Thursday, 29 August 2013

Tiny Rowland





Secretive, ruthless and contemptuous of anything that smacked of "Establishment hypocrisy", Rowland made few concessions to accepted principles of corporate governance, and none at all to public relations. In 1973 his methods were condemned by Edward Heath, the Prime Minister, as "an unpleasant and unacceptable face of capitalism". His later career was marked by a series of vendettas - notably against the Fayed brothers - which he pursued with cold, obsessive fury.

But to an army of small shareholders, well satisfied with their dividends, Rowland was a hero, tarnished only by Lonrho's sharply declining financial performance in the early Nineties. And in Africa he was esteemed hardly less than the heads of state who were his friends and business allies. A colleague interviewed by government inspectors judged him "a sort of tyrant, and part madman to boot, but a brilliant one".

Rowland's association with Lonrho - originally the London & Rhodesia Mining and Land Company - began in 1961. Lonrho was then a modest and almost moribund enterprise. One of the directors, Angus Ogilvy, was asked by Harley Drayton, a leading shareholder, to find someone to rejuvenate the company. He suggested Rowland, who was appointed joint managing director.

The business expanded aggressively, particularly in mining. It diversified out of Rhodesia, where Rowland disliked the racist tone of Ian Smith's regime.

Rowland early established his habit of taking important decisions with little or no consultation with the Lonrho board. By 1970, however, the speed of expansion had begun to overstretch the company's finances, while in South Africa Lonrho executives were accused of fraud. The accountants Peat Marwick were called in to report on the company.

In consequence, Rowland was obliged to bring in outside directors; these included, as chairman, the unmistakeably "Establishment" figure of Sir Basil Smallpeice, formerly of Cunard and BOAC, who wanted to change the company's strategy and to force Rowland to be more open in his methods.

In 1972, Smallpeice attempted to oust Rowland, accusing him of recklessness, intolerance, disloyalty and deceit. But 3,000 shareholders packed an extraordinary general meeting at Central Hall, Westminster, in May 1973, and voted overwhelmingly in Rowland's favour. Smallpeice and his group were jeered, and themselves ejected from the board. The findings of the subsequent Department of Trade inquiry, which censored Lonrho for flouting Rhodesian sanctions, prompted Edward Heath's celebrated condemnation.

But thereafter there was no question of Rowland's power being tempered by independent voices on the board. He once referred to non-executive directors as "Christmas tree decorations".

From drab and anonymous headquarters in Cheapside, he presided as an autocrat over a conglomerate which grew to encompass some 800 businesses: newspapers, vehicle distribution, textiles, mines, hotels and many others. At its peak, in the late Eighties, Lonrho's profits exceeded pounds 270 million.

The core of the company's success remained in Africa. Rowland often spent three weeks in every month there, criss-crossing the continent by private jet. His methods were both robust - he employed a private army to protect plantations in Mozambique - and politically acute. He courted heads of state and, when he saw advantage, rebel leaders. Presidents Kaunda, Banda and later Mugabe were claimed as friends. Unita, in Angola, received his backing, and Oliver Tambo of the ANC had the use of Rowland's aircraft.

Rowland relished backroom influence in high politics, and enjoyed close contacts with the British and American intelligence services. His access to Anwar Sadat is thought to have helped to open the way to the Camp David agreement in 1978. He was rumoured to have had a hand in Lebanese hostage negotiations, and even in Falklands peace manoeuvres.

IF ROWLAND was unrivalled in his grasp of African business and politics, his touch elsewhere was less sure. His long battle for Harrods, for instance, was felt by many to have been a damaging distraction of his energies and an unjustifiable cost to Lonrho.

The saga began in 1977. Rowland had identified retailing as a potential boom sector, and perhaps believed that ownership of Harrods would provide a measure of respectability otherwise denied him in Britain.

Lonrho began buying shares in Scottish & Universal Trusts, the holding company of Sir Hugh Fraser's family interests and the holder of 29 per cent of the store group House of Fraser, which owned Harrods. When the rest of Scottish & Universal was acquired by Lonrho the next year, City institutions closed ranks against Rowland. The subsequent battle for the House of Fraser was ferocious. Rowland's anger was targeted particularly at the combative Fraser chairman, Professor Roland Smith, and the unfortunate Sir Hugh Fraser - whom he had initially courted as an ally but whom he later helped to ruin by revelations about gambling debts.

When victory seemed to be in sight for Lonrho, the Government blocked the takeover on grounds of national interest. Lonrho's shares were then, according to Rowland, "parked" temporarily with the Fayeds. According to the Egyptian brothers, the shares had been sold to them outright; in any case they used them as a springboard to acquire the House of Fraser before the Government's decision against Lonrho could be reversed.

Rowland responded with a campaign to discredit the Fayeds and their alleged backer, the Sultan of Brunei. This was conducted through the pages of the Observer, which Lonrho had acquired in 1981, and by long, trenchant letters to ministers and public figures.

