Lord Sandberg
Dynamic leader of Hongkong Bank who became an active fundraiser for the Liberal Democrats
LORD SANDBERG, who has died aged 90, was an entrepreneurial and expansive chairman of Hongkong Bank, and later a Liberal Democrat peer. Michael Sandberg rose through the hierarchy of the Hongkong & Shanghai Banking Corporation to become its chairman and chief manager in Hong Kong in 1977. Affable and urbane but combative when he needed to be, he was more of a dealmaker than a traditional banker.
Indicative of a willingness to ruffle feathers was his decision in 1979 to sell Hutchison Whampoa to Li Ka-shing. Hutchison was the descendant of one of Hong Kong’s most venerable British-owned hongs, or trading houses, but had been crippled by debt and taken under the bank’s wing. Li (now the richest man in Asia) was then the leading light of the emerging generation of Hong Kong real estate players, known for his strong connections in mainland China.
Sandberg struck a private deal – brokered by the shipping tycoon YK Pao – to sell the bank’s controlling stake in Hutchison to Li at a price that was below the book value of its assets and was described by a former Hutchison director as “a steal”. No bids were invited from other potentially interested parties, including the rival trading houses of Jardines and Swires. But he rode out the storm – and by securing the bank’s relationship with Li, signalled willingness to do business with other up-and-coming Chinese entrepreneurs who would dominate the boom years ahead.
Having buttressed Hongkong Bank’s position in its home market, Sandberg embarked on an ambitious plan to build a “three-legged stool”, in which the second leg would be in the US and the third in the UK and Europe. In 1980, he acquired 51 per cent of Marine Midland, a commercial bank with a branch network in New York State, which Sandberg declared “jolly well run”. The arrangement was first announced as “a partnership” but became an increasing drain on the parent bank’s capital; Marine Midland was eventually brought under control from Hong Kong, and clocked up serious losses in the late 1980s.
In pursuit of the third leg, Sandberg took on no less a figure than the governor of the Bank of England, Gordon Richardson. In March 1981, Standard Chartered – Hongkong Bank’s major competitor in Asia – offered £334 million for the Royal Bank of Scotland, with Richardson’s approval. Sandberg flew to London to tell the governor he too would be bidding, with a view to making RBS his “flagship in Europe”. Famous for his hauteur, Richardson took against Sandberg’s bumptious approach and told him firmly a counterbid would be unwelcome. But Sandberg went ahead the next day, proffering £498million without further word to the Governor.
Standard Chartered matched Sandberg’s price, and both bids were referred to the Monopolies Commission. Meanwhile, Richardson lobbied furiously against the possibility of a Sandberg victory, in part because he could not contemplate a British bank being controlled from a territory that would eventually become part of China (when HSBC, as it had then become, took over Midland Bank a decade later, it was required to move its headquarters to London).
The governor’s hostility was certainly also fuelled by Sandberg’s attitude, which he saw as an affront to the Bank of England’s and his personal authority. But the arguments fell away when a split Monopolies Commission decision conveniently allowed the trade minister concerned to rule against both bids, on the grounds that the Scottish economy would suffer if RBS was taken over. Sandberg’s willingness to take risks inevitably left a mixed record when he retired from the chair in 1986: among the bank’s major Hong Kong borrowers on his watch, for example, was Carrian, the scandal-ridden and ultimately bankrupt property group.
But under his dynamic leadership the Hongkong Bank’s balance sheet multiplied in size many times as its horizons became global, while its commitment to its home territory – at a time of political uncertainty ahead of the handover to China – could not have been more robustly restated.
Michael Graham Ruddock Sandberg was born at Thames Ditton on May 31 1927. His father Gerald worked in the Bank of England, serving for some years as chief cashier of its Hull branch; Gerald Sandberg’s grandfather was a migrant from the province of Posen in Prussia who became an Anglican priest.
Michael was educated at St Edward’s School, Oxford, and was commissioned into the Royal Armoured Corps in 1945. Posted to India, he found the way of life to his liking and transferred to the Indian Army’s 6th Lancers; after India’s independence, he served with the 1st King’s Dragoon Guards in Palestine and Libya.
On leaving the Army in 1949 he joined the Hongkong Bank in London and took ship to Hong Kong for training. His first posting was to Tokyo, and his next to Singapore – where in 1956 his manager noted him as “a man of distinct ability and intelligence, well in excess of his years … a man for the future”.
With characteristic selfdeprecation, Sandberg himself attributed rapid promotion to “shortage of staff after the war”. By the late Sixties he was chief accountant (effectively senior lending officer) in Hong Kong, and in 1973 he became deputy chairman under the chairmanship – necessarily cautious in turbulent economic times – of Guy Sayer.
The change of leadership style from Sayer to Sandberg was signalled by the new chairman’s determination to redevelop the bank’s headquarters on Queens Road Central. The old offices dating from 1935, he declared, were “like a suit one could no longer fit into” whereas the bank deserved “a top-of-the-pops building” of which all Hong Kong could be proud.
After a competition among worldleading design firms, Norman Foster was appointed in 1979 to create what came to be seen as a masterpiece of modern office architecture, noted for the elegance of its modular steel structure and its use of natural light. By the time it was completed in 1985, it was also, at around $700 million, the world’s most expensive building – but despite many glossy developments around it, the Foster building remains a powerful symbol of the bank’s presence at the heart of Hong Kong’s business life.
Less well praised was Skyhigh, the mansion Sandberg commissioned as the bank chairman’s residence in a very prominent position on The Peak overlooking the city. Nicknamed “Costalot”, it was derided as overopulent even by Hong Kong standards – and was sold off to a Japanese department store tycoon, at a substantial profit, by Sandberg’s more frugal successor, Sir Willie Purves.
Sandberg was created OBE in 1977, raised to CBE in 1982 and knighted in 1986. Chairmanship of the bank brought him ex officio membership of Hong Kong’s Executive Council, and he was also a steward and chairman of the Royal Hong Kong Jockey Club and treasurer of Hong Kong University.
After his return to England he became an active fundraiser for the Liberal Democrat party – not least from wealthy Asian business friends. The story was told of a dinner he gave in Hong Kong in the early 1990s in honour of the then party leader Paddy Ashdown, at the end of which Ashdown was diplomatically ushered away and the doors were locked. “All right,” Sandberg reportedly told the guests, “I’m tired, but we’re not leaving until you commit to the cheques you’re sending round tomorrow morning.”
Several of the same multimillionaires were named in the British media at the time as Conservative Party donors; the fact that their Lib Dem giving remained unpublicised encouraged them to give more. Sandberg was created a life peer in 1997; he retired from the House of Lords in 2015.
He was a keen follower of racing and cricket, and was president of Surrey county cricket club in 1998. He also kept a beautiful garden at his Hampshire home. But his most distinctive pastime was horology: over many years he acquired more than 400 timepieces made by craftsmen from the 16th to the 20th Century, including musical watches with automaton scenes, often made for the Chinese market, and more esoteric “erotic watches”.
As ever, Sandberg played down his expertise: “I buy these because I’m not smart enough to know whether that vase over there is a Ming.” But the watch collection proved to be worth $13 million when it was auctioned in Geneva in 2001.
Michael Sandberg married, in Ireland in 1954, Carmel Donnelly, who survives him with their two sons and two daughters.
Lord Sandberg, born May 31 1927, died July 2 2017