City: Has Rowland got a hidden agenda?

I HAVE to confess to not having much sympathy for those in the City complaining bitterly about the latest shenanigans from Roland 'Tiny' Rowland, chief executive of Lonrho. This is no doubt an irresponsible attitude to take on an issue of importance. After all, Mr Rowland is surely behaving badly by apparently selling effective control of Lonrho to an unknown German businessman at a price way above that which other shareholders can realistically hope to get.

This is especially the case if you believe the story that Mr Rowland has rejected several even higher offers for his stake that would have been available to all.

On the face of it, what Mr Rowland has done flies in the face of one of the guiding principles of fair play in the stock market: all shareholders should be treated equally. In circumstances like these, there is bound to be a suspicion of mischief; at the very least, Mr Rowland's position is riddled with conflicts of interest.

Those who expected any different need their heads examined. Mr Rowland has always been an iconoclast. The deliberate pursuit of outrage is one of his hallmarks, developed over the years into something of an art form. He likes nothing better than to shock the financial establishment. Nobody could claim the present episode was out of character. It was entirely predictable. And in any case, as the rules presently stand, there is nothing to stop a large shareholder, even if he happens to be the chief executive, selling his shares for whatever price he likes.

For those who follow the affairs of Lonrho, it would have been almost a disappointment to see Mr Rowland making his exit from the international trading group he has ruled for more than 30 years in anything other than a controversial manner - if indeed that is what he is doing (with Tiny you never can tell). A graceful, dignified, uncomplicated and straightforward departure? Never, not in a million years. Not unless Mr Rowland undergoes a personality change.

By any standards, Lonrho is an extraordinary phenomenon. It is one of the last great remaining business fiefdoms in Britain - a kind of relic from a bygone age of buccaneering business tycoons. Mr Rowland runs it in the manner of a medieval baron. There's no independent voice on its board, nobody to rein back on the way Mr Rowland exercises absolute power. The workings of Tiny's mind are as impenetrable as his company. Nobody else really understands them.

Even by Tiny's standards, however, the latest adventure takes some beating. For a start, the transaction has been set up in a way that seems designed to require a bare minimum of disclosure and shareholder approval. Dieter Bock, the man who has agreed to buy half Mr Rowland's shareholding and invest a further pounds 80m in new shares, is a tax lawyer and businessman whom Tiny met for the first time just three months ago.

As a deal maker and property developer, he appears to have a track record of sorts, but the origins of his wealth and backing are deeply mysterious. He is a veritable 'hero from zero', to borrow an expression once used by Mr Rowland to describe his old business enemy, Mohamed Fayed.

Mr Bock claims to have been following Lonrho's affairs for 10 or more years, and in making his investment he seems to have had access to more information on the company than most. But in truth he cannot properly have understood what he has let himself in for. He is meant to be a man who shuns the limelight, but now he has hitched his wagon to Tiny's horse he will be in the news constantly. Tiny will make sure of it.

For Mr Rowland and Lonrho, Mr Bock has obvious attractions. Linked with the disposal of the VAG motor distribution business for pounds 124m, he provides a much-needed infusion of cash. Debt has continued to rise through the recession, despite a crash programme of disposals, and now stands at nearly pounds 950m. The sudden appearance of Mr Bock has bought time, kept the bankers from Tiny's door and headed off an imminent shareholder revolt over poor results and a drastically cut dividend. To the outside world, Mr Bock also appears to be a solution to the problem of Tiny's succession. Mr Rowland is 75 years old and even he must now have realised that all men are mortal. Mr Bock, unlike some of the others who have camped outside Lonrho's door, may seem to Tiny like a safe pair of hands - someone prepared to guide Lonrho into the next century rather than break it up. With the introduction of Mr Bock, Mr Rowland may have done just enough to head off mounting City pressure for more radical management and structural change.

The trouble with Mr Rowland is that with everything he does you cannot help but think there must be a hidden agenda. The idea of Tiny taking a back-seat role at the company he has created and loved, even at 75, is barely credible. As many seasoned observers in the City are saying, it seems at least possible that Mr Bock is being used, perhaps unwittingly, as a smokescreen - a convenient parking place for Tiny's shares to help weather the storm. When better times return, Tiny will re-establish control and Mr Bock will disappear as rapidly as he came.

If that's Tiny's end game, however, it is a dangerous gamble. He did something similar before: he parked his House of Fraser shares with the Fayeds in the belief that they would sell them back as soon as he came to need them. Just look where that got Lonrho - seven years of drift during which Tiny allowed himself to get sidelined in an obsessive, bitter and debilitating fight against those he believed cheated him out of his prize. Certainly, if it ever comes to a stand-up fight with Mr Bock, Mr Rowland can no longer rely on the support of the army of private investors who once heeded his every rallying call; this time, he has strained their loyalties too far.