The sensational corporate espionage case involving rivals Hilton and Starwood looks likely to provide plenty of diversion from the trading gloom that has enveloped the hotel industry over the past few months.

In a nutshell, Starwood has accused two of its former executives — Ross Klein and Amar Lalvani — of stealing more than 100,000 files and using them to help Hilton to enter the lifestyle hotel sector. Klein, who ran Starwood's trendy W brand, joined Hilton last summer to set up a new lifestyle division and within months had launched a similarly hip brand, called Denizen.

The details in the writ are dynamite. Klein is accused of signing an employment contract with Hilton without telling Starwood, then systematically “looting” confidential information to take with him. Although Hilton has dismissed the lawsuit as “without merit”, Klein, who once conceded that W was “the gayest mainstream hotel brand ever”, is famous for his unorthodox lifestyle. He spends most weekends cleaning his large collection of cars. “Washing them is a therapy. For me, you don't know your car until you've caressed every inch of it.”

Lurking in the hedge

A writer who has ghosted books for, among others, Jacqueline Gold and Noel Edmonds, has written a novel about the world of hedge funds, titled Toxic People. Lena Semaan, who is releasing the book on the internet by subscription, enlisted the help of an unnamed hedge fund director in her portrayal of the main characters — David Taylor, a former banker who sets up his own fund, and Raef Savage, the narcissistic financier who backs him. The book, set in 2005, contains (predictably) “bankers, sex, greed, filth, wives and hookers” and is said to be based on real people. The identity of her source is not being revealed, although I am told that City folk should not find it too difficult to work out who he is.

Surrey County Council recently opened a fabulous “community recycling centre” at Earlswood, near Redhill, on the site of what we locals still insist on calling the tip.

I have to admit, the multimillion-pound facility really is very impressive, although the collapse of the global market for many recycled materials does make you wonder why they bothered. A nearby field where

I walk the dog has acquired a mountain of reprocessed paper that the local farmer is being paid to plough into his land. But at least the paper provides fertiliser ... doesn't it? Er, no. The farmer claims that the impact on his soil will be neither positive nor negative.

With Alistair Darling under pressure to cut the threshold for the proposed 45 per cent income tax band from £150,000 to £100,000, the jobs website eFinancialCareers has polled 200 City “high earners” on what they think the new level should be. The result? Only 15 per cent were in favour of £100,000. What's that line about turkeys voting for Christmas?

Who said the super-rich were cutting their spending? YachtPlus, the timeshare group that on Saturday launches its first €16 million Norman Foster-designed super-yacht, says that it has sold the equivalent of 2 boats.

All change at the Exchange
In the blue corner: Martin Graham

Martin Graham, head of markets at the London Stock Exchange, has resigned in a reshuffle. The move comes as the LSE is braced for the arrival of Xavier Rolet, the new chief executive, who succeeds Dame Clara Furse in May.

He will be replaced by Raffaele Jerusalmi, the group's head of derivatives, an area in which the LSE is keen to lift market share.

Graham, a graduate of the other LSE — the London School of Economics — was well-travelled in the Square Mile, holding senior posts at Dresdner Kleinwort Benson and WestLB Panmure before joining the Exchange in May 2003. Rolet was one of his colleagues at Dresdner Kleinwort Benson, between 1997 and 2000.

Graham managed all market-facing functions at the Exchange. He also led its response to new competitors, including Chi-X, Turquoise and Bats Europe, as well as defending the Alternative Investment Market from criticisms that its standards were not high enough.

Once seen as a possible successor to Furse, his cause suffered several setbacks, notably the computer glitch that halted trading for seven hours on September 8 last year — when it had been expected to be especially busy after the bailouts of Fannie Mae and Freddie Mac, the American mortgage groups. He flew with Furse to Qatar to ask the Gulf state to partner the LSE in launching a financial market in Doha. Despite owning 15 per cent of the LSE, the Qataris went with NYSE Euro-next.

— Got a diary story? city.diary@thetimes.co.uk

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