“We’re going up midday on Friday,” said Bunch.
Rudd decided he could take the plane to Hartford in case there was any sudden need to move. “Friday evening then?”
“You’ll enjoy it,” promised Bunch.
He’d try, Rudd decided. He looked up at an approach and saw Faysel coming towards them. The Arab walked with a fluid elegance and Rudd was conscious of several women watching the man’s progress towards their table.
“I’ve kept you waiting,” said Faysel. “Forgive me.”
They hailed the waiter to give their order. Rudd chose wine for himself and Bunch. Faysel stayed with orange juice.
“Going to London tonight,” said Faysel.
“Walter told me.”
“You know Buckland House, don’t you?”
“Not for a long time. Morrison insisted I work at the Berridge for six months, on a hotel management course.”
Rudd felt the long forgotten anger burn through him at the memory. Of everything Morrison had ever done or attempted to do to him, splitting him from Angela during her pregnancy was something for which he would never be able to forgive the man.
“Fabulous hotel,” said Faysel.
“It was a long time ago,” said Rudd. He wanted to believe that Angela had known he got there but he would never be sure.
“I’m not happy about my involvement,” conceded Faysel.
“What was your last yield?” said Rudd. He knew the Arab had moved into the English group under a scheme copied from his link-up with Best Rest.
“There wasn’t one,”
Both Rudd and Bunch frowned together. “But Buckland House is the best in the world!” said Bunch.
“That’s what I thought,” said Faysel. “And why I’m so anxious to get to the meeting.”
Three thousand five hundred miles away, two other Buckland House directors had met that same evening at L’Ecu de France in London’s Jermyn Street, suffering the same anxiety.
“Condway’s lying,” insisted John Snaith.
“Short of making an outright accusation, what can we do about it?” said Smallwood.
“Challenge.” Snaith raised his hand above his head. “I’m fed up to here with Buckland and Condway and their bloody pomposity.”
“We’re outnumbered,” said the Buckland House finance director.
Snaith shook his head. “We’ll find out tomorrow,” he said.
3
The boardroom was practically a shrine to the company founder, William Buckland. Like the chairman’s office it was panelled but the carving was more elaborate, intricate designs worked into the cornices and pillars. Near the fireplace there was a plinth and a bust of the old man, the heavily moustached Glaswegian features refined and faintly deified under the improving chisel of a Victorian sculptor.
Above the mantel was a sepia-grained photograph of the opening of their first hotel, the Berridge, dignitaries grouped in stiff self-consciousness, a mixture of bowler hats and frock-coats and button-sided boots. But for the fashions it could have been a picture of the present board, thought Buckland, staring around. Condway, his friend, sat to his immediate right. Next to him and already pledged to support the loan manoeuvre was Sir Richard Penhardy. He was Member of Parliament for a Cornish constituency he regarded with almost feudal propriety and whose voters, with fitting obedience, had returned him for the past twenty years with one of the safest majorities in the House of Commons. Penhardy was a recognizable parliamentary character. He wore a luxuriant moustache as a reminder of a wartime flying career that had earned him the DFC and drove vintage motorcars with personalized number plates. He shunned party office, however, preferring to remain a backbencher with time to devote to his City interests. Apart from Buckland House, he was on the board of five other companies. The next director was Henry Gore-Pelham, although Buckland didn’t think of him as such. Gore-Pelham was a friend, as their fathers had been before them. They had gone to Eton together as well as Cambridge, and together made the grand tour of the overseas hotels after they had come down. Gore-Pelham was a tall, angular man, blond-haired and raucous-voiced. Buckland hadn’t involved Gore-Pelham in what was to happen because it wasn’t necessary: he was sure of the man’s backing. Buckland felt comfortable with people like Condway and Penhardy and Gore-Pelham. They formed part of the established society to which he belonged, the sort of men it was pleasant to invite for country weekends or be alongside on a grouse moor.
That couldn’t be said for the others: and certainly not of Snaith.
It had irritated Buckland, having to concede two years earlier to the merchant bank’s pressure to have Snaith on the board. He still wondered if he should have confronted the threat to withdraw liquidity funding and gone to another group of financiers. Snaith was a neat, precise banker who wore chain-store suits and drank mineral water with the lunch that was the traditional conclusion of every director’s gathering, because alcohol might have risked mistakes in the calculations he always appeared to be making in small, loose-leafed notebooks. Buckland found the reason for Prince Faysel’s abstinence easier to accept, although he felt the Arab’s directorship was a concession, like Snaith’s appointment. Probably because they had been for the same reason. A condition of the Saudi investment had been Faysel’s election to the board. But the man had style, which Buckland liked, and despite his wealth and position within the Saudi hierarchy he seemed to regard himself as a working director, not a titular appointee. Buckland still wished the board had remained entirely English. He thought back to the impression with which he had begun his reflection. Faysel couldn’t have appeared in the photograph over the fireplace. Outside one of the overseas holdings, perhaps, but not outside the Berridge.
Henry Smallwood sat at the end, plump and myopic. Smallwood had joined the board under his father’s chairmanship and had revered the old man, imagining no one else capable of continuing the empire. That was why he’d run tittle-tattling to Condway, instead of approaching him directly. Bloody clerk.
