Simon Murray (clearer post)https://www.bloomberg.com/news/2011-08-31/murray-transforms-glencore-from-marc-rich-legacy-with-foreign-legion-vigor.html
During five years in the FrenchForeign Legion, Glencore International Plc Chairman Simon Murraywas sent on missions ranging from death defying to merelygruesome.
Dispatched to rescue trapped comrades encircled by Algerianindependence fighters in the Aures Mountains in 1961, Murraysurvived an ambush in which the Legionnaire beside him died in ahail of machine gun bullets, Bloomberg Markets magazine reportsin its October issue.
After another battle, Murray was ordered to stuff thesevered heads of two enemy soldiers into his pack and carry themback to base for identification, blood dripping down his back.
When he quit the Legion in 1965 with the rank of seniorcorporal, U.K.-born, Hong Kong-based Murray didn’t leave hiscombativeness behind. He has headed Deutsche Bank AG in Asia andbeen taipan -- Cantonese for “big boss” -- of billionaire Li Ka-shing’s business empire.
At age 63, he became the oldest man to reach the South Poleunaided, on a 58-day slog during which he lost 50 pounds (23kilograms).
“Simon is one of the most extraordinary characters I havemet,” says Chris Patten, chairman of the BBC Trust and the lastcolonial governor of Hong Kong before the British ceded it tothe Chinese in 1997. “He is brave, outspoken, funny and pusheshimself to almost crazy lengths.”
Price Plunge
At 71, Murray is facing new challenges. As the recentlyappointed chairman of Glencore, Murray in May helped to steerthe world’s biggest commodities-trading company through a $10billion initial public offering in London and Hong Kong, thelargest IPO to date in 2011.
And as a director of Sino-Forest Corp. (TRE), a Chinese tree-plantation company listed on the Toronto Stock Exchange, Murraywatched the company’s share price plunge 67 percent between June2 and Aug 26, when the Ontario Securities Commission suspendedthe stock from trading, saying the company may have misstatedrevenue.
The suspension followed similar claims by short sellerCarson Block’s Muddy Waters LLC research firm in a June 2 reportthat Sino-Forest was overstating its assets. Investors,including hedge fund firm Paulson & Co., have lost C$3.3 billion($3.4 billion).
Sino-Forest has denied the allegations and has commissionedan independent investigation. Founder and chief executiveofficer Allen Chan resigned on Aug. 28 and the company saidthree other employees had taken leave.
Regulatory Filings
Chan and other insiders, including Murray, sold C$81million of shares since the end of 2006, according to regulatoryfilings in Toronto. Murray’s sales totaled C$10.8 million, thefilings show.
In a telephone interview, Murray yesterday denied anysuggestion that he had been cashing out of Sino-Forest, sayinghe had swapped the holding for a stake in a Sino-Forestsubsidiary, Hong Kong-listed Greenheart Group Ltd., of which heis also a director.
Murray personally owns 1,246,000 Greenheart shares and aprivate equity firm he heads, General Enterprise ManagementServices Ltd (GEMS), owns 7 million shares, according to datacompiled by Bloomberg. Those shares were worth a total of7,499,140 Hong Kong dollars ($963,000) when they were suspendedfrom trading on Aug 29. The stock has fallen 68 percent sinceJune 2.
“I sold some of my shares in Sino-Forest to buy shares inGreenheart,” Murray said from Cameroon, where he was on abusiness trip.
‘Bloody Sure’
Murray said he couldn’t comment further on the Sino-Forestallegations pending the report of the independent inquiry, whichis due by the end of the year. However, he said he had nointention of quitting either as Glencore chairman or as a Sino-Forest director. “I am not planning to resign,” he said.
In an earlier interview in June, Murray had briefly touchedon his role at Sino-Forest. “I am on the side of investors,” hesaid then. “I have to make bloody sure we haven’t made anymistakes.”
Murray’s involvement with Sino-Forest has intensified thescrutiny he already faces in his role as chairman of Baar,Switzerland-based Glencore, a job for which he will earn 675,000pounds ($1.1 million) a year.
The IPO immediately propelled Glencore, with a market valueof $59 billion, into the FTSE 100 Index, which tracks the U.K.’sbiggest companies, although the stock had fallen 20 percent fromits initial price as of yesterday.
Dominant Force
Glencore was founded in 1974 by former fugitive investorMarc Rich. Rich was indicted in 1983 for tax evasion and forbuying oil from Iran in violation of U.S. sanctions before beingpardoned in 2001 by President Bill Clinton. In 1994, Rich soldthe company, then known as Marc Rich & Co., to its managers, whochanged the name to Glencore and ran it as a closely heldpartnership.
