The Observer from London, Greater London, England • 29

THE OBSERVER SUNDAY 16 OCTOBER 1994 TECHNOLOGY PERSONAL FINANCE T7r Spielberg takes on Disney Pulp fiction at the paper mill Nick Ooodway, page 6 Debt dangers of pension mortgages Neasa MacErlean, page 16 Executive portfolio 8 Pages 9-10 William Keegan, page 2 Michael Smith, page Letters, page 6 Mammon, i r-r -i v. i I CeDvon sett mm ft I-yy i-1 'J 3 Nick Qoodway, page 4 whole Blue Arrow affair raked up again and had told the Treasury Solicitor that I did not wish to be a witness. But I had agreed to give evidence if Davies gave a draft affidavit but it is understood was only prepared to repeat what he had told the inspectors. v' Berry was accused of breaches of fiduciary duty as a director and not complying with statutory obligations. The inspectors concluded: 'Such conduct was clearly not acceptable for.

some-one in a position of authority in a public This persuaded the DTT to seek to ban Berry as a director. Counsel for the DTI explained we aeasion 10 arop rne case on Monday by saying the mpye'fol-lowed a study of Berry's 140-page affidavit and 1 ,900 pages of supporting exhibits. Witnesses had indicated they would not giye evi-dence" would only grve limited asslstMceprh described; s'a whitewash'. -There was no hew; frorritherh. Thelini had only ever; seen: one side.

They then discovered that die report and the accusations could not be Both Heilbfbn and Boohan; -were out of the country and-uncontactable. The Berry fiasco is the latest in a Blue Arrow book of errors. An earlier DTI report and subsequent failed criminal prosecution of County NatWest executives for market manipulation of Blue Arrow shares after the 850m Manpower takeover cost almost 4Gm.l The DTI faces a 900,000 claim, for costs from Berry, a director of Tottenham Hotspur. The only cola in Iceland. ticularly successful.

Cola apart, Branson is plan-ningto go nationwide with Virgin vodka next year following a successful launch in South-east Engr land. Virgin says that partner William Grant better known for Glenfiddich malt whisky tested 100 names before discovering that Virgin came top. Tasting, News, page 13 tranters his attmtiohfrbmpurs1 old pHch.Photograph by Mark Harrison -S3'ii page 7 Management, page 8 any money, and are turning on the he said. Sugar has been forced to spend an increasing amount of time at Spurs, where his involvement has led to an acrimonious dispute with England5 coach Terry: Ven-ables, who partnered him in his 'rescue' bid but was later fired as chief executive, and a row with the Football Association over financial irregularities that occmv red before he moved in. 400,000 people may have been badly advised; The final compensation bill could be as much as 1 billion and administration costs could be another 250m.

Lawyers believe it could be another year before companies start settling substantial numbers of cases. Brian Barr of Manchester solicitor Antony Hodari Go says: 'The scheme seems to be a recipe for confusion and delay. Will insurers really provide large-scale redress The SIB is still finalising its than the average in the Gulf oil states. Oil revenues paid by the companies to the Falklands government could compensate Britain for some of the billions of pounds spent rescuing the islands after the 1982 invasion. But some Falklanders are wor NEC's acclaimed TFT Versa conversant call Emily Bell, Page 5 these 'unfair' criticisms were published.

The provisional criticisms included that it was: 'Totally inappropriate' to have allowed Manpower chief executive Mitchell Fromstein to be sacked without calling a full board meeting. That the decision was taken with 'unnecessary haste' and 'without fully thinking through the implications'. That the 'detachment and restraint' required of non-executives had not been exercised Thar they had 'failed to acquaint' themselves with the details of Fromstein's role. Had not spoken 'fully and frankly at board meetings'. And had failed to address in more detail "the de Savary deal and were 'deprived' of considering alternative options.

The inspectors did not accuse "the non-executives of any illegal action or of being implicated in deals they criticised. Subsequently the inspectors accepted they were mistaken. The lished report 'made no criti cism of Tebbit, Davies and fellow nonexecutive Dennis Stevenson who were said to have acted 'responsibly and honourably'. But embarrassingly for the, DTI and the directors concerned' although withdrawn the provi-'" siohal criticisms had to be disclosed to Berry along with all the. evidence given to the investiga-' tion.

