Lonrho chiefs at odds over property sell-off

A SECRET property sale by Lonrho has caused friction between Dieter Bock, the company's joint chief executive, and Tiny Rowland, according to a source close to the company's board, writes David Hellier.

The international trading group has disposed of a modernised office block in Brussels in a deal worth pounds 20m. Lonrho confirmed the transaction this weekend but said it was too insignificant to merit disclosure to shareholders. It denied there had been any disagreement between its joint chief executives.

However, Mr Rowland is believed to have argued against selling but lost the argument to Mr Bock, who is keen to move ahead with the group's asset disposal programme. 'Tiny was not for selling just now, but Bock wants performance and he wants it now,' the source said.

In July, the group sold its half-share in the trading business of Krupp, the German steel giant, for pounds 105m. Lonrho also recently sold the Observer newspaper group to the Guardian for pounds 27m. At the time of the Krupp sale, Mr Bock was reported as saying that Lonrho was now building up a war chest, rather than simply paying off debt. 'We can now begin to grow by acquisition,' he said.

The Brussels property is an old building that has been redeveloped and modernised by Lonrho, ready for sale. It is located near the EC headquarters. Paul Spicer, a Lonrho spokesman, said the deal was 'a good sale at a good price. It was sold with everybody's full agreement.' He said the company was not prepared to go into any further detail about the cost of the redevelopment or to disclose the profit it had made on the investment.

Another spokesman for the group said that 'neither Mr Bock nor Mr Rowland were actively involved in the deal'.

The restructuring of Lonrho that has taken place since Mr Bock bought half of Mr Rowland's shares and became joint chief executive in February is expected to lead to new boardroom appointments in the next few weeks.

Mr Bock wants to appoint two or three non-executive directors to the board before the September year-end, but observers feel that the decision-making process on these appointments may lead to friction with Mr Rowland.

Lonrho shares finished the week at 128.5p, near their high for the year of 135p.

(Photographs omitted)