Mark Kleinman dissects the CBI’s rescue plan – plus the boss of Vashi’s vanishing act and Man U’s other battle
In five days time, Rain Newton-Smith must deliver the performance of her career. At an extraordinary general meeting of the CBI, she will seek to convince thousands of its members that it should survive the maelstrom which has brought it to the brink of collapse.
The cards appear stacked against her. Already, the CBI’s principal external stakeholder – the government – has made it clear it won’t engage with the group until its sexual misconduct scandal is behind it. Given that a police investigation into rape allegations could take a year or more, that’s far too long for an organisation whose lifeblood is political engagement to exist in a state of suspended animation.
CBI directors clearly recognise that point. As I reported on Sky News this week, they’ve been taking legal advice about their obligations under company law about the risks of insolvency.
Nevertheless, Newton-Smith has little choice but to give it a go. The prospectus on which CBI members will be asked to vote landed on their desks yesterday.
There’s a big problem with it though: it’s full of an arrogance and hubris that verges on nonsensical. According to the document, “blanket accusations of the CBI’s culture being toxic are not correct”; in which case why deny journalists and non-members the chance to see it debated at the EGM? (It’s ok, we’re not demanding a vote.)
Similarly, the CBI remains fixated on its self-fulfilled destiny to act as the voice of British business. One of its directors told me this week that the vote would pass because “the country needs the CBI, the government needs the CBI, business needs the CBI and the economy needs the CBI”.
There are plenty of others who now beg to differ, namely the dozens of companies, such as Aviva and John Lewis Partnership, which resigned their membership last month because of its handling of the sexual misconduct scandal which has cast a pall over it. Newton-Smith sought to address this constituency of departed blue-chips, saying yesterday: “Through the reimagining of our purpose, we also attract new ones to our mission. For those who recently left, I would ask, what more do you need from us? We will continue to show our value on the important issues of the day.”
Sadly, there is little in the prospectus to tempt them back. One leading businessperson questioned why it contained so little about the CBI’s future purpose and remit.
Another said it appeared to be no more than “another chapter in a lengthening narrative of blame-shifting and self-justification”.
There are elements of disingenuousness in the CBI’s statement, too. It cites one of its governance reform highlights as being the acceleration of a search for a successor to president Brian McBride. He was only ever due to serve a two-year term, expiring next summer.
If he leaves a few months early, so what? Ultimately, he hasn’t been part of the problem, anyway.
Nevertheless, it would be shocking if Newton-Smith and her colleagues did not win next week’s vote. The resolution on which CBI members are being asked to vote – “Do the changes we have made − and the commitments we have set out − to reform our governance, culture, and purpose give you the confidence you need to support the CBI?” – is so anodyne that it surely cannot fail to pass.
The organisation’s board should not interpret that outcome as a victory. Its road to restoring credibility is a long one. Based on the evidence so far, the CBI and British business might be better served by it handing the baton onto someone else.
Vashi boss’ vanishing act catches host of investors by surprise
The disclosure last week that Boohoo, the online fashion retailer, has handed out another chunk of equity in incentives to senior executives will have been particularly welcome to Mahmud Kamani, its co-founder.
It may have softened a recent financial blow; I understand that he was among the individuals caught up in the recent collapse of Vashi, the upmarket jeweller.
As a Vashi shareholder, Kamani was in illustrious company: the likes of Pret a Manger founder Clive Schlee and Bridgepoint CEO William Jackson were also on its investor register.
The company’s collapse has raised a series of searching questions, including in relation to the whereabouts of its founder, Vashi Dominguez.
The liquidators of Diamond Manufacturing, Vashi’s parent company, will undoubtedly also be looking for answers about the location of its stock of precious gems.
Kamani’s shares are said to have been gifted to him, so he may not have ultimately been among the big financial losers from the company’s implosion. In that case, he was one of a very few lucky ones. There are some big City names who would like answers about where all their money went – and fast.
Ratcliffe looks set for an injury-time winner
For the Manchester United fans who flock to Wembley on Saturday, winning the FA Cup to add to this season’s Carabao Cup triumph won’t be the only objective on their minds.
Just as important to many of them will be depriving neighbours Manchester City of the second leg of a rare domestic and European treble.
The odds don’t look great for the Red Devils: despite signs of a rebirth under new head coach Erik Ten Hag, United are, in footballing terms, well off the pace set by their city rivals.
All of this makes resolving the future ownership of the Old Trafford club more urgent. A preferred bidder is unlikely to be formally notified until after the derby, and people close to the process say a transaction is not currently on the verge of being signed with either party vying for majority ownership.
That timetable may have knock-on implications for Ten Hag’s rebuilding project for next season and beyond.
The Ineos Sport proposal tabled by Sir Jim Ratcliffe appears to remain the leading bidder despite the latest intervention of his Qatari rival, Sheikh Jassim bin Hamad al-Thani.
Ratcliffe’s bid is higher in valuation terms and would allow Avi and Joel Glazer, the club’s co-chairmen, to remain involved as influential shareholders.
While the latter point scores negatively among United fans, that’s clearly not a concern among the selling shareholders, their advisers or indeed the Ineos billionaire himself.
After six months of talks, Ratcliffe looks like the marginal favourite to secure a win in added time.
Mark Kleinman is the city editor at Sky News.