Wilderness of frozen assets: As the receivers begin untangling Rosehaugh's tentacles, Gail Counsell traces the path to destruction

GODFREY BRADMAN was in meetings on the day the receivers started to dismember Rosehaugh. He was forced to abandon the ailing property company he had run for more than a decade to its bankers last February, but he is already too busy with other things to return calls about his former obsession.

It is characteristic of the management style that brought down a group which was once one of the most highly rated stocks on the London market.

'Everyone at Rosehaugh seemed to spend their whole time in meetings,' says one analyst. 'No one ever had the time to go out and find out what was going on in the real world. They drowned themselves in paperwork and administration.'

While the men at the top talked, the company ran aground at the bottom.

When the receivers from Peat Marwick turned up at Rosehaugh's headquarters in the Marylebone Lane in London last Tuesday, they found a company with more subsidiaries than employees. Rosehaugh's downfall lay in this labyrinthine construction, a spaghetti bowl of mostly poor investments.

Finding and realising those assets which remain will challenge the ingenuity of Tim Hayward, Roger Oldfield and John Alexander, the men picked for the task by the banks, which have been calling the shots at Rosehaugh for more than 18 months.

Few people think there is much left to begin to repay the pounds 350m that was lent to one of Britain's most famous property companies. The 160 or so subsidiaries and associates which made up the Rosehaugh group formed a tangled web of often ill-thought-out and inadequately controlled projects.

'Godfrey would go around finding entrepreneurs and setting them up in business,' says another developer. 'He'd set up a subsidiary, give them a 25 per cent or so stake and leave them to it. So by the end there were all these chaps in smart suits driving around the countryside in Porsches, able to draw down funds. When things started to go wrong, Godfrey just couldn't get control back.'

Since the banks effectively replaced Bradman with two accountants, Leonard Kingshott and Nigel Turnbull, in March 1991, Rosehaugh has been desperately trying to dispose of assets. It is unclear what is left. Some estimates say there is pounds 100m of land and buildings still scattered through the group, though putting a value Rosehaugh's shares of joint ventures and associates, over which the receivers have no direct control, will be very difficult.

'The first thing we did on Tuesday was to ask the directors to prepare a list of what properties were left in which companies,' Oldfield said. 'Once we get that we can make a start.'

But with many of the loans secured against specific assets, shareholders, some of whom bought stock when the price was almost pounds 12, look unlikely to get any money back.

Mystery surrounds why the banks chose this moment to pull the plug. Putting in receivers admittedly saves money: 18 of the 48 staff have already been sacked, and Rosehaugh's expensive headquarters in the Marylebone Road looks certain to go at the end of this month, saving pounds 1m a year in rent.

Nevertheless, the timing looks odd. Rosehaugh had a standstill agreement with the banks which was due to run until January 1994. Cynical shareholders now argue that the banks consented to the deal to ensure they had time to rearrange the financing and control of Rosehaugh Stanhope Developments to their best advantage.

RSD was Rosehaugh's joint venture with Stuart Lipton's Stanhope Properties, and was responsible for the acclaimed Broadgate development in London. As such it was Rosehaugh's main quality asset, and its share in it remains in the long term the receivers best hope of repaying creditors - or even shareholders. The banks, led by Barclays, (also lead banker to Stanhope, which is in difficulties) needed time to put in place a new RSD management and refinance RSD's pounds 1.25bn debt.

But there were also other problems. With the value of many of Rosehaugh's remaining assets impossible to ascertain, the auditors had not yet signed the accounts, due by the end of this year. Receivership means they will not now have to be signed. All that is required is that the receivers produce an outline of the remaining assets some time within the next three months.

Rosehaugh had been in financial difficulties since the begining of 1990, when Bradman had to announce a one-for-one deep-discounted pounds 125m rights issue. Although RSD was a much bigger debtor than its parent, the biggest problems were in Rosehaugh, where debts had zoomed from pounds 262m to pounds 410m in months.

Bradman failed to capitalise on Broadgate, and tried to stave off insolvency by shedding other assets. These proved of too poor a quality to raise enough to keep the company going. By early this year it was clear Rosehaugh was unlikely to survive.

It had taken just over a decade for Bradman's star as Britain's foremost developer to rise and fall.

He is a self-made man, born the son of a poor Jewish shopkeeper in Willesden. He left secondary modern school at 15 and qualified as an accountant after taking his examinations by correspondence.

With a quick mind, he was drawn to tax work, once saving George Wimpey & Co more than pounds 18m through clever exploitation of a tax loophole, closed by legislation the following year.

In 1978 he switched into property, buying Rosehaugh, a former tea company, as his quoted shell, and began a series of deals that formed the foundation of his wealth.

The first was typical of the mix of daring and financial engineering which characterised his successes and his failures. To part-fund the purchase of an office block on Tottenham Court Road, Bradman needed to raise pounds 1m.

