About ten years ago, over a good lunch, I had a debate with the late Giles Worsley about Battersea power station. The distinguished architectural writer said Battersea was an industrial icon that should certainly be conserved but — like its sister station turned gallery at Bankside — found a new purpose. If an industrial icon had ceased to serve the very specific purpose for which it was built, I countered, there’s no need to strive at enormous cost to save its impotent hulk, especially if we’ve kept another just like it a mile or so downriver. Assuming it’s physically possible to knock the brute down, why not create a new, fit-for-21st-century-purpose landmark in place of the old one?
I’m not sure who’s winning this argument so far, but the news is that London’s great pink elephant has just seen off the latest in a line of developers and is for sale again. Having switched off its turbines in 1975, Battersea was sold in 1987 to an entrepreneur who said he was going to turn it into an industrial-history theme park. Laden with debt, the project fell into the hands of Bank of America and was sold on to a Hong Kong company called Parkview, which for 13 years tried without visible success to advance a controversial shopping mall scheme.
Parkview sold it in 2006 to an Irish crew, Real Estate Opportunities, who trumpeted a new £4 billion plan but have gone the way of all boom-time Irish property players, leaving debts of £324 million to Lloyds and Ireland’s ‘bad bank’, the National Asset Management Agency. The next queue of possible buyers is rumoured to include Roman Abramovich’s Chelsea Football Club.
In effect, while the fabric of the once mighty power station has been slowly decaying, its post-industrial fate has offered a virtual theme park of financial fantasy. Whoever the next owners turn out to be, my advice — if they’re not allowed to demolish — is to get with the 21st-century zeitgeist and dig down through the floor of the brick fortress: who knows what precious mineral deposits might lie beneath.
Scot free
In the matter of the failure of the Royal Bank of Scotland board to stop Sir Fred Goodwin wrecking their business and landing the taxpayer with a £45 billion bill, I blame Mr Justice Romer. Having lain in his grave since 1944, this distinguished Chancery judge may be surprised to find himself named and shamed alongside RBS’s non-executive directors as one of those who enabled Goodwin’s folie de grandeur to take wing. But it was Romer who defined what’s expected of non-execs, in the 1924 City Equitable Fire Insurance case, and although corporate governance has been much revised since, his opinion still carries some weight.
When former CBI chief Sir Richard Lambert wrote in the FT, commenting on the FSA report on RBS, ‘a forceful chief executive in a complex business and with the wrong incentives is unlikely to be constrained by an over-large board of directors drawn from the same establishment pool’, he might have been talking about the City Equitable, which was brought down by the fraudster running it — the subject of my book Fortune’s Spear — in 1922. But when its directors came to court for ‘misfeasance’, in the hope that they might be held responsible for its losses, Romer let them off.
A director does not have to be an expert on the business in hand, he said, and in the absence of grounds for suspicion, directors are entitled to put their trust in the company’s executives. Only for ‘wilful negligence’, rather than poor judgment, could directors be brought to book — and that is pretty much how matters still stand. It means no action can ensue, on shareholders’ or taxpayers’ behalf, against a board which accepted Goodwin’s cavalier case for buying, with minimal due diligence, the Dutch bank ABN Amro which turned out to be worthless.
If the law were more punitive, of course, no one would want to be a non-exec. To ruin directors financially when they make bad decisions would produce little relief for creditors, and might seem vindictive. Yet how unfair it seems that they get off scot-free. I’m for bringing back the stocks, though I don’t suppose Romer would have agreed.
Bring back Thundercliffe
I’ve written a lot this year about mineral deposits, tradable commodities and pub closures — none of which make uplifting subject matter. So my New Year resolution is to write more about start-up businesses. I begin by inviting you to email me (martin@spectator.co.uk) a short description of the most interesting new venture you have come across in your locality, and I will include a selection in the column in January to remind us that spring follows winter.
Mind you, it’s much easier to spot sectors where there are too many businesses struggling to survive, rather than openings for new ones. You’d be madder than Sir Fred to think of taking a lease on a boarded-up pub, for example. On the other hand, you probably don’t have the patience to hire a hangar full of teenagers — like Bob Newhart’s infinite number of monkeys — and set them to work devising the next smash-hit ultra-violent computer game. But that’s where the big money is, I’m afraid: a mind-rotting horror called Call of Duty: Modern Warfare 3, published by a French-owned US company called Activision Blizzard, has just set an entertainment-industry record by grossing a billion dollars in 16 days.
Closer to home, in my Yorkshire town of Helmsley, extensive research tells me the most promising new-business options are to dig for potash and shale gas, or to open either a fishmonger or a bicycle shop. I’ve even thought of combining those last two ideas into a franchise chain called ‘The Pedalling Pollock’, but perhaps that’s too ambitious — the omens being rather mixed. Last year’s best start-up in the town was a fine old-fashioned fishmonger called Thundercliffe, but his leased shop was suddenly sold from under him and he was gone again in three months. If he makes a comeback in 2012, that really will be a sign of recovery.
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