Code of Silence

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Chapter 9

Tony Varkanopolis had presided over the Varkasoft business for twenty-five years, and his visionary appetite was now fulfilled by his pet project: V-Works. His protégé, Ross, was focussed and full of energy, developing some incredible new opportunities, particularly in the area of artificial intelligence.

Tony was fully committed to selling the business and knew that it was time to cash in on his success and, more importantly, on the potential he could still see ahead for the Varkasoft business. His wife and son had recently relocated back to the UK so that Theodore could continue his education at university. Tony had amassed enough wealth to retire, many times over. Or for that matter, to retire, become bored, come out of retirement, set up another business and sink millions into it before quitting on it and retiring again.

He’d witnessed many business acquaintances of his age do exactly that, but he wasn’t about to roll the dice again. Instead, Tony had instructed his directors to draw up plans for the sale of his majority shareholding, handing complete control to a new owner and letting them get on with it. If it meant there was a role for Tony after the deal was done then that would be a bonus. Despite his long tenure at the helm, and the efforts and energy he’d devoted to the success of Varkasoft, Tony was clear that it was a means to an end. When the time came to let go in exchange for an eye-wateringly large cheque, then he’d do so. He included within the planning brief the ability for the top management team, his five hand-picked lieutenants as he called them, to propose a buyout, acquiring Tony’s majority shareholding and running the business themselves, should they wish to. After all, they knew the business and had grown with it, so who better to run it moving forward.

The plans had come together smoothly. The management team had gracefully declined the buyout opportunity, which surprised him until he reflected on it. His team had seen how Tony had run the business, steering clear of unnecessary gambles and rolling the dice only when the odds were in his favour; Tony was getting out of the moving car, and he could see how they might conclude that there was no reason for them to be getting in. They’d do well enough out of the deal anyway, as Tony had been keen to lock them in, securing their loyalty with shareholdings of their own.

That was all fine with Tony. The plan was agreed, and without the management team negotiating from the other side he could once again slip into adversarial mode and secure the best deal. Corporate finance advisers were employed to handle the process, lining up potential buyers, looking after the detail, dotting and crossing things as required. A shortlist was drawn up specifying a number of interested parties, all of them with different motivations but the same single focus on the jewel in the Varkasoft crown: its ability to deliver a very bankable stream of future profits.

Along with his suited lieutenants and an entourage of advisers, Tony had spent many months in meetings, on conference calls and sitting through countless presentations. He was becoming concerned at the amount of time it was taking and was keen to avoid any distractions from the main business due to the sale.

There were several possible buyers involved in the later stages but most of them were offering a share-based deal and Tony was clear about wanting to cut and run, should he need to at any point. Having shares in a new and larger business would potentially prevent that. Eventually, it became clear that there was a primary target to which they should try to sell: the giant Russian technology company Ekranotech Industries. It was one of the fastest growing businesses in Russia, around twenty times the size of Varkasoft yet only established six years previously.

Ekranotech was owned by Zoryn Radoslav, a wealthy Russian entrepreneur in his late thirties who, along with his business partner, made over two hundred million dollars in Russia’s early-stage technology boom, by establishing and eventually selling his online casino business to an Israeli software development company. While his business partner retired to take up the role of international playboy, touring the world’s most glamorous marinas in his new superyacht, Radoslav’s new venture, Ekranotech, had been created to exploit a new opportunity: the emerging market for intelligent automotive engineering, where he would be competing with giant US corporations in the race to create the ultimate smart vehicles of the future.

Varkasoft’s corporate advisers had provided extensive reports and information on Ekranotech, and Tony was completely absorbed by it all. He knew much about where they had come from, their strengths, weaknesses and the reasons they were interested in purchasing Varkasoft. It turned out that, while Ekranotech enjoyed an astronomic market valuation and delivered massive sales, the sheer amount of staff it employed, and its colossal research and development costs and roll out plans were mind boggling, bleeding the company of cash and eating into profits.

Tony was impressed with the visionary skills of Ekranotech’s young founder, and could see how Varkasoft could be a vital lifeline for his company’s future. With deep-pocketed investors and finance men clambering all over it, eager to back the successful Russian entrepreneur’s newest venture, it was a deal that should conclude quite rapidly, all being well. Time was of the essence and Tony was ready to move, keen to close the deal.

The eleventh hour had come. After months of forensically examining Varkasoft, weeks of questions and answers, and a daily stream of calls, emails and video links, Ekranotech’s board had put their final offer on the table, just within the deadlines Tony’s legal team had insisted on. Tony had been in Moscow without a break at this point for almost a month, managing only two short trips home in that time, emphasising to his family, friends and business associates the importance of concluding this negotiation.

