David Prosser: Buffett has plenty more explaining to do

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The Independent Online

Outlook For a man renowned for his plain speaking and his dislike of corporate misbehaviour, the statement made by Warren Buffett on the resignation of his lieutenant Dave Sokol is remarkably opaque. The most disappointing paragraph of all in the three-page release issued by Berkshire Hathaway after the markets closed on Wednesday evening was the penultimate one. Mr Buffet said that since he had not held anything back, anyone asking about the Sokol affair in future would simply be referred back to the release.

If the Sage of Omaha thinks there are no further legitimate questions to ask about this matter, he is not nearly so wise as we have all thought for so many decades. The most obvious question of all – how is Mr Buffett so sure that when Mr Sokol bought shares in a company Berkshire Hathaway subsequently purchased, the deal was not "in any way unlawful"? – tops a very long list.

In no particular order: Does Mr Sokol still own stock in Lubrizol, the company in question? Has he made a profit from his dealings? If the deals were so harmless, why did Mr Buffett not try to talk his subordinate out of resigning, as he had done in the past? Are the authorities now investigating the transactions? What sort of processes does Berkshire Hathaway have in place to prevent this sort of situation? The list, in fact, goes on and on.

Another odd thing is Mr Sokol's insistence that his Lubrizol dealings had nothing to do with his resignation from his roles chairing several subsidiaries of Berkshire Hathaway. If that's really the case, why bother to go to the trouble of detailing the stock purchases, particularly if, as he claimed in a CNBC interview yesterday, they were not particularly unusual.

Mr Buffett's annual shareholder meeting in Omaha, Nebraska, is only weeks away. The bash is generally an exercise in hero worship – this time around, investors ought to be asking some more searching questions and refusing to accept a redirect to a single press release.