EQUITABLE LIFE MEMBERS
Clarity and Parity - Page 8
The fall of Royalty Life continued
Gill
Ok, I think we are there. We’ve worked bloody hard this
afternoon. Thank you all. Anyone not happy? (There
is no answer). Look, it is a set back. We may have just marginally
lost one of the battles in this war, but we are still on the moral high
ground. And the war is not lost. We have got lots of great things to say
to clients tomorrow. Let’s just recap. WE ARE COMMITTED TO OUR JUST
CAUSE. WE WILL FIGHT FURTHER AND WIN OUR CASE IN THE HOUSE OF LORDS. WE
ARE A STRONG AND SUCCESSFUL MUTUAL COMPANY WITH A BRIGHT FUTURE. IGNORE
THE PRESS, THEY HAVE HAD IT IN FOR US FOR YEARS. THE WITH PROFITS FUND IS
SAFE.Ok? Oh and Briggsy, I asked specifically after you raised concerns
about that £200k cheque from Mrs Brady. Maymes’s team say “Bank it!
Go and get more!” So let’s all do just that.
Briggs
Thanks (Mouths to Andrea)
Going for a beer?
Date:
Tuesday 28th October 1998, 9.30 am
Scene
– Eton Branch. The familiar sight of all reps at desks manning phones.
They look tense and under pressure. The scene focuses on the headline of
one of the daily papers by Briggs’s elbow. It reads “Dash And His
Vulcan Sidekick Get Nasty As Judges Overturn Royalty Guarantee Case” The
article has many quotes from Carliss. At the foot of this article is the
name, J Tompkins.
Same
day, 10.45 am.
Scene
– Dash’s office. He and Maymes sit at a leather sofa, which is almost
covered with newspapers, as is the huge coffee table in front of them.
Dash has Tompkins's article in his hand.
Dash
Would that little thing you did to his neck have hurt?
Maymes
Very much so.
Dash
Good. (He
pauses) Little twerp. Who does he think he is? Nobody with any sense
of class or decorum grabs another chap by the elbow. There is never really
any need to get physical with another person like that.
Maymes
Unless they start it?
Dash
Oh yes, quite. No I didn’t mean what you did. No. It’s not as
if you struck him.
Maymes
No.
Dash
So, after
the initial shock factor, where are we at?
Maymes
In pretty good nick really. Gill, down at Eton, thrashed out all
the issues with his team. Bloody good team he’s got there. The positive
messages have been copied to all the other branches so we can have a
singular response across the country. So far the phones have been red hot,
but the word is that we are coping well.
Dash
Good.
Maymes
Any news from Gravidlax?
Dash
He says it is highly likely that there will be a spring hearing in
The Lords. Probably May.(He rubs his chin to reflect) Shame we didn’t get Bunkman you
know. He was very impressive in the appeal.
Maymes
Yes. Bloody oily solicitors!
Knock
at the door. Dash’s PA pops her head in.
PA
Piers Proctor to see you. The risk specialist from PMD Management
Consultants.
Dash
Send him in.
Maymes
I didn’t know we had a meeting with Proctor.
Dash
We don’t. I do. Not really a meeting anyway. The doomsday
scenario options that the board agreed yesterday just need recording
properly and tidying up. No need for you to be here. I’ll bet the branch
managers will be clamouring for help from you today. I’ll let you get on
with it. And you need to make a few whistle-stop branch visits. That will
need some arranging no doubt?
Maymes
looks a little putout but concedes the point and retreats. He stares
“trained-killer” eyes at Proctor, who is in a plain black suit.
Date:
Friday 23rd April 1999, 11.00 am.
Scene
– Smart and well-appointed living room. Briggs sits opposite a man with
grey hair, wearing golfing plus-four trousers and a two coloured diamond
jumper. He is Alan Briggs, his father.
Briggs
…anyway, looking good in your sporting casuals there, old chap.
Are you off to a fancy dress party as Russ Abbott?
Alan
(Laughs) Don’t be so
cheeky.
Briggs
So, how is the golf?