The non-rexecutives arid others would have faced cross-examination had the case gone to trial in 1996. Tebbit would not discuss the withdrawn provisional criticisms, on Friday but confirmed he had been a reluctant witness. had no particular wish to see the Sainsbury's. The supermarket chain says sales of Corf's product under its own name have grown "to 60 percent of cola sales since it was launched early this year. Tesco believes mat Virgin Cola, at 25p a can, could be its leading cola brand by Christmas.

-Virgin is hoping for a 75 per cent market share. Branson says: 'Our "agreement with Tesco is that Virgin Cola will not be sold through any other of the big five supermarket But he confirmed that he is talking to several independent suppliers. Virgin has set up a 5050 company with Cott, Virgin Cola, to produce soft drinks. Tt will be profitable from day one says Branson. He is interested in lending Virgin's name to other types of soft drink.

Virgin Cola could be a suitable candidate for a stock market float one day. Cott is already a quoted Its partnership' with Wal-Mart of the US, the world's biggest retailer, has proved par- Lines are Wmsi QeDsHrD(al Second Opinion, page 4 we go, 'ere we go: sugar Michael Tate IT'S away from the turf and back to grass roots for Alan Sugar tins week as the controversial football club chairman delivers the, latest, results for Amstrad, the electronics company that built the fortune he is now pouring into Tottenham Hotspur. Sugar is expected to reveal on Thursday that Amstrad, which has run up losses of more than 0 Neasa MacErlean FRESH controversy is expected over the proposed clean-up of personal pension plan transfers two weeks before the Securities and Investments Board is due to publish its action plan for the financial services sector. The SIB is expected to rule out compensation in the form of cash payments for people who. were wrongly advised' to switch from occupational schemes into personal pensions.

BRITISH Gas has teamed up with YPF, Argentina's biggest oil company, to explore the seas around the Falkland Islands, writes Hugh O'Shaughnessy. The eight-person legislative council in Port Stanley meets on 25 October to debate proposals that would allow companies access to Falklands oil. The Anglo-Argentine consor tium ojnnW Vf tn I capture a key slice of the are charged at the local rate. NEC and Versa Michael GUIard THE embarrassing collapse last week of proceedings brought by the Department of Trade and dustry to disqualify former Blue Arrow chairman Tony Berry as a director was inevitable the opinion of legal experts with knowledge of the case because of flaws in the initiating DTI inspectors' report rather than the official excuse of new evidence, and lukewarm witnesses. The case, dropped after almost two years and six-figure legal costs, was weakened by the inspectors either completely removing or toning down provisional criticisms of other Blue Arrow directors Berry was accused of misleading.

Berry was deemed responsible for the 25 million written off on a property deal with entrepreneur Peter de Savary which led to the investigation He was forced out of Blue Arrow, renamed Manpower, after its. US employment agency subsidiary, in 1989. After almost two years of investigations provisional criticisms were sent to directors in 1991 priorio publication of the 3.6m report. These were mostly withdrawn or altered by the inspectors Hilary Heilbron QC and accountant Michael. Boohan after strenuous objections from those criticised.

Among those against whom criticisms were completely withdrawn were non-executive directors Lord Tebbit and Michael Davies. The Observer has learned that bom Tebbit, a former Trade Secretary and director of FIY BET and Sears, and Davies, a director of British Airways and TIj were so concerned they indicated they would have to resign if Michael Foster RICHARD Branson has signed a deal with cut-price food chain Iceland to supply "virgin Cola, throughout its 700 stores. Iceland, is said to have found the price and taste of the new product so attractive that it has decided to stop selling Coca-Cola and Pepsi. After a great, deal of research into die popularity of Virgin's name, Iceland chief executive Malcolm Walker decided that its image was the best. But neither Iceland nor Virgin would comment on his decision to drop the leading brands.

