Zemek: New Star atmosphere ‘was like a Hitchcock film’

Former New Star head of fixed income Theo Zemek today told of the “appalling” atmosphere at New Star, under former CEO John Duffield.

After news this morning that she would be allowed to testify on behalf of Patrick Evershed although with restrictions, Zemek's witness statement, released to the tribunal before lunch, told of the "terrible fear and paranoia" at New Star.

"It was like a Hitchcock film," the statement read. "You didn't need to see the blood and gore and violence - the hint of it and the menace that pervaded the office was worse. We stopped phoning each other except on landlines at night.

"...I assumed that my office phone was being bugged and that we were under surveillance all the time. I was miserable and ready to crack."

Zemek appeared to collaborate Evershed's testimony that Duffield would offer fund managers sweets, and withdraw them for poor performance.

"The offering of sweets would not have worked on me... [but] John offering apples was legendary.

"He was particularly keen to force apples on you and make you eat them in front of him, which actually puts you at a disadvantage when you need all of your wits and are parrying some argument.

"He thought he could gauge a person's personality by the way they ate their apples."

One of Duffield's worst periods of bullying was the "Nuclear Winter" of January 2003, following New Star's takeover of Aberdeen's retail funds, Zemek alleged.

"John ‘sent me to Coventry', which I believe he had a tendency to do when he was cross with someone," she said in her statement. "You were totally ignored and excluded for everything... you were the office ‘pariah' and it was very demoralising."

Prior to 2007, Zemek said a number of New Star employees had considered leaving to set up a boutique firm, but were prevented from doing so as they were waiting for the vesting of their New Star shares.

New Star's lawyer Daniel Oudkerk QC, said Zemek was "seeking to mislead the tribunal".

He produced a draft of a letter written to a friend in December 2003, in which Zemek said Duffield has been "a very pleasant surprise".

"He is slightly eccentric, but extremely intelligent and cultivated with a good sense of fun," the letter read.

The tribunal also heard that in Zemek's 2007 resignation letter, she said working at New Star had been one of the "best parts of my whole career... I don't think I will ever work with a nicer group of colleagues".

Oudkerk is set to finish cross-examining Zemek this afternoon, after which the tribunal will adjourn until December. New Star will then call up to eight witnesses, expected to include former New Star employees Roger Dossett, Mark Skinner and John Jay.