Outlook: Corus calls on traditions of Grandes Ecoles to save the ship

ABN Amro fined; Reward for failure

Corus failed to sell its aluminium business to Pechiney but at least it has managed to buy in a new chief executive from the French metals company. Philippe Varin, who has been with Pechiney man and boy, does not come cheap. His basic package alone adds up to more than £1m and on top of that there is the £550,000 cost of buying out his Pechiney share options. So much for the argument that options are a device for keeping the top management loyal. Cable & Wireless has had to do much the same thing with its new chief executive, Francesco Caio.

Like most of the French business elite, M Varin is a product of the Ecole Polytechnique, the finishing school for France's ruling class. However, unlike many graduates of the ecole he has spent his entire working life in the smokestacks of industry rather than flitting as others have between commerce and government and back to commerce again.

There will be no state handouts to fall back on, in the way there sometimes is in France, so M Varin is going to have his work cut out trying to revive an industry which for Britain at least is in long term, and possibly terminal, decline. The Ecole also tends to train business leaders more for empire building than shareholder value, and it remains to be seen how M Varin adapts to Anglo-Saxon ways.

But at least he will be able to get on with the job without the shadow of the grim reaper, Sir Brian Moffat towering over him. The business is listing under a ton of debt and is split down the middle between the Anglo Saxons, who want to slash and burn, and the Dutch, who have a supervisory board and workers council to keep happy.

M Varin's first task will be to tell a few thousand of Corus's UK staff that they no longer have a job. After that, he has the challenge of persuading the Dutch half of Corus, which thwarted the Pechiney deal because it didn't want the money spent on attempting to revive the British bit, that the business really can survive without aluminium. The aluminium sale is necessary if the the banks are to be kept at bay, and M Varin is going to have to convince them of it.

There is presumably some logic in recruiting a chief executive who has spent his entire life smelting aluminium into the job of exiting the aluminium business to concentrate wholly on steel, but if there is, the company has yet to explain it.

Then again, perhaps it won't have time to. Provided the ship can be steadied, then the priority may still be that of locating a merger partner. Corus has already dallied with Lakshmi Mittal and thought about resurrecting talks with CSN of Brazil which shows how desperate it is. With luck, M Varin will find someone to take Corus over within his first 12 months in which case he is guaranteed a pay-off equivalent to two years money. Worth crossing the Channel for in anybody's language.

ABN Amro fined

The Financial Services Authority may be all powerful in the City, but its omnipotence doesn't seem to have improved the speed with which it deals with untoward behaviour. The wheels or regulation still grind exceedingly slow to judge by yesterday's decision to fine and reprimand ABN Ambro and one of its traders for "market misconduct" and "serious" failures in compliance.

The events complained of took place a full five years ago, which by City standards makes them pretty much ancient history. Certainly that was the message from ABN Ambro yesterday. The failures in compliance that allowed the trades to happen belonged to an altogether different age in the company's history, ABN insisted, making them irrelevant to the organisation as it is today.

To be fair on the FSA, it didn't begin investigating the ABN Amro affair until February 2001, when it was alerted to a series of attempts to manipulate share prices upwards in the London market by its counterpart in the US, the Securities and Exchange Commission. What's more, the historical nature of the offences has meant the FSA had to pursue the matter under the old, less stringent rules. New powers to punish market abuse only came into effect two years ago.

In any case, the purpose of disciplinary action is as much to deter others as to punish the perpetrators, so it can reasonably be argued that it doesn't really matter when the offences took place so long as they are seen to have been acted on. The FSA has a substantial backlog of such cases, dating from before it came properly into existence, which it must now work laboriously through.

All the same, one of the key principles of justice is that in order to be relevant and effective it must be delivered speedily. Two years after the FSA received its powers to pursue insider dealing and other forms of market abuse as a civil offence, not a single case of it as judged by the new powers has emerged into the light of public scrutiny from the FSA's Canary Wharf headquarters.

The ABN Ambro case was actually a relatively minor example of the genre. On four occasions in 1998, ABN's securities arm in London was asked to buy particular stocks at well above the prevailing stock market price. The seller and the purchaser were in all four cases the same client, his purpose to establish a particular price for portfolio valuation purposes. That in turn made the client's portfolio performance look better than it would otherwise have been.

ABN Ambro traders at least had the nous to question the propriety of these trades, but then went ahead and did them anyway. This sort of thing used to be common practice in financial markets and probably still happens quite widely today. Even so long after the event, the FSA is right to be acting, but the "super" regulator might command greater respect if it did so with a bit more urgency.

Reward for failure

Adam Singer was there when the ship went down, but the former Telewest chief executive can at least claim that the causes were sown long before he arrived on the bridge as part of company's ridiculously ill-conceived merger with Flextech. He was not the architect of the mountain of debt the company labours under. Even so, the £1.42m he received in severance pay, a two year pay off for two years of ever shrinking value, really does beggar belief.

Shareholders and bondholders, not to mention the luckless souls who once thought Telewest a company worth working for, have had to take the most financial beating. They'll be lucky if they end up with even so much as the odd piece of kitchen cutlery as their share of the salvage. Meanwhile Mr Singer is left strumming his guitar and driving his vintage Bentley majestically around the tudor maze he's having grown at his country retreat wondering what else he can squander his money on.

The payout seems shocking enough, but it is as nothing compared with the money Mr Singer has collected along the way, not least from Flextech, a company which even by the inflated standards of the bubble was able to achieve new heights in valuation hype. Most people lost money during the great speculation. Mr Singer was one of its jackpot winners.

In the flesh, Mr Singer is a decent, likeable and talented chap. His record as a chief executive was perhaps always a little more questionable. More of a media luvvie than a hands on cable guy, he was a lot better suited to the starry eyed psychodelia of the bubble than the hard grind of today's business environment. So the board unceremoniously sacked him. The financial reconstruction he was said to be obstructing still hasn't happened, so it can't have all been down to him, but did the company really need to pay him so much to go?

Here is your question, Mr Singer, for a million pounds. A number one followed by one hundred zeros is known by what name? Mr Singer doesn't need a cough from his accomplice in the audience to know the answer is "a Telewest".

jeremy.warner@independent.co.uk