City & Business: Tiny's best hope

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The Independent Online
Last week I posed the question 'are we about to witness Tiny Rowland's last stand?'. Answers are still hard to find, and I suspect that even Tiny hasn't made up his mind yet. As the weekend began, there were signs that the temperature was beginning to cool, a feeling that perhaps Tiny will eventually accept demands from his joint chief executive, Dieter Bock, for the appointment of two non-executive directors.

The most sensible thing for Tiny to do is acquiesce and pray that, once outnumbered by Bock supporters on the board, they will be gentle and kind to him in his old age. It's not nice to bully a pensioner, after all, and Tiny cannot possibly hope to win in the long term. He will find no backing in the City for a fight, either from bankers or shareholders; with Mr Bock prepared to go all the way to an extraordinary general meeting on the issue, all Tiny would succeed in doing is costing the company a huge amount of time, money and aggravation, and in the end he would lose.

But then reason never did play much of a part in the affairs of Lonrho and Tiny Rowland. It'salways possible that Mr Rowland's end game is to create so much trouble that Mr Bock is eventually forced to buy him out at a hefty premium to the prevailing stock market price; Mr Bock already has a call on Mr Rowland's remaining shares.

That, however, seems much too simple a plot for Tiny. Lonrho is his creation and even at the age of 75 he is not going to cede control to a German upstart, originally brought in only out of temporary financial necessity. Mr Bock has proved a far more effective and potent operator than Tiny exected; his attempts to 'normalise' the company and make it more acceptable to the City are not only culturally repellent to Tiny, they are also highly dangerous for him.

If he caves in now, he may never get another chance to stand and fight; this is the last throw of the dice. Once outnumbered on the board, the game would be up. Remuneration and audit committees would be set up. The medieval fiefdom Tiny has created around him would begin to crumble from inside.

Though the company's articles of association stipulate that no director can be sacked without the unanimous approval of the board, life could be made highly uncomfortable for Tiny and his allies. His salary could be slashed, his executive perks, including the famous Gulfstream jet, taken away from him, and his opportunity for power broking in Africa, his biggest love, removed. Mr Bock must be hoping Mr Rowland will see sense, but I wouldn't bet on it. He has too much to lose.