City: NatWest trials

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The Independent Online
LATE next month or early October, the Department of Trade and Industry is expected to publish a second report on the Blue Arrow affair. What a yawn, many in the City will say. Isn't everyone bored stiff by it? The Blue Arrow affair is nearly five years old. The subsequent criminal trial turned into a costly fiasco that should probably never have been attempted in the first place.

Furthermore, the only three convictions secured by the Serious Fraud Office out of a starting cast of 14 individual and corporate defendants were overturned in the Court of Appeal last month. Isn't it about time the whole thing was laid to rest? That's what National Westminster Bank hopes anyway, you are saying. If you are, you would be wrong.

The truth of the matter is that the Blue Arrow affair is only just beginning to get to the interesting bit. True enough the initial mischief - the attempt to hide the failure of an pounds 850m rights issue - is now ancient history. But like all great scandals, it's the way organisations and individuals react to and cope with the discovery of skulduggery that becomes of greater significance.

Take the Guinness scandal. The original naughties were serious enough, but they pale into insignificance when set against the drama, botched cover-ups, boardroom chicanery, double dealing, back-covering exercises and sheer panic that set in after Department of Trade and Industry inspectors started investigating the affair.

The same may prove to be the case with Blue Arrow. That at least is one of the matters under investigation by the DTI second time round. During the Blue Arrow trial, it rapidly became apparent that the first DTI report on the affair, if not quite a travesty of the truth, was often misguided and sometimes wholly wrong in its conclusions. Awkward questions kept cropping up.

Why on earth had these particular individuals been singled out for trial when there must have been more than 100 people, some of them very senior, who were aware of at least some of the events that gave rise to complaint? Was there an attempt by NatWest to doctor or sanitise the truth? Were senior NatWest executives protected at the expense of more junior employees? Was the course of justice perverted, either consciously or unconsciously, by the damage limitation exercise NatWest put in train in the wake of the affair? In essence, was there a high-level cover up?

I don't pretend to know the answer to these questions. Perhaps the inspectors don't yet either. After all, they have only just finished interviewing. But either way, NatWest can expect no let up in the adverse publicity that has dogged it since the affair first broke. Putting a scandal behind you, it seems, is no easy matter, even after five years.