Those managers still own 83.6 percent of the company andhave built it into such a dominant force that, according to thecompany’s website, it’s involved in shipping more than half ofthe world’s seaborne zinc, one-fourth of the copper and coal and3 percent of all oil that’s traded by third parties. The companyalso owns 34 percent of Xstrata Plc (XTA), the world’s fifth-biggestmining company.
In 2010, Glencore profit surged 39 percent to $3.8 billionon revenues of $145 billion as commodities prices soared 80percent in the two years to March 2011. Profit in the first halfof 2011 jumped 54 percent to $2.45 billion, the company reportedon Aug. 25.
Level of Transparency
As a result of the IPO, five of Glencore’s 500 managershave become billionaires, led by Chief Executive Officer Ivan Glasenberg, 54, whose 15.7 percent stake is worth about $7.2billion, according to data compiled by Bloomberg.
Murray’s job as chairman is to convince investors such asJames Bevan that Glencore can achieve the transparency theyexpect of the world’s biggest public companies. Bevan, whooversees about 6 billion pounds as chief investment officer ofLondon-based CCLA Investment Management Ltd., says he didn’t buythe stock in the IPO partly because Glencore doesn’t match thelevel of disclosure of BHP Billiton Ltd. or Rio Tinto Group andbecause the managers had chosen to sell shares when commoditiesprices were close to their peak and likely to fall.
“There’s no alignment between the interests of thecontrolling owners and the public shareholders,” Bevan says.
‘It Was Clumsy’
Bevan said before Sino-Forest’s suspension from tradingthat Murray’s presence as chairman may help him change his mindabout Glencore.
“It gives me much greater confidence,” Bevan said then. “Itwould have been very easy to find a figurehead from politics whocould be spoon-fed information and not ask inquiring questions.He’s very competent and he won’t be pushed around.”
Following the past week’s developments at Sino-Forest,Bevan says he’s not so sure. “We continue not to hold Glencoreshares and certainly won’t consider purchases until this is nowfully resolved, and Simon Murray’s position is clear andconfirmed to be fine,” Bevan said in an email yesterday. “If itisn’t, his position as Chairman is untenable.”
Murray said yesterday he had come under no pressure frominside or outside Glencore to stand down.
Murray’s appointment to the Glencore chairmanship didn’tproceed smoothly. In April, British media reported the job wouldgo to former BP Plc CEO John Browne. By the time Glencoreannounced its IPO plans on April 14, it still hadn’t disclosedwho the chairman would be. A statement naming Murray followedhours later. “It was clumsy,” Bevan says.
Paper Loss
That wasn’t the only mishap. In May, Murray was attacked byU.K. Business Secretary Vince Cable for comments Murray had madein an interview with a British newspaper about the risksassociated with hiring women who might get pregnant. “I thinkhis comments show an extremely primitive attitude,” Cable said.Murray, who apologized, says his comments were taken out ofcontext.
Then came the Muddy Waters claims about Sino-Forest, onwhose board Murray has served since 1999. Murray said in theinterview in June he had personally taken a paper loss of $3million to $4 million on shares he owns in Sino-Forest andGreenheart.
A bigger loss, should the allegations be proved, would beto his credibility as an independent director. “When you’re acompany director, your reputation is always on the line,” saysDavid Webb, a shareholder activist and former director of theHong Kong stock exchange whose Webb-site.com exposes corporateshenanigans.
Luxury Goods
As well as chairing Glencore, Murray is a director of eightpublic companies, including Geneva-based luxury goods maker Cie.Financiere Richemont SA, owner of the Cartier brand, and Li’sCheung Kong Holdings Ltd. (1), Hong Kong’s second-biggest propertydeveloper. Murray also runs his own $800 million private-equityfirm, GEMS, which boasts former U.S. Secretary of State Henry Kissinger as an adviser.
Murray will continue to be based in Hong Kong but will keepan office and secretary in Baar. He says he’ll attend 20Glencore board and other meetings each year and will spend timeeach day on e-mails and regular contact with Glasenberg.
Murray--who’s 5 feet 8 inches (1.7 meters) tall and wiry--still treks in the Himalayas and jogs up to 3 miles (5kilometers) a day and says he can handle the pressure. “Itdoesn’t get me in the gut,” he said in the interview in June inhis office at GEMS’s headquarters 36 floors above Hong Kong’sVictoria Harbor.
‘Things Get Twisted’
On his desk, a model Legionnaire stood at attention near acopy of the latest reprint of his memoir, “Legionnaire”(Ballantine Books, 2006). He said he was fairly stoical aboutcriticism. “But I get irritated when things get twisted,” hesaid.
After spending five years in the Legion, Murray can surviveanything thrown at him, says a friend, British novelistFrederick Forsyth.
“They made it extraordinarily hard for young Brits,” saysForsyth, 73, who as a Paris-based journalist covered theAlgerian War of Independence and whose 1971 novel, The Day ofthe Jackal, was based on its aftermath. “It was sadistic stuff.I have met Legion generals who have enormous respect for Simon.”
