“He’s not far out,” said Poole. “Thank you.”
At one o’clock Poole was called to the telephone and found Mangane at the other end. The secretary reported that he had made a definite advance and now needed further instructions as to what move was required. Poole asked him to come straight to Scotland Yard and attend a conference with the Assistant-Commissioner; within a quarter of an hour Mangane had arrived and the two repaired to Sir Leward’s room, where Barrod was already in attendance.
Sir Leward greeted Mangane with some reserve. In the first place, he was not at all keen on the introduction of amateurs into Scotland Yard investigations—he proposed to say a word or two to Inspector Poole on that head when the case was over; secondly, he still remembered the look on the secretary’s face when he (Sir Leward) had interrupted the tête-à-tête tea at Queen Anne’s Gate on the occasion of his visit to Miss Fratten. The development of friendly relations with Miss Fratten—to which he had so much looked forward—had not materialized, in view of the direction which the investigations instigated by himself had followed—the suspecting and shadowing of Ryland Fratten—not a happy introduction to his sister’s good graces. Mangane, however, appeared quite unconscious of Sir Leward’s reserve; he was clearly eager to disclose the fruit of his morning’s enquiries.
“As I told Inspector Poole on Saturday, sir,” he began, “although I knew that the Rotunda Syndicate had sold their property to the Ethiopian and General, I didn’t know anything about the terms of sale; today I’ve been able to find out something about that. It hasn’t been very easy, because the two parties to the transaction—Lessingham, representing the Rotunda Syndicate, on the one side, and Wraile, representing the Ethiopian and General, on the other—are both hostile to any form of enquiry. I didn’t attempt to get anything from Lessingham—that Syndicate obviously wouldn’t give anything away. I managed it at last by bribing the same E. & G. clerk who sold me the Company’s schedule—the one I gave you on Saturday. It cost me £50—the fellow was taking a pretty big risk—but the normal means of finding out would have taken days or weeks and I gather that you’re in a hurry.
“The terms are tremendously favourable to Lessingham. I don’t know, of course, how much of a dud this mine is—it may be a good thing but there’s quite a possibility that it’s a group of surface veins and nothing more—but for the amount of prospecting that’s been done, even if every test had been favourable, the price is a fancy one. I’ve got a copy of the report on the mine here; you’ll see that the Rotunda don’t pretend to have sunk a tremendous lot in exploration—probably they knew that if they claimed too much for initial expenditure (that’s being repaid to them in cash by the E. & G. D.) there would simply have to be a proper report. All it amounts to is that they have sunk a few bore holes at wide intervals (no doubt in the most hopeful spots) and this optimistic report is based on the assumption, first, that the whole area is as good as the bore holes show the carefully chosen spots to be and, secondly, that the ore continues as such to deeper levels.
“It’s a report that wouldn’t deceive a sound Development Company for a minute—not to the extent of plunging in as the E. & G. are doing. On the strength of it—and of course at the instigation of Wraile—they are forming a Company with a capital of £500,000 divided into £300,000 in 7% preference shares and £200,000 in 1/– ordinary shares—that is to say 4 million shares. The Rotunda—Lessingham—in addition to having all their initial expenditure in prospecting etc., refunded to them in cash, are to receive as purchase price half the ordinary shares—2 million—plus an option on a further million at 5/– per share if exercised within six months or 10/– per share if exercised within a year.
“The public is to subscribe the £300,000 in Preference Shares, and to get one Ordinary Share (of 1/–) thrown in as a bonus for each £1 Preference Share subscribed. The object of the high premium on Lessingham’s option, of course, is to create an artificial value for the Ordinary shares—to make the public think that they are valuable—and so enable Lessingham, with the propaganda at his disposal through all three companies—Rotunda, E. & G. and Victory Finance—especially the latter—to start a market in them at anything from 5/– to 7/6 a share and so make a large fortune out of his allotted two million. If he sells at even 5/– he makes £500,000 on them, and if the market goes really well he has his option on another million—in fact he’s in clover.
“The new company, when it’s floated, will have a different name, so that it’s more than likely that Lessingham’s connection with it will not be known to the public and the Victory Finance Company will be able to push it without its Chairman, Lorne, realizing either—unless he’s a much sharper man than I take him to be.
“What the Ethiopian and General Board was thinking of to agree to such terms, I can’t think. Wraile must have got them pretty well under his thumb. I believe that what weighed very strongly with them was that Lessingham said that if they gave him favourable terms he would arrange for the Victory Finance Company to make them a big loan for the development of this mine and other properties on easy terms. The V. F., being a reputable company, would also help to create a market at a premium on the ordinary shares. Lessingham has only a 15% share in the Victory Finance and is using its money for his own purposes. He’s the real directing brain of the company; he does genuinely good work for them—makes big profits for them by his advice—and makes use of the kudos he so establishes to land them in an undertaking of this kind. Eventually, of course, both the Ethiopian and General and the Victory Finance will be liable to smash over it. By that time Lessingham will have made his pile and cleared out—and Wraile too, of course. He’s only got 10 per cent in Victory Finance and 10 per cent in E. & G. D.—probably both he and Lessingham will have sold their shares before the smash comes—but he can afford to lose them altogether if he’s sharing with Lessingham in this Rotunda swindle. They’re a pretty couple.”