Thursday 08 October 1998
for his part in the most notorious insider dealing fraud of the Eighties. But then, they're
not Gerald Ronson, natural born tycoon and, once again, a big noise among the big boys
When Gerald Ronson's spectacular fall from grace came a decade ago, there was no shortage of gloaters. As he was sent down for a year - and fined pounds 5m - for his part in the Guinness scandal, the brash, Havana- smoking tycoon waved good-bye to a lavish lifestyle of Rolls-Royces and jets, along with his palatial homes and his beautiful former model wife Gail and four daughters.
Rightly or wrongly, he and his famous co-defendants, the Guinness chairman Ernest Saunders and the stockbroker Anthony Parnes, had come to represent all the avaricious, greed-is-good excesses of the City in the Eighties, when, in the rush to get rich the rules governing business were trampled into the ground.
So it warmed the heart of ordinary, poorer mortals to see Mr Ronson, minus the chauffeur and smart wheels, pedalling round the yard of Ford Open Prison on a bicycle. And oh, the sniggering, when it was reported that he was wiping up after his fellow inmates had eaten their meals.
Those who do not know Gerald Ronson thought that prison would break him, and that when he emerged from jail, so great would be the shame and the social stigma that all would shun him. But the past eight years have seen a rehabilitation - both personally and in business - which as been just as spectacular as his downfall.
Yesterday Mr Ronson formally announced his return to the London property market big time, with a pounds 250m deal involving eight prime investment properties in the West End of London and in the City. It marked the latest - and to date greatest - triumph in a claw-back from the abyss for a man who once had it all, and who at the age of 59 seems determined to have it all again.
So how did Gerald Ronson manage to pole-vault over the "disgraced tycoon" and shady dealer labels that dogged him, to get back into big business?
By the time he emerged from Ford Open Prison in 1991 after serving just six months of his sentence, he was apparently the governor's favourite prisoner. He had not just knuckled down and served his time. He had even run business courses for other inmates.
While Ernest Saunders seemed to have withered inside Ford, despite its "cushy" reputation, Mr Ronson, who was from a humbler, tougher background, throve. A third-generation Jewish immigrant, who had left school at 15 to join his father's furniture business, he had fought his way to the top of the business world. And despite the cocktail parties, the social climbing, the jets and the Rollses, he has stubbornly held on to his broad norf-London accent.
It was that rough, tough edge that saw him through. "Those who know him were not surprised he got through the sentence so easily," says one associate. "Because he is actually a pretty crude person, and the barrow boy has always been part of his persona. We knew he was more than able to tell another prisoner: `Don't fuck with me.' I use those words because he uses them."
Mr Ronson entered prison with something else in his favour. While his co-accused Mr Saunders and Mr Parnes squirmed from the charges and allegations of an anti-Semitic plot that had been circulated (ie that "the four Jews" were sacrificed for a much larger guilty group of businessmen), Mr Ronson already had his hands up, declaring it to be a fair cop. He owned up right away to his part in the illegal attempts to force up Guinness's share price to see off a rival bidder, the whisky giant Distillers. The only excuse he offered for what a government report referred to as "shabbily opportunistic" behaviour, was naivety.
"At the time, owning up was thought to be a stupid move," says one City observer. "But in retrospect he handled it best of them all. Unlike the others, he did not protest too much. He got on with it. In the long run it paid off."
Mr Saunders' solicitors eventually claimed that he had developed pre- senile dementia, in an attempt to have his sentence shortened. During an appeal in 1991 a court was told that Mr Saunders was "unable to recall three numbers backwards, forgets the subject of a sentence almost before he had started, and could not even remember who was the President of the United States". His later remarkable recovery, after early release, lost him considerable respect.
But although Ronson was seen to have taken punishment like a man, and even to have put something back into society, with his commerce courses for cons, he emerged to find his business in ruins.
For months the tabloids had screamed that he was still managing to run his vast business empire from his cell, though he claimed that his wife Gail was taking care of the business. But within months of his release Heron International - the business he had built from scratch to become the second-largest private company in Britain - was on the point of collapse, owing pounds 1.4bn. The man who risen from nothing to become the 14th-richest tycoon in Britain was staring over the edge. Business journalists speculated that his six months inside were to blame for the collapse, but Mr Ronson later pointed to recession and over-borrowing.
At times like these it helps to have friends, and crucially Mr Ronson's - despite the gossip column reports of social cold-shouldering - never really deserted him. "He's a popular, rough-diamond, salt-of-the-earth type," says a City commentator. "People like him."
They had stood by him at his trial. The chairman of Barclays, Sir John Quinton, who had once called him "the outstanding businessman of his generation" provided Mr Ronson with a glowing reference which, it is thought, helped to persuade the judge, despite the emotion of the times, to send him down for only a year.
And when Heron International was on its knees, friends were again on hand to pull it up again. A posse of American financial backers was rounded up and rode in - though it was touch and go at the time - to save the day. Among the backers were the media tycoon Rupert Murdoch, the telecommunications billionaire Craig McCaw, and Time Warner. Since then the company has been slowly and securely regaining its place in the market.
But there was a personal price to pay. Mr Ronson remained chief executive but his 100 per cent stake in Heron was reduced to 5 per cent. It must hurt that the company he named after his father Henry Ronson now belongs to others, but recently Mr Ronson hinted that his share in the company might grow as he built up its successes.
If the past does hurt, he does not dwell on it. On his desk in his London office sits the motto on which he claims to have modelled his life. "Nothing in the world can take the place of persistence. Talent will not, education will not. Persistence and determination are omnipotent."
Mr Ronson believes that. He now hates to speak about the past and his rise from the ashes, claiming to hate the way his life is summed up in such cliches.
He has written about his time in jail, but it is not for public consumption. It was for his grandchildren, he says, that he put pen to paper.
It was not just friendship that motivated his friends. Mr Ronson, unlike his co-accused, was an entrepreneur, and is still seen as bankable. The business world admires his stamina, determination and complete focus. And his charitable giving through his own foundation - which has handed out more than pounds 20m - has always been respected. However, though he was hobnobbing with the Royal Family just weeks after his release, the knighthood that, in normal circumstances, his giving might have earned him will not now come his way.
It is hard to find anyone who grudges him his return to the big time. In business they say that, a decade on, it is as if his downfall never happened. "No one in the business really thought he was a crook - just unlucky," says one businessman. "Now the Ford prison is just a bit of a giggle."
"Everyone labelled him disgraced, but the truth is, it could have happened to any of us. He was punished for the times." And who can resent a sacrificial lamb, when the sins it expiates are so liberally spread among others?
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