John Ritblat won't back away from a fight with the City

Business Profile: British Land's chief faces a hostile crowd at AGM

John Ritblat towers above his company, British Land, and the UK property scene, as one of the industry's last great characters and certainly its most controversial. But the self-made tycoon is now facing one of the biggest crises of his long career.

British Land is a company under siege and Mr Ritblat, 66, is fighting to keep control of the business he founded more than 30 years ago and has dominated as chairman and chief executive. British Land's institutional shareholders have privately complained for years about poor standards of corporate governance, but now they have an investor willing to stick its head above the parapet and cry foul.

Laxey Partners, an activist investment group headed by Colin Kingsnorth, is taking on Mr Ritblat in a battle that promises to be bloody. Although Laxey has a stake of just 2 per cent in British Land, it is widely thought to have support from other shareholders, too afraid of the formidable Mr Ritblat to confront him themselves.

The rebel investor wants the company to undertake a large-scale share buyback programme – a use of funds Mr Ritblat has vehemently opposed in the past. After talking to other shareholders, Laxey also came up with a more radical proposal to be put before July's British Land annual general meeting – to take management of the company's property away from the executive directors. It amounts to a vote of no confidence in the British Land board.

Analysts maintain that British Land is one of the worst performing property companies over the last five, 10 or 15 years. Mr Ritblat insists that the opposite is true.

After a half century in the property game, he argues that he has plenty of good years left: "Don't you start on the ageist thing or you'll get such a mouthful from me," he warns playfully. "Just look at Alan Greenspan [chair of US Federal Reserve Board]. There's no substitute for experience."

Mr Ritblat, not generally one to hold back and usually intolerant of critics, is clearly under strict instructions from his UBS Warburg advisers to be very careful what he says about Laxey. It is possible that Laxey, which has already made a profit of some 20 per cent on its British Land shares, may yet come up with more resolutions and British Land wants to reply once it knows exactly what it's up against.

"These shareholders are very new and they have a very minor holding," notes Mr Ritblat diplomatically. "But nevertheless public companies need to respond when proposals are put to them."

One obvious point of corporate governance that could be raised is Mr Ritblat's holding of the two top jobs at the company. The City has long feared that there are no controls on him and that his proven lust for big deals makes British Land a risky investment. He is a forceful personality and the impression is that no one on the board can stand up to him.

The City also dislikes the fact that when Mr Ritblat finally goes, the heir apparent is his son Nick, who was appointed to the British Land board at the age of 29. The other son, Jamie, who is considered to be more like his father, also worked for the company, but subsequently set up his own property venture.

Mr Ritblat built the company from nothing to a FTSE 100 stock with a property portfolio worth £9.3bn, doing financial deals in highly innovative ways. However, the "Ritblat factor" is blamed for the deep discount that the company's shares have traded at in recent years. Laxey's intervention, and the current favourable environment for property, has closed that discount over the last few months.

Mr Ritblat insists that combining the chairman and chief executive positions complies with the strictures of good governance. "We have a low staff so there is just a limit to the number of generals we need. We have so many good people in the group, I'm only the conductor of the orchestra," he says, pointing to the example of Marconi, where a strong independent chairman failed to avert disaster.

"The chairman of the Pru was the chairman of Marconi. If people are honest, they're honest. My board says to me, as long as you produce the returns for shareholders, that's good enough."

John Weston Smith, a British Land director and its finance director for more than 30 years until this year, says that Mr Ritblat's autocratic reputation is unfair. "John is sometimes presented as running everything entirely by himself but that is not how it works at all. He operates in a collegiate way and he expects his directors to do a good deal of the work."

From a Jewish family, Mr Ritblat is the son of a dentist who left Dulwich College at 16 to become an office boy at the West End estate agents Edward Erdman in 1952. Seven years later he had learned enough to start his own agency and soon began to trade property himself. He was a millionaire at the age of 33 and reversed some of his business interests into a listed shell called British Land in 1970.

Personal tragedy struck in 1979 when, after 19 years of marriage, Mr Ritblat's first wife, Isabel died after falling out of a plane. He cut down his work hours after the accident in order to spend more time with the three children (in addition to Nick and Jamie he has a daughter, Suki).

The business grew and prospered, surviving the property crash of the early 1970s. But relations with the City were never smooth and have probably never recovered from Mr Ritblat's attempt to take part of British Land private in 1989 – fund managers balked at a deal that was considered way too sweet for the Ritblat family.

So British Land has continued as a listed company run by Mr Ritblat, with an uneasy relationship with the Square Mile. Briefings for analysts on financial results days were only introduced recently. In 2000, fund managers panicked again, this time at Mr Ritblat's carefully plotted blockbuster takeover of Liberty, a rival. A plunge in the British Land share price forced him to walk away from the deal.

Described as a great enthusiast rather than a workaholic, Mr Ritblat has many outside interests. He leads an energetic lifestyle, which includes regular afternoon real tennis and he is a skiing fanatic. He is president of the British Ski and Snowboard Federation.

Mr Ritblat is on the board of the Royal Institution and the Royal Academy of Music, and he is also a governor of the London Business School. A reading room in the British Library is named after the family, following Mr Ritblat's £1m donation.

A famously ruthless operator, those that get on the wrong side of Mr Ritblat complain of a fierce temper and a torrent of expletives. So aggressive is he in property dealings – notorious for driving down the price after agreeing a deal – that some in the sector say they won't deal with him.

Bob Monkhouse picked up on this at a property industry dinner once, telling his audience: "John was walking along the harbour side when he saw Alastair Ross Goobey [the corporate governance campaigner] 20 feet out and drowning. Ritblat threw him a 15ft length of rope. As he went down for the third time Ross Goodbey cried out for more. Ritblat replied: 'But I've already met you more than halfway'."

JOHN RITBLAT A SELF-MADE TYCOON

Interests

Skiing, antiquarian books, real tennis, bee-keeping, golf, anti-euro campaiging

Career History

1952-1958 articles with West End firm of Surveyors Edward Erdman. Then he became founding partner of Conrad Ritblat. He chairs this agency, which now exists as Colliers Conrad Ritblat Erdman, having taken over his first employer. 1971 to present: chairman and chief executive of British Land

Pay in 2001

£634,000 salary, plus £300,000 bonus

Stake in British Land

2.31 million shares, less than 0.5 per cent, worth £14.1m. Total wealth estimated at £65m