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Co-op Bank Review Sparks Pay Clawback Demand

Written By Unknown on Rabu, 30 April 2014 | 18.56

The Main Findings Of The Co-op Bank Review

Updated: 10:38am UK, Wednesday 30 April 2014

The review by Sir Christopher Kelly into what went wrong at the Co-operative Bank is summarised below:

:: THE REVIEW

The independent review was commissioned in July 2013. It is based on more than 130 interviews of current and former employees, board members and others, as well as examinations of internal papers and external reports.

Its conclusions are scathing. In its own words it is a "sorry story of failings in management and governance".

The review states that contributory factors to the "debacle" include the economic environment and increasing capital requirements by regulators but Sir Christopher Kelly identifies two key areas of failing:

:: BRITANNIA MERGER

It says the Britannia merger of August 2009 "lies at the heart" of the problems at the bank. At the time of the merger, Britannia was the second largest building society in the UK with assets of £35bn, 2.8m customers and 254 branches, compared with Co-Op Bank's assets of £15bn, 500k customers and 90 branches.

Britannia had more exposure to sub-prime lending (loans to people who may struggle to repay them) than any other building society. The review found out Britannia would sometimes complete transactions that no other lender would take on.

It was put on a "watch list" by the city regulator, then-called the FSA, but it makes clear neither Britannia, nor the Co-op Bank were aware of this.

It calls the due diligence process preceding the merger "cursory" and "startling". Accountancy firm, KPMG was not given access to Britannia premises so could only perform high level checks on the information provided. But adviser JP Morgan Cazenove advised the Co-op that KPMG's due diligence "exceeded that normally undertaken for listed companies".

The Bank's board was not alerted to the deteriorating business case of Britannia as property prices plummeted. Something the review calls "a major error of judgement".

:: MANAGEMENT AND CULTURE

It says the executive team of the bank "failed to exercise sufficiently prudent and effective management of capital and risk" and that the board "failed" in its oversight of the executive. Combined it says "they badly let down the Group's members".

The bank's culture accepted mediocrity and "did too little to discourage wrong behaviours". It failed to address poor performance and tolerated under-performers – "something which might take a week in most banks would take months in the Co-operative Bank".

It advises that considering the Group still owns 30% of the bank, the Group board should take on an experienced banker. It notes that both Sainsbury's and Tesco, which are trading companies with banking subsidiaries smaller and less complex than the Co-op Bank, have experienced bankers on their main boards.

Other areas of note:

:: Payment Protection Insurance

In relation to PPI mis-selling it notes that in spite of the fact the Bank had an avowedly ethical policy, it "manifestly failed to treat its customers fairly". Total provisions for PPI compensation up to the end of 2013 were £347m.

:: PROJECT VERDE (LLOYDS BRANCHES)

Paul Flowers, the disgraced former chair of the Bank, is called in the report a "wholly unsuitable person to chair the Co-operative Bank board".

Flowers has asserted the Treasury pressured the Bank into buying branches of Lloyds, in the deal known as Project Verde.

He declined to be interviewed by the review but the report has found "no compelling evidence of pressure from government ministers or anyone else".

:: CONCLUSION

The report concludes the circumstances that led to the lessons laid out by the report "must pain all who care about the co-operative movement".

:: CONTEXT

In the past few weeks both the Co-operative Group and the bank have announced major losses.

The group's losses were £2.5bn for 2013 - the worst results in the group's 150-year history, with £2.1bn of that coming from the Co-op Bank.

The Bank's figure contained a trading loss of £1.44bn for the year to December, when the group lost control of Co-op Bank to US hedge funds.

The interim chief executive of the group, Richard Pennycook, on April 17 called the past year a "disastrous year for the group" - the worst in its history.

:: AGM

On May 17 there will be an AGM for Co-operative members. It is expected the mutual's board will seek backing for Lord Myners' proposals to reform corporate governance.


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Twitter Stock Down 10% As It Posts $132m Loss

Twitter shares fell almost 10% in after-hours trading in New York after the social network's latest results disappointed investors.

Shareholders were looking for stronger user growth than the company reported in its first quarter statement.

Twitter, which went public on the New York Stock Exchange last November, said it had 255 million monthly users at the end of March, up 25% on a year ago, though the figure was two million lower than Wall Street's consensus. 

The social network posted a deeper net loss of $132.4m (£79m) - which compares to $27m in the same period last year - blaming  stock compensation costs.

A sharp increase in advertising revenue helped numb the pain.

Total revenue more than doubled to $250m from $114m while Twitter's advertising revenue was $226m, about 80% of which came from mobile advertising.

But it was not enough to appease investors, with shares hitting $38.53 in after-hours trading - still above their flotation price of $26 but down significantly on the heights seen in December of $74.73.

Analysts said user numbers was a key metric for Twitter.

The company has said it is focusing on expanding its audience and encouraging people using short messaging service to use it more often.

By comparison, Facebook has 1.28 billion users and professional networking service LinkedIn had 277 million users at the end of 2013.

WhatsApp, the messaging app Facebook has agreed to buy for $19bn, recently passed the 500 million user milestone.

"We had a very strong first quarter. Revenue growth accelerated on a year over year basis fuelled by increased engagement and user growth," Twitter's chief executive Dick Costolo said in a statement.

Twitter gave a conservative revenue forecast for the current quarter and for all of 2014 - expecting revenue of up to $280m for the April-June period.


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The Politics Blog: PMQs Live Updates

The Politics Blog: PMQs Live Updates

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UK Economy Grows 0.8% In First Quarter

Written By Unknown on Selasa, 29 April 2014 | 18.56

The UK's economic recovery continued in the first quarter of 2014, with the first estimate of GDP growth coming in at 0.8%.

The figure, while weaker than the 0.9% most economists had expected, meant that output was 3.1% higher than on the same period the previous year, marking the fastest annual growth since the last quarter of 2007.

However, the economy remains 0.6% smaller than at its peak in the first quarter of 2008, after the recession wiped 7.2% off total output.

News of the economy's latest performance, released by the Office for National Statistics (ONS), showed growth across each major sector of the economy, though construction output was damaged by the impact of the winter storms.

The ONS said while widespread flooding appeared to have no overall effect on output it said bad weather in January and February did hit efforts to meet demand for new homes, with construction recording just 0.3% growth.

george Osborne Mr Osborne says the figures show Britain is "coming back"

Output in the service sector - which makes up more than three quarters of UK GDP - rose by 0.9% and continued to be driven by consumer spending.

Manufacturing grew by 1.3%, its strongest quarter for nearly four years, bolstering hopes for a rebalancing in the recovery away from its reliance on consumers.

Industrial production rose 0.8% though mining and quarrying, electricity and gas production and agriculture shrank over the quarter.

The GDP figures were seized upon by the union organisation the TUC as evidence the recovery was not gaining enough momentum to sustain a raise in interest rates, which is widely expected next year.

The figures were released at the same time as statistics showing a 2.5% rise in the number of people being declared insolvent in England and Wales over the same period.

