Macdonald is no stranger to trouble

Howard Macdonald, the Scot who made his name in the rescue of

Calgary-based Dome, an oil company set to go down with $8000m of

creditor and shareholder cash in the early 1980s.

A director of National Westminster Bank, he became deputy chairman and

chief executive of NatWest Investment Bank in January and says that he

got the job because he had become a familiar face over the other side of

the bank counter.

''We've known each other a long time, mainly from opposite sides of

the fence, with me as a corporate customer. I was thought of as someone

who could make it work, and the post was described very simply, although

it has turned out not to be that simple in practice.''

He is circumspect about the alleged irregularities which resulted in

the arrest three weeks ago of County NatWest's former chairman Charles

Villiers, the former chief executive Jonathan Cohen, and the investment

bank's finance director Stephen Clark, along with eight other city

executives three weeks ago, but believes that severe time pressure in

city deals can lead to deterioration in business ethics, morals and the

observance of the law.

''It is the responsibility of management to see that the company's

ethical views are understood, and that's now the case at County, and all

of the people we employ subscribe to that. And it's also management's

responsibility to see that employees are not under intolerable pressure

to get a deal done, and we believe we now have an efficient system well

in place.

''Frankly, without being cynical, most people know that County 1989 is

different from County 1987. We've made changes and we're not just saying

ourselves that things are fine now. We've had an outside review.''

Macdonald is no stranger to trouble, and his considerable reputation

as a financial manager earned in two decades in the oil industry is

crowned by his part in the largest financial reconstruction in the

private sector as chairman and chief executive of Dome Petroleum from

1983 until September of last year.

He was called in to help deal with what he describes as ''the most

celebrated bankruptcy in the Western system'', following several years

during which Dome, which had virtually no money, was expanded out of

sight by aggressive buying of a large number of oil companies. Alarm

bells sounded when in 1982, the price of oil faltered and fears of a

total collapse at Dome seemed entirely justified when the oil price

plummetted from $30 a barrel to $8 a barrel, while at the same time

interest rates climbed from 9% to 22%.

''At its peak Dome had borrowed $8000m, but we were able to resolve

the situation so that the lenders got largely repaid and the

shareholders got paid by reducing overheads and selling off non-core

businesses,'' Macdonald said.

''In fact we actually raised more equity, some people considered Dome

an interesting risk/reward situation and we built up a cash kitty of

around $500m by explaining that it was not a deal for widows or orphans,

but an opportunity which would interest the sophisticated investor

prepared to run the risk.

''That was before the second oil crisis, though, and after the oil

price collapse of 1986, there was no way Dome could be saved, although

we managed to find some interested parties and auctioned and sold at a

price which allowed secured lenders to be paid in full and got the

shareholders $1.50 a share.''

He got into the oil industry in 1958 when he was appointed finance

manager at Keir & Cawder Arrow Drilling after qualifying as a chartered

accountant with Thomson McLintock in Glasgow and spending a few years

working in the food industry. Kingston in Surrey was home for most of

Macdonald's career and provided a settled base for him and his wife

Anne, who comes from Ayr, to bring up their three daughters.

Co-founding the Association of Corporate Treasurers is Macdonald's

other major achievement, and he served as group treasurer with the Royal

Dutch Shell Group for the last seven years of his 23-year-long career

with the group. ''The association was founded to enhance the skills of

corporate treasurers,'' he said.

''There is now a chartered body with set exams and a very

highly-skilled pool of treasurers with expertise in transactions

involving 'swaps' which cover exchange rate liability and interest rate

caps, and a growing segregation of skills between the accountancy and

treasury sides, although it is a calling which is neglected in the UK.''

Back in Scotland for the launch of a new venture capital initiative by

County NatWest, which hopes to see more than #10m taken up annually by

businesses north of the Border, Macdonald emphasises that it's been

business as usual at the investment bank. ''In spite of Blue Arrow we

have done a host of good deals, we have access to research through

WoodMac and the NatWest operation is very professional and

decentralised, and we have only been limited by the number of quality

investment opportunities.''

Nothing in his experience has shaken his faith in the high principles

of the business community. ''Morals are the bottom line, most people

have very high standards and aim at doing better than simply staying

within the law. Just because something is legal doesn't mean it's okay

to do it.''