“Shall we start?” said Buckland. He’d decided to make it appear a normal meeting, in the beginning.
The noise around the table ceased and Buckland cleared his throat. “Not a good year,” he began. “From the provisional figures it would seem an £800,000 loss is likely.” He was consciously forceful at board meetings, like his father had always been. Except that the old man hadn’t had to feign the demeanour.
Buckland was aware of Snaith’s wince. He went on, “We’re not alone, of course. The recession has affected everyone. And compared to some, we’ve done well: the overseas holdings, particularly the Far East, turned in a profit. The biggest problem is the liners: the unions insist upon a high crew complement and oil costs have risen astronomically. We can’t properly run them as port-to-port vessels any more. And the cruise figures were disappointing. It’s the recession spiral again, people with less money to spend.”
“How much of our predicted loss comes from the ships?” asked Condway, according to the rehearsal. He had a rich, thick voice.
“About £550,000,” said Buckland.
“What about economies?” said Snaith.
“We’d risk industrial action if we tried to switch to third world crews, which would reduce our salary expenditure,” said Buckland. “There’s nothing we can do about fuel costs, except reduce the cruise programmes. And if we cut back, we make them less attractive and risk further passenger loss.”
Snaith hurried an entry into a notebook. Clerk, thought Buckland. Just like Smallwood.
“What about other economies?” said Faysel, consulting the balance sheets before him. “Our salary and administration costs seem extremely high for the London operation.…” He looked up, speaking directly to Buckland. “You know my association with the Best Rest chain in America. I’ve made a comparison against five hotels in Manhattan and Chicago. The running costs of our London units are twenty-three per cent higher.”
Buckland stared hard-faced at the Arab. “Buckland House hotels are hotels, not
units,” he corrected. “The running costs are dictated by what they are – the best there is. People come to us because of a service and tradition they can’t get anywhere else. And that decrees the administration costs. To cut that would be to destroy the very essence of what makes us different, what makes us the best.”
“Surely you don’t think a trading loss of £800,000 is acceptable?” said Snaith, unimpressed.
“I think it’s unavoidable, considering the world conditions,” said Buckland.
“Got to expect fluctuations, surely?” said Gore-Pelham supportively.
“Last year we had a royal wedding,” reminded Snaith. “It inflated hotel occupancy in London artificially. We should have shown a profit, not a loss, on our London working. If we lost last year, with that advantage, then the prediction for next year must be worse.”
“Why don’t we put an efficiency team throughout the entire operation, not just in London but Africa and the Far East as well?” suggested Faysel.
“A what!” said Condway.
“A group of men trained in hotel operation and administration, to recommend improvements,” said the Arab.
“And then introduce waitresses in cardboard caps to serve hamburgers and chips off plastic tables!” said Gore-Pelham. He looked around the table for support in the ridicule but Faysel said, “I was attempting to be constructive, not fatuous. There’s nothing on these figures that suggests anything but increased and continuing losses. Are you happy with that?”
“Of course I’m not happy with it,” said Gore-Pelham.
“So what’s your suggestion to reverse it?”
Gore-Pelham shrugged his shoulders turning hopefully to Buckland.
“All the financial forecasts suggest the recession is bottoming out,” said the chairman. “Next year there should be an upturn.”
Snaith shook his head. “No upturn would be sufficient to reverse our situation, not on these figures.”
“I wasn’t suggesting the recovery could be accomplished in a year,” said Buckland. “It’ll be a process of several years.”
“We didn’t declare an interim dividend,” reminded Snaith. “With an £800,000 deficit, what do you propose for the Full?”
“Withdrawal from reserves sufficient for a five per cent declaration,” said Buckland at once.
“We drew from reserves last year,” said Faysel.
“It’s bad book-keeping,” said Snaith making another calculation in the notebook. “Five per cent would mean £1,230,000 withdrawal from reserves. That brings us dangerously close to our support figures. And the City would recognize it.…” He snapped his fingers. “Just like that. It could start a share run. Worse, there could be a creditors’ rush. The two together would be difficult to sustain.”
“What about increasing our borrowing requirements?” suggested Penhardy, talking to Snaith. “Our overdraft is only £10,000,000, which against our assets if very small.”
“We’re spent up to that £10,000,000,” said Snaith, pointing to the balance sheet. “At a favourable interest of 13.5 per cent, it’s costing £1,350,000 a year just to service the loan. I don’t think we can afford to increase our debts.”
“It would remove the risk of any City speculation,” said Buckland. Penhardy’s suggestion was a good one.
Judging the mood, Condway said, “I’d like formally to propose the motion that we approach our bankers with the request. Another £10,000,000 is well within our asset strength.”
“Seconded,” said Gore-Pelham.
“Talk to the motion,” invited Buckland.
“It’s a panic move,” said Faysel. “It buys us time but we still have to face the fact that without the proper cost control, throughout the entire chain, the losses are going to continue. There isn’t sufficient support any more for the Grand Hotel concept.…” He turned to Gore-Pelham. “There are a lot of people who don’t want hamburgers and plastic. But there are more who do. And we mustn’t despise them.”