Alan
Dismal. The more I play, the worse I get. Now that I’ve retired
fully and can get out whenever I like, it just gets more and more
infuriating. I might have to give it up for a bit.
Briggs
So what would you do with all your time.
Alan
No problem on that score. I’ve joined a sleepy old Bridge club.
And I’m rather enjoying it.
Briggs
Oh (He pauses) Have you
persuaded them yet that you are just the sort of chap to take on an
administrative leading role?
Alan
Yes, as a matter of fact I have (He
beams proudly). I rather think I will be chairman soon. Then you just
watch. It will be sleepy no more.
Briggs
How can you make Bridge not sleepy? It is the king of sleepy games.
It’s all double-knit cardies and stay-press slacks isn’t it?
Alan
Well, I have some creative ideas.
Briggs
Strip Bridge?
Alan
No. Stop being silly. I was thinking of “Bridge and Curry
Nights” or “Bridge and Jazz Nights”.
Briggs
How about “Curry and Jazz Nights”
Alan
Yes…that sounds quite(He hesitates)…very funny. Now look, I’d love to sit here all day
and have you pull my leg, but I do need to get over to your sister’s in
an hour so we’d better crack on.
Briggs
Ok. Right. So you want to invest your lump sum?
Alan
Yes, as long as I can take an income when I need to. Because I am
allowed to draw out 5% each year tax-free aren’t I?
Briggs
Spot on. Not bad for an old git like you?
Alan
Oi. There’s life in the old fund yet, you know.
Briggs
Just kidding. Look that is broadly it. We’ve got a great plan
with low charges.
Alan
Sounds interesting. Any catches?
Briggs
No, but you do need to choose which fund to go into. (They
both study a chart full of numbers and past performance figures).
Alan
I don’t want to lose any so I’m a bit scared of these stock
market ones. But I love the look of the With Profits fund. It doesn’t go
down does it?
Briggs
Yes, officially it could. There is something called a Market Value
Adjuster. It could reduce on withdrawal during bad trading years.
Alan
Come on now, I’m your dad. Don’t go all official on me. How
likely is that?
Briggs
Dad, unofficially, not very. Officially, it could.
Alan
But look what this fund has done in the last few years.
Briggs
Dad, past performance only gives us a guide. It cannot be used to
support a promise of a similar future growth rate.
Alan
Yeah, yeah, yeah. But talk to me about the returns.
Briggs
The With Profits fund has given an average yearly return of over
10% in the last fifteen years. It also yielded a positive return in 1991
and 1994 EVEN when the stock market had negative years.
Alan
The first Gulf War and Norman Clamont?
Briggs
Yes.
Alan
Ok, so I accept it could go down. But given that track record, how
likely is that?
Briggs
But dad, it could happen.
Alan
What would you do?
Briggs
Exactly what you’re thinking of doing, but I’m not you. I need
to make sure you understand it fully, that it suits your attitude to risk
and that you know it is not guaranteed.
Alan
Ok. I do, it does and I know. Now let’s do it. Look, you’re my
son. You wouldn’t knowingly allow me to do the wrong thing would you?
Briggs
Absolutely not.
Alan
And Royalty Life is actively still selling these things? Despite
your little court thing?
Briggs
Yes.
Alan
And you trust them?
Briggs
Totally. And do you know
what else? We have put in place a watertight liability insurance contract
with a leading specialist Irish Re Insurance company. It has been in force
since before the Court of Appeal hearing. It secures the company’s
financial position and therefore the With Profits fund, no matter what. We
were actually told this recently by one of the head office bigwigs. He a
made whistle-stop, morale-boosting trip to the branch and said that we are
so safe that we could even carry on selling to family members.
Alan
Good enough. Pass me the application form.
Date:
Monday 17th May 1999, 9.15 am.
Scene – Dash’s office.
With him are Zeller, Maymes, Cooper and Treadon. All look tense and tired.
Dash
So gentlemen. Our journey nears its end. This time next week our
case will be heard in the House of Lords. Are we all set?
