View from City Road: Secret skills of Mr Montague

Why is Robert Montague still chief executive of Tiphook? It is a question shareholders of this humdinger of a corporate disaster story can only ask in desperation as they peruse the extraordinary 96 pages of detail contained in their company's annual report and accounts. Perhaps Mr Montague owes his position to the protection of his old shooting partner, Rupert Hambro, non-executive chairman of the company until the annual general meeting on 15 September.

Or maybe it is because bankers believe they still need him to help to salvage at least a small part of their pounds 500m of debt. Then again, it might be that with most serious City investors out of the stock long ago, shareholders are too enfeebled to demand action. Or perhaps it is simply that it is cheaper to keep him on the payroll under new terms and conditions than pay him off under the old.

Whatever the explanation, this has to be categorised as an executive survival story to stand against the best of them. Even as dramatic farce it would scarcely have been more unbelievable. It is not just that this is a company that last year lost its shareholders pounds 332m. Nor is it the pounds 6m Mr Montague sanctioned in pay and compensation for loss of office for himself and four of his boardroom cronies last year.

More to the point is that debt now stands at a massive 1,553 per cent of shareholders' funds. With even the ongoing trailer operation last year making an operating loss of pounds 6m, you have to wonder whether this is a company with any future at all. Certainly the evidence of the accounts suggest Mr Montague is not the man to find out.

Take, for instance, the following breakdown of exceptional items and write-offs. Some pounds 2m has been provided against German road tax. The projected cost of fighting legal action in the US is pounds 9.3m and that's just the legal fees. Any payout would presumably come on top. There is a pounds 43.4m provision against the cost of renegotiating capital expenditure contracts. Another pounds 38.4m has been set aside to cover the decline in value of operating assets such as rail freight wagons. Some pounds 5m has been written off on computers. And so on and so forth.

This is a company which has been loose to the point of negligence with shareholders' money. It is just possible the group's bankers know of some special reason why Mr Montague should carry on. If so they might let Tiphook's impoverished shareholders into the secret.