There were 24,931 individual insolvencies recorded during the three months - a period when wage increases finally caught up with inflation for the first time since the recession.

Chancellor George Osborne said: "Today's figures show that Britain is coming back - but we can't take that for granted. We have to carry on working through our long-term economic plan.

"For the first time in a decade all three main sectors of the economy - manufacturing, services and construction - have grown by at least 3% over the last year.

"The impact of the great recession is still being felt, but the foundations for a broad-based recovery are now in place.

"The biggest risk to economic security would be abandoning the plan that is laying those foundations".

Shadow chancellor Ed Balls said: "Now that growth has finally returned, the question is whether ordinary working people will properly feel the benefit and we have a balanced recovery that's built to last."

He told Sky News: "Most people are experiencing a cost of living crisis, which David Cameron and George Osborne try to deny. Its a reality for most people in our country".


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Samsung Suffers Mobile Phone Sales Decline

Samsung Electronics has reported another quarterly decline in operating profits after sales of its mobile phones slowed.

The South Korean firm made $8bn (£4.7bn) in its first quarter - down more than 3% on the same January to March period last year.

It comes after operating profits fell 6% in the fourth quarter of 2013.

The latest performance was largely blamed on smartphone sales easing back by 2.5% in the period, amid stiff competition from the likes of Apple, which enjoyed a sales resurgence over the same months after its handsets became more widely available in China.

Samsung, which is the world's largest smartphone maker, has a diverse product line ranging from memory chips to home appliances but more than half its profits are generated by mobile devices.

This month saw the global roll-out of the latest version of its flagship Galaxy series smartphone, the S5, the performance of which will be closely watched over the coming months.

While reviews have rated the S5 a top-class product, they note it offers little in the way of real innovation that would set it apart from previous versions and models offered by competitors such as Apple.

Samsung made margin concessions with the S5, launching it at a slightly lower price than its predecessor, the S4, and throwing in a premium software bundle.

The company has admitted it faces a tough road ahead, with mobile demand expected to remain sluggish in the second quarter.

However, it still expects sales of the Galaxy S5 to beat those of the S4.

The company's bottom line was boosted by a 22.8% surge in memory chip sales from the first quarter of 2013.

It helped overall net profits top market estimates at $7.5bn (£4.4bn).

Its Seoul-listed shares were down 1.6% in late trading.


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Singapore Fund Was 'Core' Royal Mail Investor

By Mark Kleinman, City Editor

State-backed funds from Kuwait and Singapore were among 16 investors given large allocations of Royal Mail shares as part of the company's contentious £3.3bn privatisation.

Sky News can reveal that the Kuwait Investment Office and the Government Investment Corporation of Singapore (GIC) were among the funds labelled by the National Audit Office (NAO) as 'priority investors' in a report which criticised ministers' handling of the postal operator's sell-off.

Both sovereign wealth funds remain shareholders in Royal Mail nearly seven months after the flotation, and at least one of them is understood to have added to its shareholding since the initial public offering (IPO).

The fact that two overseas state-backed funds were seen to have been afforded a form of preferential treatment may fuel the controversy over the sale.

The group of 16 investors was chosen by the Government's advisers as part of an attempt to establish a long-term investor base for Royal Mail when it sold shares in the company last autumn.

However, the NAO said that three-quarters of those funds had subsequently sold part or all of their holdings in order to cash in on the instant surge in Royal Mail's share price.

The precise size of the allocations given to the Kuwaiti and Singaporean funds is unclear, and the Government has so far declined to identify the full list of 16 names, citing commercial confidentiality.

Their status as shareholders was revealed by Sky News last year, but their membership of that core group of 16 had not been previously disclosed.

Vince Cable, the Business Secretary, and Michael Fallon, the Minister who oversaw the Royal Mail privatisation, will face questions from the Business, Innovation and Skills Select Committee on Tuesday, when they are expected to be asked about the allocation of shares.

Insiders said the ministers may choose to dispute the accuracy of the term 'priority investors' if questioned on the subject by MPs.

Discussions were held with more than 60 institutions regarded as long-term investors during the 18 months preceding the privatisation, with 21 of those still interested at the time the IPO took place.

Sixteen of those funds then placed firm orders for stock, having exerted significant influence over the pricing of the shares.

Among the others included in this list are understood to have been BlackRock, the world's biggest asset manager,  Lansdowne Partners, a top hedge fund which is understood not to have sold a single Royal Mail share since the IPO, and Standard Life Investments.

On Monday, the chief executive of the City watchdog said that the 38% rise in Royal Mail's share price on its first day of trading did not warrant an investigation.

A BIS spokeswoman said the majority of the 16 core investors were still shareholders in Royal Mail.

"There was no agreement – gentleman's or otherwise – on the holding of Royal Mail shares by priority investors.

"As is standard practice for any flotation, we did not seek to lock any investors in as they would have paid less for a stock they could not trade."


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Talks To Avert Two-Day Tube Strike Collapse

Written By Unknown on Senin, 28 April 2014 | 18.56

Last-minute talks to avert strikes by London Underground (LU) workers have collapsed without agreement.

Rail, Maritime and Transport (RMT) union members are set to walk out for 48 hours from 9pm tonight, bringing chaos to the capital.

A second, 72-hour strike is planned for the same time next week.

As well as the Tube, the industrial action is likely to hit buses, trains and the Overground, with services set to be busier than normal as commuters clamber onto alternative routes.

Monday's negotiations followed a deadlock last week, as the union held firm against ticket office closures and potential job losses.

LU said only 3% of tickets are now sold at ticket offices and wants more staff on concourses.

The number of tickets sold over counters is expected to drop further, once contactless bank cards can be used to pay at barriers.

Development of smartphone payment technology will also see a reduction in ticket office revenue.

RMT acting general secretary Mick Cash said: "London Underground have dug themselves into an entrenched position and have refused to move one inch from their stance of closing every ticket office, in breach of the agreement reached previously through ACAS which enabled us to suspend the previous round of action.

"Despite the spin from LU, nothing they are proposing is about 'modernisation'.

"The current plans, closing every ticket office and axing nearly a thousand safety-critical jobs, are solely about massive austerity cuts driven centrally by David Cameron and his Government and implemented by Mayor Boris Johnson."

Mr Johnson attacked the union and described the strike as "pointless".

"I urge the RMT to call off this pointless strike and get back round the table with London Underground and the three other unions who have chosen not to strike," he said.

"It seems the RMT leadership is set against modernisation and has no fresh ideas of its own."

Prior to the strike announcement, LU said the RMT was demanding the withdrawal of long-standing voluntary redundancy arrangements.

Managing director Mike Brown said: "The RMT leadership are making this up on the hoof.

"Suddenly, they want to unilaterally tear up the long-established and collectively agreed option of voluntary redundancy, throwing into question the plans of over 650 staff who have chosen to leave us.

"The RMT leadership has also failed to take on board the significant changes we have made to our original proposals."

