Standard Life vents fury at Glencore chaos

By Rob Davies for the Daily Mail
Updated: 06:35 EDT, 16 April 2011

Top City investors led by Edinburgh giant Standard Life are accusing Glencore of cobbling its board together at the last minute.

Glencore botched the appointment of its new chairman, despite spending an estimated £250m on elite bankers to advise on the biggest float in London's history.

The much-vaunted listing – valuing the secretive commodities trader at up to £45bn – deteriorated into shambles as the firm failed to name a chairman as it announced its intention to float.

The market plunged into confusion amid rumours former BP boss Lord Browne, who left the oil firm after lying under oath about his former gay lover, had got the job.

Standard Life said Glencore was already confirming fears about behaviour in its boardroom that could damage its float. 'Good succession planning is a hallmark of good governance,' it said.

Standard added that 'too often' companies looking to float tried to 'cobble their boards together at the eleventh hour'.

It added shares in such firms deserve to be marked down by investors for their conduct. Glencore later put out a statement saying Simon Murray – an adventurer who fought with the French Foreign Legion – will take the chair.

But the debacle has left investors increasingly worried Glencore will struggle to get used to the standards of transparency and responsibility to shareholders required of a public company.

A source at one major investor, said the farce was just the latest in a litany of similar FTSE debacles.

The source cited the abortive recruitment of Paul Skinner as chairman of BP from Rio Tinto, which fell apart as he became embroiled in controversy over the mining company's direction.

'It's a great shame one of the key roles in corporate governance – the chairman – appears to be treated in such an off-hand fashion,' the investor said.

The chaotic scenes are just the latest issue to rock Glencore.

The Mail revealed earlier this week the firm is the subject of a complaint to the OECD that it has been avoiding tax in Zambia. Glencore denies any wrongdoing.

It also emerged yesterday that Citigroup banker David Wormsley – a controversial figure at the centre of a courtroom battle with Guy Hands' private equity group Terra Firma – is acting for Glencore.

The eight banks advising on the float are expected to net fees of around £250m, while some of Glencore's partners will see their stakes crystallised at more than £150m.