Business Abroad: The Belgian Queen

The men who run Belgium's biggest business assembled last week to pick a new chief for what they call "The Mother Company" and what their many critics call "The State within a State." In making their choice, the directors of the Société Générate de Belgique bowed to the gusts of change that are sweeping the company, from Brussels to its vast holdings in the Congo. Seeking a successor to close-mouthed Governor (i.e., chairman) Paul Gillet, who is retiring at 70, they skipped over the vice governors and plucked out Director Max Nokin, who, by the high-buttoned standards of La Générale, is both young (53) and gregarious.

Nokin is a trained accountant, engineer and economist who combines openminded vigor with abiding respect for the conventions that have made La Générale one of the world's most powerful corporations. "Our tradition is to invest in new things that are sure," says Max Nokin. "Our tradition prevents us from being rash."

Cooperation. With this credo, La Générale has built up a 15-ft. by 45-ft. library of stock certificates, which represent effective control of corporations worth $1 billion to $2 billion. Through a pattern of interlocking directorates as intricate as a piece of Brussels lace, La Générale controls 10% of Belgium's economic life—including one-third of its steel and coal production, three-quarters of its nonferrous metals output, and chunks of its banking, electricity, transport and armaments. With a bare 17% of its investments. La Générale also controls at least half the economy of the Congo and, by cooperating with all of that nation's disputing factions, still manages to prosper.

No one outside a tiny inner circle knows who are the dominant stockholders in La Générale, but the persistent rumor that the Belgian Royal Family owns a major interest is reinforced by the traditional presence of the royal court's Grand Marshal on the board of auditors. The royal tie dates back to 1822, when King William I of The Netherlands founded the company to finance development projects in his scraggly Belgian province. When Belgium won independence in 1839, La Générale got the country going with loans, and half a century later King Leopold II repaid the favor by picking La Générale to unlock the wealth of his Congo fief.

Criticism. In the Congo. La Générale laid railroads, carved out mines, raised skyscrapers, put up company towns, paternalistically taught its workers to eat off plates and even sent some through high school (but no farther). When freedom—and chaos—came, La Génerale labored to do business as usual. Among other things, this meant paying millions of dollars in royalties and taxes to Katanga Separatist Moise Tshombe, enabling him to buy arms and defy the United Nations.