Treadon
Yes. All the five doomsday
scenarios have been costed. We are in pretty good shape if the outcome is
either 1 to 3. 4 Would be tough. I don’t like to think too much about 5
because it involves jobs going. But nevertheless, it has been done to the
last penny.
Dash
Good.
Zeller
Staff announcements have been prepared to explain all five
scenarios, as well as briefing notes for the branch managers.
Dash
Excellent.
Maymes
The press release and media response details have been tested and
look pretty good. Our friend at the Correspondent is on standby for an
exclusive. The accountants are due to join us at the scene towards the end
of next week.
Cooper
And finally the XYZ cinema in town has been booked for any relevant
announcements.
Dash
And can I trust that none of this has gone beyond these four walls?
Zeller
Yes.
Treadon
Absolutely. I have done all the figures myself and have worked from
home.
Maymes
Yes.
Cooper
Yes.
Dash
(He stares at a to do list he
has jotted and runs his gold pen down it) Good. Now, have the legal
team got an answer from Ireland about the liability cover we have as a
safety net?
Maymes
Word just in this morning. Bad news as expected. When we paid the
single premium to secure the deal the broker inserted a clause making the
policy invalid if we lose by a majority greater than four to one in the
Lords.
Dash
Hence the cheap cost. Well there’s nothing we can do about it
now. We just have to trust that it never becomes an issue. After all
Gravidlax has had a breakthrough. Since Bunkman got all non-Royalty members on the panel for the
appeal, he has got agreement from The Lord Chief Justice that three of the
five Law Lords can be members and the other two non. This fairly
represents the proportion of Lords who have a With Profits top-up pension
through the judiciary scheme that we run. The only pity is that we told
the reps so confidently that we are totally safe whether we win, lose or
draw.
Maymes
It won’t be relevant. We will win.
Dash
Of course. (He pauses) So here’s the good news. We will all be there for the
whole hearing next week. I have been given permission by the Conservative
Party to use their magnificent strategy centre. It is only yards from the
courtroom and has superb facilities. Honestly, it is the most sumptuous
business facility I have ever seen. The oak carving needs to be seen to be
believed. And the depth of pile and colour of the deep royal blue carpets.
We will be very much at home gentlemen. (He pauses and stares blankly as
if he can see it). We expect the result to be Friday morning and
there’ll be no timing surprises this time. All the Board will join us on
that day to convene a meeting and formally adopt one of the five
scenarios. So are we all clear? (There is nodding all round) Good. Top work level and loyalty these
last few weeks gentlemen. I would just like to say thanks now before it
all gets chaotic.
Date:
Thursday 27th May, 5.00 pm.
Scene
– The Windsor Castle pub, Eton. Sitting by a window are Grant, Andrea
and Briggs.
Andrea
…so he says, “I probably could do it, but I don’t think my
arse could take another bread roll just now!”
Grant
(Sniggering) where do you
hear these jokes?
Andrea
I like to get out and about, know what I mean?
Grant
(Still laughing) no not
really. But I don’t think I want to know.
Briggs
My turn to get the drinks. Listen, I hope you don’t mind but
I’ll have go in fifteen minutes. I always feel that I need to be
splashed by the little ones to make my day complete.
Grant
A last pint before the verdict, which will no doubt be given by a
man wearing a black cloth over his wig.
Andrea
A what?
Briggs
You know. The judges used to slap a bit of old black sack on their
heads before giving the death sentence verdict.
Andrea
You’re not still going on about how we are going to lose are you?
Have you told Briggsy about your tip-off from the City?
Grant
No.
Briggs
What tip-off? Tell me. (He prods him in the leg) Tell me.
Grant
You know how I like conspiracy stories. This one’s a belter. My
piss head of a brother-in-law works for a mergers and acquisitions company
called Bryce Holder. He swears blind that he overheard one of the senior
directors chatting about attending the verdict of the Royalty trial
tomorrow.
Briggs
Is this the same piss head brother-in-law who locked himself naked
in the corridor of a hotel at his Christmas bash last year. The same chap
who then broke into a conference room and wrapped himself in a NOJO
flipchart and wandered down to reception to get a spare key?
