CITY AND SUBURBAN
The Government begins to doubt the goodness of Guinness
CHRISTOPHER FILDES
My goodness, that's different. The Guinness inquiry set the City gasping and not just at finding the Department of Trade and Industry ahead of the game. Guinness, though not everybody's favourite company, is a blue chip, and (through Bell and Distillers) a major ex- porter and the dominant force in Scot- land's biggest industry. Something wrong at Guinness, in its dealings with the City, would be different in kind from something wrong in the City itself, though it might well imply that too. The official inquiry is under the section of the Companies Act which deals with possible misconduct on behalf of officers of the company: it is specified as examining circumstances sug- gesting misconduct of the affairs of Gum- ness in connection with its shareholders. In the City, the breath first drawn in has now been expelled in every kind of rumour. I offer two matters of record. First, Guin- ness's bid for Bell was anticipated in the market. Patrick Weever, the Exocet of the Standard, spread it all over his market report: fill your boots with Bell, there is heavy buying of the shares from Switzer- land, Guinness's bid is on the way. The bid came next morning. Second, Guinness was advised during the bid by Broad Street Associates, the public relations agency. Broad Street came to the stock market in August, and its placing document shows Broad Street as suing Guinness for its fee: `BSA PR' [the agency] 'has commenced proceedings against Guinness claiming approximately £131,000 in respect of out- standing fees (of which £100,000 plus VAT is disputed) for work including work car- ried out by BSA PR for Guinness in connection with Guinness's takeover of Arthur Bell & Sons.' Guinness had filed a defence and counter-claim 'for damages against BSA for breach of confidentiality owed to Guinness', and also for allegedly acting in conflict with Guinness's interests. If Guinness had fought the case, it would, so I am informed, have been expected to develop along the lines now familiar from the courts of New South Wales. It will not do so. Guinness has settled. I add only that the Department of Trade and Industry has a record of commissioning these inquiries and then leaving the reports unpublished for a very long time, years indeed, while it wonders what to do next. In justice to everyone, that must not happen on this occasion.
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