There were shifts and stirring from the hall as people settled themselves. Rudd saw that Margaret was looking up at the stage, concentrating upon her husband. The chandeliers glittering overhead seemed incongruous for what was happening beneath them.
“There may be personal allegations made,” said Condway. “It was for that reason, upon legal advice, that voting papers were circulated to all of you in advance of this meeting, requesting the attendance of non-shareholders: lawyers whose function it would be to protect against any character defamation.…” Condway went through the documents before him. “The result of that circulation was to receive approval, 3452 to 1200, for the admission of lawyers.…”
Condway looked across to the door through which they had entered, nodding to the stewards. “Will you invite them in?” he said. He turned to Snaith, offering him the voting figures. The merchant banker shook his head.
The three lawyers came self-consciously into the room, crossing directly in front of the stage to the place prepared alongside the secretariat table. While they seated themselves Rudd looked out into the hall, identifying the placings. Initial shareholders were to the left and immediately in front, about fifteen people other than the Buckland family. To the right and front were the investment fund managers, representing the block holdings. Behind them were the proxy entrants, all lawyers Rudd guessed, representing the nominee holders. At the back, where a far greater proportion of people had been seated, were the small individual holders.
Condway was awaiting an indication from the lawyers. One of them nodded and he turned back to the hall. “I give the floor to John David Snaith and Henry Robert Smallwood,” he said and sat down.
The abrupt announcement had precisely the effect that Rudd had planned. Snaith blinked up, confused, having expected a lengthy explanation of actions and behaviour from Buckland, not silence. He rose awkwardly, as he did so Buckland moved as Rudd had advised, turning pointedly to the lawyers again, as if to assure himself that they were ready.
Snaith began soft-voiced and there were immediate protests from the back. The merchant bank representative raised the microphone level and started again. “This action today has not been taken lightly nor without proper regard to the possible consequences,” said Snaith.
He was reading pedantically from what appeared to be a carefully typed speech and the American guessed it had been vetted by Haffaford’s legal advisers. “It has been taken because the merchant bank that I represent upon the board of Buckland House, a bank responsible for a considerable share investment within the group, has become worried about the running and administration of the company.”
The huge room was quiet, disturbed only by an occasional cough or foot scuff. Buckland was sitting with his head hunched forward, as if he were deep in some private thought.
“That concern began with the realization earlier this year that a trading loss of at least £800,000 would be declared, with the company drawings against overdraft facilities almost reaching the agreed limit of £10,000,000. In these circumstances, Haffaford’s felt unable to extend those facilities, despite a request from the chairman and vice-chairman.…”
It was too legal, judged Rudd: just a dry, dusty recitation of figures. They’d have to do better than this.
“During a preliminary discussion on loss-making sections of Buckland House operations, a figure of £635,000 was discovered, as a debit entered against the holding company.…” Snaith paused, clearly as rehearsed as Buckland, and said, “I would invite our chairman to explain that amount.”
Rudd nodded at the move: there was no provable allegation of any sort. In front of him Margaret was frowning worriedly. He wanted to smile at her, in reassurance, but she wasn’t looking at him.
Buckland rose slowly. “I think it is important that there should be complete accuracy,” he said. “It has been said that the sum of £635,000 came to light during a boardroom discussion about loss-making sections. This is not so. I seek a correction from Mr Snaith.”
Rudd decided it was masterly, as good as anything he would have done himself. The merchant banker rose flustered, his prepared speech disordered in his hand. “I agree to the correction,” he said. “The amount was originally discovered by auditors.…”
From the hall there was sporadic murmuring and movement as people tried to follow what was happening on stage. Buckland had more to gain than lose from confusion, decided Rudd.
Buckland stood again, pitching the condescension just right and speaking initially to Snaith. “I am grateful for the correction,” he said. “And I sincerely hope that the allegations to follow are better founded on fact.” He turned out into the hall. “At the beginning of this year I received a director’s loan of £635,000. It was an approved executive decision. It was signed by me off a company cheque and inadvertently listed against an investment.…” He glanced again at Snaith. “This was picked up, as has now been admitted, by the auditors, as it had to be: no such sum, unaccounted for, could have been passed without query. By the time the mistake was brought to my notice, the purpose of the loan had been served. I was able to repay it in full, together with full interest. The complainant directors were among those who agreed the loan. A record of that minute is available for examination.”
Buckland sat down and Rudd waited tensely. Of everything this was the most challengeable. Snaith was in head-bent conversation with Smallwood at the far end of the table. There were movements of impatience from the hall.
Snaith hurried to his feet. He seemed to have difficulty in locating his place in the prepared speech. He did so finally, and said, “A little over two months ago an in-house audit agreed upon because of the earlier realized working deficit disclosed a payment of £150,000 to Sir Ian Buckland. I would like his comment about that.”