In time-honoured fashion, both parties gathered in the vast and ornate boardroom of Ekranotech’s banking advisers. It was a palatial setting; most things in it were gilt-edged or had a gleam to them, glinting against the subdued tones of the beige, cream and ochre backdrop. The high ceiling featured cavernous vaults, ornately decorated with historical scenes of battle, celebration and feasting, meticulously maintained, with not a flake of paint evident from where Tony was seated at the enormous table below. The table itself had a mirror-like quality, highly polished and made from burled birchwood, a natural mottled pattern speckled throughout. It could easily have passed as marble or granite if it hadn’t offered a natural warmth to the touch.

Tony’s team was nine in total, matched in numbers on the other side of the table by the Ekranotech board and advisers. Zoryn Radoslav drew back the chair directly opposite Tony, leaning across with a smile to shake hands before sitting, and made a joke about the splendour of the ostentatious surroundings compared to the high-tech minimalist office environments they were both familiar with.

All seated, it was Radoslav who casually started the process. “Good morning, gentlemen, and ladies,” he added, as he acknowledged the single female executive in the Varkasoft team. “So, after all of the talking, the meetings, the decision-making we are finally sat around this table; so let us do the deal,” he announced confidently in an Anglo-Russian drawl. He continued, “Tony, my sincere gratitude to you for staying the course through these tiresome negotiations. I know we’ve had our disagreements, particularly over V-Works, but I’m pleased we’ve been able to resolve the problems and are ready to complete the deal.” Tony silently acknowledged with a respectful nod, accepting he’d been stubborn about certain aspects and recognising Radoslav’s gracious comments.

There had been a sticking point in the deal, one which very nearly derailed the whole process. Ekranotech’s advisers had agreed with Tony’s team that the V-Works subsidiary was to be excluded from the deal, as it wasn’t critical to their plans. Tony had passed it off as a pet project, something he’d set up when tiring of the day-to-day running of the company, an expensive hobby, basically. It demanded continuous heavy investment with no guarantee of profits, and so it was agreed that they would exclude it.

This had not gone down well with Radoslav; for him, this was an all-or-nothing deal and he wasn’t prepared to negotiate. Finally, after several intense meetings with both his management team and Ross, Tony agreed that the V-Works division would be included by name, but what passed to Ekranotech would be limited to current developments. Tony would come up with a new name for his pet project and would retain future rights to any new developments. With a little bit of legal juggling, this gave Tony a clever and subtle escape route, which he’d revisit once he eventually left the business and was back in the UK.

There now followed a flurry of activity from the suited advisers, a great deal of paper shuffling, piles of documents strewn across the magnificent table, all lined up in specific groups ready for a marathon of signatures and counter-signings. The female adviser had perhaps the most important role in the room that day. While her voice had hardly been heard in all of the announcements about which document was being prepared, reviewed and signed, and at which point in the proceedings, she would ultimately be the one sanctioning and pressing the button that underlined this deal: the button confirming a multi-million pound transfer of funds provided by Radoslav’s backers, from the Ekranotech corporate bank account into Tony’s private account.

On reflection, Tony felt that the conclusion was a bit of an anticlimax. Twenty-five years of blood, sweat and tears, the ups and downs, highs and lows, all changing hands in a split second with the help of a laptop computer. Tony was silent, sitting back and watching the advisers checking and rechecking documents, arranging them in temporary files, collating them in grey plastic storage boxes.

He received a call from his personal account director at his bank. The overzealous greeting from the man when acknowledging the transaction, the astonishment in his voice, confirmed that the deal was done. He was delighted for Tony and very keen, extremely keen, to meet with him, and was pleased to offer the full support of the bank’s resources as Tony required. Tony listened briefly, thanked him, and politely ended the conversation. He sat and watched, the room was a hive of activity, and most of those attending seemed pleased with the outcome, with one notable exception.

Although the deal was done, not everybody at the table appeared happy. Anatoly Dragovich sat next but one to Radoslav’s right-hand side. He had remained quiet through the final meeting and had rarely played a meaningful part in the day-to-day negotiations, instead assuming a background role in proceedings.

Dragovich was an intimidating figure and a longstanding employee of Radoslav’s. His precise role had always been unclear to Tony, but he suspected that Dragovich was valued perhaps for his underground connections and ability to break down the trading barriers that the Russian bureaucratic state system created. Tony knew that once the dust settled and Radoslav’s combined businesses began to grow, his counterpart would be under pressure from his deep-pocketed investors to ensure he ran a squeaky clean operation, all cupboards free of any skeletons.

Tony continued to watch both Dragovich and Radoslav with interest, sensing that something must have happened between them, as Dragovich pushed his chair back firmly and stood in a single movement. Excusing himself briefly to the gathering, he buttoned his suit jacket and, chin held up and tugging at the lapels of his jacket, he stared coldly at Radoslav as he silently left the room.

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