Business partnerships, like marriages, usually start out well. A shared vision, the excitement of being able to do it the way you know it should be done, a mutual respect for each party’s skills and contribution to the success of the venture. But many partnerships, like many marriages, end in bitterness and recrimination. Particularly if your business partner surprisingly turns out to be a crook.
Operating in countries of the undeveloped world, it was usually legally required, as part of the terms for the grant of a business license to a foreign entity, to take on a “local partner.” This local partner was chosen for their alleged influence and ability to assist the business to prosper. However, more often than not, the term “local partner” was just a euphemism for “thief.” They used their influence to create problems which only they could solve in order to extort money from the owners.
Sadly such venality is everywhere. A friend of mine, here in the U.S., recently received a good offer to buy the company he had built up over many years. Without him there would have been no company, the decisions he had made and the risks he ran had paid off, it was his experience and reputation that gave the company value. Unfortunately, as it turned out for him, by an accident of history from the early days of the company, he was only a 50 percent shareholder. The other 50 percent had been transferred over by one of the original partners some years before to a respectable certified public accountant. This partner had no particular experience or aptitude in my friend’s business; he played his assigned role as a stereotypical accountant, overseeing the bookkeeping in between his other roles in other companies. He involved himself in local good causes and gave his time and skills to his church as chair of the finance committee. He never gave cause to believe he was anything but competent, honest, and worthy.
Although they were not personally close, my friend seems to have liked and respected his partner, and acknowledged the contribution his sensible counsel and honest watch had played in the success of the company. By no means was he a contribution to its success of 50 percent, but my friend accepted the situation as it was and was perfectly content for his partner to benefit equally. When a larger company interested in purchasing the company outright approached them, it was obviously a joint decision, one that the accountant wholeheartedly approved of. After doing their due diligence the buyer indicated they wanted to retain my friend for his skills and experience and offered to pay him for his half of the shares over two years. They felt that within their own staff they had the accounting resources they needed and so planned to pay off the other partner in cash at signing. Everyone seemed happy.
But then, shortly before signing, the accountant ambushed his partner by announcing that if he wanted his cooperation and agreement to get the deal done my friend would have to pay his partner more money out of his proceeds of the sale. Overcome by greed, the accountant saw an opportunity to blackmail his partner into giving him more. He did not try to justify his behavior, he knew he had no legal or moral right to take what wasn’t his, he just saw a way of stealing without consequences.
Is there really any fundamental difference between a street thug threatening someone to hand over their wallet and this otherwise respectable and upright professional extorting money from his partner? Both are common thieves, but the accountant’s professed ethics and integrity makes him a more contemptible crook.
Next time he is sanctimoniously sitting in his church, congratulating himself on his windfall, perhaps there will be a reading from the Book of Matthew, chapter 10, verse 36 — “And a man’s foes shall be they of his own household.”
Julian K. Hutton is president of Merlin Hospitality Management, where he oversees the company’s hotel management and distressed asset management operations, drawing on 20 years’ experience in the worldwide travel and hospitality industry. Reach him at [email protected]
