WE are sitting in Terry Smith’s ideas room, nine floors up in Collins Stewart Tullett’s fiercesomely modern glass-and-steel City headquarters.

“Do you know who these are?” says Smith suddenly, pointing at four large, black-and-white portraits of great men hanging on the wall opposite.

Yup. Brunel, Lincoln, Einstein and Picasso. (What does he think I am — stupid?) He goes on. “I chose them all myself. That’s Brunel standing in front of the chains of SS Great Britain, biggest steamship ever built, which bankrupted him. He died bankrupt.”

He leaves the thought hanging, then continues: “What sort of hat is he wearing?” “Stovepipe,” says the photographer.

“Yeah, very good, you’re wasted doing the pictures.” He gestures at me. “Give him yer notepad, he should be doing this interview. Ha ha ha." Smith, medium-height, thin-shouldered, grey hair cropped close, is in a surprisingly good mood. He takes another quick sip of green tea before carrying on with his lecture. Then he shows us his boxing room (pictures of Ali, Foreman, Cooper), his war room (Patten, Churchill, Rommel) and his flag- raising room (Iwo Jima, the Falklands) — all meeting rooms decorated to a theme.

Is Terry Smith nuts? Some think so, others contest that he has one of the sharpest minds in the City of London. Son of an East End lorry driver, exuberant boxing fan, renowned former analyst and now boss of the stockbroker Collins Stewart Tullett, he has made a career out of doing the unexpected — borrowing £100m and buying his own firm, for instance — and speaking as he finds.

Then wham, last week he found himself at the centre of serious allegations of insider dealing and share ramping, in what had started as an employment row with a sacked analyst. To say the allegations stunned the City is putting it mildly.

For one thing, these kinds of employment rows just don’t normally get to the High Court: deals are done, tact and tight-lipped lawyers are deployed, monies paid out of court. Not Smith. With the slightly pig-headed determination of someone who has pulled himself up by his bootstraps and is not going to let just anyone take it away, he makes it clear: consequences be damned, he’s coming out fighting.

For another, he is accused of exactly what he used to excoriate others for when he was a maverick analyst. He was even sacked from UBS in 1992 when he wrote a book Accounting For Growth that stuck it to some of UBS’s clients for their opaque accounting methods. How the tables have turned.

Yet despite a week of nonstop coverage in the business press (Smith on a spit, yes, we love it), he’s as charming, chipper, and fast-talking as ever. Underneath you can just detect the trademark aggression bubbling up. With his slight physique, the limp — he stands with knees slightly bent, as if resting a sore hip — and occasional snarl, it’s like dealing with a hurt terrier that is one day going to give someone a very nasty bite.

The allegations against him and Collins Stewart (see panel below) are made in a lengthy document written by former employee James Middleweek, who is seeking compensation for wrongful dismissal and claiming to be a whistleblower.

Smith, in turn, has accused Middleweek of attempting to blackmail Collins Stewart, offering to bury the report if he got paid off. All of this is now being picked over by the Financial Services Authority (FSA) and the City of London police. By Friday, £200m had been wiped off Collins Stewart’s share value. It’s an ugly mess.

Did it have to get this far? Smith shrugs. “Of course, we could have settled. We could have just said, ‘have the money, go away’.”