CITY DIARY

CHRISTOPHER FILDES-

When Mr Ronald Grierson was seconde&from the .great merchant banking house of S. G. Warburg to get the Industrial Reorganisation Corporation under way, this was a temporary arrangement—for which he was being paid nothing a year—and when his two-year stint was up he was expected to go quietly back to the City. In just this way Mr Derek Palmer has returned from the DEA to Hill, Sanwa;

without any rancour or resignations. .

So what has provoked Mr Grierson into resigning? He and Sir Charles Wheeler, chair- man of AEI, simultaneously gave notice to quit the lac, which set -Off some putting together of two and two.

I think that the explanation lies elsewhere. Consider: the FRC was set up (by Mr George Brown, when he was at the DEA) as a govern.- ment-sponsored agency to help in the re- shaping of 'British industry. Mr Griersorrhas put his name and effort into getting it accepted among businessmen. Now the Government comes up with another scheme for reshaping industry; this time by buying shares, an idea promoted by the Ministry of Technology. All the distrust that Mr Grierson tried to calm Is at once revived. But what is worse, having two reshaping bodies leads to civil war in White- hall, with the Ministry of Technology cutting in on the DEA, and other departments all scrambling to be in the act. While Mr Grierson was backing Mr Arnold Weinstock to run the electrical industry, Mrs Castle seems to 'have been asking him to run British Railways.

This is obviously frustrating enough. But what may have irked Mr Grierson even more is that the Ministry of Technology is now figtfing the civil war on a new front. Its share-buying scheme has been widely condemned as a politi- cal gimmick, of no practical use to industry. From Mintech, the 'word is that firms are queueing up to take part. No sensibly run-drm could, on the scant information so far made public, do more than express a polite interest in the scheme. So how is the Ministry to be justified? How is the queue formed? From companies who have been quietly approached by the Ministry of Technology. Some of these companies were in the midst of talks with the IRC —and have been urged by Mintech to break off their present negotiations with Mr Grierson

and wait instead for the helping hand or the Industrial Expansion Act. If you think that this is an isolated folly, or that Mr Wedgwood Benn is the man most likely to succeed in winning the hearts and minds of business, turn now to my next exhibit: the case of the chair- man of Short's.'

One July morning Mr C. E. Wrangham, chair- man of Short Brothers and Harland, the air- craft company, read in the paper that he was going to lose his job. He therefore called on the Minister of Technology—representing the Government, his controlling shareholder—to ask if this were true. Yes, said Mr Wedgwood Benn, as a matter of fact it was. And who is chairman of Shorts now? Mr Wrangham.

In his six years as chairman, Mr Wrangham has fought battle after battle in the obsatre combat areas of Whitehall, The hottest of all came after the Plowden committee's report, which said plainly that there was no future for Short's in aircraft. The Ministry of Aviation tried to act on that, but were out-lobbied by Mr Wrangham. 'The man recovered of the bite, the dog it.was that died'—Short's survived, but the Ministry was absorbed into Technology. Mr Wedgwood Berm was no doubt advised by some defeated veteran of that struggle.

That would at least explain why the minister wants to replace the chairman of Short's at a time when the company, for the first time this decade, looks like a business proposition. They have sold more than fifty of their Sk yvan freighters and expect to sell many more when their new engine completes its trials this month. Their missile side—Sea Cat and Tiger Cat- -can more than look after itself. Their partnership with Fokker on the F28 and their sub-contracts elsewhere serve to fatten the order book. And none of this owes anything to the Government's research.

Mr Wrangham—whose brother is Sir Geof- frey Wrangham, the High Court judge—has agreed to stay on until a successor can be founefr He bears the position with what looks like mag- nanimity but is (he says) just age: 'It would be bad for Short Brothers not to have a chairman at all.' And he observes that, after his great battle with the Ministry of Aviation, he went into hospital to have—literally—a chip taken off his shoulder.

William Brandt, timber merchant of Archangel, sent a ship to America in 1796, with orders to victual at Bordeaux. She was intercepted in the Channel by a Royal Naval patrol, and impounded—'trading wi'h the enemy.' Emanuel Henry Brandt, William's son, was dispatched to London to ask for their ship back : he liked life there, and stayed on to start a bank. His successors have always held that merchant banking should mean what it says, merchant- ing and banking—Brandt's still have large I I ' r interests—but the argument has now n taken further than ever, and the result is a hew phenomenon in the City.

Tino de Angelis's $150 million salad oil swindle hurt Brandt's badly. New capital was needed, and National and .Grindlays Bank now has two thirds of Brandt's equity. Board •7. changes followed, with non-Brandt directors for the first time, and a younger generation at the top. With the backing of National and Grindlays, which in turn is part-owned by Lloyds Bank, the three managing directors— Mr Peter Brandt, Mr Alistair Thomson and Mr Frank Welsh—set off on new paths. They be—ern by buying control of Danford and Elliott. a Sheffield firm using specie/ steels. Now Dunford and Elliott has bid £41 million for a far bigger steel company, Hadfields; and, it looks as though the deal will go through.

Brandt's takeover of Dunford made it

the first merchant bank—using the term, as it does, to mean 'Member of the Accepting House Committee'—to own a manufacturing company with a Stock Exchange quotation. Dunford had an elderly managing director and a nonagenarian chairman, with no one to suc- ceed them: the deal was welcomed. Mr Welsh stepped in until a new top management could be built up. Once that was done, the company was ready to bid for Hadfields.

A glimpse of the property market: the Governors of Aberlour Orphanage, Banffshire, are trying to sell the orphanage buildings, adver- tising them (The Times, Monday) as

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