Strike action also hit commuters in the first week of February, with a second strike called off after negotiations amid a wave of flooding in the Thames Valley.

The strike that went ahead caused chaos across the capital, with bus and Overground services struggling to cope with the extra demand and many roads gridlocked.


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Unemployed Face Work Scheme Or Sanctions

The long-term unemployed will only receive their benefits if they sign on at a jobcentre every day or commit to a six-month stint of voluntary work under the Government's new Help to Work scheme.

Prime Minister David Cameron says the scheme is designed to ensure "that everyone who can work is in work".

Ministers claim there are more than 600,000 vacancies in the economy at any one time, saying the new measures are intended to help unemployed people fill them.

The voluntary work could include gardening projects, running community cafes or restoring historical sites and war memorials.

The placements will be for up to six months for 30 hours a week and will be backed up by at least four hours of supported job searching each week.

Mr Cameron said: "A key part of our long-term economic plan is to move to full employment, making sure that everyone who can work is in work.

"We are seeing record levels of employment in Britain, as more and more people find a job, but we need to look at those who are persistently stuck on benefits.

"This scheme will provide more help than ever before, getting people into work and on the road to a more secure future."

Iain Duncan Smith Mr Duncan Smith says many people were written off under the previous system

Work and Pensions Secretary Iain Duncan Smith said: "Everyone with the ability to work should be given the support and opportunity to do so.

"The previous system wrote too many people off, which was a huge waste of potential for those individuals as well as for their families and the country as a whole. We are now seeing record numbers of people in jobs and the largest fall in long-term unemployment since 1998."

Unite assistant general secretary Steve Turner said there was no evidence that such "workfare programmes" get people into paid work in the long-term.

"We are against this scheme wherever ministers want to implement it - in the private sector, local government and in the voluntary sector," he said.

"It is outrageous that the Government is trying to stigmatise job seekers by making them work for nothing, otherwise they will have their benefits docked."

Shadow employment minister Stephen Timms said: "Under David Cameron's government nearly one in 10 people claiming Jobseeker's Allowance lack basic literacy skills and many more are unable to do simple maths or send an email.

"Yet this Government allows jobseekers to spend up to three years claiming benefits before they get literacy and numeracy training.

"A Labour government will introduce a Basic Skills Test to assess all new claimants for Jobseeker's Allowance within six weeks of claiming benefits."


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Pfizer Confirms Bid Interest For AstraZeneca

AstraZeneca: The Key Statistics

Updated: 10:51am UK, Monday 28 April 2014

American pharmaceutical giant Pfizer, which makes Viagra, has until May 26 to confirm its intentions in what could be Britain's biggest ever takeover. Here are some key statistics and history about AstraZeneca:

:: Pfizer's original bid earlier this year for AstraZeneca valued the company at just under £60bn.

:: AstraZeneca operates in more than 100 countries and employs 51,500 people worldwide.

:: Around 9,000 of its staff work in research and development (R&D).

:: It attracted £15.6bn of annual sales in year ending December 31, 2013, however this was down 24% in two years - from £20.4bn in 2011.

:: Reported operating profits have fallen from £7.8bn to £2.2bn, a fall of 71% over the same period.

:: Key to these falling sales and profits is the loss of exclusivity on some of its blockbuster drugs including Arimidex, Atacand, Crestor, Nexium and Seroquel IR. In 2013, the loss of exclusivity directly reduced revenues by £1.3bn.

:: The group forecast that, with new drugs coming online and its extensive acquisition activity, revenues will be back in line with its 2013 figures by 2017.

:: In the three years to 2013, it has completed more than 150 acquisitions including Pearl Therapeutics and Omthera Pharmaceuticals.

:: In 2013, it bought Amplimmune for £700m to help the group secure future products.

:: Analysts see the group battling to sustain itself in a more competitive industry, where cheaper generics eat into the profits on successful drugs post exclusivity.

:: The R&D cost and difficulty of developing new equivalent blockbuster drugs keeps growing.

:: Pfizer's previous proposal on January 5 included a combination of cash and shares which represented an indicative value of £46.61 per AstraZeneca share.

:: The bid included a substantial premium of approximately 30% to AstraZeneca's closing share price of £35.86 on January 3.

:: AstraZeneca was formed in 1999 when Sweden's Astra - which was formed in 1913 - merged with the UK's Zeneca.

:: Zeneca was created in 1993 following a de-merger from ICI.

:: Pfizer's revenues were $51.6bn (£30.7bn) in 2013.

:: Pfizer employs 78,000 people worldwide including 900 in Britain.

:: It makes Viagra and Chap Stick.


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Myners To Chair Huntsworth In Board Shake-Up

Written By Unknown on Minggu, 27 April 2014 | 18.56

By Mark Kleinman, City Editor

Lord Myners, the former City minister, is being lined up to chair Huntsworth, one of the UK's biggest independent public relations firms, weeks after he endured a bruising public skirmish over reforms at the Co-operative Group.

Sky News has learnt that Lord Myners has agreed in principle to take the helm at Huntsworth, which owns agencies such as Citigate Dewe Rogerson and Red.Myners To Chair PR Firm Huntsworth

His appointment, which could be announced as soon as Tuesday, will see him replace Richard Sharp, a former Goldman Sachs partner as Huntsworth's chairman.

Joe MacHale, the senior independent director, is also understood to have decided to resign from the board.

Several senior City sources said on Sunday that one of the triggers for the departure of Mr Sharp and Mr MacHale was growing tension between them and Lord Chadlington, Huntsworth's chief executive.

Lord Chadlington is unusual among the bosses of listed companies for a guaranteed contractual entitlement to an annual pay rise and bonus, with some board directors said to be unhappy about his pay.

The arrival of Lord Myners, a prominent advocate of strong corporate governance, adds an unexpected layer of intrigue to a relatively low-profile listed company.

Huntsworth, which has a market value of just under £225m, is unusual among London-quoted businesses in having a Chinese peer as its largest shareholder.

Blue Focus, one of Asia's biggest PR groups, paid £36.5m for a stake of almost 20% exactly a year ago.

Lord Myners, who served as City minister during the last Labour government, will next month present his final proposals for reforms of the Co-op's structure.

His blueprint, which includes more independent board directors, has met stiff resistance from some of the regional societies which wield influence over the crisis-hit mutual.

Lord Myners' other roles include chairmanships at Autonomous, an equity research firm; Cevian Capital, an activist investor; and Nomad Holdings, a cash shell that is seeking a major takeover target.

A Huntsworth spokesman declined to comment.


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Mortgage Lending Clampdown Comes Into Force

Homebuyers will face more scrutiny by mortgage lenders under new regulations which take effect today.

The industry-wide changes affect home buyers and people looking to re-mortgage and they will mean that lenders have to take a much stronger interest in people's spending habits and how their life plans could affect their ability to meet their repayments.

Mortgage applicants will need to sit through longer interviews, and provide more evidence that they can afford a home loan before being offered one.

