Hornby leaves a bad taste

Daily Mail - - City & Finance - Alex Brum­mer CITY EDI­TOR

Lloyds Bank in­vestors, em­ploy­ees and cus­tomers, who have suf­fered un­told hard­ships since the fi­nan­cial crisis of a decade ago, have rea­son to feel bit­ter about the rise and rise of Andy Hornby.

As chief ex­ec­u­tive at the time of the HBos col­lapse and rescue by lloyds in 2008, he is liv­ing a charmed life, mov­ing from one se­nior role to an­other, pass­ing ‘Go’ and pick­ing up multi-mil­lion pay­outs at each stop.

At a time when free mar­ket cap­i­tal­ism and in­equal­ity are top of the agenda for left­ist and pop­ulist par­ties on both sides of the At­lantic, the ca­reer of Hornby of­fers an un­var­nished view of what is wrong with the sys­tem. Un­be­liev­ably, a decade af­ter the events at HBos, the bank­ing reg­u­la­tor – the Fi­nan­cial Con­duct Author­ity (FCA) – has still to of­fer a ver­dict on se­nior man­age­ment cul­pa­bil­ity.

The wrecked lives that re­sulted from Hornby’s stint at the top of HBos are le­gion. When the merger was done, lloyd­sHBos went bal­lis­tic when it was sug­gested that up to 40,000 jobs could be lost.

In the event, the num­ber of peo­ple thrown out of work turned out to be 55,000, and still ris­ing. In­vestors in lloyds and those in HBos are the un­lucky own­ers of shares worth a frac­tion of their value.

As for cus­tomers, it has been one night­mare af­ter an­other. The wrong­ful sale of pay­ment pro­tec­tion insurance by both banks has racked up a bill of £19.5bn.

A large-scale fraud has been un­cov­ered at HBos’s Read­ing branch, where the TV host Noel Ed­monds is among the vic­tims.

As sig­nif­i­cant has been the dam­age to cus­tomers in­flicted by a thou­sand cuts through branch clo­sures, turned-off ATMs and sec­ond-rate ser­vice, es­pe­cially for small busi­ness clients.

While all of this has gone on, Hornby has been on a busi­ness joyride. Af­ter an unin­spir­ing stint at Boots where he picked up £2.1m for nine months’ work and then a fur­ther £2.4m when his con­tract was paid up, he landed at book­ies Co­ral.

Be­cause Hornby was not on the main board, we don’t know his pay. But what we do know is that, when lad­brokes, which merged with Co­ral, was even­tu­ally bought by Isle of Man-based GVC, Hornby col­lected £8m from a share sale.

Now he is to be chief ex­ec­u­tive of The Res­tau­rant Group, with a pay deal worth up to £3.9m. Clearly, Co­ral and lad­brokes val­ued Hornby’s skills, and the board of The Res­tau­rant Group thinks he has some­thing to of­fer.

But share­hold­ers in the Waga­mama owner ought to be ask­ing whether Hornby is a fit and proper person to be in charge of a pub­lic company. A judg­ment can’t be made be­cause the FCA has failed to re­lease de­tails of its probe. A more pru­dent board, alert to good gov­er­nance, would have recog­nised the pit­falls.

Lift­ing the gloom

As MIGHT have been ex­pected, Brexit dom­i­nated the Bank of Eng­land’s in­fla­tion re­port. There was a tale of two economies.

on the one hand, con­sumers en­joy­ing higher house­hold in­come and con­tin­u­ing to spend in the face of un­cer­tainty.

And the other – busi­nesses pre­par­ing for Brexit by building stocks but un­will­ing to in­vest. In ex­plain­ing this the­sis, the gover­nor Mark Car­ney cited sur­veys show­ing how un­cer­tainty about Bri­tain’s fu­ture re­la­tions with the EU dam­aged the con­fi­dence of firms, adding: ‘Who could blame them?’

The re­al­ity is that the world did not stop on March 29 and won’t do so on oc­to­ber 31 ei­ther.

In­deed, all the ev­i­dence is that, af­ter wob­bles at the end of last year, global con­fi­dence is ris­ing on the back of a strong Us first quar­ter and a calm­ing of trade ten­sions.

In the same way as house­holds have cho­sen to en­joy the fruits of full em­ploy­ment and ris­ing wages, so firms could re­act positively to bet­ter global cir­cum­stances and the odds on some kind of Brexit deal.

The gloom has gone on for too long and it is time that em­ployer groups, such as the CBI, re­treated from de­spond to find a bet­ter nar­ra­tive.

Meat re­treat

FAS­CI­NAT­ING to see how ve­gan burger maker Be­yond Meat has cap­tured the zeit­geist. With Bill Gates and ac­tor leonardo diCaprio among the cor­ner­stone in­vestors, its ini­tial pub­lic of­fer­ing has now put a value of £2.5bn on the en­ter­prise.

That means it is worth al­most four times The Res­tau­rant Group. Funny, that.

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