IN the ultra-polite language of the City, even the biggest failures among departing bosses often leave with good wishes and gratitude for their contribution ringing in their ears.
So when blue-chip fund managers dispense with pleasantries and bandy words such as “cynical” around, it’s clear that somebody is seriously unhappy. Having bought Essar Energy shares at their offer price of 420p in 2010, Standard Life Investments’ distaste is understandable, now that the company’s founders have offered to buy it back for just 70p.
JP Morgan, one of the banks which floated Essar, cannot be sitting too comfortably either. It is advising the independent directors on the approach, which was sensibly rebuffed.
The committee of directors was “committed to safeguarding the interests of minority shareholders”, it said.
So JP Morgan might want to reflect whether accepting a fee for this work is prudent if it genuinely wants to be regarded as acting in investors’ interests. A spokeswoman for the bank argues that fees are a matter of judgement for clients.
That may be so, but while some investors are warning that this dispute will cost the Ruias support for any future attempt to list a company in London, that is a red herring.
The Ruias will have made their money, and they can afford to live with that threat. Bankers reliant on their relationship with the City do not enjoy the same luxury.
BARCLAYS STARTS HUNT FOR NEW CHAIR
There’s a reason why Barclays has begun a search for Sir David Walker’s successor 18 months before he’s due to retire. Once-prestigious roles on the boards of UK banks have lost their allure since the crisis. New rules increasing directors’ personal culpability for wrongdoing are proving an additional deterrent.
So neither Barclays and Royal Bank of Scotland (RBS), which is looking for a replacement for Sir Philip Hampton, are likely to have a truckload of grandees fighting their way to their doors, Yet it isn’t only big retail banks having trouble finding their next chairman. At the Bank of England, the hunt for a successor to Sir David Lees, the Court’s chairman, is also proving tricky.
Anthony Habgood, the chairman of Whitbread, has been linked with the job – and he may well get it, though not before a number of others snubbed Threadneedle Street’s grandeur. Among their number is Sir Simon Robertson, the deputy chairman of HSBC and former chairman of Rolls Royce.
A man with impeccable credentials for the post, I’m told that Sir Simon was sceptical about its substance.
Given the power vested in the governor, it’s hard to disagree with the view that the Court chairman is little more than a glorified administrator.
RBS JOB CUTS STILL UNCLEAR
By the time you read this, the full details of Ross McEwan’s strategy to normalise Royal Bank of Scotland will have emerged. Transparency and fairness will be its watchwords, he has been at pains to stress in recent weeks. Why, then, did Mr McEwan say in a note to staff last week that there would be “no big announcement” on jobs to accompany today’s estimated £8bn loss?
True, much of the headcount reduction at RBS will not be the result of job losses at all, but from employees transferred elsewhere as part of the sale of businesses. Nevertheless, McEwan can hardly dispute that there will be savage cuts in the businesses he retains: his track record in Australia and RBS’s retail bank testify to that.
More sensible, surely, would have been to outline the scale of a jobs cull early on and avoid yet more uncertainty for RBS’s long-suffering staff.
Mark Kleinman is the City editor of Sky News @MarkKleinmanSky