The news will come as a hammer-blow to Coke and Pepsi, following confirmation that Tesco will stock Virgin Cola. Never before in Britain have they faced the danger of seeing their brands forced off shelves. Virgin Cola will be made by Cott Corporation of Canada, which already supplies cola to to cDimcDn Emily Bell MIRROR Group Newspapers is set to complete its first television deal since former Sun editor Kelvin MacKenzie took over as head bfTV. MGN met representatives of Cable Programming Partners 1 and TCI this weekend to thrash out an agreement. MGN is likely to take over the resources and facilities of Wire TV for its new 2'4-hour Live TV channel.

Wire TV, owned by CPPl and TCI, is the only national channel that is available exclusively on cable. MGN is expected to change Wire TV into a sports channel to compete with Rupert Murdoch's Sky Sports. Live TV will be run by Janet Street Porter, who is joining MacKenzie at Mirror TV from the BBC, and could be up and running sooner than expected if it takes on the staff and facilities of WireTV. Rumours had been circulating in the cable industry last week that MGN would buy Wire TV outright, although this now seems unlikely. iGPPl has acquired exclusive rights to cover the 1996 Cricket World Gup as well as Lennox Lewis's fights, and is likely to bid against ky for further sporting events such as Premier League football when they come up for renewal.

Three 'weeks ago, MGN announced that it was forming a cable alliance with CPPl in the UK in order to diversify into electronic media. This gave MGN the right to run a cable channel on the national 5cable network, with NGN CPPl with ctoss-prmotional support through ih Daily Mirror: Adam Sriger of TCI con-firmed that concerning the format of the Mirror's TV channel are taking place. 'It's a question of putting all the elements into a (blender and mixing them up; Wire TV will continue in one form or another, but nothing is settled he said. 'surers already expect a substantial number of opportunistic claims, a sign many well-founded claims will also be disputed. Pension specialists, believe that ultimately the insurers and financial advisers will have to review the files for all six million people who have taken out a personal pension plan since they were introduced in 1988.

The SIB is also concerned about 'non-joiners' who did not join any occupational scheme-Pensions in crisis, page 16 councils in Britain the new laws could be on the statute book within 24 hours. The authorities will invite applications from companies for large exploration blocks of around 10,000 sq km. The British Government is discreetly encouraging the British Gas-YPF partnership, which could end wrangling between the two countries over ownership of potentially vast mineral resources. 2229 90 miIion in the previous yearshas lost money again. But the damage thistime is expected to be restricted 5m.

An attempt by Sugar to buy back the company-m 1 992 at 30p a share was. resisted by the City. Since then he has looked for new areas, of business and earlier this year paid 60m for Viglen, a company that assembles computers aid sells directly to the con sumer. Ketailers are not making ine majonry oi people wnose files suggest they weire badly advised are likely to get extra payr ments; made into their existing personal- pensions. A minority will be transferred back into their former occupational schemes; But the SIB plan relies heavily on the co-operation of the insiuv ance companies and financial advisers who sold the personal pension plans.

There are: fears that some companies or their'employT. ees might doctor their records to keep costs down. As many as Falklands development at a time when relations between the two countries are recovering. Reserves could rival in size those in the North Sea and could make the 2,000 Falkland Islanders the world's richest community far wealthier per head I DD He has recently installed former Philips senior executive David Rogers as chief executive at Amstrad, a move that is thought to have led to the depar ture in August of long-time pan-. ner Malcom Miller to join Sega.

Sugar, who pulled 34m out of the company in March 1991, still owns a 35 per cent stake, which even at the current share price of 28p, up 1 on Friday, is worth plans but has indicated that in surers and financial advisers will have to review, all transfer cases to highlight those that were badly advised. But lawyers are not convinced that the plan will be effective. A senior legal source says: 'It's a shame the industry will be asked to look at every case. It gives the insurers the chance to say there's been no bad advice. The better course of action would be to assume bad advice in all cases and then make offers.

The insurers will start In- ried that YPF involvement could strengthen Argentine claims to sovereignty. Others are concerned about the possible effect of an offshore" oiljboom on their small community and on wildlife. In the islands' tiny parliament smaller than some parish active matrix 0545 500105. The new Versas. Available in a choice of 4,096 colours.

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