Grant
Erm…yes
Briggs
Very reliable source. How did he overhear that? You don’t, I’m
sorry, you just don’t overhear that type of thing casually in an office.
No way. I’m sorry Grant, this conspiracy theory has already got holes in
it.
Grant
It wasn’t an office corridor bit of gossip. He was having a dump
in the top-floor toilet and he overheard the conversation coming from the
urinals.
Briggs
So what?
Grant
He reckons that the invitation came from old Dasher himself.
Briggs
Bit odd. But I still don’t see the big deal. And what does the
world according to Grant make of this?
Grant
We’re going to
be up for sale.
Briggs
Nice one. (He looks around and whispers) Have you stopped taking your medicine?
(Andrea and Briggs laugh)
Grant
You might laugh
you chumps. Just make sure you both have a good shave tomorrow because
it’s “lips-meet-at the-centre-of-the-baguette-time” tomorrow. You
know I’m right. (They all laugh)
Andrea
Oi you cheeky bugger. I don’t need to shave. Admitted, I may have
a little Greek blood in me, but I buy very expensive ‘tache bleach
I’ll have you know. (She pauses). Alright then. If we lose tomorrow
I’ll snog Briggsy.
Briggs
Erm, I don’t think so. Not even with very tarty lipstick.
Date:
Friday 28th May 1999, 10.30 am.
Scene – The House of Lords.
A very grand and ornate chamber. There are five overly robed and large-wig
wearing old men sitting at a raised table. They are dripping in gold and
ruby red material. Dash, Maymes, Zeller, Treadon and Cooper sit facing and
to the right. Cooper is nonchalantly picking his nose. He hooks something
large, examines it on his little finger and wipes it under his chair. A
clerk, wearing a less grand wig and black robes is standing and talking.
As the scene focuses on the clerk the sound of his voice becomes clear.
Clerk
…which brings us to the conclusions. Each of the Law Lords has
made his ruling and these will be announced first. Following this, there
will be a brief statement by each of the Lords giving reasons, which have
also been published and are available in the library. (Turning
to the Lords) On the
issue of whether Royalty Life has the right to pay no guaranteed annuity
in respect of non guaranteed funds I would ask you to state whether you
find as content or not content with the stance adopted by Royalty Life.
Lord Boveringdon of Sale.
Lord
Not content.
Clerk
Lord Gresham of Blyth.
Lord
Not content.
Clerk
Lord Hallam of Dumfries.
Lord
Not content.
Clerk
Lord Fuller of Totton-on-Moo.
Lord
Not content.
Clerk
Lord Aspinall of Leamington.
Lord
Not content.
There
is a stunned intake of breath from the Royalty team. Dash stares,
motionless and very pale. Donald Nash lets out a little yelp of joy. He
turns and hugs Sir Timothy Bunkman QC. At the back of the room, Carliss is
seen exiting holding a mobile phone to his ear. The sounds and images
fade.
Same
day, 11.15 am
Scene
– The Conservative Party Strategy Room, Westminster. The room is very
plush with a huge oak boardroom table and black leather chairs. Maymes,
Zeller, Treadon, Cooper and all the Board are seated. Dash is standing at
the head of the table alongside two unfamiliar males. They are both
dressed like bank executives. Dash has the look of a broken man.
Dash
Gentlemen, this is a sad sad day. I am almost lost for words. We
have been mortally wounded by five Law Lords who clearly do not understand
what they have just done. I must call this Board meeting to order. First
of all let me introduce some of our guests. To my right is Phillip Bryce
of Bryce Holden. He is a mergers and acquisitions expert and runs one of
the best corporate buy-out teams in Europe. To my left is Toby Hopkins of
PMD. He is the risk and strategy expert and is a world leader in managing
these sort of crises. They will be joining us at all Board Meetings from
now on.
Treadon
Hang on, you can’t just do that.
Dash
I can. I checked our articles. And more to the point, I have to. Mr
Hopkins, the envelope please. (Dash leans over and takes a sturdy manila envelope from Hopkins’s
outstretched hand). This, I am affriad gentlemen, contains scenario
six.
