Editorial: Coming clean about dirty work

Corporate adventurer Andrew Regan’s attempt to launch a pounds 1.2 billion break-up bid for the Co-operative Wholesale Society has unleashed some of the fiercest fighting seen in any takeover battle since the 1980s.

Corporate adventurer Andrew Regan’s attempt to launch a pounds 1.2

billion break-up bid for the Co-operative Wholesale Society has

unleashed some of the fiercest fighting seen in any takeover battle

since the 1980s.



So far this gory saga has featured private eyes, secret videos, offshore

accounts and press leaks. Now the CWS has called on the Serious Fraud

Office to investigate some of Regan’s previous business dealings.



The CWS strategy has been both effective and surprising. Effective

because it has tackled Regan on his major weak point - his status as a

youthful outsider - and because it has managed to muddy the waters about

his business ethics. It has been surprising because the CWS has been so

open in its use of such bare knuckle tactics as secret filming.



As in politics, slinging mud is an effective way of sowing doubt in

voters’ or investors’ minds about your opponent while deflecting

attention from your own shortcomings. To do so without getting yourself

covered in the brown stuff as well requires skilled PR handling. But it

also requires intelligence.



The use of investigators like Control Risks has long been a feature of

corporate warfare, and it can be devastating. For example, it was

arguably the discovery that Hanson had funded the late Lord White’s

passion for racehorses which ultimately scuppered the conglomerate’s bid

for ICI, rather than any reasoned business arguments.



But it is not without risk. Most of the investigator’s work involves

plodding through information which is publicly available, if difficult

to find. Of the cloak and dagger stuff, surveillance in a public car

park is about the mildest manifestation, grubbier work like dustbin

raking, while not illegal, are still widely seen as unethical and can

backfire on those who employ them.



The skill lies in knowing when to get tough. Faced with apparent high

level disloyalty within its own ranks, the CWS felt justified in

resorting to extreme measures. By being transparent, it has largely

forestalled criticism of its methods. It has also boosted its case

against Regan.



The video gave City editors the kind of exciting pictures they almost

never get the chance to use, and fuzzy long lens shots are remarkably

effective at making people appear shifty.



An unexpected bonus is that the CWS has managed to appear feisty and

streetwise - unlike anything one would have expected from that dozy old

giant. The thought that private eyes are now a respectable sight

alongside PR advisers and bankers is still a far fetched notion. But the

CWS has taken a calculated risk which may well pay off.



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