One of the side effects of corporate compliance dictates is that they may leave investors under the impression that are protected from malfeasance on the part of company directors.

However, the sad fact is that where an intent exists amongst controlling officers to enrich themselves wrongfully neither Sarbanes-Oxley, the Cadbury Code nor any other compliance structure is likely to save the trusting outside investor who, in the words of the late Richard Pryor, is likely to be taken hook, line and sinker...on dry land.

Initially this intent might inspire a selfish but legal attempt to mitigate the risks of financial downside to their often large insider equity holdings or their own possible poor job performance (somewhat self-fulfilling once said intent appears). Thus are spawned generous consulting roles, supine boards, interestingly conceived sign-on and exit packages, jobs for the boys and so forth. Any polite investor who has attempted to test or question the value of such items at an AGM or by phone and letter can attest to the difficulty and outright aggression sometimes encountered.

The story of Torex Retail plc is currently in full sprint in the UK. With possibly slightly more knowledge of the details than most it is tempting to wonder if this case fits the cynical view outlined above. Especially when one of the pseudo-accused held (until 3 hours ago) a non-executive directorship at one of this scribe’s holdings because, a reasonable deduction maintains, he knew the ex-Chief Exec very, very well. Non-execs are, of course, supposed to protect the shareholdi ignoranti from the potential selfishness that over-collegiality in the boardroom can bring. A guy whose home is raided by the Serious Fraud Office seems either unlucky or an unsuitable candidate for the role.

Of course, there is slightly more to it than that and it is all interesting. Amongst these aspects is a small Enron link with (probably) a big behavioural impact on one of the key players; a somewhat larger link to the lesser known circus that is iSoft plc; alleged physical intimidation by heavies involving a street chase; alleged threats of reputational ruin; alleged keeping of twin sets of books; and alleged insider dealing. And that is the short list – but it would be rash to prejudice what is certain to be a wider-reaching denouement.

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