Merrill's $1m a week liability

THE banker at the centre of Britain's biggest sex discrimination case was losing her firm almost $1m a week, a tribunal has been told.

Stephanie Villalba, who worked for US investment bank Merrill Lynch, had adopted the role of an 'armchair general', directing operations from behind her desk in London rather than travelling to the nine countries she was in charge of, the hearing was told yesterday.

When she was sacked by the bank in July last year, its European branch had posted pre-tax losses of $45.8m (£25.7m) for 2002 and was losing almost $1m (£562,115) a week.

Villalba, 42, is seeking £7.5m damages for unfair dismissal and sex discrimination.

She is the most senior executive in the City to sue for alleged discrimination. If she wins, the damages will be the largest to be awarded by a British employment tribunal.

Raymundo Yu, who promoted Miss Villalba, said he began to suspect she was not up to scratch only months after her appointment as Market Executive for Europe.

'Stephanie was not leading the field. She was not travelling enough. She was not getting to grips with the issues in our Spanish offices and she was not working effectively with those around her, including her boss, Ausaf Abbas,' he said.

Villalba, who lives in a £4.5m house in London's Belgravia, was appointed to her £1m-a-year post in May 2002. She had been entrusted with investing funds for Merrill's most important clients in Europe.

Villalba has branded the bank 'institutionally sexist' and has accused Abbas of humiliating her and forcing her to act like a 'stewardess' to male colleagues on a corporate jet during a business trip.

However Yu, senior-vice president of Merrill Lynch, insisted: 'I categorically deny her removal from her market executive role had anything to do with her sex.

'The reality was that Europe was losing a huge amount of money and we did not have the luxury of time to see if Stephanie could improve and turn the situation around.'

He said that only weeks after her appointment role she refused to attend a key meeting because she was holidaying in the Hamptons with her family. She also had an aggressive management style, the tribunal was told.

Yu's worries were confirmed by Merrill Lynch executive vice-president James Gorman, who flew to London to meet her and concluded she was 'in over her head'. The pair decided they needed to replace her as soon as possible.

Yu also defended Ausaf: 'My judgment of Ausaf is that he is a fair and even-handed manager who sets high standards for everybody (men and women alike).'

When Villalba was promoted, she was told her immediate task was to 'stop the bleeding' in Europe, but instead losses continued to soar.

The tribunal continues.