Maymes
Don’t you mean five?
Dash
I do not.
Maymes
But we only drafted five
reactions.
Dash
True. But I had this produced by PMD in readiness for the worst day
ever in our rich and famous history. And it makes me feel sick to the core
to be holding it before you now. (He opens the envelope and draws out a document bound in black. Maymes
and all the others stare at Dash with expressions ranging from incredulity
to horror). This document has every last detail about what we must do
next. And do it we must. There can be no deviation. I will read the
summary cover sheet, which will give you the overview message. (He pauses and clears his throat weekly) “Today’s catastrophic
result means that from this day Royalty Life ceases to be a mutual
society. We are immediately up for sale and Bryce Holden will start the
negotiations this very day. To fully honour the guarantees as the Lords
have ruled, we must with immediate effect reduce our interim bonus rate
from 9% to 2% on the With Profits fund. In addition, to meet the minimum
projected cost of these guarantees, Royalty needs to immediately raise £2bn.
The bulk of this must be met from the remaining With Profits fund.
Consequently, also from this day, every With Profit policyholder, apart
from those with guaranteed annuity rates, will see an overnight reduction
in fund value of 16%.”(He stops. There is more stunned silence) There we have it gentlemen.
We are killed. I would also like the Board to consider accepting my
resignation today and this will be minuted. I will leave this room for
fifteen minutes while you must decide whether to accept. Please do accept.
(His voice quivers. He stands and
leaves the room. Maymes follows every movement of every sinew of Dash’s
body with his eyes. A tear trickles down his cheek.)
Fifteen minutes later. The
same room. Dash has returned.
Sir
Hugo …and so we have voted
unanimously NOT to accept your resignation Mr Dash.
Dash
I am flattered and saddened at the same time. However, my mind is
made up. I would like to formally announce my retirement. I will of course
continue to give one hundred percent in my efforts to drive this company
forward and will assist in bedding in my successor while I work my
three-month notice period. Thank you all. Now, I am sorry, but we have
much to do. First of all I must hand over to Phillip Bryce. Mr Bryce.
Bryce
(He stands). Thank you.
May I say first of all say that I am desperately sorry that we are in the
position that we are in. But it is absolutely vital that what we do next
is the right thing. A press release has gone to the BBC and the
announcement about demutualising and being up for sale will be in the
midday news. The other less good news will be press released out tomorrow
and will be in the Sundays. Let us not forget. This company has a great
name, superb pedigree, great products, highly skilled salesmen and a list
of clients most others would die for. We can sell this, I am sure. In
fact, so strong is the Royalty brand that we might even start the process
by seeking out reverse take-overs. This is when another company reverses
itself into Royalty, pumps money in but almost becomes part of you rather
than vice versa. We at Bryce Holden have drawn up an A List of companies
it would be desirable to team up with and contact is being made today. We
do not see it necessary to spread our nets further than this list. But
reactions by staff, clients and and potential clients must be managed very
carefully. We must act to stop there being a mass exodus. WE MUST KEEP THE
REPS AND THE CLIENTS. Any sign of this being a threat could reduce the
sale value. So here I will hand over to Toby from PMD. Toby
Hopkins
Thanks Phillip. (He also stands). We have drafted some instructions for the reps.
First, they must continue to be positive. We WILL get a superb buyer. But
it must only be spoken of as a partner. Second, in recognition of how
turbulent new business sales may now be until a partner is agreed, bonuses
will be guaranteed indefinitely.
Maymes
How?
Hopkins
We reserve around £30m from the With Profits fund. This should
cover it and more so. Every rep will get a monthly bonus payment of at
least the average monthly bonus paid in the last twelve months, or the
actual monthly sales figure if it is higher.
Maymes
But they will all just stop selling.
Hopkins
Maybe. Not all will. But we must keep the staff. They are crucially
valuable. Next, we must get the reps to work through their With Profits
clients spreading a simple message. When a new partner is found, the
intention is to use the sale proceeds to replace as much of the newly
applied penalty as possible. Simple. Any questions? (There is no response) Good..
