Banks seek change at top of Heron

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The Independent Online
BANKERS to Gerald Ronson's beleaguered Heron Corporation are pressing for key management changes.

KPMG Peat Marwick, the accountancy firm advising the five-bank steering committee trying to restructure Heron's pounds 1.3bn debts, has written to Barclays, the lead member. Copies of the letters have been passed to the Independent on Sunday.

Marked 'private and confidential', the documents refer to the Heron refinancing as 'Project Fred'.

In one letter, Michael Wheeler, a KPMG partner, writes of 'the potential for enhancing the management of Fred'.

Mr Wheeler says he regards it 'as inevitable' that Mr Ronson, the group's chairman and major shareholder, 'needs to continue in his role'. As for Michael Marx, the finance director, 'he is more than competent and I see no merit in replacing him'.

However, it is Alan Goldman, Heron's chief executive, who appears to be causing concern.

Says Mr Wheeler in his letter: 'I am aware that some doubts have been expressed about his abilities. My view is that he has an exceptionally good and detailed knowledge of his business and is a tough and commercially minded individual.'

But, Mr Wheeler adds: 'I believe it is important that the banks should seek to enhance the board of Fred.'

Mr Wheeler recommends the appointment of two non-executive directors 'whose function would be to obtain an understanding of the direction of the group and act as the banks' 'eyes and ears' '.

He adds: 'It may be difficult to find appropriate people in the commercial world and consider that the type of person you should be seeking is a recently retired high calibre professional person whose background should be from a major firm of accountants, solicitors or surveyors.'

George Cracknell, the Barclays director overseeing the Heron talks, confirmed that the banks were discussing strengthening the board.

'Obviously, it is one of the things that gets considered in all these situations. There is a whole gamut of questions to consider.'

He said the steering committee hoped to lay a set of proposals before Heron's 80 creditor banks in early October.

These are thought to include the banks that have taken equity in Mr Ronson's empire.

Mr Wheeler refused to comment.

(Photograph omitted)

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