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Last Updated: Thursday, 4 October 2007, 23:21 GMT 00:21 UK
The fall of BP's Sun King
By Pierre Peron
BBC Money Programme

Lord Browne, leaving BP's headquarter after his resignation
Lord Browne's resignation triggered a media frenzy

Wednesday, 2 May 2007, was a bad day for Lord Browne of Madingley.

The day before he had resigned as chief executive of of UK oil giant BP, and both the broadsheets and tabloids had his picture on their front pages.

As one of the UK's most highly-regarded corporate leaders, Lord Browne's contacts book listed the great and the good of Britain and he enjoyed close ties with the Labour government.

No-one, however, could save him from the scandal that marked his downfall.

No choice

Lord Browne's crucial mistake was that he lied to a High Court judge in his attempt to block a kiss and tell story by his former lover, Jeff Chevalier.

Lord Browne claimed he had met Chevalier while jogging. In fact he found Chevalier on the male escort agency website suitedandbooted.com.

This may have been a white lie caused by embarrassment, but as Peter Wright, editor of the Mail on Sunday argued: "you shouldn't lie to a court and if you do there will be consequences." Once the judge lifted the injunction on the story, Lord Browne had no choice but to resign.

Lord Browne never fitted the mould of a typical oil baron: he is an opera loving bachelor who used to take his mother with him to official functions.

He lived and breathed BP, moving up through the ranks from a 21-year-old graduate trainee to become chief executive in 1995.

He had a talent for grasping detail, a knack for negotiating successful mergers and introducing stringent budget cuts. He oversaw the mega-merger with Amoco in 1999, as well as the "Beyond Petroleum" re-branding designed to emphasise the firm's green credentials.

Two terrible years

However, the scandal was in fact the last straw, capping two terrible years for Lord Browne and BP.

It all started with an explosion at BP's Texas City refinery in March 2005. Fifteen people died and scores were injured.

A US government investigation blamed the cost-cutting that made Lord Browne's reputation; the independent Baker Report criticised his leadership.

A year later, disaster struck again, this time in the form of an oil spill at a pipeline in Prudhoe Bay, Alaska. BP's safety culture was put under scrutiny once again and blame directed towards management decisions resulting from Lord Browne's cost-cutting directives.

Angry shareholders

Lord Browne getting into a car
But would Lord Browne suffered a similar humiliation had he not been gay?

This all concerns many of us directly: if you have a private pension, it is more than likely that your pension company is a BP shareholder.

Few complained while BP paid out 50bn in dividends to shareholders during Lord Browne's 10 years at the top.

Now that it looks like this phenomenal success was in part based on what some see as cutting corners in safety, Lord Browne is facing lawsuits by shareholders who are trying to stop BP pay-outs to him, and demands for him to testify in court in Texas.

So far he has resisted calls to return to Texas.

What if...?

Undoubtedly Lord Browne has suffered one of the worst falls from grace of any business leader. But would this story have had a different ending if he hadn't been gay?

Matthew Gwyther, editor of Management Today thinks so: "If he had been heterosexual then he would have been allowed to go in a more dignified way."

In the past month Lord Browne has been making his business comeback, with an appointment in the private equity company Riverstone, as well as positions at the Tate gallery and in Lord Foster's architectural group.

He is also continuing his personal campaign to address climate change in business.

But there is no doubt his reputation has been damaged. It remains to be seen how he will he be remembered - as an influential leader, as a deeply flawed businessman, or as the casualty of a kiss and tell tabloid story.

The Money Programme:The Fall of BP's Sun King, Friday, 5 October at 1900 on BBC 2

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