Fairburn’s viral hissy-fit

EVen after the severe haircut imposed on chief executive Jeff Fairburn at Persimmon, the £75m bonus payout is still outrageous and has brought shame on the whole housebuilding sector.

what makes it even more disturbing is that the york-based firm, which enjoys jet-fuelled profits with the support of the Government’s Help to Buy policy, appears to be as immune to the complaints of some of its customers as it is to public criticism of its overpaid and uncommunicative directors.

Maybe it is time for Persimmon to follow the lead of Facebook and seek a high-profile public policy expert in the nick Clegg mould, in recognition of its gross shortcomings.

nothing could ever justify the proposed payments to Fairburn and his fellow executives, even if they built the best, most environmentally friendly and high- quality homes in Britain. But as Matt Oliver reports today ( see Page 70) residents of Philmont Court, a four-storey block built by Persimmon 11 years ago, have experienced a decade of problems.

Homeowners in the development have been required to evacuate their properties because

of fears that severe winds could render them dangerous. Defects uncovered include poor insulation, widespread damp and mould.

In spite of repeated complaints by residents, Persimmon so far has been reluctant to engage.

Local MPs, including the veteran industrialist Geoffrey Robinson, describe the behaviour of Persimmon as ‘corporate looting’ and ‘totally obscene’.

Persimmon’s reputation, already shredded by its arrogant behaviour, has not been helped by Fairburn’s hissy-fit when rightfully challenged by a BBC reporter over his bonus payments. After more than 1.1m online views of Fairburn’s car crash interview, he and the board ought to be getting the message. It is shocking to discover that although the property concerned may have been built before Fairburn took the helm, he and his colleagues appear impervious to the distress of customers spending their life savings on a dream home.

new chairman Roger Devlin already has his work cut out imposing some discipline on directors guilty of rampant greed and who are regarded as pariahs in their own industry. But he also needs to recognise that a company generating pre-tax profits of £1bn a year should be offering first-class service and, if justified, generous compensation to those living in faulty homes.

the sooner Fairburn is removed from office, the quicker the repair work at the disgraced housebuilder can begin.

Private grief

PUttInG trust in private equity to run sensitive assets is always a mistake. the bitter memory of Blackstone’s stewardship of crashed care homes group Southern Cross still resonates.

now, thanks to an investigation by the BBC’s Panorama, we learn that the 2016 sale of a suite of northern Rock mortgages to the American private equity firm Cerberus may have been flawed.

A pledge to rescue customers trapped in above-market interest rates looks as if it has not been honoured. there is evidence that some of the former northern Rock customers are paying rates of up to 5pc – three times the market rate.

At the time of the £13bn sale, Government agency UK Asset Resolution assured customers that the return of the mortgage book to the private sector would allow them to be offered better deals, including extra loans and fixed rates.

Part of the Cerberus pitch was that it wanted to develop into an online challenger bank, providing customers with a wider range of services. City regulator the FCA and the Bank of england have been sympathetic to online banking. But Cerberus’s systems have so far failed to come up to scratch, so existing customers are still to experience the promised flexibility.

Should we be surprised? Almost certainly not. too often private equity outfits turn out to be wolves in sheep’s clothing.

Safe bet

FUnD managers at Invesco have the kind of crystal ball which most investors could only dream of.

On Friday it doubled its stake in doorand-window maker Safestyle to 10pc.

In latest trading, shares in the AIMquoted minnow soared almost 39pc after it settled a patent dispute with a competitor.

Still way below previous peaks, but nice work if you can get it.