by Karen Swan
‘But surely Lochie has a strategy? He’s the CEO. It’s in his job description to lead the company to safety and profitability.’
‘He wants to diversify.’ Torquil wrinkled his nose as though it was a dirty word. ‘We’ve got an image problem – young people don’t want to drink Scotch; they think it’s their father’s drink. They want vodka, gin, tequila . . .’
Alex felt a twinge of guilt. She was one of them.
‘So Lochie thinks we should distil gin and vodka – utilizing our existing operations and resources.’
‘And you don’t?’
He shook his head. ‘Personally, no. Specialism is our USP. We’ve done very well out of being a legacy brand, producing small batches of exceptional single malts that can hold a premium. Blends account for ninety per cent of Scotch sales, but of our ten per cent market share, we’re leading from the front; older whiskies in the super-premium category have grown by thirteen per cent in the past few years and we’ve benefited from that, not to mention that our twenty is now the official malt of the Houses of Parliament. We won Malt of the Year for two years running in 2014 and 2015 and came runner-up last year. We’re never going to compete with, say, Glenlivet when it comes to yield – they produce twelve million litres a year, we produce five million. But market saturation is not our story. And neither in my opinion is gin.’ He sighed. ‘But it looks like I’m on my own in that viewpoint – it was passed with a sizeable majority by the family council. Lochie scored an important victory there.’
‘Well I guess if you need to grow the business . . . Your father told me the business needs a capital investment?’
‘That’s right, and the board – with the full backing of the family assembly and the shareholders – want to fund it through equity, by issuing new shares.’
‘But?’
‘But naturally Lochie wants to go another way – raise the money by delaying on dividend payments and reinvesting the profits.’
‘Ah.’ She winced. ‘So everyone’s agreed on what to do next, just not how.’
‘Pretty much. Not only did the family assembly vote overwhelmingly against Lochie’s reinvestment proposal, so too did the thirty-five per cent of non-family shareholders – within that number is a very large consortium made up of employees and former employees, all of whom badly need the quarterly return from their shares.’
‘So how has it been left?’
‘In limbo. It’s on the table for the next board meeting. Lochie is the majority shareholder. He’s got a fifty-three per cent stake, but he’s not forcing his hand. Yet.’
She frowned, remembering his arrogance and certainty that Sholto wouldn’t act against him. ‘Do you need a qualified majority? Won’t a consensus do?’
‘No. The Articles of Association stipulate that a clear majority is required.’
‘But surely if there’s enough family votes and shareholder votes, you would outnumber him?’
‘We would – if the family shares were common stocks and not preferred stocks.’
‘Oh dear,’ Alex said, realizing the problem immediately: the preferred stocks which were issued to the family shareholders, whilst retaining first dibs on dividend payments, came at the cost of one small thing: voting rights.
‘Exactly. The vast majority of the family shareholders have no controlling voice in how the company’s run.’
Alex thought for a moment. ‘But if the family shareholders have preferred stocks, surely Lochie does too?’
‘He used to – or rather Robert, his father did – but he converted them to common stocks many years ago. Lochie’s mother was from money so Robert didn’t need the higher yield of the preferred stocks in the same way. He preferred to have a voice,’ Torquil quipped ruefully.
‘That was prescient of him.’ Alex was impressed by Lochie’s father’s shrewd business acumen.
‘Wasn’t it just? As was the fact that Robert also took advantage of the family’s “first refusal” rights any time a cousin wanted to sell. He bought as much stock as he could get his hands on and converted it.’
‘But even with all that,’ Alex argued, ‘hereditary shareholdings are usually diluted over the generations.’
‘Ah, but Lochie is the only child of a long line of only children leading back to one of the company’s founding partners.’
