City: Keswick coup

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The Independent Online
SO it's going to be Simon Keswick after all. After a long search to find a suitable replacement for Alan Clements, always a stop-gap chairman of Trafalgar House, non-executives have been unable to come up with a single willing candidate. Three top names were approached, but all of them turned the beleaguered contracting group down. By default, it now looks as if the board is going to have to opt for Mr Keswick, one of the two brothers who run the Hong Kong- based Jardine Matheson group. I say by default for it is through gritted teeth that Trafalgar's advisers, Kleinwort Benson and UBS Phillips & Drew, will allow Mr Keswick to take control of the group. They strongly resisted his tender offer for 30 per cent of the company, condemning it as an attempt at back-door control on the cheap. Now it looks as though Mr Keswick has won after all, with confirmation of his new role likely at the next board meeting.

He's already been on the phone to the advisers to complain about their fees for the recent rescue rights issue, which he regards as excessive for the work done. As soon as he gets his feet under the table, he's going to sack them. Out also will go the present finance director, John Ansdell, and one or two other directors.

So will end one of the most extraordinary corporate disaster stories of the present recession - and something of a scandal to boot. It became apparent more than a year ago that the company's reported profits and assets were little more than fiction. Sir Nigel Broackes and Sir Eric Parker, founding fathers of this once-mighty name in shipping and contracting, nevertheless managed to survive long enough to recommend shareholders strongly against accepting an 85p a share tender offer from Jardine's Hongkong Land offshoot. With the benefit of hindsight, it was ridiculous advice; within months, Trafalgar was back cap in hand asking its shareholders to cough up at 65p a share for a rescue rights issue.

Were it not for Jardine, which in effect underwrote the rights issue, Trafalgar House could never have done it. So perhaps shareholders shouldn't be too upset by the idea of Mr Keswick, with a mere 25 per cent of Trafalgar's share capital behind him, taking up the chairmanship. But they should be left in little doubt that Trafalgar's future course will be partly dictated by Mr Keswick's wider business interests, which may not always coincide with their own.