Before the election, the Conservatives were dogged by stories about the tax affairs of their deputy chairman and former treasurer, Lord Ashcroft. It seems they never learn, says Andrew Pierce in the Daily Mail. Their new treasurer is another former tax exile whose past business dealings make “Ashcroft seem like a nun”. No doubt David “Spotty” Rowland’s financial expertise and donations (nearly £3m so far) are welcome, but Labour’s attack-dogs are salivating at the thought of him taking up the post in October.
The son of a south London scrap-metal dealer, Rowland, 65, is “a legendary City figure”, says The Times. He left school without qualifications. But, by the age of 23 (when he had barely outgrown his teenage acne – hence the nickname), he had already made his first million as a property wheeler-dealer. A year later, he floated his company and headed for tax exile, living in Paris, then Monte Carlo, before settling down in Guernsey.
Rowland swiftly emerged as one of the most colourful deal-makers of the 1970s and 1980s. His speciality was aggressive corporate raids. Many saw him as a budding Jimmy Goldsmith, noted Forbes in 1989, when Rowland was laying siege to Sir Terence Conran’s Storehouse Group. There were certainly parallels in their private lives (like Goldsmith, Rowland had a domestic ménage, maintaining families with both his wife and mistress). But he wasn’t known for his “finesse” so much as for his “commercial instincts and quick reactions”. Several of his acquisitions (including the upmarket estate agency Chestertons, which was later placed in receivership) came unstuck.
It was Rowland’s activities abroad that proved most controversial. In 1989, he used his listed investment vehicle, Inoco, to acquire a controlling 34% stake in Gulf Resources (a US oil explorer and industrial smelter) from the Barclay brothers. He inherited an environmental disaster: pollution from a decommissioned lead smelter in Idaho had contaminated the area. But, as a series of lawsuits later alleged, instead of using Gulf’s funds to clear up the mess, Rowland diverted tens of millions of dollars into a property deal in New Zealand, before selling out of the company altogether.
Rowland is not without vanity: he commissioned a life-sized statue of himself in Guernsey. But, in recent years, he’s been happy to let his son, Jonathan, front most of his deals. The latter’s listed internet incubator, Jellyworks (once valued at £240m), was a prominent victim of the dotcom crash. But father and son have spent the past decade steadily growing their wealth, which The Sunday Times now puts at £730m. For Rowland, that’s a mixed blessing, says the Daily Mail. “Money just complicates things. And the more you get, the more complicated your life becomes,” he once observed. As Tory party treasurer, his life is probably about to get more complicated still.
A risky choice for the Conservative Party
The Tories might have inherited the direst public finances since World War II, but their own coffers are in remarkably good shape, says Jonathan Isaby on Conservativehome.com. In the run-up to the election, the current co-treasurers – Man Group “godfather” Stanley Fink, and Icap founder Michael Spencer – succeeded in raising far more than the party could legally spend, “putting it in a good place for a second election if one became necessary”. Some £10m was raised in three months flat at the start of the year, notes The Independent: more than all the other parties combined.
A good half of the Tories’ war chest came from the pockets of City bankers and financiers, observes the Daily Mirror. Big donors included hedge-funders Michael Hintze of CQS, and Michael Farmer of RK Capital Management. But neither has matched the largesse of David Rowland, who was so keen to secure “fresh ideas, national renewal and above all a government that sets the people free” that he returned to Britain from tax exile last year so he could legally contribute to the party’s funds.
Donations are one thing, but how much of a political risk are the Tories taking in hiring Rowland as party treasurer? With opponents ready to pounce at any whiff of impropriety, he will certainly need to be squeaky clean. In February, as The Daily Telegraph notes, party chiefs had to fend off calls for the resignation of his predecessor, Michael Spencer, when he sold £14.5m worth of Icap shares three weeks before a profit warning. Rowland might officially be taking an investment back seat to his son, but the semi-opaque nature of some of their recent deals – including the acquisition of the collapsed Icelandic bank Kaupthing’s Luxembourg operations by a small Rowland hedge fund, Blackfish Capital – will certainly arouse curiosity, and could come back to haunt the party.