Buckland started up, his confidence obvious. “Each year, you are circularized with details of salaries and directors’ remuneration,” he said. “You will find complete listings in previous years’ accounts and in those that have been sent to you in advance of this meeting you will see them repeated. If you would turn to them.…” He stopped, and in front of him there was a sudden flutter of pages being turned and heads bent over accounts. “… You will see that my salary and remuneration, as chairman of Buckland House (Holdings) is £150,000 a year. This was the sum allocated to me and which Mr Snaith has commented upon. The allocation was made without the formality of a directors’ vote. Once again, the figure was openly available to any examination. I agree with the technical error, of payment having been made and received in advance of boardroom approval. I do not agree it is sufficient justification for the convening of this meeting and the spate of inspired leaks about the running and behaviour of this company which in preceding weeks has cost something like £1,500,000 in share value.”
Rudd had never believed Buckland capable of the performance: it exceeded anything he had hoped for. He was aware of Lady Buckland smiling admiringly up at her son.
Snaith rose determinedly. He looked at his speech, then across at the lawyers’ table as if debating whether to abandon his own legal advice. Seeing the movement Smallwood quickly touched the man’s arm. Snaith bent for another widespread conversation and then turned back towards the shareholders. “Listed among the assets of our Far East division is a mews house, off Sloane Street. It has been a property owned by that division for a number of years. I would invite the chairman to explain its present occupancy.”
Buckland was rising, before the other man had time to sit down. “There is no present occupancy,” he said. He was back in his seat seconds after Snaith. There were isolated sniggers and then laughter from the hall.
Snaith stood again, flushed. Rudd was unsure whether the colouring was irritation or embarrassment. “Then perhaps the chairman will explain the recent occupancy of a lady,” said Snaith.
Buckland maintained the condescension. “As has already been patiently explained within the boardroom of this company, the house in question was occupied for a pe
riod of a little over two months by a friend of my family. A rental was paid into the accounts of the Far East company and the letting was agreed with the chairman of that holding, Mr Kevin Sinclair. There is a record of an exchange of letters between us, reaching agreement upon it.…”
Snaith jerked up, unable to control himself any further. “After the occupation commenced,” he said. “To justify it.”
Again Buckland’s timing was perfect. He turned, looking first to the director and then beyond him to the lawyers. Then he came back to the hall and said, “Would Mr Kevin Sinclair please approach the table?”
The Hong Kong-based chairman of their Far East division stood, in the fifth row, and excused himself as he passed along the line of people to reach the aisle. Almost at once Rudd turned away to look at Snaith and Smallwood. Both men were staring fixed-faced at the man. Sinclair mounted the steps at the side and approached a microphone separate from the directors’ table. He was a tall, loose-limbed man wearing a lightweight tropical suit.
Buckland remained standing too. He said, “There is a clear inference that there was some wrong – maybe even elicit – letting of the company house off Sloane Street.”
“That’s as I understood it from the hall,” agreed Sinclair. There was a pronounced Australian accent.
“Can you tell me the date of the letter to you, arranging the letting?”
“July,” said Sinclair. He took an envelope from his pocket. “I have the letter here.”
“When did the occupancy begin?”
“June,” said the Australian.
Snaith smiled and looked sideways at Smallwood.
“Was there any contact between us in June?” said Buckland.
“Sure,” agreed Sinclair. “The telephone call, around the nine or tenth, when we agreed to it. The July letter was merely confirmation.”
Buckland looked down at Snaith and Smallwood. Neither man was smiling now.
“What’s happened to the tenancy now?” said Buckland.
“It was terminated,” said Sinclair.
“Did the occupancy cause you or our Far East division any inconvenience?”
“No,” said the Australian. “How could it have done? The arrangement always was that it was temporary; we had access at any time.”
“What’s the effect of the termination?”
Sinclair shrugged. “We lose £120 a week and the place stays empty again.”
Buckland went back to Snaith. “Is there anything you’d like to ask?” he invited.
Snaith jerked his head towards Sinclair and he returned to his seat. Then Buckland continued: “This meeting was convened to consider allegations of mismanagement. You have heard the complaints. And my responses to them. You have already heard that because of the furore that has been created, a perfectly respectable, satisfactory tenancy bringing some £480 a month into the accounts of a sub-division has been lost. What you have not heard, although I hope you have understood it clearly enough from the statement of accounts which was sent to each of you in advance of this meeting, is that the losses of some £800,000 a year which were earlier mentioned no longer exist. As the result of a sale negotiated with.…” he turned sideways, nodding in Rudd’s direction. “… our newest and most welcome director, the liner division of Buckland House has been sold. To us, they represented a loss of £550,000 a year. To our new associate, they will be profitable. Effect of that sale is to bring into the company a cash payment of close to £10,000,000. There has also been a share exchange, representing an infusion into Buckland House of something like a further £3,500,000. I would like these facts borne in mind when considering this allegation of bad management.” He turned to Snaith. “Have you any further points to make?”
Snaith moved his head again and said, “No.”
“I invite questions from the hall,” said Buckland.
The response was immediate. From the seating plan before him Rudd identified the question as coming from the pension fund manager of the Prudential Insurance company. He appeared a neat, precise man. He rose with a sheet of notes before him.
