David Prosser: Buffett dropped a clanger when he backed Sokol so publicly

Outlook A month ago tomorrow, Warren Buffett, chief executive of Berkshire Hathaway and the world's most famous investor, issued a tersely worded statement. Mr Buffett announced the resignation of one of his most trusted lieutenants, David Sokol, as well as disclosing that Mr Sokol had owned shares in Lubrizol, a company he had recommended to his boss as a takeover candidate for Berkshire Hathaway – a tip that was acted upon. The resignation and the shareholding were unconnected, Mr Buffett said, insisting Mr Sokol had done nothing unlawful and adding that he would not utter another word on the topic.

As Berkshire Hathaway investors gather for the company's annual meeting this weekend, Mr Buffett is going to have a tough time sticking to that. Berkshire Hathaway's official line changed on Wednesday night, disclosing that following an investigation into the Lubrizol purchase, it was considering taking legal action against Mr Sokol. The company itself is already facing a lawsuit from a shareholder over the matter.

Now, Mr Sokol continues to insist he has done absolutely nothing wrong. Nor has he been charged with any offence by the authorities. Still, Berkshire Hathaway's swift about-turn leaves Mr Buffett looking rather silly. Having publicly insisted that his former acolyte had nothing to be embarrassed about, Mr Buffett may soon be instructing lawyers to issue proceedings against him.

The "Oracle of Omaha", as he is sometimes known, has cultivated his reputation for plain-speaking and folksy straightforwardness. The Sokol affair is beginning to look as if it may tarnish the image.

Though Mr Buffett said last month that he would entertain no further questions about the matter, it is now clear that Berkshire Hathaway was intent on making some additional inquiries of its own. Like finding out exactly how much money Mr Sokol made from the Lubrizol deals, for example, and when he decided it might be a good acquisition opportunity for Mr Buffett and Berkshire Hathaway.

The company was quite right to launch an investigation. The high standards of probity Mr Buffett insists upon publicly and privately required no less. The question is why Mr Buffett in his public statement on the matter was so unwilling to even consider the possibility of misdeeds.

Mr Buffett, though he is now 80, shows no sign of wishing to relinquish the reins at Berkshire Hathaway. That is his privilege, for this is a company he has built almost single-handedly, enriching his investors beyond their wildest dreams. Still, the Buffett fans gathering to pay homage to the great man tomorrow are entitled to hear what the company is planning on the question of succession. And this sorry episode reveals even Warren Buffett is not infallible.