WILLIAM KESWICK WAS an ambitious, modernising taipan who took over the reins of the burgeoning east Asian Jardine trading empire in 1874. A great nephew of the princely hong's founding partner, William Jardine, he was the first of five generations of Keswicks to sit at the pinnacle of Hong Kong's colonial business establishment.
Whether Jardine Matheson's present chairman, Henry Keswick, ends up the last lowland Scot to wield such control will become clearer in the coming weeks. Jardine insiders say last week's sabre-rattling proposals by US investment firm, Brandes Investment Partners, to break its defensive cross-shareholding drew a steely yet nonchalant response.
The Jardine group has spent the better part of its corporate energies over the last 20 years building a legal fortress to ward off attackers. Those defences have not been tested since 1986 and a few shareholder resolutions demanding unconditional surrender hardly rank as an attack compared with the corporate battles of the early 1980s.
The six resolutions to be voted on at June 1 annual meetings in Bermuda of Jardine Matheson Holdings (JMH) and Jardine Strategic Holdings (JSH) call for the cross-shareholding between the two firms to be dissolved.
This, Brandes suggests, could be achieved by JMH effectively privatising JSH. The result would be to leave a single company holding all Jardine assets. In that bigger merged entity the Keswick family would control about three per cent of the shares. Not surprisingly, the Jardine board has rejected the proposals.
The cross shareholding between JMH and JSH allows each company to vote down proposals at the other firm. Although other firms carry 'poisoned pills' to stymie would-be raiders, the structure represents a glaring anomaly. Modern markets impose a strict discipline. If firms do not perform, their share price falls, encouraging other companies to take them over. Alternatively, shareholders complain and use their voting power to effect changes.