One claim down, but 80,00 still to go for T&N

COMMENT: 'With Chase Manhattan's failure to win even a dime of compensation for the asbestos that was used in its head office more than 30 years ago, T & N can safely assume that other property-related claims will now quickly fall away'
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Good news: T&N has won a landmark US legal ruling in its battle against asbestos related claims. Bad news: there are at least another 80,000 claims to come. Most companies have to spend a certain amount of time dealing with overhangs from the past but at T&N, better known by its former name of Turner & Newall, dealing with the legacy of its once- pioneering wonder product is a task so great that it is almost overwelming. This depressing, consuming, and largely thankless work has fallen on a management which had nothing to do with the company when it actually made asbestos; that belonged to a different generation.

On the whole, however, it has managed to deal with this difficult and distracting business in a professional and humane manner. Furthermore, unlike many others caught up in asbestos related litigation, it has survived. Many of its competitors are no longer here to meet burgeoning claims for compensation. Under the guiding hand of Colin Hope, chairman, T&N has emerged better from the wreckage of asbestos than nearly all others involved in this business.

Its fault has been to raise City expectations about when we might finally see an end to the constant provisioning and legal wrangling to unrealistically high levels. A year ago last summer, the shares were on a roll, buoyed by a landmark settlement that many, including the company, thought might herald an end to the perpetual round of litigation. Not so. By chance or design T&N chose Budget day a year ago to announce a further pounds 100m of provisions, spread over two years, because of an "unexpected rise in claims". The shares plunged.

Hope springs eternal and Mr Hope (sorry) was yesterday once again expressing the belief that T&N has finally got the the measure of the asbestos problem. Is his optimism any better founded this time round? Certainly T&N seems finally to have seen off the property related claims. With Chase Manhatten's failure to win even a dime of compensation for the asbestos that was used in construction of its head office more than 30 years ago, T&N can safely assume that other property related claims will now quickly fall away. The same cannot be said of health claims, where the issues are more emotive. At this juncture T&N is probably right in its assertion that provisions already made are more than adequate to meet known claims. If even a small proportion of the 80,000 refusing to join the US out-of-court settlement succeed in their claims, however, the company may be in trouble again.

Furthermore, the boundaries of litigation in this area are constantly being pushed out. The recent Armley case extended potential claimants in Britain from former employees to those living in the vacinity of the company's factories. The next logical step would be to make the company liable to all those with mesothelioma, a lung cancer caused by asbestos. The company thinks this highly unlikely but it also thought that about the Armley case. T & N may be right. The worst could well be over. But it seems equally possible that the worst is still to come.

Sir Ronald looks for reform not revolution

Sir Bryan Nicholson, president of the CBI, has an amusing explanation of why Sir Richard Greenbury accepted his invitation to chair the committee on top pay, the hottest seat of the year. "I called him on my car phone and you know how bad they sound - I think he thought I was inviting him to lunch."

The hot seat, or at least a very warm equivalent, is now occupied by another senior businessman, Sir Ronald Hampel, chairman of ICI. After the pay row, he can have few illusions about the chairmanship of the relaunched Cadbury Committee on corporate governance, which is to review the work of both the Greenbury and Cadbury Committees. As Sir Richard Greenbury found to his cost, the scope for misunderstandings in these areas is enormous. Sir Ronald has already experienced one.

According to the CBI, all seven organisations that set up Cadbury Mark II agreed that it was time to digest past reforms, rather than launch any grand new initiative. Before he took the chairmanship, Sir Ronald insisted on maximum flexibility in the terms of reference, so the committee could tackle any unforeseen issues that cropped up. By insisting on a wide remit, Sir Ronald set a hare running.

Yesterday, he was distancing himself as fast as he could from suggestions that these terms of reference presaged a fundamental review of the entire corporate governance structure in the UK. If there is a quicker way than this to make himself a pariah in British boardrooms, it is hard to think of one, and Sir Ronald made clear he had proposed nothing of the sort.

He said: "I don't believe there is anything fundamentally wrong with governance in this country. The committee's remit is wide ranging. It gives an opportunity for any relevant subject to be discussed. But I don't want to give the impression that we are concentrating on any one thing or the other because I genuinely don't know."

Should Sir Ronald be so cautious about his objectives? If there is a Labour government it is certain to give the British boardroom another going over, and perhaps he should get his oar in first. One controversial question on the Labour agenda is whether there should be a board member with formal responsibility for representing outside interests such as shareholders.

Cadbury and Greenbury have promoted the role of non-executive directors as corporate policemen, acting on behalf of shareholders, but failed to acknowledge that the law makes no such distinction between different types of director. This creates a problem at the heart of all their reforms.

One way to resolve it is the creation of a two-tier board, a Continental concept much reviled in Britain. The claimed drawbacks may be exaggerated, but so are the benefits: look at how ineffective the Phillips supervisory board was as the company drew near the brink of collapse a few years ago. Sir Ronald should certainly make one of his taks a way of bring shareholder representation into the boardroom in a more formal way - without all that Continental paraphernalia.

Unease at Granada's knockout power

Forte's official defence document, published yesterday, was a tame enough affair but before it rolled off the printing presses at lunchtime there were tangible signs of unease about Granada's ability to deliver a knock- out higher offer sometime next month.

Granada's shares tumbled 11p to 634p while Forte firmed 0.5p to 338.5p. Those movements widened the gap between Granada's bid terms and Forte's market price from just 6p a couple of days ago to almost 13p. More worrying still for the Granada camp is that Granada's recently declared 8p dividend will be stripped out of the price in early January. That implies an underlying price of 626p, which is only 1p above the 625p at which Lazards, Hoare Govett and BZW underwrote the bid.

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