Nor has age wearied Murray, Forsyth says. “We go shootingpheasant, and Simon has such amazing energy that you getbreathless watching him,” he says.
‘Good Governance’
Murray says he plans to use that energy to work withGlasenberg to improve Glencore’s image. “I think the wordsecretive is misapplied here,” he says. “When you are a privatecompany, you get on with your business. This isn’t whispering-out-of-the-corner-of-the-mouth stuff.”
Murray says he and Glasenberg both know their roles.“Ivan’s is to run the business, and mine is to run the board--and the board functions in great part to look after the interestof shareholders,” Murray says. “That’s all about goodgovernance. Ivan’s the sort of guy who will listen. He has notrun a public company and is very conscious of the fact.”
There are eight directors on the Glencore board, includingformer BP CEO Tony Hayward, now head of investment companyVallares Plc and Leonhard Fischer, CEO of RHJ International (RHJI) SA,the Brussels-based investment firm that last year acquired U.K.private bank Kleinwort Benson. Glasenberg declined to commentfor this article.
‘We’re Building Hospitals’
Another issue Murray says he wants to tackle is publicrelations. Glencore owns mines in developing countries, andadvocacy groups such as Global Witness have alleged it pollutes,offers low wages and doesn’t pay enough in taxes.
In May, the European Investment Bank, the European Union’slending arm, announced it had barred Glencore from receivingloans because of corporate governance concerns and a tax disputein Zambia. Glencore spokesman Simon Buerk said the company,which denies any wrongdoing, welcomes an inquiry.
“You have pension funds that zero in on this stuff,” Murraysays. “People talk about Glencore taking out, but we’re alsoputting back. We’re building hospitals and schools.”
While Murray’s background is far removed from those ofGlencore’s employees in developing countries, he didn’t entirelyescape hardship. After his father left home, Murray spent timein a British orphanage. Although later schooled privately, hedropped out of the educational system at age 18.
When he was 20, he took a train to Paris and enlisted inthe Legion, the 180-year-old force of mostly foreign mercenariesthat fought in France’s colonial wars and carries on today as anelite military unit.
‘Laundromat of Thugs’
Murray was immediately posted to Algeria, fightingguerrillas of the National Liberation Front. In his book, Murraytells of conditions so tough that some recruits deserted. Murraystayed but declined the offer of officer school.
Instead, he headed to Asia. “Simon came out of a laundromatof thugs,” says Ken Courtis, former Asia vice chairman ofGoldman Sachs Group Inc. “Through extraordinary ambition, energyand drive, he made the world his school.” In 1966, Murray joinedHong Kong-based British conglomerate Jardine Matheson HoldingsLtd. (JM) as a trainee and eventually rose to senior management.
In 1980, he set up his own company, Davenham Investments.Then, in 1984, he teamed up with Li, who had risen from povertyto acquire Hutchison Whampoa Ltd. (13), making him the first Chineseto own one of Hong Kong’s great trading houses. Li wanted Murrayto run it.
Murray’s Independence
Murray was doubly unique among Hong Kong business leaders:He believed in transparency and was prepared to speak his mind,says Stephen Vines, author of “Hong Kong: China’s New Colony”(Aurum Press, 1998).
“There were only three ways to rise to the top in the LiKa-shing empire,” Vines says. “You were either family or asycophant or you were Simon Murray.”
Murray’s independence wasn’t confined to business. In 1992,London dispatched its last colonial governor, former cabinetminister Chris Patten, to manage the handover of Hong Kong toChina five years later.
Patten began to introduce a limited form of democracy.Chinese government spokesmen objected loudly. Most businessleaders, including Li, sided with Beijing. Murray, equallyloudly, backed Patten and quit as Li’s taipan. In 1994, hejoined Deutsche Bank and, four years later, launched GEMS.
‘March or Die’
In his book “East and West” (Pan Macmillan, 1998), Pattensays the Chinese Communist Party must have had a fat file onMurray. In reality, rather than blacklisting him after thehandover, leaders of some of China’s biggest companies embracedhim, appointing him to the advisory boards of offshore oil giantCnooc Ltd. (883) and Huawei Technologies Co., China’s largest phoneequipment maker.
When he’s been able to break away from the corporate suite,Murray has continued his adventuring. In 2000, three yearsbefore his trek to the pole, Murray completed the Marathon desSables, a six-day, 243-kilometer foot race across the Sahara.
“A slogan of the French Legion is ‘March or Die,’ andthat’s one of the enduring features of Simon’s life, both inbusiness and his other adventures,” says Daniel Mudd, a formerU.S. Marine Corps officer who now oversees $43 billion as CEO ofNew York-based Fortress Investment Group LLC.
Judging by Murray’s past record, it won’t be easy to knockhim off his stride.