Scene and sound blur.
Same
day, midday.
Scene
– The Queen Anne Tavern, Westminster. By a side window overlooking the
Houses of Parliament, Carliss, Tompkins and Nash sit drinking champagne.
Nash
Cheers and thank you. My lord I would never have expected it. We
won five nil. Five bloody nil.
Tompkins
Donald, I am absolutely thrilled for you. And thank you too. It has
been a pleasure to have worked with you in recent months. You really are a
bloody nice chap.
Nash
Good behaviour and politeness cost nothing. That man Cooper would
learn from that.
Carliss
And that creep Dash.
Nash
And what about all the work you have done for me Ray. I couldn’t
have done it without you. And for no reward.
Carliss
My reward will come just you wait and see. And I’m sure the
pieces John has written during the whole affair may gain some recognition.
Nash
Good. That is really good. I so hope that you both benefit in some
way. But at the very least I would love for you both to visit me down in
Swanage in the summer. I’m selling in Exeter and moving back to where I
was born. Nice little cottage by the sea would suit me fine. You will
won’t you. Marge would really love to have got to know you. (He pauses
and tears begin to run down his cheeks)
Same
day, 12.30 pm.
Scene – The Windsor Castle pub. The pub is full of Royalty
employees. Some of the reps are sitting near a window. They are still,
with slumped shoulders and no
one
is talking. Briggs approaches carrying a tray of pints.
Briggs
I can’t believe we found out the result on the news before the
company could tell us?
Grant
It’s a disgrace. That’s the thanks we get for all the hard work
we’ve had to put in these last few months.
Andrea
Wankers! (she takes a big sip of her wine). We’ll be ok though won’t we? I
mean they’ve guaranteed our income. Most companies would love to have us
as a partner.
Grant
Well I’ll take the money for now. But mark my words. Royalty Life
died today. Whatever it might look like in three, six, twelve month’s
time, it will never be the same. I’m not going to hang around. Any sniff
of an early retirement or redundancy package and I’m off.
Briggs
It’s a joke this. Someone’s winding us up. I mean, that General
Plimochet bloke murders countless innocent Chileans and when his
extradition case goes to the Lords, he only loses 3-2. And yet we lose
5-nil.
Grant
I know. It is bloody peculiar. There is something that we in the
field force have not been told. I smell a conspiracy. I really do.
Andrea
(Smiling) And this time you’re probably right.
Briggs
And I understand why the Lords have made the ruling because after
all, if any of us had an old style pension with a guarantee, we’d want
it paid in full. In isolation that seems fair. But the issue isn’t
isolated from the rest of the company. And the cost of allowing these
90,000 members with guarantees to have it applied to their whole fund has
to be paid for from the funds of the 600,000 other policyholders. It just
doesn’t make sense.
Grant
What bugs me is this. Remember that dapper bloke at the EGM who
asked about our With Profits fund bonus payouts, and why they needed to be
so high? Well he was right. I mean how long has the company known about
this problem? Because if it was as early as 1993 or something, we could
have paid out 1% a year less, which would still have been generous and
competitive, and it would have easily raised the £2bn and more. And then
ALL the policyholders would be in effect paying for this mess evenly.
Bloody hell. I’ve just depressed myself even more. I shall have to open
a bottle of Petrus tonight. It’s the only thing for it.
Briggs
Well you’ve depressed me even more. Last month I sorted my dad
out with a With Profits Annuity for ALL of his pension fund. How am I ever
going to live with that?
Andrea
It’s not just you. We’ve all done it. But to be honest guys,
the top brass have said all along that we are safe. We were like the
infantry in the First World War. You know, acceptable bullet fodder
blindly following orders without questioning it.
Grant
Well I’m not going to sit around and mope all day. I’m off
home.
Briggs
Me too. Stuff work for the rest of the day. I’m going home to see
my boys. They don’t lie to me.
Grant
Careful Briggsy. You might end up being as cynical as me. Oh and by
the way, isn’t Andrea supposed to be snogging you right now?
Andrea Sorry boys, forgot my tarty lipstick.