In 1989 a secret Department of Trade report, highly critical of the Fayed takeover, was leaked by the Observer in a special mid-week edition headlined The Phoney Pharoah. But despite a continuing barrage of litigation, control of the store eluded Rowland. This cast a shadow over his last years.

Rowland never hesitated to flex his proprietorial muscle at the Observer. When he fell out with Daniel arap Moi of Kenya, the paper ran exposes of corruption which named the President. When reporting of atrocities in Matabeleland displeased him, he threatened to sell the paper to Robert Maxwell.

All Rowland's corporate battles had a dark personal edge. "He's a very hard man. He's the sort of enemy no one wants to have," the wife of one adversary remarked.

Rowland's most merciless victory was over the Australian tycoon Alan Bond, whom he at first befriended as a potential "white knight" when Lonrho was being stalked by another predator, Asher Edelman. Bond bought out Edelman's stake, boasted of himself as Rowland's natural successor and continued buying up shares.

Rowland turned on him with savage intensity, publishing a 93-page document claiming that Bond, sustained by a fragile pyramid of borrowings, was technically insolvent. Bond's bankers demanded their money back, and he found himself facing bankruptcy and jail.

BUT IN 1991 serious cracks began to appear in Lonrho's impenetrable facade. The dividend was cut and the share price tumbled. A billion pounds worth of debt forced a shedding of assets. The lucrative Volkswagen Audi franchise was sold and, ever unpredictable, Rowland offered part of his hotel interests to his arch-enemies, the Fayeds.

Most controversially, a pounds 177 million stake in the Metropole Hotels group was sold to the Libyan government, just when the United Nations was considering sanctions against Libya in connection with the Lockerbie bombing. "To me, Gaddafi is a super friend," Rowland explained. "Don't talk to me about morality and proper behaviour. I pay my taxes here. Gaddafi and Lonrho are a perfect fit."

At 75, Rowland continued to defy his critics. The arrangements he made in December 1992 for the eventual sale of his own 15 per cent stake in Lonrho - to a little-known German property developer, Dieter Bock, at a price substantially higher than that which Rowland's loyal band of small investors could hope to obtain - provoked a storm of hostile comment, coupled with speculation whether Bock (whom Rowland had only recently met) was his chosen successor, or was in some way being set up to be "flayed alive" (as one commentator put it) like Alan Bond.

This inscrutability and menace were at the heart of the City's distrust of Tiny Rowland. He in turn trusted only his closest collaborators. Fiercely loyal while they were with him, he was utterly unforgiving if they jumped ship.

Although capable of charm - and of kindness to fallen tycoons like Sir Freddie Laker - he had few friends, always suspecting venal motives. He eschewed the social trappings and foibles which his immense wealth (much of it hoarded in cash deposits) might have brought him. The intrigues of business and power occupied virtually the whole of his existence.

Rowland was born Roland Walter Fuhrop on November 27 1917, in a detention camp in India where his father, a German merchant, and his Anglo-Dutch mother, were held as aliens during the Great War. After the war, the family sought to settle in Britain, but were refused entry. They moved to Hamburg, where Roland joined the Hitler Youth. His father, though, lost his business through his anti-Nazi sentiments, and the family finally succeeded in moving to England.

Roland was sent to Churchers College, at Petersfield. His first job after school was with a firm of shipping agents, for which he travelled widely.

In Berlin in 1939 he was jailed for eight weeks for associating with anti-Nazis, and that year he changed his surname, forming Rowland by inserting his middle initial into the first syllable of his Christian name. The origin of the nickname "Tiny" - with which he signed all official correspondence - doubtless lay in the fact that he was tall and well-built.

His two elder brothers fought in the German army during the Second World War, but Rowland was enlisted in the Royal Army Medical Corps, and in 1940 served in Norway. However, when his parents were again interned, this time on the Isle of Man, Rowland refused to continue in the RAMC while they were detained.

He was discharged, and detained with his parents. His mother died in detention, and her treatment by the authorities was often cited as a cause of Rowland's hostility to British officialdom.

Thereafter, Rowland took various jobs, including a spell as a porter at Paddington station and as a waiter at the Cumberland Hotel. After the war he sold refrigerators and car radios, and then in 1947 decided to emigrate, first to South Africa and then to Southern Rhodesia. He bought two farms and had interests in gold mines. He acquired the Mercedes franchise for Rhodesia, and became an agent for Rio Tinto Zinc.

When Angus Ogilvy recruited him in 1961, Rowland's own group of businesses, Shepton Estates, was exchanged for 1.5 million shares in Lonrho. The holding was the foundation of a personal fortune estimated to have reached pounds 200 million by the late Eighties.

Always impeccably dressed and tanned, Rowland lived in discreet opulence with mansions in Buckinghamshire and Chester Square. He was fiercely protective of his family's privacy.

He collected African and German expressionist art, and had a penchant for Siamese cats. But very little impinged on his work.

Tiny Rowland married, in 1967, his god-daughter Josie Taylor, the daughter of his farm manager in Rhodesia. They had a son and three daughters.

No comments:

Post a Comment