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Buffett Believes Reputation After Sokol Still Intact

02.05.2011 -

Warren Buffett still believes his reputation is intact after his former top lieutenant David Sokol pitched for a takeover of Lubrizol Corp after Sokol had purchased shares in the chemicals company.

"Everything I do is out there for the people to judge," Buffett said during his company's annual shareholder meeting on Sunday.

"I don't hold myself to a standard of perfection or I'd have committed suicide a long time ago."

He said that with 260,000 people working for his company, Berkshire Hathaway, something is going to go wrong. Buffett, who is called the "Oracle of Omaha" and one of the world's richest men, attracts about 40,000 people a year to the city for the annual meeting of his ice-cream-to-insurance conglomerate Berkshire Hathaway.

This weekend he was under the microscope, facing global media as well as shareholders, regarding the Sokol incident. And yet, Buffett's feelings toward Sokol are neither protective, nor violent.

"I know what's happened and perhaps investigative authorities will develop it more fully over time," he said.

Berkshire Hathaway is not looking into any other trades by Sokol aside from Lubrizol, Buffett said.

"I know nothing in terms of his trading activities or anything of the sort," Buffett said.

Buffett also addressed the possibility of his successor and said "it would be almost impossible" to consider a CEO from outside Berkshire.

The next chief executive does not need to be a showman or attract large crowds to an annual meeting, Buffett said.

In more than five hours of questioning from shareholders on Saturday, Buffett gave his most public comments yet on the resignation of Sokol, his one-time presumed successor who resigned in March amid a growing scandal over stock trading. Buffett called Sokol's behavior - allegedly misleading Berkshire about the nature of a $10 million investment in Lubrizol Corp before suggesting Buffett buy the company - "inexplicable and inexcusable."

Sokol's lawyer slammed Buffett in a statement for making his client a scapegoat.

Buffett also addressed a share buyback program and said it would be self-defeating to buy back shares. He said he would buy back stock if Berkshire were well below the bottom range of intrinsic value.

 

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