“Q Branch’s” Stock Market Shenanigans

This post has every­thing, folks:

* Killer robots!
* Cheeky Brits!
* Cute marine mam­mals!
* Shady gov­ern­ment offi­cials!
* Insider trad­ing!
* Those Trilateral Freemasons over at the Carlyle Group!
* Plus, a gra­tu­itous ref­er­ence to James Bond!

Here’s the scoop: Back in 2001, the UK Ministry of Defence decided to split its research and devel­op­ment divi­sion into two parts. The Defence Science and Technology Laboratory, (Dstl) would remain as the British military’s in-​​house tin­ker­ers and geeks. The other half, dubbed Qinetiq, would become a pri­vate com­pany, focus­ing on tech­nolo­gies that could be used both by the com­mer­cial and the gov­ern­ment mar­kets — the war-​​makers, as well as the money-​​makers. It’s as if James Bond’s “Q Branch” decided to start sell­ing jet packs to Silicon Valley, as well as 007.
But one doesn’t sim­ply move from the civil ser­vice to the board­room. To help with the tran­si­tion, Her Majesty’s gov­ern­ment picked a pack of cor­po­rate financiers. Not just any pack, mind you. But the boogey­man of the conspiracy-​​minded every­where: the Carlyle Group. That’s right, the for­mer (?) pro­fes­sional lair of illu­mi­nati like James Baker and John Major and George H.W. Bush. It bought about a third of the new com­pany.
Under Carlyle’s wing, Qinetiq went on a buy­ing spree. One acqui­si­tion in par­tic­u­lar should be famil­iar to Defense Techies: Foster-​​Miller, maker of the Talon robot. That’s the squat, treaded machine used by U.S. bomb squads through­out Iraq. The Army now is try­ing to strap a machine gun or a grenade launcher onto the 3-​​foot tall ‘bot, and send it into the war­zone. The armed Talon would prob­a­bly be in Iraq by now — if only it could have pass its safety tests.
Qinetiq’s pur­chase meant that, in a sense, the British Ministry of Defence now owned a part of America’s robot arse­nal. That’s because “the MoD retains a Special Share in QinetiQ to ensure that the UK’s defence and secu­rity inter­ests are pro­tected,” accord­ing to the company’s web­site. “Robust safe­guards also exist to pre­vent con­flicts of inter­est and to ensure that the Government pro­cure­ment process’ integrity is not com­pro­mised.“
Those safe­guards are being put to the test, now that the Carlyle Group has decided to take Qinetiq pub­lic, on the London Stock Exchange. The esti­mated price: 1.1billion. But the February 15th. event won’t be some tra­di­tional IPO. Qinetiq shares won’t be avail­able to indi­vid­ual investors. Instead, the firm will only be sell­ing stock to the biggest of the big finan­cial firms.
More than a few small investors are pissed. They fig­ure, as tax­pay­ers, they’ve indi­rectly poured money into Qinetiq. Why shouldn’t they be able to reap the ben­e­fits? Spurred on by the Daily Telegraph, over a thou­sand investors are demand­ing to buy in. Leaders of the London Stock Exchange are back­ing the effort. So is the white col­lar union rep­re­sent­ing 10,000 QinetiQ employ­ees.
That’s not sur­pris­ing, con­sid­er­ing more than 99 per­cent of the staff can’t get in on the IPO. But a few on the tippity-​​top can. And they are slated to cash in, big. Qinetiq finance direc­tor Graham Love is sup­posed to make off with 18 mil­lion, “on an ini­tial out­lay of just over 100,000,” accord­ing to IT Week. “Sir John Chisholm, exec­u­tive chair­man and for­mer chief exec­u­tive, is set to make more than 20 mil­lion from his stake, for which he paid 129,000,” notes the Times of London.
That is, if the deal sur­vives. It may not. The gov­ern­ment has launched at inves­ti­ga­tion into the Qinetiq offer­ing. Ministry of Defence finance boss Trevor Woolley is being eyed for vio­lat­ing con­flicts of inter­est. So is Qinetiq direc­tor Noreen Doyle, who also hap­pens to be on the board of Credit Suisse, the bank which is jointly run­ning the IPO. There’s talk that Chisholm and Love may even pass up their options.
Amazing, though, the talk of finan­cial shenani­gans isn’t the worst of Qinetiq’s press in recent days. Remember that cute lit­tle whale that swam up the Thames River, and then trag­i­cally died? Well, folks are accus­ing Qinetiq of killing it.

Marine sci­en­tists and ani­mal wel­fare groups believe that navy sonar may have dis­ori­en­tated the whale. Marine acoustics experts sup­ported local res­i­dents on the north coast of Kent in blam­ing huge explo­sions from a site oper­ated by the defence con­trac­tor QinetiQ.

That’s gotta hurt.
UPDATE 10:50 AM: Speaking of zany British security-​​types, what the heck is up with the UK’s Russian spooks and their spy rock?!?!?

January 24th, 2006 | Money Money Money | 179224 Comments »http://defensetech.org/2006/01/24/q-branchs-stock-market-shenanigans/%22Q+Branch%27s%22+Stock+Market+Shenanigans2006-01-24+12%3A25%3A38murdoc You can skip to the end and leave a response. Pinging is currently not allowed.