The Sunday Times February 6, 2022 3
6 It’s not just the US that has produced billionaire
dropouts. Simon Nixon, 54, is notorious for having
quit an accountancy degree at Nottingham
University because he found it “too boring”.
Before he abandoned his studies, Nixon co-
founded Moneysupermarket in 1993 to provide
mortgage information to financial advisers, and
then launched an accompanying website in 1999 —
where he made most of his fortune. He offloaded
his remaining stake in the price-comparison
service in 2016 and currently rents out his portfolio
of luxury homes via his website SimonEscapes. The
Lincolnshire-born billionaire also invested in start-
ups including Airbnb, Wise and Robinhood before
they went public. Last year, Nixon was placed 91st
on The Sunday Times Rich List with a net worth of
£1.8 billion — up £450 million on the previous year.
TOO COOL FOR SCHOOL
6 Let alone dropping out of university, some tycoons
made it to the top without even finishing school.
Amancio Ortega, 85, left education at 14 to work in the
textile industry, where he would go on to co-found Zara
parent company Inditex in 1975 with his ex-wife
Rosalia Mera (also pictured). Ortega now owns
about 60 per cent of the Madrid-listed company,
which runs more than 7,000 stores worldwide.
He has a net worth of about $70 billion.
Li Ka-shing, who would go on to become Hong
Kong’s richest man, started his career selling
plastic flowers after dropping out of
school following the death of his father.
Now worth about $36 billion, 93-year-
old Li built a plastics business into an
empire with 300,000 employees
spanning retail, media and shipping.me tycoons
chool.
owork in the
o-found Zara- wife
6 Ben Francis founded athleisure brand Gymshark
aged just 19 in 2012. Francis, now 29, was studying
international business management at Aston
University when he launched the firm from his
parents’ house, and paused his studies soon after.
Francis went from hand-making sportswear on a
sewing machine to running a billion-pound brand,
using social media to grow it. Gymshark hit a
£1 billion value in 2020 after an investment from
General Atlantic, granting the firm unicorn status
and valuing Francis’s stake at £700 million. The
Solihull-based brand’s parent company reported
pre-tax profits of £30.5 million for the year to July
2020 and turnover of £260.6 million. Francis, who
married fitness influencer Robin Gallant last year,
has credited his shortened studies with giving him
“a strong foundation on which to build a business”.JUMP-STARTING THE SHARK UNQUALIFIED SUCCESSES
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3.6%
Outperformance against the
market of companies two years
after an activist attackFund (TCI), which
called for boardroom
change at the London Stock
Exchange Group, are more aggressive.
Elliott, one of the most established
activists, appears to strike more fear into
boardrooms than any of its rivals. Last
year, though, there were signs that other
investors were becoming wary of Elliott
after some shareholders in SSE accused it
of “back of a fag packet” calculations.
This could be a troubling sign for the
activists, as they cannot wrest changes on
their own — they need the support of a
range of shareholders. “It’s about getting
the wolfpack behind you,” said McKen-
zie, and “knowing how you network and
build trust” with long-term investors.
These investors also need to decide
whether backing an activist will pay off
for them. Some evidence suggests so.
Alvarez and Marsal conducted research a
year ago that showed UK companies tar-
geted by activist campaigns in the three
years to February 2020 outperformed
the market by 3.6 per cent.
THE DEFENCE
As expectations mount that more activ-
ists are ready to pounce, there are plenty
of advisers coming up with ideas for
companies that fear their presence.
Indeed, an argument can be made that
their arrival shows stock markets are
working. “If the management really has
lost inspiration as to how to drive the
business to create value for all stake-
holders, it’s absolutely right that their
shareholders exert strong pressure on
them,” said McKenzie.
Some bosses feel their tactics are very
personal and brutal but the message is to
think like an activist — and ask questions.
Is the business firing on all cylinders? Are
costs too high? Is the capital allocated in
the right areas? Are shareholders really
being given their fair share of the profits?
It is a wake-up call for any conglom-
erate-style business or one
where bosses have
been talking about
synergies that fail
to emerge.
“Any well-ad-
vised company
would be thinking
about [the possibil-
ity of an activist] at the
moment,” said Hopkins. “We say to them,
‘Be your own activist — step back and look
at yourself critically.’ ”
That might be easier for bosses who
have just arrived in a new role than for
those who are well established. Anyone
running a large, sprawling business, or
one where the shares have been under-
performing, should be on the alert. Uni-
lever’s activist only broke cover after The
Sunday Times revealed the firm’s auda-
cious attempt to buy the consumer arm
that is being spun off by Glaxo.
Alvarez and Marsal uses 45 measures
to decide if a firm is vulnerable. It does
not publish its list but Unilever and Voda-
fone were among them.
licence. Since its launch, it
has created 6,300
millionaires and handed out
£56 billion in prize money.
However, the main focus of
the lottery is to provide
money for good causes,
including sport, the arts,
heritage and other charities.
To date, it has handed out
£45 billion in more than
600,000 grants.
Camelot gave 28 per cent
of its revenues to good causes
in 2010, but that proportion
fell to less than 23 per cent in
its most recent accounts. The
company points out that it
has increased the total figure,
due to a rise in revenues from
£5.5 billion to £8.4 billion a
year, but it has still come
under criticism.
There are also concerns
about the increase in the
proportion of sales from
scratchcards and online
instant-win games.
Carolyn Harris, chair of the
all-party parliamentary group
for gambling-related harm,
said Camelot had “gone
wrong” by diversifying into
these areas. “For me, they’ve
exploited the goodwill of the
lottery to make profits,” she
argued. “Whoever takes this
on, the more they are putting
into good causes and the less
emphasis on profit... the
better.”
