The tactics used in giving inducements to individuals, known as fan clubs, to buy Guinness shares – thereby temporarily pushing the price of the offer above that of rival Argyll – became known as the Guinness scandal.
Fan club member Gerald Ronson accompanied Saunders briefly to jail (Sir Jack Lyons got off due to ill health). But the long-term consequence was that with the 1987 general election looming, Margaret Thatcher's government passed the Financial Services Act – piloted through the Commons by a youthful Michael Howard – which brought statutory regulation to the City.The Securities and Investments Board created by that act is the direct forerunner of today's Financial Services Authority.
My favourite Saunders story taught me a valuable lesson. During the Arthur Bell bid, he called and invited me to lunch – 'today, if possible', because his advisers were out of touch, he was losing the argument and he 'really needed' my advice on how to win his prize. Though against his bid, I accepted lunch, juggled my diary, and we duly met that day and talked tactics. It was not until two years later, after his conviction and disgrace, that I discovered that the other leading critic of the bid – David Brewerton on The Independent – had had an identical call.
So what was the lesson? It was the power of flattery and how journalists are suckers for it. Generally, the feedback we get is negative, in that people are more likely to pick up the phone to complain than to give compliments, so when someone comes in actually wanting to know what we think it gets under our defences. I am now sure Saunders never had the remotest interest in getting my 'advice', but made me feel that he did.
I can't speak for colleagues on other papers, but I was never again such a virulent public critic. The result was that Saunders got a significantly better press after the lunch than he had done before. It was a brilliant piece of manipulation and, without wishing to offend any sensibilities, a brilliant bit of PR – in the short term, at least.