By William James
LONDON, Aug 21 (Reuters) - Differences over hiring policy emerged between senior Nomura executives after the bank's takeover of parts of Lehman Brothers, according to court documents filed by a London recruitment agency which is in a legal spat with the Japanese group.
One scheme depicted in documents filed at a London court involved a discussion of how one Lehman banker could be lured to Nomura, paying him "blood money" to get others on his team on board, then ditch him six months later.
As part of a claim over fees, headhunting firm Hogarth Davies Lloyd (HDL) said in the court documents its accounts of telephone conversations showed tensions within Nomura and the sensitivity of its mandate to hire top staff.
Hogarth is claiming fees for its role in recruiting about 600 Lehman bankers after Nomura bought the U.S. investment bank's European operations last September.
But in a statement attributed to Nomura's head of human resources in Europe Stephen Sidebottom, the bank said on Thursday Hogarth is seeking "a commercially absurd sum".
In the court documents, Hogarth cited a telephone call between one of its partners and Maxine Sutton, Nomura's managing director of human resources, saying a drawback to hiring Riccardo Banchetti, Lehman's European co-head of investment banking, was that his background might be too similar to Barry Nix, Nomura's co-head of global markets. Sutton said Nomura "couldn't get rid of Barry as he was the only European who knew how to deal with the Japanese", according to a copy of the court documents.
ANOTHER OPTION
But senior figures in Tokyo then instructed Hogarth to speak to Banchetti and asked that Sutton and Nix were not informed, the documents allege.
Once informed of their actions, Sutton is then alleged to have said Nomura's senior people in London felt "shafted" by colleagues in Tokyo.
The documents also allege Nomura was prepared to pay "blood money" to hire Banchetti in order to get the rest of his team.
"Another option was to hire Riccardo (blood money), if he was key to getting the others, and then get rid of him in six months time," the document said.
In a response to Reuters, Nomura said it had not hired Banchetti. Hogarth did not return calls for comment.
The basis of Hogarth's claim for payment is that it provided services which entitled it to fees for each banker or trader hired, in the aftermath of Lehman's collapse and the subsequent race to secure banking talent.
The Times newspaper estimated fees Hogarth is seeking could be as high as 90 million pounds ($149 million).
Nomura said in its court response that work undertaken by Hogarth was done against the backdrop of an unprecedented event and the scale of the recruitment was not covered by their existing arrangement.
Nomura said in a statement the claim "is misconceived and HDL is seeking a commercially absurd sum".
Times Online said a defence document lodged by Nomura with the court said the bank denied its 2007 contract with Hogarth was relevant, saying that as it took on so many former Lehman bankers that the situation was more like a full-scale merger than a head-hunting situation in which fees based on individual hirings would be paid. (Additional reporting by Steve Slater; Editing by David Holmes)