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Seducing Mundy Ellis, Branson’s girlfriend, had been an enjoyable challenge for Tom Newman, but stealing away Kristen Tomassi, Branson’s bride-to-be, on the eve of their wedding was ecstasy. In the three weeks before the wedding, while working with Newman in the manor, Kristen, a sexually adventurous girl, had focused on the rough diamond.

Artistic, purposeful and coolly sophisticated in a manner still unknown among British girls, the American blonde represented a trophy for Branson. Chasing women was for Branson similar to chasing business, part of the great game in his consuming competitiveness. After bumping into Kristen in a bedroom at his Oxfordshire mansion, Branson decided to pounce immediately. Nothing, he had absorbed from his mother, was unobtainable. Racing in his own car after the woman as she and her boyfriend drove back to London, Branson had lured her to a meeting and soon after moved her on to his houseboat.

Newman judged that Kristen, the daughter of an American business executive, had fallen for Branson’s status and wealth rather than eternal love. Branson, Newman believed, was similarly deluded. On the night before the stylish wedding at the manor, Newman and Kristen had a raucous sexual fling. Suitably, one session was across the bonnet of Newman’s green Bentley, bought by Branson for £1,000 and parked by The Ship public house. The following morning, 22 July 1972, Kristen smiled serenely to about three hundred guests dressed in hired, ill-fitting morning suits, top hats and flowing dresses. Most had barely recovered from a riotous dinner in a local hotel the previous evening and wilfully indulged at the reception in the frenetic fun of bun fights and pranks.

After the honeymoon in Mexico, Branson moved from the houseboat to a three-storey Victorian house in Denbigh Terrace, Notting Hill, bought from Peter Cook with the help of an £80,000 mortgage provided by Coutts bank. Branson’s ability to meet the mortgage payments bewildered his employees whose salaries in South Wharf Road, after an unpleasant row, had just been increased from £12 to £15 a week. Branson constantly described his salary as ‘modest’, and Virgin’s first registered accounts disclosed Branson’s annual income as £1,820. His employees assumed that he benefited from a secret source of money.

Kristen Tomassi’s passion for Newman had developed while he mixed and remixed the tracks of over twenty different instruments of an unusual forty minutes of music composed by Mike Oldfield, a diffident guitarist whose handsome looks belied a troubled personality. Newman and Simon Draper’s excitement about Oldfield’s extraordinary composition washed over Branson. To an unmusical businessman, Oldfield’s forty-minute track without a song was difficult to appreciate. Branson’s indifference was shared by every established record producer. All of them had rejected Oldfield. ‘Why don’t we produce Oldfield?’ asked Simon Draper. ‘We have nothing to lose.’ Draper’s suggestion that Virgin produce the manor’s first record, Branson appreciated, was risk free. Failure would cost nothing. Branson’s virtue was his willingness to gamble if the financial risk was minimal.

Taking a standard record company contract, Branson added a refinement. Oldfield was contracted for a decade’s work at the low 5 per cent royalty fee and, acting simultaneously as Oldfield’s agent and manager, Branson tilted the contract further in his own favour by paying Virgin an additional 20 per cent of Oldfield’s income for ten albums. ‘We’ll put Oldfield on £20 a week,’ Branson told a friend, ‘like me and all the other Virgin employees.’ No one challenged Branson’s pretension to earn just £20 per week.

‘It’s got to have words,’ Branson urged Draper and Newman. ‘Everyone says that records without a song don’t sell.’

‘No way,’ replied the two men who by spring 1973 had developed what they had named Tubular Bells into a polished composition. Branson relented. From his new offices in Vernon Yard, Notting Hill, he was hectically marketing Virgin’s first record. To increase his profits, he had retained all the rights. Tubular Bells had developed into his personal challenge to the established record corporations. Brashly, he invited the DJs and critics to dinner on his houseboat to preview the new record. The unusual venue gave his sales performance unique style. Among those persuaded was John Peel, who a few days later devoted his entire programme on Radio One to the record. His audience was ecstatic. Overnight, thanks to Peel and others, Branson owned Britain’s best-selling album of 1973. The success was spectacular. Daily, tens of thousands of pounds poured into Virgin’s account. Atlantic Records, after buying the American rights for $750,000, sold the music to Hollywood as the soundtrack of the film The Exorcist. Branson’s personal wealth was assured. Some would subsequently carp that Tubular Bells effortlessly fell into Branson’s lap, but that reflected their naivety. Flair and energy had created the circumstances.

At twenty-three, Branson was a millionaire. Wealth tortured many in that socialist era but Branson’s conscience was untroubled. He seized the moment to develop a formula for survival and success. Previously, the mystery about Branson’s finances was his fearless accumulation of debt. The new mystery was the cloak of secrecy he cast over his business and personal wealth. To disguise his ambitions from his low-paid employees he plotted a strategy to protect his new fortune from taxation and future creditors. Although he would boast, ‘we still paid ourselves tiny wages’, the whole picture was different.

On the advice of his father, and against the background of family trusts, he sought the help of Robert Maas of Harbottle and Lewis, his solicitors, to establish his first offshore trust in the Channel Islands. Hundreds of thousands of pounds of royalties received for both Tubular Bells and the use of the Virgin logo, a newly registered trademark, were being deposited in the offshore trust. Ray Kite, the logo’s designer commissioned by Simon Draper, was paid £250 out of Virgin’s fee of £2,000 and received no further royalty. (Branson’s subsequent account about casually seeing a sketch of the logo drawn on the back of a serviette while passing through a dining room seems to be mistaken.) Beyond the view of the Inland Revenue and his growing Virgin family, Branson, Draper and Powell, the elite, could discreetly accumulate and manage their millions. Yet despite their legality, Branson’s trusts did arouse suspicions.

Taxes could only be avoided under British law if Branson, as a British resident, did not influence the management of the trusts. Yet Branson would speak of his ‘family trusts’ and enigmatically assure banks and business partners that the trustees would financially support his business ventures, appearing to call into question the trustees’ independence.

After taking advice as to how he could conceal his fortune from the Inland Revenue, Branson’s next step was to reinforce his camouflage from his employees. Austerity was introduced to suggest poverty and to protect his wealth. He expressed a new dislike of expensive cars and clothes. The second-hand Bentleys bought by Virgin for Tom Newman and others were sold. The patriarch, however, discovered that some Virgin employees were becoming jaundiced by the fraying façade of the family’s equality.

To capitalise on his success, Branson had become immersed in the millionaire’s schedule of international travel and power lunches to negotiate mega-deals with major record companies. He was unaware of his staff’s complaints about low wages. ‘They want to join a trade union, Richard,’ revealed a secretary after a return to London. Horrified by visions of the constant trade union strife ravaging Britain, Branson rushed to his employees’ meeting and burst into tears. ‘Why are you so interested in money?’ he asked, presenting himself as a victim of their demands. The millionaire’s question only temporarily silenced his confused audience.

‘Do you know how much a pint of milk costs, Richard?’ asked Sian Davis, the director of Virgin Records publicity department.

‘No,’ he replied sheepishly.

‘You live on another planet. We need money to live.’

‘We’ve got no money,’ pleaded Branson, tears running down his cheeks. His manner reinforced the impression of equality and poverty. Richard, the capo of his family, was giving everyone a chance of their lifetime, so long as they obeyed his rules. The threat dissolved. No one was inclined to contradict the source of so much fun and few appreciated the sharp variation in incomes between the ordinary employees and the inner circle.

Entry into the cabal was biased in favour of former public schoolboys. By accident rather than intention, that selection automatically excluded the racial minorities. Branson’s social background and life had not included Jews, blacks or Arabs as intimates. Rather the capo was attracted to like-minded people from a similar mould. The result was reflected in the employees’ contractual relationships with Virgin.

For Steve Lewis, a state-educated Jew negotiating publishing rights for music which became the seedcorn of Branson’s future fortune, entry to the cabal was barred. Lewis was welcome to dedicate his life to enhance Virgin’s fortune by accumulating the ownership of publishing rights in popular music and managing the record company, but he could expect nothing more than appreciation and his salary. Branson appeared to be unaware of the insensitivity of jotting on his notepad under the name Arthur Indursky, a famous New York lawyer, the word ‘Jewish’. Branson, Lewis accepted, was not anti-Semitic but merely ignorant of those who lived their lives outside the realm of the Jags and judges inhabiting Surrey and Stowe.

Branson’s appreciation of Tom Newman and Simon Draper was expressed by giving each stakes in different Virgin companies. Newman’s stake was in the studio at the manor; Draper’s in Virgin Records. Both shareholdings were potentially worthless since their value was determined by Virgin’s holding company which Branson and Nik Powell controlled. Nothing was needlessly given away. Branson’s loyalty was restricted to those aware of his financial secrets, especially to Ken Berry, a skilled accounts clerk promoted to Branson’s personal assistant. For the rest, Branson evinced no sense of obligation. In the process of rapid self-education, his canon tolerated nothing else.

Unlike Chris Blackwell, a rival independent who owned Island Records, Branson spent limited time in the studios with artists and appeared less concerned than Blackwell about his artists’ lives. His pleasure was the deal: signing artists as fast as possible, even if they were contracted to his competitors. Island Records was a first target. Having pondered whether Bob Marley could be lured, he settled on Peter Tosh. After that deal, Alison Short, his secretary, would say someone punched Branson on the nose in fury, and he faced threats on his houseboat from G. T. Rollins, a musician, over a payment of £2,000. ‘You shouldn’t go taking other people’s acts,’ advised Tom Newman. Branson laughed. Poaching was, he replied, acceptable. In the tough rock world, whatever the rights and wrongs, he would fight with the best. Breaking into the big league required risks and he was happy to gamble over his limits, offering huge sums of money which he did not possess. Famous groups – 10cc, The Who, Pink Floyd, the Boomtown Rats and finally the Rolling Stones – were offered fortunes to switch to Virgin but every agent rejected Branson’s money. Even his £3.5 million bid for the Stones was spurned. Virgin was too small and failed to inspire confidence. Rejection, however, never embarrassed Branson; it was his incentive to try harder. Outdoing others was the criterion for his life as Jacques Kerner, his French distributor, discovered.

Branson flew to Paris for dinner with Kerner. The impatient tycoon wanted to expand Virgin’s distribution in France. At the dinner, Kerner introduced Branson to Patrick Zelnick, his employee with responsibility for Virgin’s sales. ‘He’s just what I need,’ thought Branson about Kerner’s salesman. One month later, Branson hired Zelnick. ‘When you’re invited for dinner,’ complained his outraged French host, ‘you’re not meant to walk away with the cutlery.’ Branson was chuffed. When people screamed ‘foul’ he felt pleasure.

By 1976, Branson’s hyperactive deal-making, exclusively financed by Tubular Bells, had expanded the Virgin empire into more record shops, the creation of Virgin Rags, a putative national clothes chain, Duveens, a restaurant in Notting Hill Gate, a sandwich delivery service, a health-food megastore, Virgin pubs and the sale of hi-fi systems. Juggling many balls, Branson hoped, would produce a major success. His business philosophy was crystallising. ‘With many companies we start,’ he later explained, ‘we don’t even do the figures in advance. We just feel that there’s room in the market or a need for something and we’ll get it going. We try to make the figures work out after the event.’ The flaw was his accelerating debt. He had proven dynamism but not business acumen. His shotgun approach exposed an inability to focus on the detailed management of businesses he did not understand and his lack of strategy was perilous.

Virgin’s costs were growing and in the developing recession of the mid 1970s its income was dwindling. Branson faced a cash and a commercial crisis. His gambling instinct was to double and redouble his stake to escape from trouble but the trading conditions were dire. Under the Labour government, the British economy was suffering record inflation and high unemployment. To survive, Branson needed to close down the loss-making businesses and dismiss unprofitable artists.

Sitting alternately with Draper, Varnom and others in the cramped offices in Vernon Yard and on the houseboat, he repeatedly groaned as he had eight years earlier, ‘What can we do?’ Pop and rock music had fallen into the doldrums. Virgin offered nothing to the new teenagers whose latest passion was Punk. His unsuccessful expansive frenzy revealed the unpalatable truth that Virgin was a one-act show relying on the Big One – Tubular Bells – and that Branson did not possess a profitable spread of original music.

The distinction between the star players in business and the alsorans is their ability to overcome the challenges of adversity to avoid sinking into oblivion. Branson’s gift was to shrug off despair and find an epiphany. While his cabal and employees winced in trepidation, he pondered the outrageous to survive. ‘We need the Pistols,’ he eventually declared.

In summer 1976, Simon Draper had condemned the Sex Pistols, four violent and drug-addicted hooligans with spiked, dyed hair, dressed in ripped leather, as musically bankrupt. Branson had followed his cousin’s advice and walked away from signing an agreement with Malcolm McLaren, the Pistols’ thirty-two-year-old manager. McLaren was not disappointed. Renowned for his anarchic artistry and outlandish mastery of pop culture which had created the Pistols’ grotesque appearance, he branded Branson a philistine. His suspicions had been fuelled by the story of a meeting on Branson’s houseboat with Jake Rivera, an agent representing Elvis Costello and the Attractions. To successfully contract the group, Branson turned on his customary charm: ‘I loved your last album.’

‘What was your favourite track?’ asked Rivera mischievously.

Branson was dumbstruck. His ignorance was exposed. The story of his humiliation raced around London. McLaren’s opinion of Branson was so low that he suspected Branson might even consider selling bootleg records of Virgin’s own artists.

For their first record, ‘Anarchy in the UK’, the Pistols contracted instead with EMI. In December 1976, Branson watched television bewitched by the stream of drunken expletives used by the Pistols to prove their notoriety and promote their record. Their violence was headline news. It was just what Branson required. But a hurried agreement the following morning by Leslie Hill, EMI’s embarrassed managing director, to transfer the group to Virgin ended abruptly. McLaren had agreed with Branson to ‘be in your office this afternoon’ to discuss the transfer but he never arrived. However, five months later, in May 1977, McLaren finally arrived in Denbigh Terrace with Steven Fisher, his lawyer.

The Sex Pistols needed a record company and Virgin needed a sensation. McLaren was not surprised by the absence of any records in Branson’s house except for one Reader’s Digest collection of Mozart, a present from Ted. ‘We want someone who’s going to run with us,’ said McLaren. ‘It’ll be hair-raising, but it’ll be fun.’ Branson smiled. ‘Sex’ in all its guises was richly exploitable. He traded on other people’s ideas. ‘I’m just piggy-backing,’ he would later admit. McLaren’s creation offered a chance of financial salvation.

‘Those two are loathsome,’ Branson told John Varnom after McLaren and Fisher departed. ‘They’re loathsome,’ he repeated with vehemence. ‘Loathsome!’

‘Richard’s utterly over the top,’ thought Varnom, who normally shared Branson’s prejudices. Branson’s loyal acolyte concluded that he had witnessed the clash of two mutually intolerant spin-masters. However loathsome, Virgin and the Pistols were yoked together to ridicule the monarchy.

‘We need something,’ mumbled Branson. Varnom’s sophisticated sense of mischief, he hoped, would contrive an outrageous prank to promote the Pistols new record, ‘God Save the Queen’. The record was a vicious curse at the monarch designed to coincide with the nation’s extensive Silver Jubilee celebrations. Creating chaos for publicity was commercially vital.

At 4 p.m. on 7 June 1977 Varnom arrived at Westminster pier to hire The Elizabethan, a Thames cruiser.

‘It’s not for those Punks?’ asked the boatman.

‘No,’ replied Varnom, ‘it’s for a boring German synthesiser band.’

Thirty minutes later, the taxis arrived with the Pistols, their managers and Branson. ‘Just sail past the Houses of Parliament,’ ordered Branson.

‘It’s going to be sensational,’ laughed Varnom.

‘Great,’ bubbled Branson. His imagination raced. Pranks were always exciting but this was special. Earning money by insulting the Establishment and basking in celebrity was a blissful combination. As the cruiser neared the Palace of Westminster, the curses of the four drugged and drunken Pistols blared from loudspeakers across the river towards the Houses of Parliament. The result was better than Branson could have imagined. Police boarded the cruiser, ordered that it return to the pier and, amid screams and fights, arrested several people. Branson held back until the mêlée was over and then briefed the newspapers. Chortling at the anticipated publicity, Branson led the Virgin cabal to a Greek restaurant to celebrate. The evening ended with everyone smoking marijuana supplied by the restaurant. Irreverence was certain to restore Virgin’s fortunes.

‘Fantastic,’ screeched Branson reading the universal disgust expressed in the newspaper headlines the following morning. Publicity meant soaring sales and guaranteed profits. He was delighted to attract more headlines by attesting in court later that day to McLaren’s good character. Conflict and controversy, he knew, would be even more profitable if he positioned himself as the victim: the helpless innocent fighting for the common good. By stoking the Pistols’ notoriety, he would push their album Never Mind the Bollocks up the charts. ‘It was a political statement,’ he told the reporters outside the court. ‘Those arrested are all victims of the system.’

The only victim was Malcolm McLaren. The agent was the victim of Branson’s imposition of an unusually advantageous contract. McLaren had made a fatal error which many mixing with Branson over the years would commit. Coolly devoid of attachment to the music, Branson had viewed the Pistols’ contract as a vehicle to earn money. He had planned McLaren’s entry into his life, and his exit. In the eagerness to find a record label after EMI terminated the Pistols contract, McLaren had failed to carefully examine the details of the agreements which he had signed. As the Pistols disintegrated amid debauchery, disputes, murder and suicide, McLaren discovered that Branson, to secure his investment, had excluded him from the management of the surviving group. ‘He’s a dangerous man in court,’ was Steven Fisher’s brief assessment. Rushing to court in August 1978 to protect his property, McLaren found himself outclassed by his partner. His losses were Branson’s profits, financial and tactical. The victor understood the commercial advantage of using the courts. It was part of the formula for survival and success.

During that period, Branson was also ‘piggybacking’ on the vogue for reggae music and welcomed the chance to distribute Atra records, a black label owned by Brent Clarke, a Caribbean. Reggae records had become profitable in Nigeria and Branson was particularly interested in Keith Hudson, a singer contracted to Clarke. By 1976, Clarke suspected that Branson might try to lift Hudson and feared that Virgin’s accounts of Atra sales were inaccurate. A crude check of how many records Virgin had sold suggested discrepancies. ‘You owe us money,’ Brent Clarke told the Virgin accountants to no response. Branson preferred not to take Clarke’s telephone calls. Irritated, Brent and his brother Sebastian called at Branson’s home. The businessman was assaulted and fled.

Branson was terrified. In agitated tones, he confessed to Al Clark, his sophisticated publicist, ‘I escaped with my life.’ To his closest employees, Branson appeared to be shaken and deflated by the rancour. But Branson was not prepared to concede defeat.

After complaining to the police, Branson arranged to meet the brothers at the Back-a-Yard café on the Portobello Road. In what seemed to be a stilted conversation, the brothers explained their case unaware that Branson was carrying a tape recorder provided by the police officers. After thirty minutes, a group of policemen charged into the café and arrested the brothers. Both were accused of demanding money with menaces. ‘You’re only accepting his word,’ shouted Sebastian Clarke, ‘because he’s white and we’re black.’ Branson smiled but by the time he arrived at the Old Bailey to testify, he seemed uninterested in the case. His testimony was rejected by the jury and the Clarkes were acquitted. The brothers’ euphoria was tempered by their financial plight. By then, Clarke’s business was bankrupt.

The ringmaster did not fear any criticism from his cabal. Most were unaware of the entrapment and prosecution of the Clarkes. In the social and economic misery created by the Labour government, Virgin was a sanctuary where music and enjoyment were a lifestyle. Those gathered around Branson were innocent and even unconcerned about his lurches from persecutor to poacher to self-professed victim. Virgin’s employees were simply grateful to the catalyst for their licence to play. Branson himself was, it appeared, preoccupied with winning the battle for financial survival.

Emboldened by his restored finances, Branson was searching for new acquisitions. Established stars were offered huge amounts to switch allegiance. The Marchess group, negotiating with Dave Robinson of Stiff Records, were told by Branson, ‘I’ll pay you double whatever Robinson is offering.’ Melody Maker featured his announcement that Devo, an American new wave band contracted to Warner Brothers, had signed with Virgin. The announcement prompted Warner Brothers to issue a writ seeking to restrain Virgin from inducing a breach of contract and infringing Warner’s copyright. The articled clerk employed to deliver the writ found Branson in bed with two girls. Five weeks later, Warner Brothers was awarded an injunction. ‘I just want you to know,’ smiled Branson at the end of the trial, ‘that you’ve hung me on a precedent set by my grandfather.’ In 1938, Warner’s lawyers discovered, Judge Branson had found against Bette Davis, the actress, in similar circumstances. His calm acceptance of defeat was impressive. Similar to his fearless approach to money and debt, Branson’s undaunted use of the law ranked him as a potential big player.

‘Injunct them,’ he announced in a humourless voice back on the houseboat. Rough Trade, he discovered, a small distributor of records, was selling bootlegs of a Virgin recording. ‘I’m going to get them. Put out a press release and call Harbottle’s,’ he ordered his assistant. The organiser of the Sex Pistols antics had forgotten that Virgin Records owed its existence partly to selling bootlegs. ‘Rough Trade will be ruined,’ his adviser mentioned. Branson paused. He gazed at his two other shabbily furnished barges moored nearby, The Arthur for parties and another houseboat as a private bolt-hole. He enjoyed the barges’ discreet testaments to his wealth. ‘It’s hardly good publicity,’ continued his adviser, ‘when The Sunday Times is preparing its first profile of you.’ ‘Okay,’ agreed Branson reluctantly. The writ was not issued. His attention had switched to The Sunday Times’ interview. He would, he decided, meet the journalist in jeans and barefoot on the houseboat.

The backdrop of Little Venice for a hippie millionaire was brilliant theatre for impressionable journalists and he agreed to meet only the most susceptible. He encouraged profiles of himself as the genial, happy-go-lucky face of capitalism, a ‘man of the future’, disguising his workaholic craving for success with the informal backdrop of his humble home. His genius was to disarm any accusations of disingenuity. A handful of sceptics were silenced by his unaffected warmth and the hilarious anecdotes repeated among his loyal employees about Branson’s parties and pranks, and about the spectacular antics performed on the unsuspecting on April Fool’s Day. Virgin’s association with fun won Branson admirers but, like so many clowns performing in the public arena, there were signs of the conductor’s deep-rooted unease.

A recent Branson performance – sitting naked on the roof of the manor to attract the attention of a TV cameraman away from XTC playing below to one hundred employees and friends – had aroused embarrassment but he had been oblivious to his guests’ sentiment. Frequently, he thrust his nudity and sexuality into the public arena. All his staff, he was certain, were enthralled by his regular bulletins to anyone passing through the office about his painful circumcision conducted after a misdiagnosed illness; and he delighted in the playground humour of secretaries leaving pornography on his desk or flashing their naked breasts. Attracting attention had become a balm to fill the vacuum of a failing marriage evident by the relationships which both he and Kristen were enjoying with others.

The marriage reached its crisis on his houseboat at the end of a drunken meal cooked by Kristen. Their guests, Kevin Ayers, an older, sophisticated rock musician, and Cyrille, his wife, had met Branson at a party, ‘a rich middle-class affair with all the usual drink, drugs and rock and roll’, recalled Ayers. After the meal, Ayers offered the Bransons cocaine. Taking drugs was not unusual for Branson: he had used marijuana and LSD, and cocaine might have been a predictable progression, although twenty years later Branson would deny taking the drug. Soon after, Ayers disappeared with Kristen into the bedroom while Branson stayed with Cyrille. Each would claim that the other partners had sex together but deny the same about themselves. Cyrille, however, complained afterwards, ‘Branson was so cheap, the bastard wouldn’t even pay my taxi fare home’; while Kevin Ayers delighted in stealing Kristen to embark on a long relationship. ‘Branson exploded,’ chortled Ayers later. ‘It’s pathological because he can’t stand losing. For a year, [Branson] kept up a battery of letters, telephone calls and chases across Europe pleading, “How can you leave me?”’ Branson loathed rejection. His unrelenting pressure to encourage his wife’s sense of guilt reflected the pain of his humiliation. At a concert in Hyde Park where Ayers was playing, Branson confronted the musician aggressively. ‘How could you do this to a friend, stealing my wife?’ he exploded, castigating Ayers as an enemy. Branson had forgotten that originally he had lured Kristen from another man.

Branson was lonely. Unsatisfied in his own company, he often telephoned Simon Draper late at night to discuss business or arranged breakfast conferences in Draper’s home in Holland Park for ten people. At weekends, he would drive to Draper’s country home, knowing that his cousin had a dinner party to which he was not invited, and impose himself. To avoid a moment’s solitude, he invited his employees to his mother’s house in Majorca. Branson demanded full attention from the Virgin family. He received nothing less. Few rejected their employer’s summons.

Solace was found among his employees. One-night stands with secretaries were the topic of constant gossip in his office about the ‘passing flavour’. Pretty young women were the common currency in the music world and the young, unmarried millionaire who enjoyed partying was a magnet for those seeking fun. Most remained discreet about their relationships. Branson was kind and won the women’s respect. Despite the temptation of money, few were inclined to kiss-and-tell.

But there was talk about Branson’s strange sexual antics. Crossdressing appeared to be a passion, suggesting something unusually important about Branson’s single homosexual experience soon after his arrival at Stowe. In adulthood, he happily dropped his trousers at parties to reveal fishnet stockings and lacy suspenders; he dressed in women’s clothes and allowed himself to be photographed kissing a man; he performed solo drag acts on the dance floor; and he cavorted naked covered in cranberry sauce. ‘He had this thing at parties,’ recalled Carol Wilson, a senior executive in Virgin Music, ‘of exposing himself all over the place.’ Alison Short, an assistant, was puzzled why he dressed as a woman and was ‘always throwing water over my breasts and rubbing me down’. Regardless of whatever clothes he was wearing, he could rarely resist propositioning women, even those attached to other men. Like a caricature on a seaside postcard, he drooled over big breasted women and few were more amazed by his habit than Tom Newman, the rock guitarist, who stood at the bar of the Warwick Castle, a public house in Maida Vale, with Maggie Russell, his attractive friend, amused by Branson’s unsuccessful attempt to poach. But in 1978, after two years as a bachelor, his fortunes changed.

In starkly similar circumstances to his introduction to his first wife at the manor, he spotted Joan Templeman. The Roman Catholic daughter of a Glasgow carpenter, Templeman had been married for twelve years to Ronnie Leahy, a musician in Stone the Crows whom she had accompanied to a recording at the manor. Leahy would say that the marriage was solid and his wife displayed no hint of unhappiness. Yet Branson was smitten by the Notting Hill shop assistant. The opportunity so close to his home and office was too good to miss. Although upset by Tom Newman seducing his girlfriend, Mundy Ellis, and his wife, and distraught that Kevin Ayers had taken Kristen, he was prepared to entice Joan Templeman, a married woman, by siege.

In Branson’s mind, Joan Templeman, five years older than himself and whose two brothers were well known in local pubs, was ideal. Besides her good looks, she was socially and intellectually unthreatening, comfortably domestic and yet cool. Whenever Leahy was on tour, Branson sought invitations to dinner parties to meet his quarry. Eventually, his persistence was rewarded. Although in late 1977 Branson promised Leahy that he would leave Joan alone for three months to allow the couple to attempt reconciliation in New York, he reneged and flew over, untroubled by Leahy’s distress.

Manhattan was cold and to celebrate their decision to live together, the owner of Virgin headed for the sun in the Virgin Islands. In Branson’s version, he whisked his true love around the idyllic islands on a trip financed by an estate agent to discover his paradise called Necker, an isolated lump of barren rock lacking water, people and animals. Branson would tell friends that the estate agent’s price was £3 million but that he paid just £180,000 to Lord Cobham, the owner. The peer, however, would deny owning the island – Necker was owned by a trust – or demanding £3 million. Branson’s self-esteem was always bolstered by his stories of success. The purchase of Necker imposed a legal commitment to spend a large sum to build a house on the island and provide a water supply. His enthusiasm coincided with his staff, earning by then about £40 per week, voicing fears of unemployment because his company was once again on the verge of bankruptcy.

The following year, 1979, Branson knew that Virgin was ‘virtually bust’ yet, confident about his private finances in the Channel Islands trusts, he bought during the next two years the Roof Gardens in Kensington and Heaven, a popular gay nightclub under Charing Cross Station, using interest-free loans from brewers. ‘Those gays are so neat and tidy,’ he mimicked. Owning clubs excited Branson. He could be the host of a perpetual party, they were useful buttresses for the music business, and Virgin would have a permanent cash flow as a smokescreen against his return to debt. The reappearance of that albatross was the climax of a familiar pattern.

The windfall from the Pistols, the latest Big One, had financed expansion into films, video-editing suites, property, the Venue nightclub, Reggae singers in Jamaica and a music business in America. All of those ventures had turned Virgin’s pre-tax profits of £400,000 in 1977 and £500,000 in 1978 into a projected £1 million loss in 1980. Branson was under pressure from Coutts to repay his debts or declare bankruptcy. Nearly everything, he lamented to his staff, would be offered for sale. To keep up appearances, he sold Denbigh Terrace and moved back on to the Duende, his houseboat.

Gossip in the pop world about Virgin’s closures and staff dismissals was reported in the New Musical Express. Branson was horrified. The truth about Virgin’s financial plight, he feared, would deter Coutts from continuing their loans. His friendly and unruffled upper-class manner, he trusted, would disarm the suspicious. With equal effectiveness his approach charmed journalists, bankers and on occasion even the police. Twice he had been stopped for speeding along the M4 with John Varnom. On both occasions, to escape prosecution, Branson encouraged Varnom to persuade the police that he was seriously ill and allow the trusting officers to escort Branson’s Volvo to the nearest hospital. Varnom continued his performance until the police had disappeared. On another occasion, Branson produced a driving licence to the police belonging to someone else and successfully escaped conviction. Occasionally, he denied he was driving his white Mini, laughing ‘The police couldn’t have seen me because the car’s got blacked-out windows.’ His similarly fanciful tales to his bankers and staff about Virgin’s finances, relayed in his casual style, were protected by similar black-outs and compartmentalisation. Although he knew that Virgin had ‘no money’, he denied that the company was in financial difficulties. In adversity his resilience and methods were remarkable. New Musical Express was threatened with a writ if the magazine did not publish a correction, whatever truth there may have been in the original article.

Rebutting Branson’s denials had become complicated. Under the guise of encouraging individual entrepreneurship, Virgin’s different businesses had been spread in small offices around London, preventing his employees understanding his organisation and blurring his juggling of money between companies. In managing his finances, Branson relied partially upon Chris Craib, a Virgin accountant, to follow his directions on both the administration of his funds and the valuation of his assets to secure ever higher loans from the banks. ‘We’ve spent so much on these things,’ he lambasted the accountant, referring to all the new business he had accumulated by 1981. ‘Surely you can get higher valuations. They’re worth a lot more.’ ‘Nothing more we can do,’ replied Craib, unable to produce the values required to persuade the banks to provide extra loans. To escape that squeeze, Branson’s helpline was his fortune secretly accumulating since 1973 in offshore trusts. Although by law, tax-free trusts could not be used under Branson’s direction, he had little problem persuading the trustees to provide guarantees for a £1 million loan to Virgin from the Bank of Nova Scotia. Virgin was again saved but the lifeline fractured Virgin’s benevolent character. ‘The men in suits have arrived,’ Chris Stylianou muttered as staff and artists were dismissed, property was sold and costs were cut during that year.

Among the minor casualties was Nicholas James of Saccone and Speed, a wine supplier and friend from Stowe who could not recover thousands of pounds from Duveens, Branson’s failed restaurant. ‘I could always get through to Richard until I asked him for my money,’ James would complain. ‘Then he disappeared forever.’

Branson easily lost his sentiment for those no longer deemed valuable to his fortunes. Tom Newman, the whisky-loving recording manager, was deemed dispensable and his stormy departure, abandoning his share options in the manor, passed unmourned.

The major casualty in 1981 was Branson’s relationship with Nik Powell. Branson’s childhood friend urged prudence by terminating the contracts with Virgin’s ‘marginal’ groups, the Human League and Phil Collins. ‘Over my dead body,’ snapped Simon Draper.

‘You just spend all the money I save in the shops,’ countered Powell as the temperature rose. Powell was too cautious, Branson concluded. He had lost his way. The triangular relationship was irreparably fractured.

In Branson’s new world, accountability to anyone was an intolerable shackle. The ‘mumbling pullover’ as he had become known to Varnom, enjoyed working in a team only if he was captain. Since Powell, despite their friendship and partnership, refused to compliantly follow, he was unacceptable. The partnership, they agreed, should be dissolved. ‘He’s on his way,’ Branson told Draper, a phrase frequently used to describe excluded members of the family. ‘Nik had no particular skills to contribute to the company as it was at that stage,’ was Branson’s less than affectionate summary. But he was correct. His savvy outclassed his friend’s.

The unresolved issue was the value of Powell’s 40 per cent share of what Branson called a ‘busted company’. In the final act of severance, even with his oldest friend, Branson wanted to feel that he was the winner.

Under Branson’s and Powell’s direction to reduce taxes, the accountants had minimised Virgin’s profits and had accumulated huge losses which were, for outsiders, as unquantifiable as the group’s assets. Not included under the rules of accountancy was the value of Virgin’s music catalogue and the rights to the music and records owned by Virgin. Those rights, Branson realised, were worth unquantified millions. Additionally, there was the secret accumulation of money in their offshore trusts which remained unmentioned in Virgin’s accounts. Under Branson’s guidance, it was finally agreed that Powell would receive £1 million in cash and some assets. Branson’s problem was producing £1 million in a way which his accountants would find acceptable.

Until 1973, Branson had been officially earning just £20 per week. Thereafter, his annual salary had been about £2,000. Producing £1 million from his own resources as declared to the Inland Revenue was impossible. So instead he borrowed money guaranteed by the trusts for a transaction which was senseless without Branson’s private knowledge of Virgin’s true value.

The divorce was finalised on the Duende. The two school friends sat across a round table. Between them was Heimi Lehrer, a solicitor employed by Virgin since 1973 as their property specialist. Barely a word was spoken as the signatures were scribbled. For Branson it was an unemotional moment. The division of the business, he believed, was a limited risk. His demeanour was a disorienting blend of innocence and cunning. Branson did not appear sad about the divorce from his childhood friend. Powell would be airbrushed into oblivion. The gap-toothed grin, suggesting a heart of gold, was replaced by a hard-fixed stare. ‘We’ll trade out of trouble,’ the thirty-one-year-old quipped. Embracing his gambler’s gospel, every crisis was an opportunity and Powell’s departure left Branson with total ownership.

One of the few relationships he worked hard to protect was with Mike Oldfield. That was endangered by Tom Newman’s incitement for separation. ‘You’ve got a lousy contract,’ the disgruntled producer of Tubular Bells advised Oldfield. ‘You should break from Virgin.’ Oldfield’s ultimatum terrified Branson. The musician was once again Virgin’s major source of income. ‘We’ll give you a better deal,’ pleaded Branson with the graceless recluse, ‘even though we’re nearly bust.’ Eventually, Oldfield succumbed. The continuing income from Tubular Bells was Branson’s lifeline.

Just one year later, in 1981, Branson’s risk paid off. Thanks to Simon Draper and Steve Lewis, Virgin Music produced nine hits to repay all the company’s debts. In a decade of honeymoons, divorces and crisis, he could reflect, the Big Ones had provided singular lifelines until the good times returned. Fortunately, his friendly manner had disguised his rough tactics. Browbeating the New Musical Express about his financial crisis, he smiled, was justified by his survival.