Each lender will have their own interpretation of the new rules, but in general people are likely to be asked for more detail about regular outgoings such as childcare, food, household bills, loans, credit cards and leisure activities.

The changes also mean lenders will have to test whether homebuyers will be able to afford their mortgage payments if interest rates rise sharply, to 7% or above.

The Mortgage Market Review (MMR) rules aim to ensure there is no return to any irresponsible lending practices of the past, but there are some concerns that it could slow down the housing market.

Rental market The changes come amid growing consternation about rising house prices

Paul Broadhead, head of mortgage policy for the Building Societies Association, said: "The Mortgage Market Review was introduced in order to ensure that a common sense approach to mortgage lending is applied by all lenders and that people are not borrowing more than they can afford to pay.

"A number of building societies implemented the process early and have been lending this way, without problems, for a number of weeks."

Andrew Montlake, a director at broker Coreco, said that for people considering applying for a mortgage: "It's important for people to prepare a lot earlier, potentially six months before you apply. Start looking through your documentation and go through a budget."

He said most lenders will want to know whether mortgage applicants are planning to increase their spending for any reason in the near future and if they are expecting a change in their income.

Martin Wheatley, chief executive of the Financial Conduct Authority was asked this week about reports that some people are being asked if they are planning to have children.

He told the Daily Mail: "If you are eight months pregnant, that is a reasonable question. But most of the time that is probably too invasive - and that is not committed expenditure. People have a right to a certain degree of privacy.

"People should be expected to talk about known costs, such as school fees and car loans, but planning for future unknown events is a much more difficult space."


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Cable Drawn Into Row Over 'Russian' Oil Bid

By By Mark Kleinman, City Editor

Vince Cable, the Business Secretary, has been drawn into a row about the controversial takeover of a London-listed oil group that is reliant on funds from one of Russia's largest banks.

Sky News has seen a letter sent by the Association of British Insurers (ABI) to Mr Cable warning him that the Stanlow refinery, which produces 15% of the UK's transport fuel, is being used as collateral in a bid for Essar Energy.

Robert Hingley, an ABI director, said in the letter to Mr Cable that Essar Global, the vehicle of the billionaire Ruia brothers who want to buy the company, had failed to provide any indication of its plans for the Stanlow site in north-west England.

By highlighting the Russian provenance of the financing for the offer, the ABI's intervention will escalate tensions over the cut-price bid by Essar Global for the 22% of Essar Energy shares it does not already own.

The Ruias listed Essar Energy in London by selling shares less than four years ago priced at six times the price they are now offering.

The cut-price offer has sparked fury from big City institutions, including Standard Life Investments, which in February described it as "cynical opportunism" and "a calculated attempt to deprive minority shareholders of the substantial future upside in Essar Energy's valuation".

Under stock exchange rules, because the Ruias already control a majority of the shares, they can declare their offer unconditional even if no other shareholders accept their bid.

Doing so would enable them to delist the company without a vote, which would either force investors to accept just 70p-a-share or to remain shareholders in a more highly-indebted and unlisted company where they possess no influence.

The ABI special committee, which represents major City shareholders including Standard Life and Henderson, has urged Essar Global to commit to a delisting only if a majority of the independent investors accept its offer.

The Financial Conduct Authority is changing its rules relating to delistings but has irritated the ABI by not applying that rule-change to takeover situations.

It is unclear what power Mr Cable has to intervene in the situation, although question marks over the future of the Stanlow refinery and the involvement of Russian funds are likely to put the issue on the political agenda.

Investors believe that while the right to make an offer for the company was detailed in a relationship agreement drawn up when Essar Energy floated, its terms were not made clear in the shareholder prospectus, which could provide the ABI with another legal avenue to explore.

Skadden Arps Slate Meagher & Flom, a law firm, is advising the ABI committee.


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Starbucks Sales Fall For First Time In 16 Years

Written By Unknown on Sabtu, 26 April 2014 | 18.56

Starbucks' turnover dropped last year for the first time, in the wake of revelations about its corporate tax practices.

Sales for the year to September 29 were £399m, a decline of 3.4% compared to the previous year.

The company said the decline, the first since it started UK operations 16 years ago, was due to the closure of unprofitable outlets and not the result of other reasons.

It reduced its average UK workforce by 11.6% in the financial year to 7,726.

Starbucks was able to increase its gross profit by 13% to £79.7m, before deductions of £100.5m were taken into account.

Its pre-tax loss was £20.4m in the period, down from the £30.4m recorded in the 2011-12 financial year.

The company's tax liability in the period was £3.4m, but including deferred taxation was reduced to £2.25m.

A Starbucks spokesman told Sky News: "The UK business is moving in the right direction, but the turnaround will take time.

Protesters hold demonstrations at Starbucks stores Protests outside Starbucks stores were held during this accounting period

"The continued loss is largely because the reforms we have introduced are yet to take full effect.

"Many of the expensive leases we have renegotiated occurred after our financial year started in October 2012. The benefits of this action will be shown in the accounts for this current year."

It said the £10m fall in the pre-tax loss was largely due to the rise in gross profits. Its staff costs dropped £13.5m in the tax year compared to the previous year.

In October and December 2012, key executives were grilled by MPs about multinational corporate (MNC) arrangements.

Revelations about royalty, licensing and transfer pricing structures used by MNCs to minimise UK tax burden became a focus for Westminster's Public Accounts Committee.

Seattle-based Starbucks was quizzed on why it remained a loss-making business for tax purposes while telling investors it was profitable.

Groups such as UK Uncut urged boycotts of Starbucks and organised store protests and the company's unmoderated website blog was flooded with hundreds of critical comments.

But the company said the latest sales drop was not related to the 2012 tax furore and says Britain is its star EU performer.

Amazon, Google and Starbucks chiefs at tax grilling Executives from Amazon, Google and Starbucks were grilled by MPs in 2012

"The UK is our fastest growing market in Europe. We are on schedule to open 100 new stores this year and expect the business to continue to grow as economic growth picks up," the spokesman said.

However, the latest accounts filed with Companies House show that it is acutely aware of the impact certain issues may have on the company.

It said there was potentially a "significant risk" of "adverse impacts resulting from negative publicity regarding the company's business practices".

Responding to the widespread criticism in late 2012 it offered to pay a voluntary £20m in tax over two years, and has already given £15m of that to HM Revenue and Customs.

It also dropped total remuneration for its three directors by almost a fifth to £886,000, with the highest paid executive's salary falling by more than half to £268,582.

At the end of last September Starbucks had 549 company-operated stores in the UK, down 44 in the period.

It also had 125 licensed and 57 franchised operations. Although it has a planned franchise expansion, the company's website says it is not looking for new partners.


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RBS Ditches Double-Salary Bonuses For Bankers

Taxpayer-backed Royal Bank of Scotland has ditched a proposal to give bankers bonuses of up to twice their salaries.

The bank had wanted to give workers lucrative and competitive bonuses, despite making a pre-tax loss of £8.2bn in 2013.

