BUSINESS

A jolly green billionaire

Goldsmith prefers ecology to business

ANDREW PHILLIPS November 5 1990
BUSINESS

A jolly green billionaire

Goldsmith prefers ecology to business

ANDREW PHILLIPS November 5 1990

A jolly green billionaire

Goldsmith prefers ecology to business

Sir James Goldsmith has long relished his reputation as a corporate predator. He won worldwide renown and a personal fortune of more than $1 billion in three decades of daring business takeovers that inspired others to use the language of the jungle when describing him. Robert Maxwell, the British media baron, calls Goldsmith “a shark.” And Le Monde, the leading French newspaper, once labelled him “a charming carnivore.” But last week, business communities on both sides of the Atlantic were getting used to the idea of a new, gentler Goldsmith—a protector of nature rather than a ruthless hunter of vulnerable companies. On Oct. 17, the 57-year-old Anglo-French financier suddenly announced that he was quitting business and devoting the rest of his life to protecting the environment. “I wish to add a new chapter to my life,” he told reporters in London. “The business chapter is now closed.” Last week, Goldsmith was at his villa in Spain, relaxing with three of his seven children by his three marriages. But his mind was evidently still on the implications of his new

cause. His older brother Edward, a longtime ecological activist and author in Britain, told Maclean’s that he and Sir James were in regular contact and that they would soon announce details of four environmental campaigns. They will be financed by the family-run Goldsmith Foundation, which last year donated about $4.5 million to a variety of social causes ranging from antinuclear groups to preserving tropical rain forests. Before leaving for Spain, Sir James said that he intends to use his wealth and influence in Europe and the United States to convert conservative business people to the importance of saving the global environment. “He won’t just be putting money in,” said his brother Edward. “He’ll be taking a very active part in the whole thing.”

When he announced his abrupt change of direction, Sir James maintained that he had been trying to retire for three years. Just before the stock-market crash of October, 1987, he sold off virtually all his stock holdings and some property, then worth an estimated $580 million, and concentrated on building a

private retreat in Mexico. However, he resurfaced with a vengeance in July, 1989, when he attempted what would have been the secondbiggest corporate takeover ever, after Kohlberg Kravis Roberts & Co.’s $29.1-billion takeover of RJR Nabisco Inc. last year. Along with two partners, London-based banker Jacob Rothschild and Australian businessman Kerry Packer, Goldsmith bid $25.4 billion for B.A.T. Industries PLC, the tobacco-based conglomerate that is one of Britain’s largest companies, and that owns 40 per cent of the shares in Montreal-based Imasco Ltd., which in turn owns Canada Trust, Shoppers Drug Mart and makes duMaurier and Player’s cigarettes. The bid failed last spring, and Goldsmith now dismisses it as a “relapse” into active business that he will not repeat.

Instead, at the same time that he announced his retirement from the fray, Goldsmith said that he had concluded a $ 1.5-billion deal to trade his holdings in an American timber company, Cavenham Forest Industries, to the British conglomerate Hanson PLC in return for Hanson’s 49-per-cent share of Newmont Mining Corp., the biggest gold producer in the United States. Goldsmith said he did not intend to actively nm the mining company, but added that he is pessimistic about the future of the Western world’s economies and believes that,

in such a situation, gold is a good investment.

If he sticks to his promise to retire, it will be perhaps the strangest twist yet in the career of one of Europe’s most unorthodox businessmen. He first made money at the age of 9, when his Jewish parents, who had fled France for England at the beginning of the Second World War, sent him and his brother to school in Canada, at St. Andrew's College, a private boys’ preparatory school in Aurora, Ont., which he later said that he hated. During the winter,

James set traps in the woods for small animals and sold the furs for a profit. Back in England after the war, he left school at the age of 16 after winning $18,000 from a $23 bet on a horse race.

Employed as a waiter before he was married, Goldsmith laid the foundations of his business empire after his first wife, Maria Isabel Patiño, a wealthy Bolivian heiress, died in childbirth in 1954.