Her head was swimming, trying to work it all out. ‘Jesus.’ Alex couldn’t decide whether luck or brilliance had connived to create Lochie’s good fortune. The chances for this scenario coming to pass were negligible and yet he alone now held the veto. The board could neither force through their motion, nor could they remove him from his post, for he was operating perfectly legally. They were caught in an impasse – Lochie the not-so-benevolent dictator making them bend the knee – and Alex was staggered by his arrogance both in single-handedly blocking the consensus vote and refusing to resign. There were precious few leaders, even amongst her clients, who had the temerity and ego to bullishly insist theirs was the only way.
‘So first he torpedoed the Ferrandor sale, then he blocked the issue of shares?’
‘Yes, although perhaps with hindsight it was obvious that he would do that,’ Torquil shrugged.
‘Was it?’ It wasn’t to her.
‘Of course. If we issue more shares, his stake will be watered down and I happen to know for a fact he can’t afford to buy up more at the moment.’
Alex’s eyebrows shot up. ‘So you’re seriously telling me he’s potentially stalling the growth of this company and disregarding the mandate of its shareholders, just to protect his personal position?’
‘I’m afraid so,’ Torquil nodded.
‘But you must be so . . . so angry,’ Alex said hotly, feeling utterly indignant herself.
‘Furious. Devastated. All of the above,’ he said benignly. ‘But it’s business. Those are the facts. We have to deal with it and move on.’
Alex sighed in disbelief. That bloody-minded man was the limit. ‘Why can’t he afford to increase his stake?’
Torquil lowered his voice, his eyes flickering towards the open door. ‘He overextended himself on a pet project he was trying to set up as a subsidiary – and which, I should add, was promptly thrown out by the board.’
‘What was the venture?’ she asked, intrigued and pleased that it cut both ways at least.
‘He was trying to develop a trading model for small investors to trade in maturing malts. As you can imagine, we have thousands of barrels of slowly maturing whiskies just sitting around in warehouses and that maturation costs us dearly, as it’s years – generations even – before we can utilize it and actually turn a profit from it.’
Alex nodded. ‘Go on.’
‘Lochie’s so-called great idea was to trade on the maturing whisky barrels by buying into the speculation that both the brand and the market will continue to appreciate in value.’
‘Sounds like a good idea,’ she shrugged. ‘If those barrels are just sitting there for ten, twenty years, it’s making them work for you until you can actually touch them.’
‘In principle it is a good idea. The problem is the matter of scale. We may be one of the smaller producers but we’re still producing five million litres a year and every single one of those litres is earmarked for a particular reserve. For flavour continuity purposes, it’s clear that these barrels can’t be separated or broken up, meaning trades have to be of a very significant size, far out of the reach of most private investors. Simply put, we don’t believe the demand is there.’
‘But he does?’
‘He did, but the proposal was shot down.’
Alex frowned. ‘Do you think that could be a factor in him blocking the issuance of new shares? He’s angry? This is his revenge?’
‘Honestly? Nothing he did would surprise me any more.’
From behind his head, Alex suddenly saw something fly across the courtyard – something round and pink. She looked back at Torquil in alarm.
Torquil swivelled in his
chair and looked out the window, following her eyeline. ‘Oh, that,’ he grinned, getting up and gesturing for her to join him. ‘Come and see.’
She walked over and was bemused to see a couple of men in boiler suits playing football in the courtyard with a bright pink ball.
‘They’ve just cleaned the draff pipes,’ he said, watching as they passed the ball between themselves.
‘What’s a draff pipe?’ she asked.
‘Draff is the barley residue that’s left over after the mashing; we reuse it for cattle food. And it turns out a size five football is the perfect size for cleaning the pipes. We just drop it in at the top and it whistles through the chute, cleaning the debris as it goes.’
Alex laughed. ‘I’ve never heard of anything like it!’
He chuckled. ‘No, it is one of our more unorthodox working methods.’
‘Well, this looks cosy,’ a sarcastic voice behind them said, and they turned to find Lochlan standing in the doorway, a bunch of files in his arms. He had changed into jeans and a grey sweater and Alex thought he looked more as though he was going out for a Saturday lunch than heading a management meeting.