British taxpayers own 81% of the bank, which received the biggest bailout in history following the financial crisis.

UK Financial Investments, which manages the Government's stake, said it would not support the proposal.

As a result, RBS said a planned vote at the bank's annual general meeting (AGM) in June would not take place.

The Treasury rebuked the bonus plan and said "an increase to the bonus cap cannot be justified and the Government made clear it would not have supported such a proposal".

Last year the European Parliament agreed to cap bonuses for bankers at their fixed annual salary, or twice that sum if shareholders approve.

Mindful of London's importance in world finance, the Government remains opposed to the EU 2:1 bonus-to-salary cap.

A Treasury spokesman said: "The European bonus cap is not a well-thought out idea and will not support stronger and safer banks, which is why the Government is challenging it in the European Court.

"But while it exists, we will make sure it is applied fairly.

"Under the new strategy set out by RBS chief executive Ross McEwan, RBS is heading in the right direction, but it has not yet completed its restructuring and remains a majority publicly-owned bank."

RBS also said Mr McEwan and chief financial officer Nathan Bostock would not receive bonuses from 2014.

But it said they would still receive share-based "long-term incentive awards" that vest in five years.

The RBS bonus block comes just a day after a heated Barclays AGM saw jeering from shareholders and a partial rejection - reaching 24% of votes - of its remuneration proposals.

And on Friday, 38.5% of pharmaceutical firm AstraZeneca shareholders rejected a lucrative management remuneration plan.


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Mortgage Lending Clampdown Comes Into Force

Homebuyers will face more scrutiny by mortgage lenders under new regulations which take effect today.

The industry-wide changes affect home buyers and people looking to re-mortgage and they will mean that lenders have to take a much stronger interest in people's spending habits and how their life plans could affect their ability to meet their repayments.

Mortgage applicants will need to sit through longer interviews, and provide more evidence that they can afford a home loan before being offered one.

Each lender will have their own interpretation of the new rules, but in general people are likely to be asked for more detail about regular outgoings such as childcare, food, household bills, loans, credit cards and leisure activities.

The changes also mean lenders will have to test whether homebuyers will be able to afford their mortgage payments if interest rates rise sharply, to 7% or above.

The Mortgage Market Review (MMR) rules aim to ensure there is no return to any irresponsible lending practices of the past, but there are some concerns that it could slow down the housing market.

Rental market The changes come amid growing consternation about rising house prices

Paul Broadhead, head of mortgage policy for the Building Societies Association, said: "The Mortgage Market Review was introduced in order to ensure that a common sense approach to mortgage lending is applied by all lenders and that people are not borrowing more than they can afford to pay.

"A number of building societies implemented the process early and have been lending this way, without problems, for a number of weeks."

Andrew Montlake, a director at broker Coreco, said that for people considering applying for a mortgage: "It's important for people to prepare a lot earlier, potentially six months before you apply. Start looking through your documentation and go through a budget."

He said most lenders will want to know whether mortgage applicants are planning to increase their spending for any reason in the near future and if they are expecting a change in their income.

Martin Wheatley, chief executive of the Financial Conduct Authority was asked this week about reports that some people are being asked if they are planning to have children.

He told the Daily Mail: "If you are eight months pregnant, that is a reasonable question. But most of the time that is probably too invasive - and that is not committed expenditure. People have a right to a certain degree of privacy.

"People should be expected to talk about known costs, such as school fees and car loans, but planning for future unknown events is a much more difficult space."


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RBS Ditches Double-Salary Bonuses For Bankers

Written By Unknown on Jumat, 25 April 2014 | 18.56

Taxpayer-backed Royal Bank of Scotland has ditched a proposal to give bankers bonuses of up to twice their salaries.

The bank had wanted to give workers lucrative and competitive bonuses, despite making a pre-tax loss of £8.2bn in 2013.

British taxpayers own 81% of the bank, which received the biggest bailout in history following the financial crisis.

UK Financial Investments, which manages the Government's stake, said it would not support the proposal.

As a result, RBS said a planned vote at the bank's annual general meeting (AGM) in June would not take place.

The Treasury rebuked the bonus plan and said "an increase to the bonus cap cannot be justified and the Government made clear it would not have supported such a proposal".

Last year the European Parliament agreed to cap bonuses for bankers at their fixed annual salary, or twice that sum if shareholders approve.

Mindful of London's importance in world finance, the Government remains opposed to the EU 2:1 bonus-to-salary cap.

A Treasury spokesman said: "The European bonus cap is not a well-thought out idea and will not support stronger and safer banks, which is why the Government is challenging it in the European Court.

"But while it exists, we will make sure it is applied fairly.

"Under the new strategy set out by RBS chief executive Ross McEwan, RBS is heading in the right direction, but it has not yet completed its restructuring and remains a majority publicly-owned bank."

RBS also said Mr McEwan and chief financial officer Nathan Bostock would not receive bonuses from 2014.

But it said they would still receive share-based "long-term incentive awards" that vest in five years.

The RBS bonus block comes just a day after a heated Barclays AGM saw jeering from shareholders and a partial rejection - reaching 24% of votes - of its remuneration proposals.

And on Friday, 38.5% of pharmaceutical firm AstraZeneca shareholders rejected a lucrative management remuneration plan.


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Starbucks Sales Fall For First Time In 16 Years

Starbucks' turnover dropped last year for the first time, in the wake of revelations about its corporate tax practices.

Sales for the year to September 29 were £399m, a decline of 3.4% compared to the previous year.

The company said the decline, the first since it started UK operations 16 years ago, was due to the closure of unprofitable outlets and not the result of other reasons.

It reduced its average UK workforce by 11.6% in the financial year to 7,726.

Starbucks was able to increase its gross profit by 13% to £79.7m, before deductions of £100.5m were taken into account.

Its pre-tax loss was £20.4m in the period, down from the £30.4m recorded in the 2011-12 financial year.

The company's tax liability in the period was £3.4m, but including deferred taxation was reduced to £2.25m.

A Starbucks spokesman told Sky News: "The UK business is moving in the right direction, but the turnaround will take time.

Protesters hold demonstrations at Starbucks stores Protests outside Starbucks stores were held during this accounting period

"The continued loss is largely because the reforms we have introduced are yet to take full effect.

"Many of the expensive leases we have renegotiated occurred after our financial year started in October 2012. The benefits of this action will be shown in the accounts for this current year."

It said the £10m fall in the pre-tax loss was largely due to the rise in gross profits. Its staff costs dropped £13.5m in the tax year compared to the previous year.

In October and December 2012, key executives were grilled by MPs about multinational corporate (MNC) arrangements.

Revelations about royalty, licensing and transfer pricing structures used by MNCs to minimise UK tax burden became a focus for Westminster's Public Accounts Committee.

Seattle-based Starbucks was quizzed on why it remained a loss-making business for tax purposes while telling investors it was profitable.

Groups such as UK Uncut urged boycotts of Starbucks and organised store protests and the company's unmoderated website blog was flooded with hundreds of critical comments.

