Black spot lifted at Primark

By Alex Brummer for the Daily Mail
Updated: 02:46 EDT, 17 June 2011

In an age of celebrity chief executives and financiers George Weston, chief executive of Associated British Foods, prefers to keep his profile low.

He would rather be at home mowing the lawn than be seen parading at Royal Ascot.

So Weston, who puts a high value on the way that ABF and its famous High Street offshoot Primark do business, was chagrined when the BBC's Panorama programme falsely alleged that it uses child labour.

Because it was the BBC and its flagship documentary programme making the charges, Primark, in Weston's words, came to be seen as the 'poster child' for such poor practice.

As chief executive he has been absolutely determined to establish the truth before the child labour charge became urban myth.

After three years of endless complaints and legal exchanges - during which the Beeb sought to wriggle off the hook - the BBC Trust (which now regulates the broadcaster) reached the conclusion that the filming of child labour was faked.

For a media group which likes to pride itself on its high standards and political correctness the admission is damning.

Superficially, the faked filming did little to harm Primark. As a brand it has gone from strength to strength and has even managed to begin conquering the German market.

Only perhaps in some of the more leafy suburbs of North London has there been any adverse business reaction - if any at all.

On the ABF board and at Primark the issue has been of acute concern. Hundreds of hours of management time have been spent on wrangling with a reluctant BBC and the issue, because it is potentially so damaging, has regularly been discussed by Weston and his colleagues.

As an international group, with operations across the developing world as well as on UK High Streets, its reputation as an ethical investor and employer is paramount.

It is this reputation which Weston felt it was imperative to defend and worth spending upwards of £500,000 in legal fees to make sure its case was properly heard.

Justice looks now to have been done. But it is disgraceful that it has taken three years to lift the canard.

Laird folly

It is a long time since the Cammell-Laird group built Britain's first aircraft carrier HMS Ark Royal, turned out battleships, London underground trains and taxis.

Its successor Laird, which still boasts a heritage dating back to 1824 and the foundation of the Birkenhead Ironworks, is now a light-on-its-feet electronics group which specialises in components that cut the interference for mobile devices.

Now, like so many British high-tech groups, it has caught the eye of an American predator, Cooper Industries, on the hunt for growth opportunities.

One of the most interesting things about the bid is the price offered - and rejected - by the Laird group which is at a 35% premium to Wednesday's closing price.

This suggests that among our second tier industrial groups there are still hidden jewels, under-priced and easy meat for foreign buyers.

The reality is that Laird's key subsidiary, Laird Technologies is based at St Louis in the United States, and the company, which is an R&D leader in its field, bears little resemblance to the industrial powerhouse it once was.

There is no escaping the fact that is a company in a growth sector with a share register dominated by British long-term investors with Aviva holding a 7.36% stake.

At the very least the board chaired by Nigel Keen is right to hold out for a better price. But a nation which made such a fuss about selling off confectioner Cadbury should also care about the loss of another bit of our industrial heritage - especially a company which has re-positioned itself at the heart of the cyber revolution.

Burst bubble

In a week when there has been so much focus on reshaping Britain's financial architecture it is worth looking, for a brief moment, at the fate of the latest failure, the aptly named Southsea Mortgage and Investment Company.

The government is fulfilling its promise to the lesser depositors and savers by offering a refund of savings up to £85,000.

But the unfortunate few, with deposits above this, are not being bailed out. The intention is to demonstrate that the financial system is now robust enough for the implied guarantee of all deposits - offered by Alistair Darling in the wake of the Lehman investment bank failure in September 2008 - to be pronounced dead.

One wonders if the authorities would be quite so gung-ho if, for instance, a euroland default were to rebound on one of the mega High Street banks. It would be a very tricky political call.