Monitor

NOW HERE IS a blast from the past. Jardines boss Henry Keswick is still kicking, and recently aimed a kick at a Financial Times editorial that criticised Ford Motor Co for putting family back in the driving seat and booting a hireling out.

'Unwise and foolishly politically correct,' railed Mr Keswick in a published letter to the FT, topping it off with a reference to the newspaper's 'egalitarian agenda of its own rather spoilt journalists'.

Mr Keswick thinks that family members are the best choice to run Ford because 'your racing correspondent might perhaps remind you that the genes of fast horses are more likely to produce winners.'

Come again, Henry. I missed a step of reasoning there in your theory of genetics and corporate performance. Seems to boast about as much logic as FT does racing correspondents. And, since the genes of fast horses is your choice of analogy, could you please tell us a little about your own progeny?

What seems odd here at first is the fury Mr Keswick musters for something in which he has little personal interest.

But think again. There is an exact parallel with Jardines itself, another family controlled (I deliberately avoid the word 'owned') company that has long alternated between putting hirelings in the driving seat and then sacking them in favour of family members.

The results do not necessarily confirm that the fast horses were the family ones. In fact there is an old joke around town that the Keswicks have the magic touch. Whatever they touch they can make disappear. Trouble is they only play the trick with money.

Let's list some of them. First a big rights issue at the top of the market in the early 1970s when Mr Keswick was himself briefly in the seat. The share price then promptly did a vanishing act of its own, making Mr Keswick's seat a rather hot one.

He pulled the trick off again in the early 1980s. A big placement was followed by the announcement that Jardines was moving its headquarters to Bermuda and down went the price. I was a stockbroker at the time and it opened doors for us in Scotland that had previously been marked as exclusive Jardine Fleming territory.

Try Reunion Properties. Ever heard of it? There is not much reason to any longer. Try property in Hawaii, sugar in the Philippines, vehicle retailing in the Middle East, groceries in Spain, the big Jardines shipping fleet, the steady demise of the firm's standing in Hong Kong and the list just goes on and on, a long record of the Keswick magic touch.

I made the best investment forecast of my career in 1987 when I was asked what I thought of Jardines' acquisition of 20 per cent of Bear Stearns, a New York investment bank. I replied that if Jardines was getting into the business then it was time for others to get out. Two weeks later came the 1987 market crash.

So when Mr Keswick says 'it is a shame that the family behind Pearson [the FT's owners] ran out of vitality to take a proprietorial interest in FT's performance', what can one say but what a shame it is that the family behind Jardines did not?

And when he says 'I wonder if, following your losses on a wild dotcom extravaganza, a proprietor would allow management to continue unchanged', what can one say but that following Jardines' losses on any number of wild extravaganzas it is a wonder that the proprietor continued unchanged?

The reason he did not is a highly unusual cross-shareholding structure that locks in Keswick control with only a small Keswick shareholding.

You may well ask if regulatory authorities should allow this astounding anomaly to persist. To use Mr Keswick's own words, 'out of respect to shareholders I rather doubt it'.