Daniel Acker/Bloomberg NewsWarren Buffett, second from right, sits with his children, from left, Howard, Susie and Peter at the Berkshire Hathaway shareholder meeting in Omaha, Neb.
OMAHA — At the annual gathering of Berkshire Hathaway’s investors here this weekend,
Warren E. Buffett made it clear that, as far as he is concerned, it’s back to business as usual. But a former top manager for him,
David L. Sokol, may make that a difficult goal to accomplish.
Mr. Buffett said at a news conference on Sunday that while he viewed the controversy caused by Mr. Sokol’s abrupt departure a month ago as sad, he saw little reason to dwell on the matter for very long.
“I’ve got no strong feelings about it, except that it’s a very sad situation,” he said.
He said he planned no major changes to Berkshire’s management practices, which largely leave the executives of the company’s subsidiaries to operate as they please. With more than 260,000 employees working for him around the world, something can and will inevitably go wrong, Mr. Buffett said.
His longtime investing partner, Berkshire’s vice chairman, Charles Munger, addressed the issue more bluntly. “We’ve had a close brush with scandal two times in 50 years,” he said Sunday. “We’re not going to devote a lot of time to this.”
Nevertheless, Mr. Sokol appears ready to keep the issue alive and wage a fight against Berkshire and his onetime boss. In a statement issued after Berkshire’s annual meeting, Mr. Sokol’s lawyer insisted that Mr. Buffett was “transparently scapegoating” his client, and that Mr. Sokol had not violated company policy with those trades.
Mr. Buffett already used the annual meeting on Saturday, attended by tens of thousands of ardent investors from around the world, to speak at length about what he knew of Mr. Sokol’s stock purchases in a chemical maker that he later recommended to Mr. Buffett as a potential acquisition.
Berkshire announced in March that it would buy the chemical producer, Lubrizol, for $9 billion. The deal produced a $3 million paper profit for Mr. Sokol.
Mr. Buffett said Saturday that Mr. Sokol’s actions were “inexplicable and inexcusable,” though he declined to personally attack him. Mr. Buffett said that Mr. Sokol had violated company trading policy. In his statement, Mr. Sokol’s lawyer defiantly denied that claim, saying, “At no time did Mr. Sokol violate the law or any Berkshire policy.”
Mr. Buffett sought to parry those assertions on Sunday, arguing that he has been forthright in disclosing the relevant details of the matter. He said that he did not know of any other details relevant to an investigation, and that he was cooperating with regulators in their inquiries.
“The facts are the facts,” he said. “His lawyer wasn’t there. I know what happened.”
Since Berkshire disclosed Mr. Sokol’s resignation and its circumstances, the controversy has threatened to mar Mr. Buffett’s lustrous reputation among investors. But Mr. Buffett said he did not expect the affair to cause permanent damage.
The pressure on Mr. Sokol is likely to grow. The Securities and Exchange Commission is looking into his trades, according to people briefed on the matter, using in part information submitted by Berkshire. Mr. Buffett said on Saturday that the data his company had turned over was “pretty damning.”
Mr. Buffett spoke at greater length Sunday about more traditional topics of discussion for Berkshire meetings.
Asked by reporters from various countries — including Germany, Brazil and South Korea — about whether he would be interested in acquiring companies in those areas, he responded yes to all of them.
Asked again about a potential successor to him, Mr. Buffett said only that even the worst of the unnamed candidates would be “very, very good.”
Shareholders appeared to side largely with Mr. Buffett. At Berkshire’s meeting on Saturday, most seemed more concerned with potential investments and successors than with the Sokol matter.
“I trust Buffett and the board,” Mary Murphy, from Omaha, said on Sunday. “He seemed like he was being honest and saying what he knew.”
Article source: http://feeds.nytimes.com/click.phdo?i=a6cda4ae830aa848bdebd5b5a8fd182d
Speak Your Mind
You must be logged in to post a comment.