Smash hit

But they didn’t. What’s going on? Opportunism, says Smith.

“It’s August, the press are having a frenzy.”

How long could it run? “Dunno, why don’t you ring the High Court and FSA and ask?” And what do his lawyers think? “Dunno, why don’t you ask them too?” Yeah. right, point taken. Smith, whether lecturing on his heroes or getting the hump, goes for the interrogative.

Then, as quickly, the mood passes, and he is breezy again. Yes, he says eventually, he could have settled but was astounded by the allegations and the £3m compensation for wrongful dismissal.

Is he worried? No, determined. Elbows on the table, he methodically offers a point by point rejoinder to all the allegations made. He called in the police and has also lodged tapes of relevant conversations with Clifford Chance, the lawyers he asked to investigate the matter. They have found no evidence to support the allegations on the tapes.

But it’s hard not to think that Smith’s famed pugnacity — he once, legend has it, head-butted a fund manager at a dinner after a row — has inflamed the situation. He says his former employee should have known, when threatened, he doesn’t run. “If we are as questionable as the allegations would suggest, it’d be highly likely Mr Middleweek would be £2.4m better off and you wouldn’t have a story to write.”

That pugnacity was forged in his tough East End upbringing — money was scarce, his dad eventually died of asbestosis after a stint in an asbestos factory — which bred into Smith a heightened desire to fight his own corner, and not to toe the line. Combine that with his gift of the gab and a bent for figures (physics prize at school, a first-class degree reading history) and you can see why, as an analyst, Smith made many plc finance directors uneasy.

Ironic, then, that he’s now being needled as a boss by another maverick analyst? He gives me a withering look. The proper forum for all this, he points out, is in the courts and in the regulatory authority and he is not going to indulge in trial by media. He believes he and his firm will be found innocent, but at the moment it is pretty difficult for Collins Stewart to defend itself in a matter that is sub-judice.

And he is quick to see bigger forces at work. It is no coincidence, he says, that the Financial Times has reported the allegations about Collins Stewart particularly aggressively. Less than a month ago he was highly critical of the accounting practices of the FT’s owner, Pearson.

They’re extracting revenge for his hubris? That’s his interpretation.

The truth is, Smith hasn’t been that good at making friends on the way up. “Yeah, I was a bad subordinate to those I didn’t respect,” he says. “And I guess I am not a clubbable guy.” You can understand why. For a start, he hates to be pigeon-holed.

Everyone wants him to be the East End boy made good, but he claims he is not that motivated by money or status. Yeah, he owned a Porsche but he says he’s happier in his Volvo. He used to ride to hounds (“I love sports that are politically incorrect”), but since his daughters stopped, he can’t be bothered.

He just wants to build up his firm, go to the boxing, holiday in Barbados, keep to himself. For his 50th birthday earlier this year — a big deal for most City nabobs — he “went across the road for a couple of pints in the pub” near his home in Essex. “I didn’t want any presents.”

Those who get on with him find him provocative, hard to read, but never a chancer. “Terry is one of the good guys,” says one, mystified by the charges laid against Collins Stewart.

Others acknowledge that Smith, who likes to monitor his staff on office webcams, can be quick to find others stupid, tough to work for, even tougher to pick a row with. This current fight isn’t going to make him any easier.

“You know the prime rule of fighting?” he asks suddenly, showing us his boxing room. “If you are going to hit someone when they are down, make sure they don’t get up again.” Those giving him a kicking at the moment had better remember that, he adds coldly. And then he smiles, as if in anticipation.