The mystery is where the missing Montague money went: Tiphook's founder and chief revelled in the trappings of the high life, and until last week had no apparent financial worries. John Willcock looks at how the debts grew

AS bankers meet in smoke- filled rooms to solve Robert Montague's bankruptcy crisis, creditors and shareholders of his company, Tiphook, are wondering how he managed to amass debts of pounds 30m.

This was a man who came from a wealthy background - inheriting the 70-year-old family haulage firm - and also drew a huge salary and dividend earnings from Tiphook during its boom years.

The Tiphook affair has become a byword for corporate misgovernance, with directors taking big salary rises just as the company slumped into bigger losses.

The gravy train only hit the buffers this year when it emerged that Mr Montague was receiving pounds 1.3m while the company, which has now renamed itself Central Transport Rentals, announced pre- tax losses of pounds 332m.

So where did Mr Montague's money go? Perhaps the explanation lies in his reputation for lavish living.

Yesterday speculation was rampant over the ownership of the September Blue, a 139ft luxury motor yacht now up for sale for dollars 14.5m, on which Mr Montague used to entertain friends and business contacts in the South of France.

The yacht was leased by Tiphook via the yachting agents Yachting Partners International of Brighton, which said yesterday that the boat was owned by GP Holdings, a Channel Islands company.

A spokesman for Tiphook said yesterday that whether Mr Montague had an interest in GP Holdings or not was 'his affair'.

Clearly the bulk of the pounds 30m must have gone on Mr Montague's 1,300-acre estate in Oxfordshire, which includes a lavish Georgian mansion, Pusey House, and 15 cottages.

Mr Montague bought the estate from Sir Simon Hornby, the former WH Smith chairman, for a reputed pounds 8.5m and then had to spend at least another pounds 1m renovating it. Within the estate's boundaries is a pheasant shoot, which Mr Montague uses with friends. These include Henry Keswick, chairman of Jardine Matheson, and Sir Adrian Swire, chairman of John Swire & Sons, owner of Cathay Pacific Airlines.

There was also an HS125 jet housed at Oxford airport but this was leased by Tiphook. Last night a Tiphook spokesman insisted that the directors had not had access to it for some time.

Mr Montague's boyish charm has taken him far in the City, according to City sources, and this includes a disarming attitude to money, at least before his present problems. When he lived in a previous home in Kent, a visitor commented that a black Ferrari was the 'wrong colour'. He replied: 'That's OK, the others are all red.'

He also once joked to a journalist that one of Tiphook's many rights issues was needed to pay off an ex- wife. He is on his third marriage, to Silke Kruze. Ms Kruze comes from a wealthy German family, and this connection has fuelled speculation that his largest personal creditor, Commerzbank, may be his best ally in the fight against bankruptcy.

The Tiphook founder and chief executive has certainly done well from the company since he launched it in 1978. Tiphook had a bumpy flotation in 1985 when its original prospectus had to be withdrawn as the assets had been wrongly added up. Just 15 per cent of the shares were subscribed, leaving the company capitalised at pounds 15.4m with profits of pounds 66,000.

But the company seemed to have hit on a winning formula of leasing transport containers to shipping companies that no longer had the resources to own them outright. At its peak in 1992 Tiphook was the second-largest container company in the world, with a 16 per cent market share. Mr Montague described the company as 'recession-resilient'.

As early as 1989 the press noticed Mr Montague's salary, which rose by 81 per cent to pounds 370,000 in the year to April 1989, in line with rising profits. What caused outrage, however, was the way his salary and that of other directors continued rising during the recession - pounds 842,000 in 1992 and pounds 851,000 in 1993.

Mr Montague did not just benefit from a high salary. In the late 1980s dividends grew by a compound rate of 33 per cent. His estimated earnings from dividends alone were pounds 426,000 in 1990, pounds 466,000 in 1991, pounds 588,000 in 1992 and pounds 656,000 in 1993.

Mr Montague also benefited from outright share sales. In July 1990 when the Tiphook price hit 550p, he sold 1.25 million shares for pounds 6.7m, which still left him with 3 per cent of the company, 3.4 million shares then worth pounds 18.6m but now only pounds 1m.

He also has more than 3 million share options over which Barclays Bank has a charge.

All this largesse makes it hard to comprehend how Mr Montague could have piled up pounds 30m in debts. The coming weeks will see how he will cope with more straitened circumstances.

(Photograph omitted)