The career of one of the world's most respected business leaders crashed to an ignominious end yesterday as Lord Browne, chief executive of BP, resigned immediately following revelations that he had lied to a High Court judge.
Court documents released yesterday showed Lord Browne admitted he lied about how he met Jeff Chevalier, his lover from 2002 to 2006, as he sought an injunction against a British newspaper from printing his former lover's allegations of improper business conduct and details of their relationship.
The resignation will cost Lord Browne his agreed entitlement to a year's notice including a bonus of up to 1.3 times his annual salary, worth in total more than £3.5 million (€5.1 million). He also forgoes inclusion in the long-term performance share plan for 2007-09, which has a maximum potential value of up to £12 million.
Tony Hayward, his designated successor, takes over immediately.
A High Court judge criticised the former BP boss, saying he was not prepared to "make allowances for a white lie to the court . . . especially by a man who refers to the various honours he has received . . . when asking the court to prefer his account of what took place".
Lord Browne also helped his lover set up a mobile phone ringtones business, which had one BP executive as a director and another employee as company secretary, the judge said. Lord Browne accepts that his personal assistant gave secretarial assistance; Mr Chevalier said the help went further.
Mr Chevalier also alleged that Lord Browne dodged VAT by paying cash for renovating a flat in Venice, a claim strongly denied by Lord Browne.
BP insiders yesterday revealed that Peter Sutherland, BP's chairman, has for several years sought to limit any damage Lord Browne's personal life could inflict on the company's reputation, creating one of the most tense and personal battles between a chairman and his chief executive that British business has recently witnessed.
Last year Mr Sutherland refused to let Lord Browne extend his tenure past 2008 and later brought forward the chief executive's retirement date to the end of this July. Those close to Lord Browne said it was news of Mr Chevalier's decision to sell his story to the Mail on Sundaythat made the BP's boss finally decide to accelerate his departure.
Lord Browne yesterday acknowledged the relationship with Mr Chevalier but denied the allegations, saying: "In my 41 years with BP I have kept my private life separate from my business life. I have always regarded my sexuality as a personal matter, to be kept private. It is a matter of deep disappointment a newspaper group has now decided allegations about my personal life should be made public."
After crisis talks at BP headquarters yesterday, Mr Sutherland said the board deeply regretted Lord Browne's decision to resign, saying: "For a chief executive who has made such an enormous contribution to this great company, it is a tragedy that he should be compelled by his sense of honour to resign in these painful circumstances."
In applying for the injunction,Lord Browne had lied about the circumstances under which he had met Mr Chevalier, saying it had been "by chance, while exercising in Battersea Park", Mr Justice Eady said.
Although he retracted that claim two weeks later, after evidence from Mr Chevalier, the judge said he was "not prepared to make allowances for a 'white lie' told in circumstances such as these". The judgment said that Lord Browne provided Mr Chevalier with clothes, food, travel and accommodation, and paid him "substantial amounts".
- (Financial Times service)
