This is my FT column from Saturday, November 3.


The Coen brothers make great movies, and some, like Fargo, are based on real life events. Their latest, Gambit, is about a billionaire who is conned by an art curator into buying a fake Monet. Starring Colin Firth, Cameron Diaz and Alan Rickman it sounds fun, but may not amuse Pierre Lagrange, the billionaire who claims he was conned by an art dealer into buying a fake Jackson Pollock.

Mr Lagrange, better known in the City as the L in hedge fund managers GLG, paid $17m for Untitled 1950. Last year he considered selling it, but Christies and Sothebys  fretted about its authenticity. When a report suggested that some of the pigments were invented after Pollock’s death, Mr Lagrange reached for his lawyers. Ann Freedman, director of the 165-year-old gallery which had sold him the painting, closed her doors the next day. We all sat back to await a fine legal spat.

Alas, the parties settled confidentially last month. Her lawyer waffled to Bloomberg that “Mrs Freedman continues to move forward…” A federal investigation into the dealer who sold her the picture continues. Mr Lagrange may never recoup his investment, despite the painting’s notoriety value. He can admire it as a thing of £17m beauty, which is (of course) why he bought it in the first place. If he gets bored, he can go to the movies, and ponder how art imitates life, unlike Untitled 1950.

Is Dudley dude or dud?

With one bound he was free. Bob Dudley swapped out of BP-TNK, its doomed partnership with a group of Russian oligarchs and into President Putin’s oil company of choice, Rosneft. He then followed up by declaring a bigger dividend and started looking like a chief executive atop a company in charge of its own destiny, for the first time since the Gulf caught fire two years ago.

Well, maybe. Assuming the deal goes through (this is Russia, after all) BP will wind up with something under 20 per cent of Rosneft’s equity. This is a very awkward number. It’s much too large to trade in the market, and despite the promise of two seats on the board, is not enough to have much influence. After all, BP found it hard enough to influence the three TNK oligarchs, despite having a half share, and none of the trio was president of Russia. As long as Putin is, and as long as Rosneft remains in favour, all may be well.

Unfortunately, the Russian approach to minority shareholders is rather more robust than Britain’s. Igor Sechin, Rosneft’s chief executive says he sees no obligation towards the outside shareholders in BP-TNK’s operating company, and the market price has plunged since the news of the deal broke. Out of the TNK frying pan, into the Rosneft fire?

New change at the Bank

Perhaps to distract us from Britain’s economic woes, we’re promised the name of the next governor of the Bank of England in  the chancellor’s autumn statement on December 5. This week’s mildly self-flagellatory reports into the Old lady’s performance during the banking crisis will hardly influence the decision. We already knew about the dismal forecasting record, while the other reports are miles away from the cold-eyed analysis needed after a life-threatening financial crisis. Why, for example, was RBS allowed to pay £50bn in cash for ABN Amro in 2007?

At least the insights into how the court of King Mervyn works give the next governor a mandate for a new republic. Even if Paul Tucker, the insider candidate, gets the job, the changes of personnel could be pretty comprehensive. David Lees, the chairman of the Court, is in extra time and will go at the end of 2013, while headhunters are advertising a new post, of chief operating officer.

The BoE managed with one deputy governor in its first 303 years, and got two by accident in 1997 thanks to a legislative blunder. Gubernatorial inflation will now take the total to three. The popular worry among BoE observers is that the new governor will have too much power, but if three deputies, a COO and a new chairman can’t control him, they don’t deserve to be there.