Thursday 2 October 2014

Lord Mayor setback for Sir Paul

Interesting to see that former Kleinwort Benson banker Alan Yarrow was earlier this week elected to be the new Lord Mayor of London.

Last time I checked, Sir Paul Judge was one of the leading candidates to become Lord Mayor. Here is a link to a Daily Mail article on the topic:

Indeed, I'm told by insiders that the three people on the ballot (which is voted on by the Court of Aldermen) to become the next Lord Mayor were investment banker Alan Yarrow, shipbroker Jeffrey Evans and businessman Sir Paul Judge.

Readers might recall that over the last eighteen months Sir Paul has been involved in a legal spat with Eurasian Natural Resources Corporation (ENRC), the mining company that used to be his employer and was once listed in the FTSE 100 index.

In case you don't remember, here is the quick back story. Last summer, ENRC accused Sir Paul - who was said to be paid £125,000 to be a non-executive director of the mining giant - of leaking damaging information to the media, prompting Sir Paul to deny he had ever done any such thing and file counter claim for libel.

Then the company produced transcripts of the conversations Sir Paul had with a journalist and he changed his mind, admitting that he had talked to a hack but that he had known he was being set up and only leaked the information to catch out the scribbler in a sort of double bluff. Here is a quite a good piece from The Independent on the matter:

Still, mud doesn't seem to stick in the case of Sir Paul as he was elected a City of London Sheriff last September, leading to widespread speculation he was being lined up to be the next Lord Mayor. Typically, City of London Sheriffs are often subsequently elected as Lord Mayor.

The thing is, a key role for the Lord Mayor is to act as an international ambassador to attract foreign companies, just like ENRC, to the City of London as place to do business, invest and raise capital. Here is a good description of the Lord Mayor's role and how he/she is elected:

Although plenty of British (private-equity backed) companies have this year floated on the London market, there has been an obvious decline in the amount of big foreign companies choosing the United Kingdom as a place to raise equity capital. Take Alibaba, for example. The Chinese company ultimately chose New York for its record breaking £104 billion flotation after flirting with the idea of listing in London last year.

As I pointed out back in July, some observers blame the decline in foreign listings in London on how ENRC was treated by its highly-paid City advisers. Here is a link to to my piece from July:

So, I wonder whether the City of London's Aldermen opted for Yarrow - who has spent over thirty years working in equity capital markets - instead of Sir Paul because he is considered a more appropriate overseas champion for London's financial district?

That would certainly appear to be the case to me as the City of London Corporation has just stated Sir Paul's rival Jeffrey Evans will likely become Lord Mayor after Alan Yarrow:

It certainly doesn't look promising for Sir Paul's mayoral ambitions.

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