“I don’t despise them,” said Gore-Pelham. “I just don’t expect them to stay with us.”
“That’s the problem,” said the Arab. “Too many people are staying elsewhere.”
“Will you put the request to your people?” Buckland said to Snaith.
The bank nominee hesitated, looking directly at the chairman. Then he said, “It’s my duty to put forward a request that has been duly voted upon by this board.” The qualification was obvious.
Now it was Buckland’s turn to hesitate, aware of the other man’s reluctance. He said, “Any more discussion?”
From around the table came varying gestures of refusal. Confident of control, Buckland said, “Vote then.”
The motion was carried four votes to three, Snaith, Smallwood and Faysel being the opposers.
“How long do you imagine it will take your people to respond?” Buckland asked Snaith.
“A week,” said the man.
“Then perhaps we should meet ten days from now, for a decision upon the dividend announcement,” said Buckland. There was nothing else to discuss, apart from the loan. Now the moment had come, he felt a twitch of nervousness. He’d been a bloody fool, he realized, belatedly. He stirred the papers before him, his eyes lowered. “There’s another item,” he said. “Something to be tidied up.”
“An item of £635,000?” said Snaith at once.
Buckland’s head snapped up, staring-eyed with anger. There was no way Snaith could have known about it unless Henry Smallwood had briefed him. They were a fitting pair, he thought: narrow, insular, blinkered little men who probably kept their small change in purses and carried folded-up squares of toilet paper in their top pockets and put handkerchiefs on lavatory seats. Very little men.
“Yes,” said Buckland tightly. “Eight months ago I settled a private debt against a company cheque. It was an executive decision, involving the deputy chairman.…” He hesitated, grateful for Condway’s nod of agreement. “Regret to say I overlooked it, until it was brought to my notice. I’ve repaid it, of course. But there’s a need for a board minute.”
“You settled a private debt against a company cheque?”
Buckland looked across the table at Snaith’s question. “There seemed no point in bothering to put it through my personal account; it was for a specific purpose.”
“It’s illegal.”
“It was an executive decision to advance me a loan.”
“Which needs three directors,” came in Smallwood. The man had a weak, rise-and-fall voice.
Buckland looked sideways to Penhardy.
“My agreement was sought,” said Penhardy dutifully.
Buckland wished the MP had made it sound less like a recitation.
“In the draft accounts the sum is entered under investment,” persisted Snaith.
“An accountancy mistake,” said Buckland. “No one thought to ask.”
“A mistake of over £600,000!” said Faysel. “Are sums like that often wrongly entered and then overlooked?”
“I find this embarrassing,” said Buckland.
“I think I would,” said the Arab unhelpfully.
“There’s been adequate explanation,” said Gore-Pelham.
“I don’t think there has,” said Snaith at once.
It was being more awkward than Buckland had expected. “I resolved a private matter through the company,” he said. “I had director authority to do so. It was never my intention to avoid responsibility for the loan. I have made an adjustment through the accounts.…” He paused, unaccustomed to explaining himself and angered at the necessity to have to do so. “I accept an apology is justified to this board. Which I make, unhesitatingly.…”
Prince Faysel and Snaith were regarding him blank-faced. Smallwood was concentrating upon the accounts. Condway and Penhardy were looking away, as well. Only Gore-Pelham offered a smile of reassurance.
“.… Just as I unhesitatingly assure the board that it is an oversight which will not be repeated,” completed Buckland.
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br /> “How is it to be accounted for in the statement of account?” demanded Snaith. The three directors had made it legal and he was annoyed.
“I have already explained it was a private director’s loan,” said Buckland. He was sweating, the dampness glueing his shirt to his back.
“At what interest?” asked Smallwood.
Damn, thought Buckland: he should have thought of that. “Free,” he said.
“For it to be free, there would have had to be shareholders’ awareness and approval before the allocation,” said Smallwood.
Another mistake, realized Buckland: he was being made to look extremely foolish.
“There’s already been discussion about the effect of rumours upon share pressure and creditors’ demands,” said Penhardy. “I don’t think this should come before an open shareholders’ meeting.” The pause was just too long. “You’ve already heard the executive decision was within the terms of the company formation,” he finished.
“I don’t think there’s anything here that can’t be settled between the discretion of these four walls,” said Condway.
“Neither do I,” said Penhardy. “I think it would be a mistake to let this go to the shareholders.”
“It would need a full directors’ minute, properly approved by the entire board,” said Snaith.
“Yes,” said Buckland.
“Backdated,” continued Snaith.
“Yes.” The bastard was determined to make him grovel.
“I’d like to propose a retroactive minute entry, approving a temporary loan,” said Gore-Pelham loyally.
“Seconded,” said Condway, at once.
“When was the cheque issued?” said Snaith, refusing to be hurried.
“May last year,” said Buckland. He felt as though he was explaining some lapse before a tutor.
“When was it repaid?”
“Two weeks ago.”
“Base rate in May was fifteen per cent,” said Snaith. “Accepting that as a preferential charge, interest on £635,000 at a full year would be £95,250.”
“Are you saying you think I should pay interest!” demanded Buckland.
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