Hailed a saviour, Rose is now an embarrassment

EXACTLY one month ago, Philip Green was forced to declare his intention to bid for Marks & Spencer. The retail group was truly caught on the back foot, but it rushed through some top executive changes with the appointment of Stuart Rose as chief executive considered the coup de grace.

Green looked decidedly outmanoeuvred. The City cheered, shares climbed and M&S appeared to have bounded free.

Since then, however, Rose's appointment has begun to smell distinctly less sweet.

His purchase of M&S shares faces scrutiny from the Financial Services Authority's powerful Enforcement Division. That could, and in all probability will, mean him being questioned under caution by the FSA's lawyers, a grilling that takes place only if the City watchdog suspects a criminal act.

Rose will not be alone. Several others who bought shares before Green declared his hand on May 27 will be invited in to justify their purchases. But it will be ignominious to say the least to become the first boss of a FTSE 100 company to be questioned under caution.

However, this is just the latest embarrassment for M&S since Rose joined. As we report today, the failure to reveal the timing of Rose's share purchases broke Financial Services Authority rules. And the company persistently tried to dodge media questioning on the issue.

Earlier, the company had to cope with the revelation that Rose was actually offered a job by Green if he would join his bidding team. And M&S now admits it was complicit, and even encouraged, its incoming chief executive to lie to Green so they could keep their defensive powder dry.

Green can be intimidating and he clearly wanted Rose in his camp rather than in the opposition. But it seems dubious that a chief executive elect of one of our great companies should choose to lie rather than refuse to attend a meeting or fail to answer his phone. His supporters will hope he shows more backbone resisting Green's takeover overtures than his personal ones.

Rose has courted controversy before. Poached from Iceland to head Arcadia in November 2000, he insisted that the fashion group compensate him for giving up share options in the frozen foods group, even though internal documents stated that Iceland had hit severe sales problems.

At the time, there was nothing public to suggest Iceland wasn't doing well. Its share price was strong and it was not until the following January that the profundity of its sales decline emerged.

But Rose had been sent an e-mail, from Iceland chairman Malcolm Walker in mid-October. This said: 'Sales have fallen off a cliff.'

While at Iceland, Rose had shares in the group that he sold when he moved to Arcadia, well before Iceland's difficulties became known and the share price collapsed. Arcadia was not so lucky in the deal it struck when buying out his options.

A spokesman for M&S says there is no question of Rose resigning from the company because he has done nothing wrong. Suspicion is suspicion and no more.

But the honeymoon he enjoyed as investors cheered his early plans to revive M&S is over. Recently, Rose has attracted enough negative attention to threaten to wipe that out.

Hostile takeover bids can get very dirty and Rose is, of course, a lightning rod for malicious rumour and unkind tittle-tattle.

Those now championing M&S's defence against Green's predatory intentions will hope Rose shakes off his woes and impresses with next week's strategic review.

The retailer searched high and low for someone to spearhead its independent recovery. Without last-chance Rose, the shares will go into freefall and M&S will be a sitting duck for Green.