Richardson wears Forte colours in race for Savoy: Boardroom drama unfolds as embattled hotel group heads for radical management shake-up

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The Independent Online
HIGH INTRIGUE in the run-up to tomorrow's board meeting at the Savoy hotels group intensified yesterday as it emerged that Rocco Forte is lobbying to install Sir Michael Richardson as chairman of the embattled hotel group.

Sir Michael, outgoing chairman of Smith New Court, the stockbroker, is understood to be keen to take up the position. Weekend speculation suggested the job would go to a fellow non-executive director, Sir Ewen Fergusson, the former British ambassador in Paris.

Sir Michael has the support of Forte, which has waged a 13-year battle to secure control of the Savoy. For that reason, the rest of the board is thought to favour Sir Ewen, who is considered a more neutral choice.

In what looks like being one of the most dramatic weeks in the history of the Savoy, its managing director, Giles Shepard, will resign today and Sir Anthony Tuke, chairman, will step down tomorrow.

However, a source at the Savoy said speculation that Lord Forte was close to realising his dream of gaining control of the group, which takes in Claridge's, the Connaught and the Berkeley, was wide of the mark.

Forte, founded by Lord Forte, and which itself owns some the world's most exclusive hotels, including the Georges V in Paris, has a majority of the Savoy's shares. An arcane shareholding structure means that it only controls 42 per cent of the votes.

The voting structure was introduced 40 years ago by a former chairman, Sir Hugh Wontner, to fend off a previous threat from property tycoon Sir Charles Clore. His passion for preserving the independence of the group was handed on to Giles Shepard.

It has also been confirmed that Ramon Pajares, general manager of the rival Four Seasons hotel group, has been asked to be the Savoy's new managing director. By yesterday, he had still not decided whether to accept.

Mr Pajares is seen as another Forte man, and the job offer as an unprecendented reconciliation between the warring factions at the Savoy. It could lead to much greater management input from Forte.

Whoever wins the battle to head the Savoy, his tenure is likely to be temporary. A permanent replacement from outside the company is to be found.

The departure of Giles Shepard means he has taken responsibility for the Savoy's recent disappointing trading performance. Profits have fallen to only pounds 725,000 from turnover of pounds 83m.

Last year the company halved its dividend, persuading trusts set up by Sir Hugh Wontner, an avowed Forte opponent, that management change was necessary.

More recently, Mr Shepard fell foul of his fellow directors by producing an anti-Forte dossier and then accusing Sir Michael Richardson of leaking the news.

Mr Shepard authorised a press release saying the board was 'dismayed', but later retracted the statement and said that he had been speaking only for himself.

Discussions between Rocco Forte, Lord Forte's son who now chairs the group, and the trusts, which hold the key to the company's independence, are understood to have broken down.

Mr Forte has been pressing for the creation of a management committee, on which he would sit, to run the Savoy. He already has a seat on the Savoy board alongside Forte's finance director, Donald Main.

Private investors, who hold nearly 4,000 of the high-voting B shares are expected to try to scupper any deal between the Savoy and Forte. The shares, which have been as high as pounds 130 and closed on Friday at pounds 50, would drop still further if Forte were to wrest control without making a full bid.

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