Goldsmith used his inheritance to purchase a small French pharmaceuticals company, which he sold at a profit in 1957. By 1970, he owned several French and British grocery stores and confection companies. The following year, he made his most pivotal deal to that point when he purchased the manufacturer of Bovril, a hugely popular British beef-based soup. He settled in France in the early 1980s, and then initiated a series of company takeovers in the United States. His acquisitions there included Grand Union supermarkets and forestry-products giants Diamond International Corp. and Crown Zellerbach. In the process,

Goldsmith became one of the most feared corporate raiders on Wall Street.

Along with his bold business deals, Goldsmith also became noted for both right-wing political views and a tempestuous private life. Before he married her, Goldsmith had a child by his second wife, Ginette, formerly his secretary. He also had two children by his third wife, Lady Annabel Birley, before he married her. At one point, he housed Ginette in one wing of a Paris mansion, and a mistress in another wing.

Still, Goldsmith’s decision to devote his energy and wealth to ecological causes was not a complete surprise. Clearly, he has been influenced by his environmental activist brother Edward, 61, who publishes The Ecologist, a bimonthly British magazine with a circulation of 7,000 copies. Edward has written, co-auth-

ored or edited nine books about the environmental cause. Indeed, the latest work he has contributed to, Imperiled, Planet, which maintains that mankind faces extinction within decades unless radical measures are taken, came out in Britain during the same week as Sir James made his announcement. In Canada, the book has been available since September.

Sir James himself is a long-standing opponent of nuclear power and has twice donated money to the environmental lobby group Friends of the Earth to support its antinuclear campaigns. In addition, he recently gave his brother’s magazine $114,000 to launch another campaign against using nuclear power as an alternative to the burning of fossil fuels, which contributes to global warming. Sir James says that he fears the nuclear industry will receive a boost from higher oil costs resulting from the Persian Gulf crisis. “It is extremely dangerous, polluting and even uneconomic,” he told a British newspaper, The Independent. “Anyone who has nuclear power should become a global leper.”

Sir James has also spoken out against the use of chemicals and pesticides in food. And he advocates a plan to preserve tropical rain forests by having the rest of the world pay Third World countries to safeguard them. Indeed, when he was knighted by the British government in 1976, he was cited for “services to exports and ecology.”

Associates maintain that Sir James’s long-standing interest in environmental issues deepened in the mid1980s when he became pessimistic about the economic future of the West. He bought 16,000 acres of tropical forest on the western coast of Mexico, on the Gulf of California, and developed a spectacular estate on the site. He brought in ecologists to maintain it as a preserve for the animal and plant life of Mexico’s tropical forests. In total, 90 per cent of Mexico’s tropical forests have been cut down, but Goldsmith’s estate has become a refuge for several rare and endangered species of animals, including crocodiles, turtles and jaguars. And on a cliff top above the sea, Goldsmith built a complex of five homes for himself, three of his children and even his ex-wife, Ginette.

Still, Sir James says that his views are more moderate than the anti-industrial opinions expressed by his brother. Instead, he says that he would be satisfied to persuade business people and conservatives of the importance of the environmental crisis facing the world. Getting out of active business dealings, he says, is an important step towards doing that. ¿ Adds Goldsmith: “People automatically ask, ‘What’s he after, what’s his angle?’ Whereas if one is clearly and irreversibly out of business, and purely involved in a foundation like mine, that line of attack is cut off.” Edward Goldsmith argues that his brother’s track record as a deal-maker puts him in an ideal position to act as an ecological missionary to skeptical business leaders. “That’s something Jimmy can do which nobody else in the environmental movement can possibly do,” he said last week. “He is one of them, and he is highly regarded as one of the most successful businessmen in the world.” For Sir James, his new task will be to use that credibility to spread a message that many of his onetime business colleagues may not be eager to hear.

ANDREW PHILLIPS in London