Ian Hannam says he made up claim or was spinning, and that email he sent 'cannot constitute inside information'
Ian Hannam, one of the
highest-profile bankers censured by the City watchdog, insists he acted
with honesty and integrity. Photograph: Luke Macgregor/Reuters
Ian Hannam, the City dealmaker fighting a £450,000 fine for
disclosing inside information, may have fabricated the contents of
incriminating emails that form the case against him, the banker told a
tribunal .
The surprising defence emerged on the second day of the financier's appeal against his punishment – a case that hinges on two 2008 emails sent by Hannam about Heritage Oil, his longstanding client, to Ashti Hawrami, the Kurdish oil minister whose government was both a potential Hannam client and investor in Heritage. The evidence presented by the Financial Conduct Authority, formerly the Financial Services Authority, relies heavily on a 9 September 2008 email, in which Hannam attempted to coax Hawrami into a move by revealing Heritage was on the verge of a deal elsewhere.
Hannam argues that the talks he was referring to had stalled at the time, so cannot constitute inside information.
"Either I was making it up or I was getting it from Tony Buckingham [Heritage Oil's chief executive]," he said.
The FCA's counsel, Richard Bolton QC, responded: "Mr Buckingham is not going to make things up to you is he? You are his trusted adviser. The last thing Mr Buckingham would do is mislead you."
Hannam replied that he was "very close friends" with Buckingham, with whom he shares the "same DNA".
When pressed again about his email about a potential deal, he repeated: "I was either making it up or I was putting a spin on it."
The claims by the banker that he might have cooked up the content of his emails shocked the FCA as the defence was not mentioned in Hannam's own witness statement, released by his lawyers .
In that submission, he said of the September email: "By sending the email, I was doing my job as a corporate adviser. I was trying to keep up the momentum with the minister, to keep him interested in Heritage and to keep Heritage at the forefront of his mind. This is what Tony had instructed me to do … It was entirely appropriate and within the scope of the mandate to set out the information in the September email."
Nine days after Hannam sent the email, the Takeover Panel requested that Heritage make a statement to shareholders, in which it confirmed that a preliminary takeover approach really had taken place. The next day, Heritage shares rose 18%, although the deal never happened.
The comments to the tribunal by Hannam, who was supported in court by family and friends including former Conservative leadership contender David Davis, came as he painted himself as the victim in a case that has seen him become one of the most high-profile bankers ever censured by the City regulator.
He resigned from JP Morgan Cazenove last year after being hit with the fine in order to fight the case, a move that potentially meant he had to forgo £30m in bonuses. He was keen to repeat to the tribunal on numerous occasions that the regulator had not revoked his "fit and proper status and has accepted that I acted with honesty and integrity" and he has now set up a new City firm.
"I love my job," he said. " I particularly enjoyed my time at JP Morgan Cazenove. I would still be at JP Morgan. I had no reason to leave. They gave me immense job satisfaction".
Hannam's second contentious email, sent on 8 October, contained a postscript: "PS. Tony has just found oil and it is looking good."
This was at a time when news of drilling at Heritage's Warthog-1 well in Uganda was so sensitive that the group's staff had been barred from trading in company shares.
On 21 October 2008 Heritage announced to the stock market "a significant new discovery" at Warthog-1.
That day, the FCA told the court, shares in the exploration group rose 14.6%.
The tribunal hearing continues.
The surprising defence emerged on the second day of the financier's appeal against his punishment – a case that hinges on two 2008 emails sent by Hannam about Heritage Oil, his longstanding client, to Ashti Hawrami, the Kurdish oil minister whose government was both a potential Hannam client and investor in Heritage. The evidence presented by the Financial Conduct Authority, formerly the Financial Services Authority, relies heavily on a 9 September 2008 email, in which Hannam attempted to coax Hawrami into a move by revealing Heritage was on the verge of a deal elsewhere.
Hannam argues that the talks he was referring to had stalled at the time, so cannot constitute inside information.
"Either I was making it up or I was getting it from Tony Buckingham [Heritage Oil's chief executive]," he said.
The FCA's counsel, Richard Bolton QC, responded: "Mr Buckingham is not going to make things up to you is he? You are his trusted adviser. The last thing Mr Buckingham would do is mislead you."
Hannam replied that he was "very close friends" with Buckingham, with whom he shares the "same DNA".
When pressed again about his email about a potential deal, he repeated: "I was either making it up or I was putting a spin on it."
The claims by the banker that he might have cooked up the content of his emails shocked the FCA as the defence was not mentioned in Hannam's own witness statement, released by his lawyers .
In that submission, he said of the September email: "By sending the email, I was doing my job as a corporate adviser. I was trying to keep up the momentum with the minister, to keep him interested in Heritage and to keep Heritage at the forefront of his mind. This is what Tony had instructed me to do … It was entirely appropriate and within the scope of the mandate to set out the information in the September email."
Nine days after Hannam sent the email, the Takeover Panel requested that Heritage make a statement to shareholders, in which it confirmed that a preliminary takeover approach really had taken place. The next day, Heritage shares rose 18%, although the deal never happened.
The comments to the tribunal by Hannam, who was supported in court by family and friends including former Conservative leadership contender David Davis, came as he painted himself as the victim in a case that has seen him become one of the most high-profile bankers ever censured by the City regulator.
He resigned from JP Morgan Cazenove last year after being hit with the fine in order to fight the case, a move that potentially meant he had to forgo £30m in bonuses. He was keen to repeat to the tribunal on numerous occasions that the regulator had not revoked his "fit and proper status and has accepted that I acted with honesty and integrity" and he has now set up a new City firm.
"I love my job," he said. " I particularly enjoyed my time at JP Morgan Cazenove. I would still be at JP Morgan. I had no reason to leave. They gave me immense job satisfaction".
Hannam's second contentious email, sent on 8 October, contained a postscript: "PS. Tony has just found oil and it is looking good."
This was at a time when news of drilling at Heritage's Warthog-1 well in Uganda was so sensitive that the group's staff had been barred from trading in company shares.
On 21 October 2008 Heritage announced to the stock market "a significant new discovery" at Warthog-1.
That day, the FCA told the court, shares in the exploration group rose 14.6%.
The tribunal hearing continues.
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