‘Ah, Lochie . . . I was just bringing Alex up to speed on the challenges facing the company,’ Torquil said placidly, leaving the window.
‘Well, that would explain why my ears were burning then,’ he said, walking straight through to the conference room next door. Alex glanced back at Torquil with a knowing look. After what she’d just heard, if Lochlan was feeling paranoid, he had good reason to be.
Chapter Eleven
The canteen was a cosy affair – a domed single-storey unit behind the mash house – with an old wooden counter and four women in blue housecoats and catering caps standing behind it. The smell of stew seemed to drift down like clouds bouncing off the ceiling, steam from the stainless-steel kitchen behind them warming the space.
‘Just a coffee, please,’ Alex said.
‘A finger of shortbread? Or a scone?’ the dinner lady asked.
‘No, thanks.’
‘It’s included in the price.’
Alex smiled. ‘No, really, just the coffee, thank you.’
There was a pause. ‘Right you are, someone’ll bring it over to you.’
She could feel the woman’s eye roll as she looked around for where to sit. All but two tables were unoccupied; it was that lag time between elevenses and lunch. Most of the wooden refectory tables were set in continuous rows down the centre of the room, but a few smaller ones had been positioned by the windows and she headed for the one nestled in the corner, furthest from the door and any draughts.
She sat down, thinking over what she’d just seen in the meeting. It was clear the junior staff were nervous of him, holding their coffee cups high at their chests – a protective measure – and struggling to make eye contact with him. As for the tone of the discussions, Lochlan had been passive-aggressive and argumentative. Nothing was too small to bicker over – not the cost of the embroidery on the new staff shirts, repairing the CCTV system, nor the free biscuits with coffee.
‘Here you are.’ The coffee was set down in front of her, a little sloshing onto the saucer.
‘Thanks.’
Talk of the devil – a shortbread had been put on the saucer and she looked up at the dinner lady who gave an apologetic shrug. ‘I figure you’ve paid for it anyway; and you do look awful pinched. But it’s up to you. Leave it if you want.’
Alex watched her go. Why did everyone keep telling her she looked ‘pinched’?
She put her hands round the cup and shivered, realizing suddenly that she was cold. The temperature had dropped under the clear skies and her outfit – chic and understated as it was – wasn’t anywhere near sufficient for keeping her warm in this. She was used to first-class airport lounges and plush climate-controlled offices, not stone huts with cold Crittall windows. The energy involved in engaging Lochlan Farquhar kept her distractedly warm most of the while but even he couldn’t cocoon her completely from a minus-five wind chill.
‘Hi, Alex!’
She looked up to see Skye coming through the door. ‘Oh, hey,’ she waved back. ‘Join me?’
Skye nodded, placing her order at the counter and making her way over.
‘How are you?’ Skye asked, sitting down with a ‘flump’ and unwinding the red knitted scarf from her neck. Her ponytail swung and her cheeks were flushed a wholesome rose tint; she looked ridiculously young and as though she should have been in a school uniform rather than a lab coat.
‘Fine. This is a victory coffee! I’ve just come out from a meeting with Lochlan.’ If she found it alarming that her joy lay in not having been thrown out, rather than any great leaps they’d made in coaching, she didn’t show it.
‘That’s great!’ Skye enthused, looking surprised as she shrugged off her coat. ‘How did you get him to sit down with you?’
Alex blew out through her cheeks. ‘Oh, by winding him up, mainly.’
‘Huh?’
‘I played him – got him to a point where he negotiated with me: he wants to prove his superiority so badly, he’s prepared to meet my terms to do it.’ She wondered whether he could go through with it though. After his attitude in the meeting just now, was the satisfaction of beating her at the MacNab going to come at too high a cost for him?
‘Sly, I like it. Well, congratulations. I must admit I was doubtful you’d get him to listen. He’s so bloody stubborn,’ she tutted. ‘Ooh, are you having the shortbread? It’s so good. I’m having to deny myself at the moment. I need to lose another four pounds before the wedding.’
