MÆRSK Mc-KINNEY MØLLER

An old man was laid to rest in Copenhagen yesterday. Since he was almost 99, it was perhaps not so surprising. However, the man in question was Mærsk Mc-Kinney Møller, reputedly Denmark's richest man, the former head of the country's biggest company A.P. Møller-Mærsk and still its controlling shareholder. So the funeral was not your average affair. The audience included most of the Danish royal family, five current and former Prime Ministers, and much of the business and political elite.

This is not going to be popular with Danish readers, but I have to admit to having had a dislike of Hr. Møller and his business methods, ever since my first job as a shipping analyst at an American bank. Four things bugged me. The first was an almost obsessive regard for secrecy. In the old days, all the group's assets were owned exactly 50% by each of two holding companies, Svendborg (the place where the company was started by Hr. Møller's father) and 1912 (the year). Since neither owned a majority of anything, the group got away with not having to produce any consolidated accounts, even though both companies were publicly quoted. Basically, no outsider knew what was going on. Market pressure eventually forced the dismembership of this construction some years ago, so there is now only one holding company, A.P. Møller-Mærsk; but the climate of secrecy remains.

Secondly, the group has used a trick which is quite common in Scandinavia, where there are A and B shares, with one lot having many times more votes than the other. This has allowed the family (well, various trusts, which are in turn controlled by the family) to tap the markets for capital without having to cede ultimate control.

Thirdly, by being big and retaining control, the company has got involved in all sorts of businesses, which would in other circumstances have cost managers their heads. Ports and terminals are a useful adjunct to the core shipping business (where Mærsk Line is the world's leading container shipper). But the company only owns 50% of the country's largest supermarket chain, because Hr. Møller was friends with the family who own the other half. Mærsk Air was a costly mistake, as were other industrial ventures. Oil and gas has been a success, after the then Government asked the company to exploit the reserves found in the North Sea. True, it involved some risk; but it helps if you have a quasi-monopoly.

Fourthly, one of those businesses is a sizeable shareholding in Danske Bank, Denmark's largest financial institution, which effectively allows A.P. Møller-Mærsk to control it. When Danske Bank's Chairman retired a year or so ago, his replacement was the head of Mærsk Line; and when the long-standing Managing Director also retired this year, the Chairman chose to replace him with, er, himself. I have no idea whether, and if so, to what extent, A.P. Møller-Mærsk borrows money from Danske Bank; but having a country's largest company control its largest financial institution is not at all healthy. Imagine the outcry if (say) Exxon controlled Citibank, and the new CEO of Citibank was the former head of Exxon's exploration division; that gives you an idea.

All of which should have given business journalists and commentators more than enough material to ask some fairly searching questions. But that brings me to the last irritating thing. Hr. Møller was always treated with kid gloves. He is the only person (other than members of the royal family) that I have seen interviewed on Danish television, where the interviewer used the old-fashioned polite De ("they") form instead of the normal du ("you"), and the only person called Hr. Møller instead of his full name (this may sound churlish about being polite to an old man; but Denmark is an informal country, where even the Prime Minister is called Helle Thorning-Schmidt and not Ms/Mrs Thorning). Questions about the business got stonewalled answers and the stock response from the company that the whole thing ran on the concept of "rettidigt omhu" (literally care in time, but perhaps best translated as "be prepared"). This was treated as philosophically pathfinding instead of a mere platitude; besides, it didn't in any way deal with the issue of why A.P. Møller-Mærsk was an old-fashioned conglomerate instead of a focussed ports and shipping company.

There has been much comment on Hr. Møller's penchant for giving away a large part of his fortune to worthy causes. Yet even here, it was not without controversy. The family trust in his parents' name paid for Copenhagen's new opera house and then donated it to the state, without an architectural competition (normal in such circumstances). Hr. Møller pretended that the whole thing had nothing to do with him, but was in the spirit of his parents' wishes (even though they are long dead), got the Government to swallow that line, and then bullied them into paying for the running costs. The lack of criticism sort of sums up his untouchable status in Denmark.

(I have to admit to an interest in this charity work, since one of the family trusts gave the local cinema money to help with its digitalisation project. However, I don't think that that act of generosity outweighs the things above.)

So what now? Hr. Møller had no sons, but three daughters, the youngest of whom is set to take over his role as controlling shareholder, but who is not involved in day to day affairs. There are supposedly quality family members in the next generation, who work for the company. But I suspect that over time, there will be a gradual concentration on the shipping and ports business, and a gradual disengagement from some of the other activities, starting with the Danske Bank stake. A radical solution would be to do what many conglomerates have done and break the company up into its constituent parts; after all, although A.P. Møller-Mærsk is the world's leading container company, it still has only about 15% of the market, and the container business has lost money in recent years. However, it is a measure of the shadow that Hr. Møller casts over the business that I suspect that nobody will dare. A pity. Every Dane owns, either directly or indirectly through a pension fund or insurance company, a stake in A.P. Møller-Mærsk, and it's in their interests that it is run as efficiently as possible. Shipping companies don't own supermarkets elsewhere in the world, and I don't see why Denmark is different in that respect.

Walter Blotscher