“Are you accusing me of lying?” shouted Armstrong.
“If I were to do so,” asked the chairman, “would you then issue a writ for slander against me?”
For a moment Armstrong was stunned.
“I can see that you have no intention of answering any of my questions candidly,” continued Sir Paul. “I am therefore left with no choice but to resign as chairman of the board.”
“No, no,” cried a few muted voices round the table.
Armstrong realized for the first time that he had overplayed his hand. If Sir Paul were to resign now, within days the whole world would become aware of the precarious state of the company’s finances. “I do hope you will find it possible to remain as chairman until the AGM in April,” he said quietly, “so that we can at least expedite an orderly handover.”
“I fear it has already gone too far for that,” said Sir Paul.
As he rose from his place, Armstrong looked up and said, “Do you expect me to beg?”
“No, sir, I do not. You are about as capable of that as you are of telling the truth.”
Armstrong immediately rose from his place, and the two men stared at each other for some time before Sir Paul turned and left the room, leaving his papers on the desk behind him.
Armstrong slipped across into the chairman’s place, but didn’t speak for some time as his eyes slowly scanned the table. “If there is anyone else who would care to join him,” he said finally, “now’s your chance.”
There was a little shuffling of papers, some scraping of chairs and the odd staring down at hands, but nobody attempted to leave.
“Good,” said Armstrong. “Now, as long as we all behave like grown-ups, it will soon become clear that Sir Paul was simply jumping to conclusions without any grasp of the real situation.”
Not everyone around the table looked convinced. Eric Chapman, the company secretary, was among those whose heads remained bowed.
“Item number two,” said Armstrong firmly. The circulation manager took some time explaining why the figures for the Citizen had fallen so sharply during the past month, which he said would have an immediate knock-on effect on the advertising revenue. “As the Globe has slashed its cover price to ten pence, I can only advise the board that we should follow suit.”
“But if we do that,” said Chapman, “we’ll just suffer an even greater loss of revenue.”
“True…” began the circulation manager.
“We just have to keep our nerve,” said Armstrong, “and see who blinks first. My bet is that Townsend won’t be around in a month’s time, and we’ll be left to pick up the pieces.”
Although one or two of the directors nodded, most of them had been on the board long enough to remember what had happened the last time Armstrong had suggested that particular scenario.
It took another hour to go through the remaining items on the agenda, and it became clearer by the minute that no one around the table was willing to confront the chief executive directly. When Armstrong finally asked if there was any other business, no one responded.
“Thank you, gentlemen,” he said. He rose from his place, gathered up Sir Paul’s files and quickly left the room. As he strode down the corridor toward the lift, he saw Peter Wakeham rushing breathlessly toward him. Armstrong smiled at the deputy chairman, who turned and chased after him. He caught up just as Armstrong stepped into the lift. “If only you had arrived a few minutes earlier, Peter,” he said, looking down at him. “I could have made you chairman.” He beamed at Wakeham as the lift doors closed.
He pressed the top button and was whisked up to the roof, where he found his pilot leaning on the railing, enjoying a cigarette. “Heathrow,” he barked, without giving a thought to clearance by air-traffic control or the availability of take-off slots. The pilot quickly stubbed out his cigarette and ran toward the helicopter landing pad. As they flew over the City of London, Armstrong began to consider the sequence of events that would take place during the next few hours unless the $50 million were somehow miraculously to materialize.
Fifteen minutes later, the helicopter landed on the private apron. He lowered himself onto the ground and walked slowly over to his private jet.
Another pilot, this one waiting to receive his orders, greeted him at the top of the steps.
“Nice,” said Armstrong, before making his way to the back of the cabin. The pilot disappeared into the cockpit, assuming that “Captain Dick” would be joining his yacht in Monte Carlo for a few days’ rest.
The Gulfstream took off to the south. During the two-hour flight Armstrong made only one phone call, to Jacques Lacroix in Geneva. But however much he pleaded, the answer remained the same: “Mr. Armstrong, you have until close of business today to repay the $50 million, otherwise I will be left with no choice but to place the matter in the hands of our legal department.”
41.
New York Star
6 November 1991
SPLASH!
“I have the President of the United States on line one,” said Heather, “and a Mr. Austin Pierson from Cleveland, Ohio on line two. Which will you take first?”
Townsend told Heather which call he wanted put through. He picked up the phone nervously and heard an unfamiliar voice.
“Good morning, Mr. Pierson, how kind of you to call,” Townsend said. He listened intently.
“Yes, Mr. Pierson,” he said eventually. “Of course. I fully understand your position. I’m sure I would have responded in the same way, given the circumstances.” Townsend listened carefully to the reasons why Pierson had come to his decision.
“I understand your dilemma, and I appreciate your taking the trouble to call me personally.” He paused. “I can only hope that you won’t regret it. Goodbye, Mr. Pierson.” He put the phone down and buried his head in his hands. He suddenly felt very calm.
When Heather heard the cry she stopped typing, jumped up and ran through to Townsend’s office. She found him leaping up and down, shouting, “He’s agreed! He’s agreed!”
“Does that mean I can finally order another dinner jacket for you?” asked Heather.
“Half a dozen, if you want to,” he said, taking her in his arms. “But first you’ll have to get my credit cards back.” Heather laughed, and they both started to jump up and down.
Neither of them noticed Elizabeth Beresford enter the room.
“Am I to assume that this is some form of cult worship practiced in the more remote parts of the Antipodes?” asked E.B. “Or could there be a more simple explanation, involving a decision made by a banker in a mid-western state?”
They abruptly stopped and looked toward her. “It’s cult worship,” Townsend said. “And you’re its idol.”
E.B. smiled. “I’m gratified to hear it,” she said calmly. “Perhaps, Heather, I could have a word with Mr. Townsend in private?”
“Of course,” said Heather. She put her shoes back on and left the room, closing the door quietly behind her.
Townsend put a hand through his hair and returned quickly to his chair. Once he had sat down, he tried to compose himself.
“Now I want you to listen, Keith, and listen carefully,” E.B. began. “You have been incredibly lucky. You were within a whisker of losing everything.”
“I realize that,” said Townsend quietly.
“I want you to promise me that you will never make a bid for anything ever again without first consulting the bank—and by the bank, I mean me.”
“You have my solemn oath on it.”
“Good. Because you’ve now got ten years in which to consolidate Global and make it into one of the most conservative and respected institutions in its field. Don’t forget, that was stage five of our original agreement.”
“I will never forget,” said Townsend. “And I shall be eternally grateful to you, Elizabeth, not only for saving my company, but me along with it.”
“It’s been a pleasure to help,” said E.B., “but I won’t feel my job has been completed until I
hear your company described, especially by your detractors, as blue chip.”
He nodded solemnly as she bent down, flicked open her briefcase and removed a stack of credit cards. She passed them across to him.
“Thank you,” he said.
A flicker of a smile appeared on her lips. She rose from her chair and offered an outstretched hand across the table. Townsend shook it. “I hope we’ll meet again soon,” he said as he accompanied her to the door.
“I hope not,” said E.B. “I don’t think I want to be put through that particular mangle a second time.”
When they reached Heather’s office, E.B. turned to face him. For a moment Townsend considered kissing her on the cheek, but then thought better of it. He remained by Heather’s desk as E.B. shook hands with his secretary in the same formal way. She glanced in Townsend’s direction, nodded and left without another word.
“Some lady, that,” said Townsend, staring at the closed door.
“That’s for sure,” said Heather wistfully. “She even taught me one or two things about you.”
Townsend was about to ask what they could possibly be when Heather added, “Shall I call the White House back?”
“Yes, straight away. I’d completely forgotten. When I’ve finished with him, get me Kate.”
As Townsend returned to his office, Elizabeth stood in the corridor, waiting for one of the six lifts to arrive at the top floor. She was in a hurry to get to the bank and clear her desk—she hadn’t spent a weekend at home for the past month, and had promised her husband that she would be back in time to see their daughter perform the role of Gwendolen in the school play. When a lift finally reached the executive level, she stepped inside and pressed the button for the ground floor just as another lift door opened on the other side of the corridor. But the doors closed before she could see who it was who had leaped out and run off in the direction of Townsend’s office.
The lift stopped at the forty-first floor, and E.B. was joined by three young men who continued their animated conversation as if she wasn’t there. When one of them mentioned Armstrong’s name, she began to pay closer attention. She couldn’t believe what they were saying. Every time the lift stopped and new people came in, she picked up a fresh piece of information.
A breathless Tom came rushing into Heather’s office. All he said was, “Is he in?”
“Yes, Mr. Spencer,” she replied. “He’s just finished speaking to the President. Why don’t you go straight through?”
Tom walked toward the executive suite and threw open the door just as Townsend completed dialing a number on his private phone. “Have you heard the news?” he gasped.
“Yes,” said Townsend, looking up. “I was just phoning Kate to let her know that Pierson’s agreed to extend the loan.”
“I’m delighted to hear it. But that’s not news, it’s history,” said Tom, falling into the seat E.B. had recently vacated.
“What do you mean?” asked Townsend. “I only heard it myself a few minutes ago.”
A voice came on the line and said, “Hello, Kate Townsend.”
“I mean, have you heard about Armstrong?”
“Armstrong? No, what’s he been up to now?” asked Townsend, ignoring the phone.
“Hello,” Kate repeated. “Is anyone there?”
“He’s committed suicide,” said Tom.
“Is that you, Keith?” said Kate.
“He’s done what?” said Townsend, dropping the receiver back in place.
“It seems he was lost at sea for several hours, and some fishermen have just picked up his body off the coast of Sardinia.”
“Armstrong dead?” Townsend swiveled his chair round, and for a few moments just stared out of the window over Fifth Avenue. “And to think my mother outlived him,” he said eventually.
Tom looked bemused by this statement.
“I can’t believe it was suicide,” said Townsend.
