CITY DIARY

As the first flush of this year's tea harvest reaches the Calcutta auctions, a row is brewing among the world's tea community about the infiltration of top-quality branded teas by low-grade foreign leaves and weeds.

At the head of British concern is Will Hobhouse, the former Tie Rack managing director who now runs tea retailer Whittard of Chelsea. Since buying into Whittard, with backing from Granville venture capitalists, he has seen earnings at the tea-shop company rise five times in two years to £1.55m on a turnover of £15m.

London traders, who traditionally demand the highest quality, complain that teas branded as coming from one region are frequently only half-filled with the right leaves, and with many of the leaves coming from weeds.

Mr Hobhouse is calling for a quality-control system similar to the French appellation contrle. "When customers buy a named tea they should be able to expect pure ingredients," he says.

Christopher Heath's planned new venture, which may be staffed by refugees from Barings, is set to be called Caspian. "He has a thing about the seas of the world," a source says.

Dispirited employees at John Govett, the City fund managers recently put up for sale by Arthur Treugar, can take heart from the gung-ho attitude of the new head of its derivatives desk. Ian Morely was formerly the desperately busy director of Shearson Lehman's managed funds. He has also been managing director at Cable House Investment Services and headed the international fund management group at Rudolf Wolff. In his time off he likes to run marathons, support Spurs and organise a theatre group. Is he worried by the impending sale of his new company? "I am encouraged by what I hear," he says, bullishly.

The London Capital Club, the City club headed by Lord Palumbo and Sir Peter Parker, is to open a branch in Vietnam. The Hanoi club will be sited on the infamous "Hanoi Hilton" where captured US fliers were held prisoners of war. Let's hope the food has improved since then.

The increasingly fashionable but stubbornly obscure world of securities lending, which generates over £1bn of fees a year for investment managers, is set to receive two independent advisers. Charles Stopford Sachville and Mark Faulkner, former Lehman Brothers bankers, are setting up their own consultancy, Securities Finance International, to help fund managers to exploit this increasingly lucrative market.

The City's bankers nearly saw their attempt to liven up the tedious milk round presentations to fresh-faced undergraduates at Oxford and Cambridge universities come a cropper. In an imaginative break from the usual round of dull recruitment presentations, the banks organised a troupe of actors provided by Harwood Presentations to portray City stereotypes. Among the trainees they portrayed were a Hooray Henry, a patronising American and an over-aggressive barrow boy with wild misconceptions of City life. When the Hooray Henry, who was planted secretly in the audience, started barracking the speakers, the university security guards sprang into action, fearing some sort of demonstration, and tried to wrestle the unfortunate actor out of the hall. Peace was restored by the quick-thinking bankers.