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He also set up a chain importing cars and motorbikes. He established a yacht-building venture, of which Robert Maxwell was a client. Most successfully, he began trading and developing property, establishing himself as chief executive of Heron (named after his father Henry) in 1976. He was reputed to have accumulated some £700 million and plenty of what he calls ‘toys’: yachts, private planes, more Rolls-Royces.
But unlike Maxwell, Ronson kept his nose clean — until Guinness. He had made the right friends, including Margaret Thatcher. His fiefdom was the Jewish community and the Ronsons were a model Jewish family. His glamorous wife Gail was always on his arm; his four daughters were all eventually brought into the business. When I once went to see him in his office, our meeting was interrupted by Gail walking in carrying his dinner suit for that evening’s charity dinner.
The knighthood was reputedly imminent when, in 1986, disaster struck. Ronson was found to have been part of a share-buying ring set up by Guinness chief Ernest Saunders and his bankers to support Guinness’s takeover of the whisky company Distillers. Saunders recruited the richest people he could muster to push up the price of Guinness shares. He offered Ronson some sweeteners to take part, including an indemnity against loss and a £5 million bonus out of Guinness’s coffers. Some City practitioners argued this was standard practice at the time, but it was later judged illegal.
Along with Saunders, the stockbroker Anthony Parnes and another wealthy investor, Sir Jack Lyons, Ronson faced charges of theft and false accounting. In 1990, after a lengthy trial, he was sentenced to six months in prison. Ten years later, the European Court of Human Rights ruled that the prosecution had made unfair use of self-incriminating DTI interviews with the defendants. Ronson believes to this day that he did nothing wrong. ‘I was never banned from anything. How come this was the fraud trial of the century, and we were perceived by the press as four of the most terrible people to walk the earth and they wanted to burn us alive, but I wasn’t banned from being a director. Ninety per cent of people in business knew that Gerald Ronson didn’t do anything dishonest. I can look anybody in the eye. Nobody said, this is a little bit hooky. Would I have bought shares in Heron’s name if I thought anything was wrong?’
‘I’m not mental, you know. I might not be the cleverest corporate guy. That’s not my thing. I’m not a lawyer, I’m not an accountant, I’m a businessman, I’m an entrepreneur, I’m not embarrassed to use that word. There is an establishment out there, and you have to have a scapegoat. Maybe my face didn’t fit, maybe being a private company, maybe being high profile, having a lot of toys and being Jewish didn’t help. But the fact is, it’s all history.’
Ronson uses his autobiography (Leading from the Front, published this month) to put the blame on his co-defendant Parnes, who he says should have investigated the legality of the deal before inviting Ronson to take part. He writes, ‘He dropped me in it with his lies and if this had been a movie about the Mafia, they’d have put a contract out on him.’
Ronson spent six months in Ford Open Prison, where many low-risk prisoners are sent. They include white-collar offenders like Ronson, whose crimes did not involve violence, but it also includes some hardened criminals whose sentences are nearing their end. ‘There were a load of animals there, 550 animals,’ says Ronson. ‘I won’t say 550 were [animals], but certainly 500 were. You’ve got lifers, you’ve got murderers. Because it’s a so-called open prison, people think Ford is a holiday camp, [but] 36 of the prisoners were murderers. There were a lot of very unpleasant people. Yet there were a few good people there.’
The work ethic that had enabled him to make loads of money in business also en-abled him to survive prison. He went to the prison governor and asked for a job. He was given washing-up. ‘It didn’t bother me. They had to do that. I put a smile on my face. I used to sweep the floor at the family furniture factory when I started work at 14, back in the Fifties. The worst thing about prison is that it’s so boring. What do you do with yourself all day long? You can sit there like a load of idiots, puffing roll-up cigarettes or pot, or just talking complete rubbish.’ But that was not the Ronson way. He progressed from washing-up to restructuring the prison’s probation service. He says his work was so appreciated that the probation officers visited him before he was released and had a party for him, complete with smoked salmon sandwiches.
Even in his absence, business had to go on. Gail Ronson went round Heron’s clients reassuring them about the family’s business ethics and ability to keep the show on the road in her husband’s enforced absence. Gerald’s deputy handled day-to-day affairs, receiving his orders during frequent prison visits. Gerald’s own business activities resumed the moment he was released from prison and climbed into the waiting Rolls-Royce. ‘The day I walked out, I got on with my life. I was most probably the only person that left Ford at one minute past midnight, not at 7 a.m. the following morning when they [normally] let people out.’
Ronson’s conviction did not trouble a gaggle of billionaires who came to his support after his release, ranging from Larry Ellison of Oracle and Terry Semel of Warner Bros to the convicted US junk-bond financier Michael Milken. Each took an investment in Heron. ‘They have been very good partners, loyalty is a very important thing. T hey were there in my darkest hour. I would never let them down. They have made a lot of money over the last 16 years, a lot of money.’
These investors enabled Heron to see out the recession of the early 1990s, in which property prices plummeted — as they have done again recently. ‘Memories are short, I’ve seen more recessions than I care to remember,’ Ronson says. But the earlier ones were nothing compared to today’s and he is far from sanguine about the outcome. ‘The economy is in a work-out situation. It could be five to seven years before the crisis is over. A massive gap has opened up between the best and the worst properties. Billions have been invested in stuff that nobody wants. Everyone has been looking for the fees. Now look what we’re left with.’
While property is still stuck in the mire, he has more hope for the financial sector. ‘The banks are getting their act together. The problem is a lack of transparency. They aren’t ready for that because they’ll have to write off another £20 to £30 billion. Their profitability is rising. They will start making a lot of money, but they have a lot of write-offs. There is no quick cure for the situation.’ Ronson says he has sought to profit from improving market sentiment, buying some shares for his charitable foundation and his pension fund — but cautiously. ‘We didn’t go bonko, I just put my toe in the market.’
Gerald Ronson has made many hundreds of millions. His property developments pepper the West End, the City and other commercial centres around the world. He has also given extensively to charities in the UK and Israel, setting up schools and training institutions, and he says he has left many more millions to his foundation in his will. When the complete Ronson story comes to be written, perhaps his commitment to good causes will win more attention than his ruthless business practices. Whatever happens, he is a remarkable example to today’s business generation of how to hold on to your name and fortune through extremes of adversity.
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