Mischievous sting that hurt the City

THIS was the perfect story. It seemed plausible. There was a fair degree of commercial logic in it. And what journalist can fail to be excited by receiving what are obviously leaked documents?

Hence last Wednesday, a handful of newspapers carried the fascinating news that internal documents showed that Interbrew of Belgium was weighing up the idea of bidding for South African Breweries.

Some 24 hours passed, and everyone was nodding sagely and saying that yes, the idea of an Interbrew/SAB could make sense: SAB's African and Chinese brewing businesses would fit well with Interbrew's existing international portfolio. And Interbrew admitted that it had indeed looked at the idea of an SAB deal - although it certainly wasn't poised to launch a bid.

And the reason for the leak? A bit of mischief-making, it was decided, by someone who wanted to damage the chances of any bid going ahead.

Nevertheless, the notion of a tieup wasn't entirely stupid, it seemed. By Thursday night, SAB's share price was around seven% higher than before the story broke.

Only on Friday did the full truth begin to emerge. Parts of the document had been forged. (In fact, on closer inspection, they didn't seem particularly credible. Example one: who would launch a bid and then wait seven days before holding a press conference? Example two: why did the document suggest an offer period of only 28 days?)

This was more than mere mischief: it involved forgery and fraud, using the names of Goldman Sachs and Lazard, two respected advisers to Interbrew. It was their logos, after all, that were plastered over the documents, most of which, remember, were genuine.

MORE sinister, though, was the fact that these same logos had been used on the sheets forged to give the impression that a takeover was not merely being vaguely chewed over but was actually imminent.

Little surprise, then, that the Financial Services Authority, the Takeover Panel and the London and Brussels stock exchanges have all been asked to investigate.

There seems no doubt that the tweaking and leaking of the Goldmans/Lazard document was calculated to mislead. It was a deliberate, cynical attempt to promote a story that was just about credible but actually untrue. Crucially, it was a story that was certain to move share prices - in particular, that of SAB.

It is too easy to sneer at newspapers that were caught by this scam. News stories are often hammered out at great speed with little time to check every fact and that every element makes perfect sense. If newspapers are prepared to admit candidly that they have been had, no one should complain too much.

Bet your pint of Stella that someone, somewhere, made money out of this fraud. Let us hope that they are identified and punished.

APAMPHLETflutters on to my desk. And what is it? It's the agenda for the Local Authority Pension Fund Forum's annual conference, to be held later this week in sunny Bolton.

Lots of material here for shareholder activists to chew on - sessions on engaging with companies to mould their approach to the environment and the use of sweatshop labour. Worthy stuff.

As one would expect, the forum is devoting time to a session on directors' pay. Quite right, too: it is of pressing concern to all investors with a careful interest in the companies whose shares they own. How useful that the panel discussing the issue includes Iain Richards, head of corporate governance at Schroder Investment Management.

Now, doesn't the name Schroders have a particular resonance in this context? Haven't we read somewhere of a hoo-ha about the appointment of new chief executive Michael Dobson? It's worth reminding ourselves what Schroders has been up to this year.

First, former chairman Sir Win Bischoff received a £5 million bonus. Jolly nice for Bischoff, no doubt, but a source of concern for the Association of British Insurers, representing institutional investors.

More recently came the Dobson affair. Dobson (educ. Eton, Trinity College, Cambridge; failed maths Olevel first time round) has been guaranteed - yes, guaranteed - a salary and bonus of at least £2 million in each of the next three years. Just in case that leaves him feeling uncomfortably near the breadline, he will also receive free shares worth at least £1.5 million a year. And if Schroders' share price doubles in five years, Dobson will receive a further £3.75 million of free shares.

So a hearty welcome for the brave Iain Richards when he steps up to the podium at the Forum on Thursday. No doubt he will have plenty of wise advice for delegates and will be happy to take questions about his employer's policy in this field.