But the company said the latest sales drop was not related to the 2012 tax furore and says Britain is its star EU performer.

Amazon, Google and Starbucks chiefs at tax grilling Executives from Amazon, Google and Starbucks were grilled by MPs in 2012

"The UK is our fastest growing market in Europe. We are on schedule to open 100 new stores this year and expect the business to continue to grow as economic growth picks up," the spokesman said.

However, the latest accounts filed wtih Companies House show that it is acutely aware of the impact certain issues may have on the company.

It said there was potentially a "significant risk" of "adverse impacts resulting from negative publicity regarding the company's business practices".

Responding to the widespread criticism in late 2012 it offered to pay a voluntary £20m in tax over two years, and has already given £15m of that to HM Revenue and Customs.

It also dropped total remuneration for its three directors by almost a fifth to £886,000, with the highest paid executive's salary falling by more than half to £268,582.

At the end of last September Starbucks had 549 company-operated stores in the UK, down 44 in the period.

It also had 125 licensed and 57 franchised operations. Although it has a planned franchise expansion, the company's website says it is not looking for new partners.


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Consumers Warm To More Loans And Overdrafts

British consumers are returning to the habit of using credit to fund their spending, according to a banking body.

The British Bankers' Association (BBA) said personal loans and overdrafts are rising for the first time in five years.

It called it a "clear" sign of improving consumer confidence.

The BBA's report comes as official data revealed an above-expected rise in retail spending last month.

The Office for National Statistics (ONS) said retail sales volumes were up 0.1% in March compared to February.

The rise surprised City analysts who had predicted a 0.4% fall last month.

Clothing and retail saw a month-on-month climb of 3.1% - the best result for three years - while non-food shops saw a spike of 9.6% compared to the same period last year.

However, food retailers saw their worst month-on-month decline for a year, with March revenues down 2.3%.

The BBA said March overdrafts were up 0.5% on an annual rate, in the first rise since January 2009.

But it added that the number of mortgage approvals made to home buyers dropped to a four-month low, fuelling hints of market cooling ahead of new industry-wide mortgage risk checks.

The BBA said 45,933 approvals totaling £7.5bn - an average of £163,281 each - were made in March.

Home mortgage approvals have sunk amid a flurry of price rises particularly in the South East.

Just under 50,000 mortgages were approved in January.

Government's schemes such as Help to Buy have helped those with low deposit levels to gain mortgages, and the BBA said house purchase approvals were 43% higher in March compared to the same month last year.


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Gazprom Turns Up Heat On Kiev With $11bn Bill

Written By Unknown on Kamis, 24 April 2014 | 18.56

Russia Has Best Hand In Ukraine Poker Game

Updated: 6:58pm UK, Tuesday 22 April 2014

By By Sam Kiley, Foreign Affairs Editor in Donetsk

If the Ukrainian crisis was a poker game, Russia holds a royal flush, the Kiev government and her allies not much more than a pair. And that's for every hand played, for now.

Since the annexation of Crimea it has been Vladimir Putin's choice as to whether to fold or call or raise and with every round his pot appears to be getting richer.

In the long term, though, Russia knows it could lose heavily.

The question is: When will the Kremlin decide to cash in its winnings and celebrate a return as a world power with a hearty round of chilled vodka at the bar?

US Vice President Joe Biden, on a visit to Kiev, said "time is short" for Russia to make progress on its commitment at Geneva last week to help defuse the crisis in Ukraine by signalling to its proxy militia (and the Russian commandos alongside them) to evacuate the buildings they have seized across the east of the country.

That isn't the view from Moscow - or from the sandbagged municipal centres, where the men in balaclavas, known locally as "the green men", are reinforcing their defences, not tearing them down.

Sure, Russia faces an increase in sanctions from Europe which may bite into an economy already suffering capital flight, inflation and reduced growth.

But Mr Putin knows that more sanctions are going to cut into Europe too - possibly slowing growth and the recovery from recession that in any case is looking fragile.

Individual countries in the 28-member European Union have been conducting analyses of how damaging broad sanctions against Russia would be.

The City of London will be anxious indeed - it runs on the fuel of  "few questions asked" capital injections from oligarchs who have gouged the countries of the former Soviet Union.

"Stop talking and start acting" said the US vice president.

In Donetsk the "meh" from the Kremlin was almost audible.

"No nation should threaten its neighbours by amassing troops along the border. We call on Russia to pull these forces," he said after meeting Ukrainian Prime Minister Arseny Yatseniuk.

"We have been clear that more provocative behaviour by Russia will lead to more costs and to greater isolation."

In Moscow, once senior officials had figured out who this "Mr Biden" was - a man without portfolio - minds have already been focussed on how to face down the European sanctions which have been threatened now for weeks.

Dmitry Medvedev, the Prime Minister who channels Mr Putin as his avatar, said Russia was already looking for diversified markets for its gas, namely China, and that sanctions threats were a "bluff".

Mr Putin's popularity is soaring up to and over 90% since he grabbed Crimea amid red-faced blustering from the international community.

His generals have harnessed some of the finest chess minds in a game that has left his opponents gasping. The government now enjoys untrammelled authoritarian power.

In Russia the opposition press was silenced before the Crimean operations.

Now the media there and in the east of Ukraine pumps out lies about neo-Nazis running the Ukrainian government in league with the CIA - convincing enough people that backing the pro-Russian separatists, who now only admit to being "federalists", is an existential necessity.

Mr Yatseniuk said Russian special forces are operating in eastern Ukraine to undermine a presidential election due on May 25 and he called on Moscow to pull them out.

"Everything that is now happening in the east and which Russia is supporting is aimed at wrecking the presidential election," Mr Yatseniuk said.

And that is the Kremlin's ace.

In a month's time Ukraine will not be able to hold legitimate elections in the east of the country because the separatists and their Russian sponsors will not let them.

Instead they are threatening to hold referenda in the middle of May - just as in Crimea - which one can confidently predict will result in a huge pro-Russian majority for independence or annexation into the Russian Motherland.

By the end of the month the Kremlin will be able to step up the chaos and divisions - probably even revving the engines of tanks and mobile artillery on the borders to signal that it may rush to the "aid" of "persecuted" ethnic Russians in Ukrainian territory.

This is the point at which it will be in Russia's interests to cash in on the game it has been playing by forcing its own agenda on Kiev, and getting the West to turn its face away from Ukraine's flirtation with formal association with Nato and the EU.

The alternative will be a return to cold war and economic embargo. Ordinary Russian's won't like that – they have got used to Armani.


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Gym Fees 'Could Stop Mortgage Approvals'

By Ed Conway, Economics Editor

Homebuyers could find themselves turned down for a mortgage because of their gym memberships, phone bills and pension payments, under new rules introduced this weekend, experts have warned.

Mortgage advisers said new restrictions introduced under the Mortgage Market Review (MMR) would drastically increase the intrusiveness of checks undergone by applicants.

The warning coincided with advice from economists, who claim the rules could dampen down activity in the housing market.

The new rules, part of a push to prevent lenders handing out loans to those unable to afford them, will stipulate banks and building societies must inspect customers' spending commitments to ensure they can keep up their monthly payments.

Those commitments might include items as innocuous as informal club memberships, according to Peter Marriott of Westexe Mortgage Solutions.

He said: "They might have a gym membership, they might be contributing to a pension plan - anything that's deemed by a mortgage lender to be a commitment could be held against them as an ongoing expense, which would in turn affect the affordability and the lender's decision on how much they can borrow."

The MMR changes will also mean lenders have to test whether homebuyers will be able to afford their mortgage payments if interest rates rise sharply, to 7% or above.

The Bank of England's Financial Policy Committee has recommended it should be able to change the suggested stress test rate in future, giving it an extra lever to influence house prices.

The changes come amid growing consternation about rising house prices.

According to the Office for National Statistics, house prices across the UK have increased by 9.1% in the past year.


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Mt Gox Bitcoin Exchange Liquidation Ordered

The failed Bitcoin exchange Mt Gox is to be liquidated after a Tokyo court ordered bankruptcy proceedings to proceed, it has been confirmed.

The court-appointed lawyer previously responsible for the cyber currency company announced the decision.

"(I) will implement the bankruptcy proceedings, in which the assets of the bankrupt entity will be managed and converted into cash," a statement by bankruptcy trustee Nobuaki Kobayashi was placed on Mt Gox's website.

"If funds for a distribution are secured, the liquidating distribution will be made."

A creditors' meeting has been set for July 23 but those owed money were warned of the potential of seeing no return.

"The actual amount and value of Bitcoins and cash of the company will be investigated by the bankruptcy trustee with the cooperation of certain experts," the statement added.

The Tokyo District Court ruling, which was widely expected, signals the death throes of the exchange.

At one point Mt Gox, run by American CEO Mark Karples, was responsible for around 80% of global transactions of the virtual exchange.

Bitcoins are generated by complex chains of interactions among a huge network of computers around the planet and are not backed by any government or central bank.

Mt Gox plunged into trouble last February after withdrawals were prevented. It said a software bug had made it vulnerable to theft.

It filed for bankruptcy and said it had lost 850,000 coins - worth nearly $500m (£300m), and it also filed for protection in the United States.

Some 200,000 of the 'stolen' Bitcoins were later found in an electronic wallet.

Mr Kobayashi was named as provisional administrator last week, wrestling control from its embattled CEO.

Mr Karpeles has reportedly refused to travel to the US, where he is wanted for questioning over the exchange's demise.

He remains the registered owner of the Mt Gox website.


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Co-op Admits 'Disastrous Year' Amid £2.5bn Loss

Written By Unknown on Senin, 21 April 2014 | 18.56

The embattled Co-operative Group has confirmed a loss of £2.5bn for 2013, in what it described as a "disastrous year".

The loss comes on the back of a £529m figure recorded in its 2012 results.

Interim group chief executive Richard Pennycook said: "2013 was a disastrous year for the Co-operative Group, the worst in our 150-year history.

"Today's results demonstrate that but they also highlight fundamental failings in management and governance at the group over many years.

"These results should serve as a wake-up call to anyone who doubts just how serious the challenges we face are."

It said most of the losses were from "discontinued operations" of its banking arm, which totaled £2.1bn.

Group sales were £10.5bn, down from the £11bn recorded in the previous year.

Profit from its food division were down 8% at £247m but it also recorded a goodwill impairment charge of £226m for its purchase of Somerfield stores.

The Co-operative Group divisions The Co-operative Group consists of a number of divisions

However, it recorded more encouraging figures for some other divisions.

General insurance profit jumped from £13m in 2012 to £33m last year.

The pharmacy chain, which is being offered for sale, saw profit rise by about a fifth to £33m.

And its funeral services business saw sales up 3% to £370m and profit up £2m to £62m.

Co-operative Group chair Ursula Lidbetter said: "During 2013, it became apparent that our governance had fallen far short of the standards to which we aspire as a co-operative society.

"Now is the time to put that right through fundamental reform - we have to act with urgency if we are to lay the foundations for a stronger, healthier co-operative business in the future."

The group's bank division revealed a £1.5bn capital black hole last year and then in March announced a plan to raise another £400m.

Amid risks of the bank's collapse, the group reduced its stake in the institution to 30% as private equity bondholders provided capital - raising concerns of how it would maintain its 'ethical' stance.


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British Gas Bonus Claims To Be Investigated

Claims that British Gas workers have been paid large bonuses to inflate customer bills are to be investigated by the energy regulator, Ofgem.

It comes after a former employee claimed the energy company encouraged its sales staff to sign up charities, churches and small businesses to its highest-priced tariffs in order to boost their own earnings.

British Gas has strongly denied the allegations.

The whistleblower, who worked for the company between 2010 and 2013, told the Daily Mail the firm's policies were designed "to rip off" customers.

He claimed sales agent typically earned between £4 and £37 in commission per deal if they persuaded existing customers to renew contracts.

But by moving a customer to a more expensive deal they could earn more than £400 a time, he alleged.

"People were desperate to make the salaries they had been promised, so everyone inflated the prices," he told the paper.

"Scout clubs was a favourite one; churches, charities, small businesses, where people would just go for the maximum 5p notch-up," he added.

Ofgem headquarters Millbank London Ofgem will investigate whether the sales activities were 'honest and fair'

A British Gas spokeswoman said: "British Gas strongly refutes any suggestion that employees are paid commission on any prices charged to residential customers."

British Gas Business managing director Stephen Beynon said his sales agents are paid commission, but he denied any suggestion that contracts were negotiated inappropriately.

"This is a highly regulated market, and every part of the sales negotiation process is closely monitored," he said.

"Sales agents in British Gas Business do receive commission, but we are reducing its importance.

"We're leading the way in addressing the variability in price that customers face in this market, and we'll continue to do so."

Ofgem said in a statement: "There are strict rules in place which require suppliers to take all reasonable steps to ensure information provided is accurate and not misleading, and that sales activities are conducted in a fair, honest, transparent and professional manner.

"Ofgem is an evidenced-based regulator and we would encourage anyone with information that an energy company is not complying with Ofgem rules to provide us with this."

Energy and Climate Change Secretary Ed Davey said: "This is a very serious and deeply disturbing allegation that comes as we are doing all we can to make the energy markets work better for all consumers - whether domestic or businesses.

"The Government fully supports Ofgem's recommendation for a full market investigation.

"In the meantime, we'll continue to help people pay less for the energy they use, driving the competition that has seen the number of energy suppliers triple since 2010 and people switching supplier in record numbers."

The allegations come days after Ofgem fined British Gas Business for a series of failures including blocking firms from switching to other suppliers.

Ofgem said British Gas Business would pay a total penalty of £5.6m of which £800,000 would be in fines, on top of £1.3m already paid to 1,200 customers who paid higher bills because they were not notified when their contracts were due to expire.


