THE problem with the Smurfit Group is that it looks like a family business a large family business no doubt, valued at £2 billion, but with too many people called Smurfit running it. At the head there is Michael Senior (60), who is chairs. man and chief executive.
That is bad news for a start. The fund managers who really own the Smurfit Group don't like public companies where the chairman and chief executive are one and the same. They prefer a chairman who is independent of the management. Michael denies he is under pressure to split the roles.
Then there is Dermot Smurfit (52) who is joint deputy chairman. The other joint deputy chairman is guess who? Alan Smurfit (54). These are Michael's brothers.
Another board director is Michael's son, Tony (33). The president and chief executive of Smurfit's American subsidiaries is another son, Michael Junior.
The chairman and chief executive of Smurfit Ireland is not called Smurfit. He is Paddy Wright, who once memorably told The Sunday Press that he would walk "bollock naked down O'Connell Street" if Michael Smurfit ordered him to. No lack of loyalty there.
It wasn't so bad when Howard Kilroy (61) was an executive. Kilroy could be relied on to rein in the wilder impulses of Michael Smurfit but the market now sees no restraining hand on the dominant family. It's not as if the family is a dominant shareholder Michael owns just five per cent of the shares, worth £10 million. For a man who once said "equity is blood" Michael is no Dracula.
What the fund managers don't understand is Michael's obsession with the family name. The company was founded in 1934 by Jefferson Smurfit Senior. The sons worshipped the father, none more so than Michael. It has been Michael above all who has turned a small box maker in Walkinstown into the world's largest paper based packaging company.
His lifestyle is Hello!-ish. For tax reasons, he resides in Monaco where he is honorary Irish consul. His near neighbour in the luxury Le Rocamar apartments is Tony Ryan, honorary consul for Mexico in Ireland. Smurfit has an apartment in Beverly Hills and another in Trump Tower in Manhattan
A British business magazine was taken on a tour of Fournoughts, the £4 million stud farm in Kildare which is in the name of young Tony Smurfit. It reported that "though not large there is a whiff of Dallas or Dynasty about the house's interior, with its staircase sweeping around the circular hall, copious silver and carpets on which it seems a sacrilege to walk.
"In the drawing room horse racing cups and trophies jostle with family portraits on the mantelpiece. Coffee table magazines on art and poetry nestle among out of date annual reports. Art adorns the walls, including some of Smurfit's 30 paintings by Jack B. Yeats..."
A guest recounts an episode during a dinner given at Fournoughts for Casiraghi, the husband of Princess Caroline of Monaco, who was later to die in a motor boat accident. "The conversation turned to the Irish influences on Bordeaux, especially Chateau Lynch Bages. I have some of that, said Michael and went out to his cellar. When he came back, Casiraghi was saying casually that he had bought half the entire vintage of one Lynch Bages year. Michael seemed to go into a decline for the rest of the evening. He could not bear the idea of someone having something he had less of."
He is intensely competitive, even in small things. When he was named chairman of Telecom Eireann, Feargal Quinn was at the same time named chairman of And Post. He asked how much Quinn was getting and was told £5,000 a year. Michael held out for £7,000.
He has bid aggressively to build up his collection of Jack B Yeats. Last year Tinker's Encampment The Blood of Abel was auctioned to him for $883,123. He has been lucky in that Irish painters generally have gained international recognition and the best of them command prices unheard of when Smurfit first began collecting.
Other investments have been less fortunate. In fact, Michael Smurfit does little right when he moves away from paper and boxes. The K Club was an expensive venture, with a golf course which did not drain properly. The big golf tournaments staged there appear to require Smurfit sponsorship.
Smurfit's investment in the UK leisure group Brent Walker was an expensive disaster.
His excursions into publishing have a mixed history. The international business magazine Vision was a financial disaster. Smurfit "bought 60 per cent of Business & Finance from the liquidator of the Creation Group. He was immediately locked into a legal tussle with the minority shareholder, who insisted on having editorial control. Smurfit finally sold this share holding last summer.
His interest in horse racing was passed to him by his son, Tony. His greatest achievement was to win the Melbourne Cup in 1993 with the 14-1 outsider Vintage Crop, trained by his friend Dermot Weld.
Though he enjoys racing, he is not very clubbable. Unlike Tony O'Reilly, he has little sense of humour and it is unthinkable that Michael Smurfit would ever attempt to mimic anybody. There is a story that he once twisted his ankle while playing tennis with Howard Kilroy at Fitzwilliam. Kilroy drove him to Vincent's Hospital to have the ankle examined. A young girl on the admission desk asked his name and said "What are your entitlements?" He whispered to Kilroy "What does she mean?" Kilroy replied "Tell her you're in the VHI the top plan." "No," said the girl, "I need to know your entitlements. I'm sorry, I don't know what you mean," said Smurfit. "Do you make £9,000?" the girl asked. "Not every day," replied Smurfit.
The only trouble with that story, said a Smurfit executive, is that it requires you to believe that Michael has a sense of humour.
Michael has four children (two sons, two daughters) by his firsts wife, Norma, and two (both sons) by his second, Birgitta. He told Reuters news agency in January that he has no successor in mind for when he retires and that his sons already involved in the business have no guarantee of filling his shoes when he goes. "My sons are not enfranchised nor will they be disenfranchised. The two boys, who are in the business are more aware than anybody just how good they have to be to make it. They don't have to be good, they have to be exceptionally good as there will always be the query did they make it because of their father?
His inclination to talk of the Smurfit Group as a family business will my sons be good enough to inherit my mantle? still frightens investors. The share price will stay in the doldrums so along as Michael thinks he is running a dynasty rather than a public company where over 90 per cent of the shares are owned by people not called Smurfit.