Morning:
6°c
Sir Keith Mills is sitting in his smart office on Pall Mall. He's jolly and open, a big chap, well turned out - the sort who looks as though he was invented for every yacht club balcony in the land: blazered, cigar in one hand and a large brandy in the other.
It's easy to be taken in by men like Mills. He has created not one but two fortunes - from inventing Air Miles, then the Nectar loyalty card. He steered the 2012 Olympics bid and he's determined to lead a successful GB America's Cup sailing challenge.
Despite being extremely wealthy and in his late fifties, his work rate is unrelenting. He's got three assistants on the go, sitting in an outer room.
This week, as well as maintaining various business interests, as deputy chair of the London 2012 organising committee he will take a Very Important Person, here for the G20 summit, on a tour of the Olympic Park at Stratford. Mills is also hoping to hear any day now that a legal dispute between the Americans and Swiss has been resolved so the next America's Cup can go ahead and Team Origin, which he finances, can take part.
He's also a director of 2018, the attempt that is gathering pace to land the 2018 football World Cup for England. Oh, and he's a director of Spurs.
There's enough in his CV to suggest that while Mills may have the appearance of a labrador, underneath he's a bulldog, not to be messed with.
Proof that is so comes from his crusade against Coutts, the ultra-discreet private bank - bankers to the Queen, no less. People who bank with Coutts normally do so because they abhor publicity and want their financial affairs to remain hidden. What they certainly do not do is publicly question the historic institution's ability and reputation - it's just not done.
But Mills has done that and more with a series of moves that have seen him take out newspaper adverts appealing for other Coutts customers to join him, then writing to those who he suspects may be the bank's clients to see if they will consider siding with him and tabling questions designed to embarrass Coutts at this week's AGM of its owner, Royal Bank of Scotland.
Coutts is reeling from the onslaught. Mills, though, is far from finished. He's got a plan of action all mapped out. "We're only at phase one or two," he says, beaming. "There are plenty of other phases to come. We're not going anywhere - we will start legal proceedings if necessary." You realise he's displaying the methodical organisation and zeal that saw us win the staging of the 2012 Games and may yet deliver victory in the America's Cup and secure England the 2018 World Cup.
"I'm pissed off, basically" he says. In December 2007, he sold his LMG company, the owner of the Nectar points programme, to Canadian rival Aeroplan for £370 million. Of that figure, although he won't confirm how much, around £160 million went to Mills personally.
He warehoused the sale proceeds with Coutts, for temporary safekeeping. "I'd put a lot of money with them in the past; I'd banked with them for 20 years. It was two months after Northern Rock went pear-shaped and the start of the financial meltdown. I made it clear I wanted somewhere safe. I didn't want it in stocks and shares and I didn't want any danger of risk. It was pure parking of the money, that was all."
Coutts, he says, suggested he put £65 million into AIG Life Premier Bonds. "Coutts said they paid 6.3%, which was 50 basis points more than a normal-term deposit." While America's AIG looked like a safe bet as the largest insurer in the world, unknown to Mills there were warning signs, that he maintains Coutts should have heeded. "It did have some problems and there were questions being raised, which anyone doing some tracking would have uncovered. Its profile had also changed, so it was looking for riskier homes for its money."
Two or three months later, he says, news reports flashed up that AIG was giving cause for concern. "I wrote on 3 March and asked if I should move into gilts because I was nervous about AIG. But Coutts said, 'We've looked into AIG and we're perfectly happy they're sound. We're still not concerned with any risk to investors such as yourself.' "
One weekend last September he was en route to the Paralympics on the Friday when Coutts called to say there were worries about AIG and the funds should be moved. By the Monday, as he puts it, "I was in Beijing and it was too late, the drawbridge had been pulled up - my money was frozen."
AIG offered him the choice: he could withdraw half his money but suffer a 26% hit on the other half, or take out half without penalty and leave the other half until 2012 when it would be returned without interest - all being well.
Coutts, he says, recommended he take the latter course. He'd already withdrawn £8 million to put into his charitable foundation so, of the remaining £57 million, he took half immediately and left the other half (around £28 million) until 2012. "July 2012," he says, wryly, referring to the same date of the London Olympics he fought for.
What he'd like is for Coutts to simply stand behind any losses he may suffer on that £28 million. His point is that he was depositing his cash, not investing it. "I'm angry. I don't think AIG was a safe place. The AIG product was mis-sold and when questioned in the months leading to the collapse, Coutts protested it was safe. I've had to accept that £28 million of my money is locked up for three-and-a-half years. There's no interest on it and I have no access to it. What I want Coutts to do is to give an undertaking they will protect me. All I've come up against is a blank wall saying, 'You're on your own.'" His line to Coutts is: "I think you've not given me the advice I would expect from one of the world's leading private banks."
He's rich enough to absorb the loss but he's not backing off. "I said to Coutts, if you're not prepared to stand behind your customers then I will wage legal and publicity campaigns to bring you to account. He placed adverts seeing if there were other Coutts depositors in his position and he got "several hundred" replies. What they showed, he claims, is that Coutts appeared to continue to sell AIG bonds even when AIG was in trouble.
Then he wrote to those he thought might bank with Coutts - "members of the House of Lords, celebrities, anyone I suspected might use them" - to see if their experience was the same and if they would join him. He says he's been overwhelmed by the response.
Coutts has been knocked for six by the actions of one of its clients. If it knows what's good for it, it might do as Mills wishes. As he says: "I've got three and a half years to go. We're not quitting. This is the beginning of what will be a long campaign if necessary."
As others have done in the past, Coutts, you suspect, would be foolish to underestimate him.