His solution was simple, if risky. A landlord in north London was offering a pounds 1m reverse premium (an up-front sweetener) to anyone who would rent his building. Bradman took it.

Then he succeeded in selling the Tottenham Court Road block for pounds 13m, making a profit of pounds 2.5m, and letting the north London building shortly after.

It was audacious and lucky. It also gave rise to one of Bradman's legendary gestures; visited by letting agents to discuss the brochure to advertise the building, he spent his time peeling pounds 10 notes from a bundle and throwing them into a wastepaper basket. The idea was to bring home to them that while they debated the colour of the brochure, the unlet building was eating up interest charges.

The deal which moved Rosehaugh into the big time came shortly afterwards. In 1981 Bradman spotted that Woolworth UK's assets - primarily property - were worth four times its share price, and approached Charterhouse Bank with the aim of putting together a bid for its UK operation. However Woolworth's US operation did not want to sell.

The following year Charterhouse persuaded Woolworth to change its mind. Although Bradman was not active in the deal, as the initiator he was given share options in one of the most successful buy-outs of the Eighties. Rosehaugh made more than pounds 20m as a result.

There followed a string of developments with Stuart Lipton, which established the Rosehaugh-Stanhope partnership. The first was at Finsbury Avenue, a joint development in the City, and it characterised the relationship between Bradman and his alterego, Lipton.

Bradman was the accounting whiz, dreaming up a novel form of financing for Finsbury in which he persuaded John Ritblat's British Land and Stanley Kalms's Dixons to invest. Lipton was the creative architect, who built offices of the highest quality.

Finsbury Avenue became the much more ambitious Broadgate. But by then Bradman had already started on the expansion course which was to bring the company down.

A heritage division, a retailing division, a residential division, companies specialising in self-build housing and convention centres, investments and landbanks followed with frightening speed.

Some of the figures who had been integral to the company's early success left, starting with David Blackburn, a solicitor with an eye for detail who had been responsible for much of the tortuous detail of the Broadgate development - his letter of instruction to the solicitors was more than 70 pages long. He left in the mid-Eighties.

'In his early days Godfrey had around him people who pulled his leg and kept his attention fixed on what mattered,' says one insider. 'Gradually they left, though, and were replaced by bureaucrats.'

Bradman was also increasingly distracted by high-profile social causes. From isolated examples, such as his 1974 offer to raise pounds 2.25m from businessmen to pay the striking miners to go back to work, he became involved in a variety of causes as the Eighties wore on, crusading for the anti-abortion movement, promoting campaigns on Aids, lead-free air and freedom of information, organising self-build housing schemes and masterminding the fight for compensation for Opren victims. He was continually finding something new to absorb his energies.

But property is an industry which is built on individual judgement, and Bradman was increasingly out of touch with Rosehaugh's roots.

'He virtually franchised the name Rosehaugh,' observes one insider. 'But not only did he set up these small companies, he bankrolled them. And you can lose an awful lot of money on a small deal.'

(Photographs omitted)

Start your day with The Independent, sign up for daily news emails
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Retirement Coordinator - Financial Services

Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...

Recruitment Genius: Annuities / Pensions Administrator

Negotiable: Recruitment Genius: You will be the first point of contact for all...

Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

Ashdown Group: Learning and Development Programme Manager

£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

Day In a Page

The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

The saffron censorship that governs India

Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
Prince Charles' 'black spider' letters to be published 'within weeks'

Prince Charles' 'black spider' letters to be published 'within weeks'

Supreme Court rules Dominic Grieve's ministerial veto was invalid
Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

How did fandom get so dark?

Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
The galaxy collisions that shed light on unseen parallel Universe

The cosmic collisions that have shed light on unseen parallel Universe

Dark matter study gives scientists insight into mystery of space
The Swedes are adding a gender-neutral pronoun to their dictionary

Swedes introduce gender-neutral pronoun

Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

Disney's mega money-making formula

'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

Lobster has gone mainstream

Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
Easter 2015: 14 best decorations

14 best Easter decorations

Get into the Easter spirit with our pick of accessories, ornaments and tableware
Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

Paul Scholes column

Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

The future of GM

The greenhouses where Monsanto 'plays God' with the future of the planet
Britain's mild winters could be numbered: why global warming is leaving UK chillier

Britain's mild winters could be numbered

Gulf Stream is slowing down faster than ever, scientists say
Government gives £250,000 to Independent appeal

Government gives £250,000 to Independent appeal

Donation brings total raised by Homeless Veterans campaign to at least £1.25m
Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

The most borrowed book at Bank of England library? Oh dear

The book's fifth edition is used for Edexcel exams
Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

Cowslips vs honeysuckle

It's the hunt for UK’s favourite wildflower
Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

Did a botched blackmail attempt help Cyril Smith escape justice?

A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss