The auction house sold 107 lots for more than pounds 1m during the full year compared with 83 lots in 1993-94

The auction house sold 107 lots for more than pounds 1m during the full year, compared with 83 lots in 1993-94. The world's most expensive work of art sold at auction, excluding paintings, Leonardo da Vinci's Codex Hammer, which went for pounds 19.24m to Bill Gates of Microsoft, helped Christie's lift worldwide auction turnover for the August 1994-July 1995 season to pounds 885m. It is understood that the City watchdog made a waiver of the rule that forces bids for different classes of share capital to reflect any recent price differential in the market conditional on a board recommendation.. Gestetner capital shares rose 1p to 95p on yesterday's news, with the ordinary putting on 6p to 88p.The differential offers had been a bone of contention between the two sides, but pressure to reach an agreed deal appears to have been increased by a Takeover Panel ruling. The new terms raise the originally indicated offer for the former by 2p to 92p and for the latter by 10p to 89p.

The opportune timing of the move by Ricoh, which has three non-executive directors on the board, has created some bitterness at Gestetner.It is thought that management felt it could handle the negotiations with the banks, although there would have been some cost in terms of having to pay a fatter interest margin.A key factor in winning the board recommendation was the decision by Ricoh to narrow the gap between the offers for the ordinary capital shares and the ordinary shares, which have recently traded at a discount. Gestetner revealed that it is in discussions with its lenders, believed to be around a dozen mainly European banks, after the Canadian problems threatened to breach banking covenants by the end of the year. Independent board members, led by chairman David Thompson, who have been negotiating with Ricoh since it announced its intention to make a bid earlier this month, said they believed the offer did not reflect fully Gestetner's recovery potential and growth prospects. But they added that they believed that the company's financial position "could restrict its opportunity to develop the business as an independent entity in the short term."Gearing is not thought to have risen substantially above the year-end level of 60 per cent, but interest and leasing charge covenants have been threatened by a C$30m drop in income in Canada. But it also became clear that Gestetner's financial position is in much worse condition than it appeared after the group warned in May that problems with a Canadian subsidiary would lead to pounds 14m losses and a pounds 15m restructuring charge.

Ricoh already owns 28.8 per cent of its target and Inchcape, the international trading group, has pledged its 15.1 per cent to the bid. Ricoh, the Japanese business machines giant, yesterday looked set to seal victory in its bid for Gestetner, the ailing British photocopier group, after upping its original indicative terms by pounds 15m to pounds 179m and winning a board recommendation. Existing schemes have been given back their CGT allowance.But the schemes have not achieved their objective of encouraging managers to be long-term shareholders, because most sold on exercise. All that guff about aligning employee interests with shareholders was hot air. It became just another dodge.It is good for employees to own shares in their companies. The best way to encourage this is to give them shares, which is what happens with Inland Revenue profit-sharing schemes. Next best is saving for options, the basis of the save as you earn scheme.

Both these could be improved and extended.But such tax breaks are only justified when they have clear objectives and mechanisms that ensure they are achieved, which was not the case with executive share options.. It may not yet have dawned on Gordon Brown, the shadow Chancellor, but abolition will not kill executive options, just the Inland Revenue-approved version.The real mistake of the dawn raid on options was, of course, the retrospection, which caught a lot of the lesser paid who had joined schemes expecting a tax allowance, and who then found it whisked away. It seemed a sensible idea at the time to give a strong push to share ownership.But with the top rates of capital gains and income tax long since aligned at 40 per cent, the scheme has become irrelevant to top earners, for whom the pounds 6,000 CGT allowance is a flea bite. Significantly, tax advisers for some time have been telling clients to go straight for an unapproved option plan liable to income tax. But this one must be nipped in the bud, or it will mushroom like the tax relief on profit-related pay, which costs the Exchequer 10 times as much as executive options. Taxpayers should not be giving open-ended subsidies to employee costs.When executive share options were introduced in 1984, the top marginal tax rate was 60 per cent and income tax 40 per cent. A recent survey found one in seven public companies extended share options to non-management staff.

Those misnamed tax breaks for bosses, in fact available to all employees, have outlived their usefulness. Archie Norman of Asda is outraged because he uses options as an integral part of employee remuneration Ignore him. Your basic judgement that the Inland Revenue should drop the executive share option scheme is right. Well done, Kenneth Clarke, for doing the right thing for the wrong reasons and rather late. The 10 days it took for your partial U-turn on share options was a lot slower than your record - the reversal of theRevenue's meddling with mortgage insurance taxation in the spring But better late than never. What's more, Alan Greenspan's term as chairman is due to end in March. Bets on interest-rate policy are off if President Clinton decides to replace him..