I’m still reeling from watching last night’s Panorama programme. If you haven’t seen it yet, it’s well worth watching on iPlayer. It told the story of a convicted fraudster who conned, in roughly this order, an investment bank, Notts County’s owners, Sven Goran Erikson and the North Korean government, as well as other unspecified parties.
The scam seems to have started when Russell King convinced First London plc that he was managing investments for the Bahraini royal family. Incredibly, he was then able to acquire 49 percent of the bank’s shares without handing over a single penny. This bank had Tory MP Tim Yeo and Air Marshal Sir John Walker, the former head of defence intelligence, on its advisory board!
Once he had the bank’s name, King was then able to do all sorts of dodgy deals. The more big names he got, the more credible he became until he was able to wheel Sven in to help him clinch a deal to exploit North Korea’s mineral rights.
I can’t have been the only one shouting “What about due diligence?!!” at the telly last night. If find it staggering that so many people, not least a former spymaster, asked so few questions.
Whenever I do business with anyone I haven’t met before I do an internet search on them. This is not because I’m suspicious but because I’m curious. I like to know about people. Have they written anything or spoken at events? Are they involved in any charities or sports clubs? Are they in a rock n roll band? (You’d be surprised how many directors are.) Perhaps I’m more curious than most about people – that’s why I do the kind of work I do.
But I can’t believe the lack of curiosity among the people who fell victim to Russell King’s scam. It was as if they’d had their curiosity amputated. They wouldn’t even have needed a private detective or a credit rating agency. A Google, Companies House or standard director search should have been enough to set alarm bells going. The man was a convicted criminal, for God’s sake! Yet no-one, it seems, did any probing at all. The board of an investment bank, an international football manager and the owners of Britain’s oldest league football club took Russell King at face value. Incredible!
Curiosity is essential in business, and will be all the more so in a rapidly changing and uncertain world. It’s the lack of it in all these serious players that I find most unbelievable about this whole murky affair. Of course, there is still a lot we don’t know and the SFO investigation will hopefully shed some light on it. But it still beggars belief that so few people asked rudimentary questions.
Curiosity, it is said, killed the cat. That may be so but a little more of it would have saved those duped by King a lot of money and lot of embarrassment.