Don't hold your breath over Guinness report

So finally, finally, after all these years, the Department of Trade and Industry is to publish its report on the Guinness affair. It might actually do so as early as next week, although the DTI was yesterday casting doubt on whether it could be ready quite so soon. The spark for this belated little act of public service is next Tuesday's ruling by the European Court of Human Rights in Strasbourg on whether Ernest Saunders, the former Guinness chairman, was unfairly tried over the Guinness shares fraud.

Whatever the judges have to say on the matter, the DTI takes the view that it is now free to publish the results of its 10-year investigation of how Guinness illegally won control of Distillers in the mid-1980s. Conspiracy theorists will believe the timing is dictated by the Government's desire to deflect attention from what is all too likely to be another slap in the face for British justice from the European courts. Europe might wish to say, or at least imply, that Mr Saunders and others didn't get a fair trial, but this report will claim in the strongest possible language that he is as guilty as sin. The Serious Fraud Office will fight tooth and nail to uphold the Guinness convictions, whatever the European court says.

I've followed the various twists and turns in the Guinness affair pretty closely over the years, but unfortunately I haven't yet been able to get my hands on a copy of the final version of this report. However, from reasonably well informed gossip and an earlier unpublished draft it is possible to surmise roughly what's in it. Don't hold your breath.

Ten years after the event and with numerous criminal and civil trials to sift the evidence, there isn't a great deal the inspectors can say which is genuinely new about this affair. The Guinness scandal has passed into history and that's what the report is - a history book. There are no significant changes in the law, corporate governance or City practice the inspectors can recommend, for the lessons have been largely learnt and generally acted upon, in so far as they ever can be.

It is, of course, the case that the inspectors can still pass judgment on individuals and organisations still alive and kicking - and they will - but it isn't going to surprise anyone to learn that Mr Saunders is a crook or that Morgan Grenfell, his City advisers at the time, disregarded accepted rules and practices.

From what I hear about this report, however, the inspectors have missed an opportunity. In their analysis, evidence and judgment, they mirror very closely the prosecution case aired in the various criminal proceedings. Broadly, this attempts to pin blame for the scandal on a small group of key people and to varying degrees on the organisations they represented.

The central allegation is that led by Mr Saunders they conspired one with another illegally to support the Guinness share price and that this was kept secret not only from the markets (for the trick would not have worked if everyone had known the share price was being artificially supported), but also everybody else at Guinness and its professional advisers. Ergo these are the culpable ones and everyone else - lawyers, accountants, City advisers and the like - is in the clear. Indeed the case goes rather further than that, for to work properly - as it plainly did in the first Guinness trial - it needs you to believe that no one outside this inner core had any conception of what was going on. Moreover, they would have been profoundly shocked and tried to stop it had they known.

I've never believed this to be the full picture. It is largely true but the real story is more complicated - that the Guinness affair took place against a well established backdrop of cavalier practice and behaviour that encouraged the main protagonists into believing that if this was not quite the accepted way of doing things it was common enough at least to be tolerated. In some City firms practice of this sort was endemic, going unchecked either by internal controls or outside regulators.

I'm not saying here that any of the professionals caught up in the Guinness affair knew what was going on or even that they should have been officiously running around the place saying there's something wrong here and we are going to find out about it. No one ever starts in these situations from the point of view that their client is a crook nor is it their job to act as watchdogs over the activities of others.

All the same, it seems astonishing that nobody suspected what was going on. At the very least they should have been more vigorous in their approach. In the cut and thrust of a contested takeover an anything goes culture rapidly takes hold. It is reasonable to expect established practitioners in these matters to keep things in check. Even after DTI inspectors were sent into Guinness the attitude among some remained one of relaxed complacency right up to the moment when the full enormity of the scandal emerged. Then everyone ran for cover.

The Ernest Saunders version of events, that all these professionals knew what was going on and conspired to pin the whole saga on him, is absurd. But with so many highly paid, top-drawer names around the table to advise and guide him, it is hard to understand how this could have been allowed to happen, even now, 10 years after the event. There won't be much of this in the DTI report, however. The possibility that the whole thing might have been avoided had a more vigorous and professional approach been adopted is simply not addressed. This is a shame for it might have led to a more rounded and illuminating report. The inspectors were in a position to tackle the question of whether the night watchman was asleep on the job. They appear to have decided not to.

Nobody should be too surprised by the spectacle of Duncan Lewis flouncing out of his Granada TV job so soon after joining. Incompatibility seems to be his middle name. He did much the same thing when he was at Cable & Wireless's Mercury Communications subsidiary. He lasted barely more than a year there too. Gerry Robinson and Charles Allen are hard task masters, applying a vigorous regime of management control and accountability throughout the Granada empire. In never seemed very likely that they would be able to work happily with Mr Lewis.

He'll claim that he was never allowed the money or flexibility to do what he wanted with Granada's television interests. They'll claim he couldn't run a .... That's what happens when you get a difference of approach in business. The real problem, I suspect, is that Mr Lewis wants to be his own boss. He wasn't, either at Mercury or Granada. Mr Lewis is the type of executive who needs to be running his own show.