View from City Road: Victory to Bock but Tiny retains firepower

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The 'Tiny' Rowland-Dieter Bock concordat is as unusual as one might expect of its parentage. On the face of it, Mr Bock appears yet again to be getting his own way, a result much anticipated by the City and which has done no end of good to the share price.

Mr Bock had long targeted the so-called 'pensioners' on the board - those directors drawing not just a salary but also a pension - for overdue retirement. And he has won. Two deputy chairmen will go at some unspecified time during the current financial year, while another director will leave at the annual meeting. The 74-year-chairman will also go. The hunt is on now for a non-executive chairman.

So Mr Rowland's calm acceptance and agreement, after all the well-publicised ructions between him and Mr Bock over the past few months, appears to be an admission of defeat. Or is it? The board is, as it stands, still packed with a majority appointed by Mr Rowland and the old Lonrho guard. Moreover, Mr Rowland remains a considerable executive power in the company.

Stripping out the profit contributions from discontinued operations, pounds 69m of pre-tax profits come from Africa, representing 87 per cent of the ongoing operations. This is an important power base, and Mr Rowland, at the ripe old age of 76, is still Lonrho's Mr Africa. In contrast, Mr Bock has line responsibility only for residual activities. It would be unwise to assume that Mr Bock will have everything his own way.

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