Barclays Bank falls foul of the laws of Lawson

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The Independent Online
Lord Lawson of Blaby, former Chancellor of the Exchequer and sometime diet guru, trousers pounds 31,000 a year as a non-executive director of Barclays Bank. Shareholders in Barclays and Lord Lawson's fellow directors should therefore make a point of perusing a recently published collection of writings on investment, The Investor's Anthology; Original Ideas from the Industry's Greatest Minds.

The book reprints an article the then Nigel Lawson penned in 1963 when he was City Editor of the Sunday Telegraph, headed "Seven rules for investors". The question is, does Barclays pass these rules?

The list of rules starts with: "Avoid companies whose chairman's photograph is published more than four times a year." Barclays should be OK there - photos of chairman Andrew Buxton are hardly ever seen these days, outshone as he is by former Courtaulds matinee idol Martin Taylor.

Lord Lawson's second rule is: "Avoid companies that publish their balance sheet in front of their profit and loss account in the final report." Again Barclays passes with flying colours. Uh-oh. Rule three says: "Invest in companies whose chairman is less than 5'8" tall." That's blown it. Mr Buxton towers well over 6 foot.

On to rule four: "Assess the board on the points system as follows - one point for every director, and an extra point for every peer, admiral, general or air marshal. More than 15 points disqualifies, or more than 20 in the case of banks and insurance companies."

Here Barclays just squeezes through with 14 points, including two points for Lord Lawson himself, the only peer.

Fifth: "Avoid companies who hold their annual general meetings at awkward times or in unlikely places." No problem there. Barclays' agm was on a Tuesday in April at the QEII conference centre in Westminster.

But wait for rule six: "Avoid companies who have just moved into a lush head office." The reasonably new clearing bank head office in Bishopsgate is pretty lush, while BZW is just moving into a veritable palace in Canary Wharf, down Docklands way.

Barclays does OK on the last rule: "Bad figures take longer to add up than good ones." It always publishes figures on time. But shareholders should still be wary of a stock that fails two of the Laws of Lawson.

May I welcome the Italian cricket team, who have just arrived to commence a tour of England. On Wednesday the UK branch of Generali, the team's Italian sponsors, held a reception for the team at their City offices in Fenchurch Street. Incidentally, I am informed the Italian for "Howzat?" is "Com'e questo?"

The 66-page offer for subscription document published by Audio Books and Music Holdings repays careful reading. The company, which started operations in May last year, is seeking to raise pounds 1.5m. It supplies audio books to retailers.

Page 55 of the document lists the previous directorships of David Selby, ABM's chairman, John Cooper, managing director, and Hugo Robson, a non- exec. (A finance director and sales director are being sought.)

It tells us that Mr Selby was a director of Alliance Property and Construction and its subsidiary, APC Management Contractors, "which suffered heavily in the property crash of 1991/92 and were ultimately wound up after bank LPA receivers had been appointed".

The document goes on: "In 1991 an associated group of seven companies, whose main trading company was Savage Transformers Limited, went into receivership." And there's more: "In 1995 the companies forming the school textbook supply division of the Foyles Educational Group was put into receivership. The change in the structure of Government financing to schools materially affected the school book supply market."

Turning the page, we find: "Hugo Robson was a non-executive director of London Executor and Trustee Limited, a fund management company. This ceased trading in November 1987 and subsequently was put into liquidation."

John Cooper was a director of "Posh Entertainment Limited. This was wound up by the Official Receiver in March 1996."

I wonder what Lord Lawson of Blaby would make of it all.