‘You do not, there’s nothing of you,’ Alex protested.
‘You’re very sweet but it’s true. I had a dress fitting the other day and either I’ve fallen off the diet wagon or they expected me to lose more than I have, but it was tight here,’ she said, girdling her waist with her hands. ‘They told me every bride loses weight before her big day but –’ she whistled quietly – ‘looks like I’m the exception to the rule.’
‘I’m sure Alasdair wouldn’t want you half-starved and fainting on your way down the aisle.’
‘No, you’re right there. He’s not got much truck with “faddy diets” as he calls them. But then he’s a six-foot-three beanpole who’s never known what it’s like to have a fat day or not be able to get into his jeans. It’s actually really annoying; he eats like a horse whilst I’m nibbling on daisies and I still put on weight! He’ll be so cross when he comes down this weekend and finds he’s having salad for supper again.’
‘Oh, he’s coming to Islay?’
‘Aye. We take it in turns. I went to Glasgow this weekend, now it’s his turn to come here – he’s got Friday off to help me with packing the last bits. You must meet him.’
‘I’d love to.’
Skye looked pleasantly surprised. ‘Yeah? Well, how about dinner at the pub on Thursday?’
‘Great, where were you th— Oh, wait, I’ve actually already got dinner plans that night.’
‘Friday then?’
‘I’m heading off to Perth for the weekend – part of my deal with the devil.’ Alex rolled her eyes.
Skye looked disappointed. ‘That’s such a shame. We’re having Sunday lunch with my folks and then Al’s getting the last ferry back that evening. And then the next time I’ll see him after that will be in the church.’ She made an excited squeak.
‘Oh, I’m sorry. I’d have loved to meet him.’
‘Couldn’t you change your dinner plans on Thursday?’
‘I’m not sure. Possibly. It’s just Callum.’
‘Callum?’ Skye’s eyes widened. ‘Are you two—?’
Alex groaned. ‘Oh God, no! No. No, no, noooo. I just promised to have dinner with him in return for a favour he did me. I like to honour all my debts.’
Skye looked at her. ‘Well, you should watch yourself with him. Callum’s got quite a reputation with the ladies. He’s a bit too good-looking for his own good.’
‘At St John’s, the wee chapel up the road here. And we’re having the reception here.’
There was a pause. ‘Here? Actually here at the distillery?’
‘Aye. In the dunnage.’ She closed her eyes and inhaled deeply. ‘All that beautiful whisky maturing in oak; we’ll be breathing the sweet air of angels’ share.’ She opened her eyes and saw Alex’s expression. ‘What? Have you not heard of angels’ share? It’s the amount of whisky lost to evaporation through the oak casks.’
‘No, it wasn’t that.’
‘What then?’
‘Well . . . how did that go down with Lochlan?’
‘He was fine with it,’ she mumbled, physically retreating.
‘Oh.’ But Alex wasn’t so sure; she had seen his reaction to Skye’s name when they’d been talking in his office earlier. It had hurt him, wounded him even – it was the closest thing to vulnerability she had seen in the man since getting here. No, she wasn’t convinced he was going to be ‘fine’ with her marrying Alasdair – right here, of all places – no matter what he might say to the contrary.
Alex folded her hands in front of her on the table, an idea beginning to present itself to her like an image in a dark room. ‘Can I ask you something?’
‘Of course.’
‘Do you miss him?’
Skye’s jaw dropped open, her body freezing mid-action. ‘What?’
‘I mean, just over a year ago you were going to marry him and now, here you are instead on the eve of your wedding to Alasdair. I just wondered . . .’
Instantly, tears stung Skye’s eyes. ‘Why are you asking me that?’
Her reaction seemed as heightened as his. One tiny scratch of the surface drawing blood. ‘I don’t know. I just thought . . . Well, that night at yours, when I saw the two of you in the porch, I wondered if . . .’