Unsurprisingly, King, 60,
has a response. “In every
marketplace that we operate
in in Europe, we’ve increased
the contribution to good
causes faster than we’ve
increased the performance of
the lottery,” he said.
Part of this was due to a
reduced focus on
scratchcards, King
continued. “Typically, draw-
based games ... deliver a
higher return to good
causes.”In the UK, he once fought
the British oil company
Ramco Energy in the courts —
a case that included wild
allegations of corruption.
Komarek, 52, denied the
claims and sued for libel in
London.
Komarek owns and is
chairman of MND, the largest
Czech oil and gas exporter.
Under him, MND invested in
Vemex, a natural gas trader
and retailer controlled by
Russia. The German arm of
Gazprom, the Russian-owned
energy corporation, owns
50 per cent of Vemex, with
MND holding 17 per cent. The
remaining shares are owned
by Centrex, which is believed
to be a Gazprom front
company.
Komarek’s links to Russia
have been highlighted as a
decision over the lottery
draws near, putting King on
the defensive. “Nobody in the
whole of Europe, certainly in
the world, has built a
business based on energy and
not done business with
Gazprom,” King said. “But to
turn that into the idea that
somehow he’s a member of
Putin’s inner circle is pretty
ludicrous.
“It begs a question: why
have some people been so
keen to try and cast him in
that light?”
The National Lottery has
the potential to provide
hundreds of millions of
pounds in dividends over the
course of the ten-yearWhen Allwyn took over the
lottery in Greece, it handed
shopkeepers a proportion of
digital sales. When it went
into Austria, it introduced
games to win prizes such as
cars and launched “Lotti the
chatbot” to talk to customers
on Facebook and Amazon’s
Alexa.
Now the Czech lottery
operator is setting its sights
on the UK, where it could
deploy similar gimmicks. It
has enlisted a team including
the former Sainsbury’s boss
Justin King to spearhead its
battle to win the right to run
the lottery, snatching it from
the incumbent, Camelot.
A decision on the award,
one of the most lucrative
public contracts going, is
expected as soon as this
month.
If Allwyn is successful,
King, an adviser to the firm,
will be made chairman to
oversee the huge task of
building the infrastructure to
operate a lottery.
The fight for the lottery has
become fierce. Camelot,
owned by the Ontario
Teachers’ Pension Plan, has
run the lottery since its
inception in 1994. Along with
Allwyn, it faces competition
from Italian operator Sisal
and the media tycoon
Richard Desmond.
The battle has been
shrouded in secrecy but is
likely to burst into a court
showdown. Allwyn and
Camelot have each lined up
the UK’s leading QCs for afterA new licence will
be awarded soon
—and then the bid
fight may get dirty.
Sabah MeddingsPolice ‘ leak to Lloyds’ to be investigated
A police watchdog is to
examine allegations that
officers leaked confidential
information to Lloyds
Banking Group about their
inquiries into a customer’s
claim that it defrauded him.
Avon and Somerset police
had been looking into
allegations by a Lloyds client
who claims his property
business was fraudulently
misappropriated by the
bank’s Bristol branch after
the global financial crisis.
Extracts of Lloyds emailsobtained by the man, Kashif
Shabir, suggest police told the
bank in advance about a
confidential meeting it was
having with him.
Shabir alleges this was
police corruption, given that
Lloyds was a potential
defendant in what could have
become a criminal
investigation. Police said the
complaint was being looked
into by the Independent
Office for Police Conduct.
Shabir obtained the emails
by making a data subject
access request, through
which customers canJim Armitage demand to see information
organisations hold on them.
This resulted in disclosure
of an email apparently
referring to police, saying:
“They are meeting Mr Shabir
on Monday to tell him that
intend [sic] to close their
inquiry with no further action
intended.” At the time, that
was the case, but during the
meeting, in March 2020,
police decided to examine his
complaints further. There is
no current investigation.
The Bristol branch has
been subject to complaints by
small firms that its Lloydsma
in i
the
cau
inc
th
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s
co
basbas
highig
cauhundreds of millions of
pounds in dividends over the
course of the ten-yearhas
with
on
lss
t
up
afterthe decision has been made.
The Gambling
Commission, which is
overseeing the process, has
banned bidders from talking
about their plans for the
lottery in public. In an
interview last week, King,
who is also a non-executive
director of Marks & Spencer,
was restricted from
discussing how Allwyn would
approach the lottery in
Britain. He would say only
that it would increase the use
of data and pointed towards
its work in other markets,
where it focused on draw-
based games such as the Lotto
rather than scratchcards.
Allwyn has also increased
its focus on tackling problem
gambling, including
restricting play during anti-
social hours. A user buying
tickets or playing games at
3am is more likely to be a
problem gambler than one
buying tickets in-store during
the afternoon. “One of the
things where we have a
spectacular track record in
other markets is reducing
harmful gambling by insisting
that people stop after a
period of time,” said King.
Until recently, Allwyn was
known as Sazka, part of a
conglomerate owned by
Karel Komarek, the Czech
billionaire who made much
of his estimated £2.8 billion
fortune from investments in
oil and gas after the 1989
Velvet Revolution against
Soviet rule.Recoveries arm
misappropriated their
businesses when the bank
was scrambling to shore up
its cash position.
Lloyds denies wrongdoing
over the alleged leak and
said: “Concerns in relation to
a Bristol unit... have been
thoroughly investigated by
the group and we have not
found any evidence to
support them.” It said police
had told it in 2020 that “the
information provided did not
show evidence of criminal
wrongdoing and there was no
investigation into Lloyds”.The lottery has
created 6,300
millionaires