Gardner digs in at Man Utd

WHEN SIR Roy Gardner became non-executive chairman of Manchester United in 2002 he could not have imagined that he would find himself at the vortex of a dispute that is tearing Britain's most famous sporting franchise apart.

His motives in taking the job were entirely honourable. As an enthusiastic sportsman and lifelong Man Utd supporter, it was a temptation he could not resist. To make room in his schedule as chief executive of Centrica, the British Gas and AA group, he dropped off the board of chemical firm Laporte.

But now the rumblings of discontent are being heard among Centrica shareholders. Acting as a go-between in the crossfire among Man Utd's disparate band of large investors and the manager Sir Alex Ferguson is no mean task.

Especially when two of the largest investors, John Magnier and JP McManus, are piling on the pressure. The Irish tycoons have sent a letter to the board that raises no less than 63 questions relating to the finances and ethical behaviour of the club and its manager.

It will be no surprise to anyone who follows football that clubs are run as personal fiefdoms and tracking the complex financing of transfers is a tricky business. But as a public company, Man Utd has important legal and listing responsibilities.

Indeed, given the questions that have been raised, there may well be a case for a full-scale inquiry by the Department of Trade and Industry or the Financial Services Authority into the club's tangled affairs.

As matters stand, an internal investigation is being carried out by finance director Nick Humby. As he answers the questions put down by Magnier and McManus, they are being fed back to Gardner at Centrica's offices in Windsor. There the chairman is putting in the extra hours to sort out the growing mess.

Centrica shareholders are unlikely to suffer in that the group is likely to produce good financial results on 12 February - at the top end of City forecasts.

But Man Utd is turning into one of those chairs that demands oodles of time, especially given the overall weakness of the board and the governance. At the very least, Gardner should have called on outside professionals to sift through the charges raised.

Then at least the investigations would have been beyond the internal crossfire and Gardner would not be so deeply involved in the day-to-day drama.

Industrial surge

MORE evidence that the British economy is taking off comes from the CBI, which points to a huge improvement in the order books of British companies. Remarkably, the rise in the pound against the dollar is being shrugged off by exporters which are reaping the benefits of global upturn.

With industry registering its best reading since October 1996, the odds on an interest rate rise at February's session of the Monetary Policy Committee are strengthening.

In testimony to the House of Lords, Mervyn King, the Governor of the Bank of England, focused on the pound. He noted that it would be a factor in framing the next Inflation Report - suggesting that the governor is not as certain as some City analysts that rates need to be raised now.

King believes that the dollar's fall against sterling has 'not led to any difficulties' so far. But the bigger drop against the euro will make it harder for euroland to accelerate away from stagnation.

The governor was remarkably calm about the prospect of the government borrowing up to £40bn in the current financial year.

He noted that Britain was in a better fiscal position than many of its competitors and as long as the government 'sticks to its fiscal rules' he will have no problem. He and the MPC cannot but be aware that the combination of strong manufacturing, rising public spending and robust consumption will ultimately put upward pressure on prices and wages.

This will mean applying some cold balm in the shape of higher interest rates.

Costly watchdog

NOBODY could fail to be impressed by the range of work the Financial Services Authority aims to complete in 2004-05, according to its business plan. It will be swinging into action on everything from the market timing scandal to listing requirements.

What is less impressive is the cost of the exercise. The FSA's budget for next year will soar to £240.6m against £215m this year. This partly reflects new responsibilities for regulating mortgages and insurance brokers.

But the City and the consumer is having to pay a high price for more intrusive regulation that has been short of notable successes so far.