Rowland retains position at Lonrho: Board interrupts meeting to inform Stock Exchange of patriarch's unchanged role within the company

Gail Counsell,Business Correspondent
Thursday 01 September 1994 23:02 BST
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LONRHO yesterday stepped back from the brink of a damaging public fight with Roland 'Tiny' Rowland, its patriarch of 33 years, when its directors interrupted their monthly board meeting to inform the Stock Exchange that his role at the company remained unchanged.

His opponents had been expected to use revelations earlier this week that salary, expenses and other costs associated with Mr Rowland were in excess of pounds 5.5m to try to force him to give up the post of joint chief executive.

Prompted by one of the group's three non-executives, thought to be Sir John Leahy, the meeting began with a half-hour discussion of 'press coverage' of the affair and what to do about it.

Described variously as 'a damp squib' and 'a very matter-of-fact conversation' in which Mr Rowland took no part, the meeting eventually resolved to back the joint chief executive with a statement to the Exchange.

There were hints of deeper disagreement in comments by one board member that 'a few heads had to be knocked together'. But he also observed that those present had concluded 'orderly and civilised behaviour was preferable to rows in public'.

Drafted by joint chief executive Dieter Bock, a German businessman who became the company's largest shareholder early last year, and who is seen by many as determined to progressively rein in Mr Rowland's power, the statement described speculation about his role as unfounded.

It said all directors' remuneration and benefits had been properly recorded in line with the requirements of the Companies Act and were fully reported in the annual report and accounts.

It observed that last November a remuneration committee had been set up with the three non-executive directors - Sir John, a retired diplomat, Peter Harper, a director of Hanson, and Stephen Walls, chairman of Albert Fisher - as well as Rene Leclezio, the outgoing chairman, to review directors' contracts, remuneration and expenses.

But in a hint that Mr Rowland may have to face tougher cost constraints, it added that the committee's remit included 'the ongoing process of change' and said the board continually had head office expenses under review.

The conclusion to the affair appeared to vindicate Mr Rowland's quiet confidence that he would survive any challenge.

Arriving at Lonrho's Cheapside headquarters in his silver Bentley, he said: 'I am too young to retire. I have no intention to go even if it means starting my own business.'

Mr Rowland, 76, who had been expected to remain at the Lonrho helm in partnership with Mr Bock for another two years at least, was philosophical about the mooted challenge to his power.

'I have seen so many things in my life and not just coups in the City, but coups in Africa,' he said. 'At my age you don't really expect me to be seriously worried by anything,' he added.

He vigorously defended his need for such criticised expenses as Lonrho's private jets, insisting that they were only used for company purposes, and dismissed the idea that Lonrho met any of his private living costs.

On Mr Bock, 55, he said it was inevitable young men were ambitious and would seek to replace older men like himself, but said he was not expecting it to happen.

However, some observers commented that while Mr Rowland had secured the backing of the board and emerged victorious, the affair had shown how seriously weakened his power base had become. Mr Bock had demonstrated that had he openly challenged Mr Rowland, he would have been the victor, said one, but that would inevitably restrict Mr Rowland's freedom of action in the future.

Lonrho's shares ended up 1.5p at 144p.

View from City Road, page 29

(Photograph omitted)

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