When Portuguese adventurers first arrived in India, drawn by the scent of spices and the lure of money, they set up their trading outpost in Goa.

By the middle of the 16th century, the streets of Lisbon were buzzing with stories of gold, spices, exotic women and ready-made fortunes.

The Orient was where it was at for any ambitious young man. As well as painted ladies, the word �casta’� became commonplace to describe the rigid Indian social hierarchy. Casta in Portuguese means race, breeding or lineage.

This is where the term caste, used to describe the Indian social system, comes from. Indians refer to it as the �jati’� system. There are 3,000 castes and 25,000 sub-castes in India, each related to a specific occupation. These different castes fall under four basic categories: Brahmins are priests; Kshatryas are warriors; Vaishyas are traders and Shudras are labourers.

Caste dictates one’s occupation, dietary habits and interaction with members of other castes. Members of a high caste enjoy more wealth and opportunities, while members of a low caste perform menial jobs. At the bottom of the caste system are the Dalits or �Untouchables’.

Untouchables’ jobs, such as toilet cleaning and rubbish removal, require them to be in contact with bodily fluids.

They are therefore considered polluted and are not to be touched.

Back in the days of the Portuguese traders, such systems were common in many countries. Until the late 18th century, even modern, post-reformation Germany operated a system of Stande or status groups (where society was rigidly delineated into special groups).

Likewise, imperial Japan had its system of samurai, merchants and peasants.

These caste systems attempt to impose a functional order and stability on society, thus protecting elites from change.

Observing the recent developments in the Fyffes/DCC trial, it is easy to conclude that a similar caste system exists in the Irish financial community, where the nature, quality and size of the deal depends on a company’s position in the financial hierarchy.

First, there are the �big boys’� – our 21st century financial Brahmins – who get the best deals, at the best prices, long before the rest of the market.

Brahmins are on the boards of publicly-quoted companies, are paid in shares of those companies and can be (as in the Fyffes/DCC case) major investors in the company. When you are that big in a small market, you don’t exactly make the regulations, but you damn well understand the rules of the game better than anybody else.

Under the Brahmins are the Kshatryas, the warriors. These are the senior executives in the broking business and their preferred clients, who get preferential status on syndicates and are privy to exit strategies which are typically based on selling the asset to a lower caste in a few months or years when much of the value has been taken out.

This is euphemistically known as a �turn” or �flip’�.

Next we have the Vaishyas, the traders. These are the workhorses of the financial market in Dublin and they are typically brokers and their clients – the large pension funds. They work for a wage and rarely get a piece of the direct action (known as �a carry’� – a part of the equity in the deal), but they have generous expense accounts, company BMWs and Carton House memberships. They also help fine city centre restaurants do a roaring trade at lunchtime.

Below the Vaishyas lie the Shudras, or the labourers who are the smaller brokers and their clients. Typically, new private clients might be those who have made money in property and want to diversify into stock, or maybe those who are topping up their self-administered pension funds with leveraged stock holdings.

In good times, they can do well by going with the flow; in bad times, they tend to be the last to know of trouble and often do not get out on time.

At the bottom of the caste system, we have the financial untouchables. These are the punters, the amateurs and those who naively believe that the market is fair, transparent and the odds are evenly matched. They are the hundreds of small Elan investors who, through their own actions, got caught up in the hype.

They are the �Eircom untouchables’ – the willing victims of botched privatisations. But like all caste systems, the market couldn’t work without them.

All markets work on the basis of an asset being shunted on to the next layer of buyers who take a bit of value and shunt on again to the lower caste. The name of the game is not to be the lowest caste holding the asset with nobody to shunt the thing on to. The untouchables are therefore an essential lubricant of the financial market.

However, they sometimes do not realise that they are the buyers of last resort, rather than the small-town captains of the universe they like to see themselves as.

Observing the evidence this week at the Fyffes/DCC trial – a clash of the Brahmins if ever there was one – one can be left in little doubt about the financial caste system.

DCC decided to sell its stake in Fyffes and brokers lined up to place the stock. There was the risk of a huge overhang of the stock – over 10 per cent of the company – and therefore, the caste system got to work. The various different castes lined up their buyers.

The aim is to get the deal away with as little impact on the price as possible, so that the Brahmin gets the best price for his asset. All the way down the food chain, different castes of investors will be allocated and different packages, usually at different prices – known as �bloc trades’� – will be readied to ensure that the price does not fall when the shares come to the market.

What is clear to the outsider is that there are few heroes in the case. When the torch is shone into some of the darker alcoves of our financial market, a picture emerges which is not always pretty.

We have a chief executive claiming that he was a �conduit’� rather than a �negotiator’�. What is a human conduit?

We are told about plcs issuing what some are contending were misleading statements and, finally, we have senior financial Brahmins suggesting that the market – not themselves or the company selling – negotiated the price of a major share sale.

There may be a plausible and reasonable chain of events that makes all this credible – the judge will decide that. But the talk around town indicates that there is a lot at stake here. The industry is based on the myth that everybody has a fair chance, punters can play the casino like everyone else and there is no caste system. This essential illusion is not helped by the daily revelations in the High Court and, as a consequence, the industry is closing ranks. However, in the long run, the viability of the Irish financial market can only be maintained if everybody – even the untouchables – fully understands the risks as well as the rewards of committing cash to any investment.

More players in the market would make it more liquid and make it more attractive to companies wanting to list.

In fact, one of the problems in recent years has been the number of Irish companies seeking AIM listings in London, rather than Iseq listings.

The untouchables were named �Harijans’� (Children of God) by Gandhi. He tried to raise their status with symbolic gestures, such as befriending and eating with them. The Irish market needs its own financial Gandhi who will preach openness, transparency and tolerance for all castes. One wonders will such a leader emerge from the detritus of this case.

Stranger things have happened.

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