“Why do you say that?” asked Tom.
“It’s just not his style. The damned man always believed he could survive anything.”
“Whatever it was, London’s leaking like a sieve,” said Tom. “It seems that Armstrong’s endless flow of cash came from the company’s pension fund, which he was not only using to buy up his own shares, but also to pay off the unions in New York.”
“The company’s pension fund?” said Townsend. “What are you talking about?”
“Apparently Armstrong discovered there was far more cash in the fund than was legally necessary, so he began siphoning it off at a few million a time, until his chairman found out what he was up to and handed in his resignation.”
Townsend picked up an internal phone and pressed three digits.
“What are you doing?” asked Tom.
“Shh,” said Townsend, placing a finger up to his lips. When he heard a voice on the other end of the line, he asked, “Is that the accounts department?”
“Yes, sir,” said someone who immediately recognized the Australian accent. “It’s Hank Turner, I’m the company’s deputy chief accountant.”
“You’re exactly the man I need, Hank. First, tell me, does Global have a separate pension fund account?”
“Yes, of course it does, sir.”
“And how much are we holding in that account at the present time?” he asked.
He hung on and waited for the answer. E.B.’s lift had reached the ninth floor on the way back up by the time the deputy chief accountant was able to inform Townsend, “As of nine o’clock this morning, sir, that account is showing a balance of $723 million.”
“And how much are we required to hold by law in order to fulfill our pension fund obligations?”
“A little over $400 million,” came back the accountant’s reply. “Thanks to our fund manager’s shrewd investment policy, we’ve been able to keep well ahead of inflation.”
“So we’re carrying a surplus of more than $300 million over and above our statutory obligation?”
“That is correct, sir, but the legal position is that at all times we must…”
Townsend replaced the receiver and looked up to find his lawyer staring at him in disbelief.
E.B. stepped out of the lift and into the corridor.
“I hope you’re not thinking what I think you’re thinking,” said Tom, as E.B. walked into Heather’s office.
“I need to see Mr. Townsend urgently,” she said.
“Don’t tell me Pierson has changed his mind?” said Heather.
“No, it’s nothing to do with Pierson. It’s Richard Armstrong.”
“Armstrong?”
“He’s been found dead at sea. The first reports are suggesting that he committed suicide.”
“Good heavens. You’d better go in immediately, Mrs. Beresford. He’s got Tom Spencer with him at the moment.”
E.B. headed toward Townsend’s room. Tom had left the door open when he had rushed in, so before she reached the office, E.B. was aware that a heated discussion was taking place. When she heard the words “pension fund” she froze on the spot, and listened in disbelief to the conversation taking place between Townsend and his lawyer.
“No, hear me out, Tom,” Townsend was saying. “My idea would still fall well within any legal requirements.”
“I hope you’ll allow me to be the judge of that,” said Tom.
“Let’s assume that trading in Armstrong Communications shares will be suspended later today.”
“That’s a fair assumption,” agreed Tom.
“So it would be pointless at this stage for me to try and lay my hands on any of their stock. All we know at present is that Armstrong was bleeding the pension fund dry, so when the shares come back on the market, they’re certain to be at an all-time low.”
“I still can’t see how that helps you,” said Tom.
“Because, like the crusaders of old, dressed in the armor of righteousness, I shall ride in and save the day.”
“And how do you propose to do that?”
?
??Simply by merging the two companies.”
“But they would never agree to that. To start with, the trustees of the Citizen’s pension fund wouldn’t risk a further…”
“They might when they discover that the surplus in our pension fund more than covers the losses in theirs. It would conveniently solve two problems at the same time. First, the British government wouldn’t have to dip into its special reserve fund.”
“And second?” said Tom, still looking highly skeptical.
“The pensioners themselves could sleep secure in the knowledge that they would not be spending the rest of their lives facing penury.”
“But the Monopolies and Mergers Commission would never agree to you owning both of the two biggest tabloids in Britain,” said Tom.
“Perhaps not,” said Townsend, “but they couldn’t object to my taking over all of Armstrong’s regional publications—which should have been mine in the first place.”
“I suppose they just might wear that,” said Tom, “but the shareholders wouldn’t…”
“… they wouldn’t give a damn about Armstrong’s 46 percent stockholding in the New York Star.”
“It’s a bit late to be worrying about that,” said Tom. “You’ve already lost overall control of that paper.”
“Not yet, I haven’t,” said Townsend. “We’re still going through the process of due diligence. I’m not required to sign the completion documents until next Monday.”
“But what about the New York Tribune?” asked Tom. “Armstrong may be dead, but you’d simply inherit all his problems. Whatever he claimed to the contrary, that paper is still losing over a million dollars a week.”
“But it won’t be if I do what Armstrong should have done in the first place, and close the paper down,” said Townsend. “That way I’d create a monopoly in this city which no one would ever be able to challenge.”
“But even if you squared the British government and the Monopolies and Mergers Commission, what makes you think the board of Armstrong Communications will fall in with your cozy little plan?”