broker, Dranganoudis, had “been with Icap all his working life”.
Sheard continued: “We have been advised there is no basis for their extravagant demands for compensation, and we have no intention of paying it. We believe they are ill advised to pursue, if they do we will of course defend our position vigorously.”
But Prebon’s Verrier said Prebon is fully expecting to win its case. “We’ve had other cases where we’ve pursued people for breach of contract and won,” he said. “It’s not just the fact of the individual, it’s the fact that you might be signing them up six months, a year, even two years ahead, and you start making business plans around that. You may have invested a substantial amount of money. And if the individual reneges on the contract, it’s a real setback,” said Verrier. “And I blame Icap for trying to keep the team,” he added.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
More on People
People: Isda taps four new directors, O’Callaghan joins CA, Berlinski quits Goldman, and more
Latest job changes across the industry
People: Citi snags Raghavan, SocGen bags Estrada, all change at NYCB, and more
Latest job changes across the industry
Kane to leave Citadel Securities for senior Miax role
Options exchange has been on a four-year acquisition spree
Asia moves: senior hires at Millennium, Citi, SMBC and more
Latest job news from across the industry
Ken Pang set to join Millennium as Asia equities head
Former Credit Suisse markets co-head joins hedge fund’s Hong Kong office
People: Risk shake-up at Santander, JPM juggles markets, and more
Latest job changes across the industry
People: UBS rejigs EQD, risk head departs; Rustad joins buy side, and more
Latest job changes across the industry
Rustad re-emerges at Taula Capital
Former JP Morgan clearing head to help prepare for Q2 fund launch
Most read
- Industry urges focus on initial margin instead of intraday VM
- For a growing number of banks, synthetics are the real deal
- Did Fed’s stress capital buffer blunt CCAR?