Lies, spin and loyalty: Hannam case tells of a banker's code

Wed Jul 3, 2013 2:12pm EDT
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By Andrew Callus and Clare Hutchison

LONDON (Reuters) - The London-based banker fined last year for being careless in an email with sensitive information believes the takeover talks he revealed to a Kurdish minister in 2008 might have been fictitious, and that he might have made them up himself.

Former JP Morgan banker Ian Hannam, giving evidence at a tribunal at which he hopes to clear his name and reverse a 450,000 pound ($685,100) fine by the UK financial services industry regulator for market abuse, said his only goal in sending the email was to serve his client, Tony Buckingham, the boss of exploration group Heritage Oil HOIL.L.

"I either made it up or I was putting a spin on it to get a meeting (with the minister)," Hannam told the Upper Tribunal in London's High Court on Wednesday. "I know everything I was doing was to further the transaction."

Hannam was responding to questions from Richard Boulton, lawyer for Britain's Financial Conduct Authority (FCA). Boulton is charged with upholding the 2012 finding against Hannam - a rare success for the much-criticized watchdog.

However, the suggestion that the talks were fictitious was made not by Boulton, but by Hannam's lawyers. Part of their argument for having the fine overturned is that by being inaccurate, the contents of the email - and another, later one from Hannam revealing an oil strike by Heritage, could not have been inside information.

The man at the other end of Hannam's emails was Ashti Hawrami, then and still the oil minister of the oil-rich semi-autonomous region of Iraqi Kurdistan. Hannam and Buckingham were hoping to tempt him into a deal that would unlock the region's resource riches, undeveloped for years because of war and political instability. Bid interest from a third party was the bait.

Hannam, who in 2008 was also helping broker closer ties between affiliated investment banks JP Morgan (JPM.N: Quote) and Cazenove as crisis gripped financial markets, was joined in the courtroom by David Davis, a leading British Conservative politician and supporter of the former soldier and his campaign.

The thick-set 57-year old banker sat defiant in the witness stand facing Boulton, his small, heavy lidded eyes sometimes framed by a large pair of spectacles, sometimes not. Davis sat behind him.   Continued...

Banker Ian Hannam leaves the High Court in London July 3, 2013. REUTERS/Luke MacGregor