“The £635,000 was debited against investment?” he said.
“I have already agreed that,” said Buckland.
“And the £150,000 was paid before directors’ agreement?”
“A technical oversight,” repeated Buckland, too confidently.
“I do not consider technical oversights involving sums of £150,000 should arise. Nor that amount of £635,000 should be wrongly debited.”
“Neither do I,” said Buckland, trying to recover. “Perhaps I’ve failed properly to make clear that both these entries had to be corrected by auditing: that was how both were picked up.…” Buckland let his voice trail, then said, “The allegation being made today is one of bad management, not inability to put figures in the right columns.”
Careful, thought Rudd worriedly. There was isolated laughter from the back but no amusement shown by the fund managers grouped before them. The Prudential man stayed on his feet. “Ultimate responsibility for getting figures in the right columns is the responsibility of management,” said the man, turning Buckland’s attempted sarcasm back at him.
Buckland set his face seriously. “Which I accept absolutely,” he said. “I consider, however, that they are minimal mistakes capable of being settled internally, in the way that mistakes are settled within thousands of companies every day of the year, and not paraded for public display at such a disastrous cost to our company and your investment.”
Better, thought Rudd. The first questioner sat down, followed at once by a man in the row behind. Sun Life of Canada, identified Rudd from his chart.
“There have been numerous references to technical oversight and passing errors, together with assurances that they would always have been picked up,” said the man, tall and bespectacled. “I’ve yet to hear an assurance from the platform that steps are to be taken to ensure they don’t occur again.”
“Forgive me,” said Buckland. “I unhesitatingly give that assurance. I would remind the questioner that during the last three months I have been engaged absolutely in the sale of the liner division, to the immediate £10,000,000 benefit of the company, which I construed of more immediate importance. But naturally this will never be allowed to arise again.”
Rudd was beginning to regret the boastfulness when from the back of the room came an unidentified shout of “Well done!” Rudd looked, trying to see who had said it, but almost immediately there was a second call of “Nothing wrong with this company.”
A third man had stood from the fund section by the time Rudd looked back to the front, fair-haired, nervous, like a hen-pecked clerk. “I would like to ask the estimate of the declared dividend,” said the man. His voice was weak.
Rudd swivelled sideways, concerned at Buckland’s response. Hopefully there was no need to be, he thought, watching the man. Buckland remained seated, head bowed, a gesture of sadness. He rose with seeming reluctance and said, “And I would like to be able to give one to this meeting.” He paused. “Having virtually erased our overdraft requirements and disposed of two-thirds of our loss drain, I had every hope of declaring this year an investment return better than ever before.” Buckland allowed himself an almost imperceptible glance towards Snaith and Smallwood. “There can be no one in this room unaware of the effects upon the shares of this company over the last few weeks, pushed down by every rumour and innuendo. Our valuation has plummeted. It would be.…” A clever pause. “.… an indication of bad management for me to offer even an assessment at this stage of what the board will finally be able to recommend.”
“Damned shame,” came from the back of the hall. Then “Scandalous!”
“Despite the apparent nervousness, the fair-haired man was dogged. “Can I ask the representative of the support bank,” he said, looking to Snaith, “about their attitude towards continuing finance, in the light of the apparent recovery from a bad trading and liquidity position that has been reported to this mee
ting.”
Snaith came hesitatingly up from his chair. “I cannot give an answer to that, until the conclusion of this meeting,” he said.
Buckland was tensed to rise. “Can I emphasize what has already been said,” he reminded them. “The successful sale of the seven liners means that at the moment Buckland House is virtually free of any overdraft involvement with Samuel Haffaford and Co. I would like it understood that also subject to the decision of this meeting is, in my opinion, the continued acceptability of Haffaford’s as the merchant bank with which this company should be dealing.”
“Quite right too,” said an unidentified small investor.
Caught by the run of the meeting, Rudd was concentrating upon the back of the room now. Before they had entered the hall he’d been convinced that Haffaford’s assault had been wrongly pitched, but he hadn’t anticipated the small investor support that was obviously behind Buckland. It was an interesting development. The professionals might be unsure but the amateurs seemed to have no doubts.
Snaith rose and said, “In the opinion of the merchant bank and the investors I represent, we do not consider the loose handling of the specified sums of money that have been mentioned satisfactory. Neither do we consider, despite the assurances that have been provided, that the letting of the house or the circumstances of that letting are above question.”
The back of the room was noisy now, those in the front looking around, some in interest, others with annoyance. Condway fingered the gavel but did not use it, knowing what the sound meant. A man sitting among the Initial shareholders rose and stood patiently, waiting for the talk to subside. He was a thin, courtly-looking man, fastidiously dressed; the nervous tremor was obvious in the hand that gripped the chair-back in front of him. Reluctantly Condway hammered for order. The man said, “The calling of this meeting was extremely unusual: it has had a detrimental effect upon the company. Can I seek from the chairman the assurance that there is no danger whatsoever for those of us not attached to large investment organizations and whose capital, in many cases, is entirely trusted to this company?”
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