The bizarre case of the blackballed alderman

BY JAMES BETHELL

The Corporation of London faces one of the strongest challenges in its 800-year history to the bizarre and increasingly unpopular customs that characterise its management.

On Friday a disgruntled alderman will seek to overturn in the High Court the rules that allowed the 26-member Court of Aldermen to blackball his membership after the constituents of a City ward had voted him in with a 56 per cent majority.

With the alderman threatening to take the action to the European Court, which is unlikely to view the City's arcane regulations sympathetically, the structure of the Corporation's ancient practices will be thrown under the spotlight.

The story began last year after an election was called in the Bread Street ward where the electors comprise eight resident caretakers, 150 small businessmen and 125 partners of the international law firm, Allen & Overy. The man elected was Malcolm Matson, an entrepreneur who had made a fortune out of laying fibre-optic cables in the City.

Mr Matson is not a typical alderman. These include employees of some of the most prestigious City institutions including Linklaters & Paines, Rothschild Asset Management and Carr, Kitcat & Aitken. Some are businessmen. Seven hold directorships of public companies. And they can expect to hold their positions until they are 70.

Their powers seem minimal - they can sit on Corporation's ruling Council, nominate a Church Commissioner and meet visiting state dignitaries - but the privileges are considerable. Apart from the status and networking opportunities, the aldermen expect to spend a year as Lord Mayor, a post customarily passed around the council in rotation.

They also have influence over ancient and mysterious trust funds observers estimate are worth hundreds of millions of pounds.

Mr Matson proved a relatively controversial candidate, calling for changes in the City's approach to technology, regulation and ethics. So, when he went to the aldermen's circular meeting chamber on 6 December to take his place, he faced 23 of his fellows with trepidation. However, he could not have expected the outcome.

Standing before the Lord Mayor's raised dais and surrounded by the scarlet- robed City fathers he was told he was not fit and proper for the post of alderman and refused permission to take his post."It was like standing before the Spanish Inquisition," commented one observer.

In an ironic twist to this bizarre story, the man banishing him from the chamber was Christopher Walford, the Lord Mayor, a senior partner at Allen & Overy, the very law firm whose members had backed his election.

The reasons for his expulsion have never been explained by the Council. Mr Matson does not like to speculate.

Questions have been raised about his suitability for the role, though Mr Matson has never been allowed to answer them. Certainly, the Corporation's deep-rooted fear of change played a part.

To find an answer Mr Matson hurriedly obtained a High Court injunction preventing the City Corporation holding a new election and next week will seek a review of the aldermen's powers. He says the Council is making increased use of its power of veto - five times in 21 years - and wishes to limit it.

The aldermen are unrepentant. "It is just like when you apply for any job - they either take you on or you are rejected," said one alderman.

This view is backed by the Corporation. "We are confident of victory," said Tony Holmos, head of public relations. "There is an 800-year old custom that this process is right, proper and valid and, more recently, this precise custom was tested in court just 15 years ago."