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Best Of British Gear Up For China Car Show

Western Firms Need To Heed China Potential

Updated: 8:33am UK, Tuesday 14 January 2014

By Roland Boal, Designer, Priestmangoode

Western companies need to pay a lot more attention to what is happening in China and Britain's presence here is more limited than it could be.

There is a lot more potential here than is being tapped because Britain's creative industries are extremely well regarded in China.

There is a hunger for new and exciting things. China is moving really fast and moving forward.

There is a certain sense of excitement among people and I think they want products that reflect that; whether it is a train or a plane.

If it is a high-speed train, then make it look really fast.

For us, that is liberating, it is nice to be able to let your imagination run more freely.

In terms of design work, there is no sense of "that will be too difficult to make" or "that will be uneconomical to make" - within reason.

Quality control can sometimes be an issue, but like with any manufacturing facility anywhere in the world, as long as it is subject to the right level of on-going scrutiny and support I do not think that should be a problem.

Apple's products are an obvious example of beautifully-made things that are made here in China.

I get very upset when I hear things like "of course it broke, it was made in China" or "I don't buy that company's products because they're made in China", I think there is such an out-of-date attitude towards the capability of manufacturing in China.

I think we really do need to re-evaluate how we perceive manufacturing in China.

Yes, you can get low-quality products but manufacturing is, by definition, a supply activity so they are not creating the demand for low-quality low-cost electronics, they are fulfilling our demand for the instant gratification of, say, a $300 television.

Undeniably, there are examples of unscrupulous manufacturers ripping off products and knowing exactly what they are doing, but I think those are the exceptions rather than the rule.

I think we get a little bit obsessed by the idea of fake products in China and blatant rip-offs.

But nobody who could afford the original, particularly in China, would be seen dead with it.

I have come across no examples of dishonesty or seen anybody behave poorly. I think China recognises the importance, particularly internationally, of addressing this negative stigma attached to corruption.

There are plenty of markets yet to be exploited in China. We are looking at an explosion in the popularity of private jets and helicopters.

At the moment I think there are fewer than 500 private aircraft in all of China because you were not really allowed to fly them.

Now that you are, people will buy them and they will buy a combination of Chinese products and internationally-designed helicopters.

China is such a huge country, they have an enormous amount of experience manufacturing products for domestic consumption, it seems to have taken them a little while to start looking internationally.

As they do so, they are looking for products designed for international consumption.

So as Chinese airframe manufacturers are selling more products in Africa and South America, if those have been made in China, great, and designed in Britain, also great. Everyone wins.

:: Watch Sky News live on television, on Sky channel 501, Virgin Media channel 602, Freeview channel 82 and Freesat channel 202.


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British Gas Bonus Claims To Be Investigated

Written By Unknown on Minggu, 20 April 2014 | 18.56

Claims that British Gas workers have been paid large bonuses to inflate customer bills are to be investigated by the energy regulator, Ofgem.

It comes after a former employee claimed the energy company encouraged its sales staff to sign up charities, churches and small businesses to its highest-priced tariffs in order to boost their own earnings.

British Gas has strongly denied the allegations.

The whistleblower, who worked for the company between 2010 and 2013, told the Daily Mail the firm's policies were designed "to rip off" customers.

He claimed sales agent typically earned between £4 and £37 in commission per deal if they persuaded existing customers to renew contracts.

But by moving a customer to a more expensive deal they could earn more than £400 a time, he alleged.

"People were desperate to make the salaries they had been promised, so everyone inflated the prices," he told the paper.

"Scout clubs was a favourite one; churches, charities, small businesses, where people would just go for the maximum 5p notch-up," he added.

Ofgem headquarters Millbank London Ofgem will investigate whether the sales activities were 'honest and fair'

A British Gas spokeswoman said: "British Gas strongly refutes any suggestion that employees are paid commission on any prices charged to residential customers."

British Gas Business managing director Stephen Beynon said his sales agents are paid commission, but he denied any suggestion that contracts were negotiated inappropriately.

"This is a highly regulated market, and every part of the sales negotiation process is closely monitored," he said.

"Sales agents in British Gas Business do receive commission, but we are reducing its importance.

"We're leading the way in addressing the variability in price that customers face in this market, and we'll continue to do so."

Ofgem said in a statement: "There are strict rules in place which require suppliers to take all reasonable steps to ensure information provided is accurate and not misleading, and that sales activities are conducted in a fair, honest, transparent and professional manner.

"Ofgem is an evidenced-based regulator and we would encourage anyone with information that an energy company is not complying with Ofgem rules to provide us with this."

Energy and Climate Change Secretary Ed Davey said: "This is a very serious and deeply disturbing allegation that comes as we are doing all we can to make the energy markets work better for all consumers - whether domestic or businesses.

"The Government fully supports Ofgem's recommendation for a full market investigation.

"In the meantime, we'll continue to help people pay less for the energy they use, driving the competition that has seen the number of energy suppliers triple since 2010 and people switching supplier in record numbers."

The allegations come days after Ofgem fined British Gas Business for a series of failures including blocking firms from switching to other suppliers.

Ofgem said British Gas Business would pay a total penalty of £5.6m of which £800,000 would be in fines, on top of £1.3m already paid to 1,200 customers who paid higher bills because they were not notified when their contracts were due to expire.


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Co-op Admits 'Disastrous Year' Amid £2.5bn Loss

The embattled Co-operative Group has confirmed a loss of £2.5bn for 2013, in what it described as a "disastrous year".

The loss comes on the back of a £529m figure recorded in its 2012 results.

Interim group chief executive Richard Pennycook said: "2013 was a disastrous year for the Co-operative Group, the worst in our 150-year history.

"Today's results demonstrate that but they also highlight fundamental failings in management and governance at the group over many years.

"These results should serve as a wake-up call to anyone who doubts just how serious the challenges we face are."

It said most of the losses were from "discontinued operations" of its banking arm, which totaled £2.1bn.

Group sales were £10.5bn, down from the £11bn recorded in the previous year.

Profit from its food division were down 8% at £247m but it also recorded a goodwill impairment charge of £226m for its purchase of Somerfield stores.

The Co-operative Group divisions The Co-operative Group consists of a number of divisions

However, it recorded more encouraging figures for some other divisions.

General insurance profit jumped from £13m in 2012 to £33m last year.

The pharmacy chain, which is being offered for sale, saw profit rise by about a fifth to £33m.

And its funeral services business saw sales up 3% to £370m and profit up £2m to £62m.

Co-operative Group chair Ursula Lidbetter said: "During 2013, it became apparent that our governance had fallen far short of the standards to which we aspire as a co-operative society.

"Now is the time to put that right through fundamental reform - we have to act with urgency if we are to lay the foundations for a stronger, healthier co-operative business in the future."

The group's bank division revealed a £1.5bn capital black hole last year and then in March announced a plan to raise another £400m.

Amid risks of the bank's collapse, the group reduced its stake in the institution to 30% as private equity bondholders provided capital - raising concerns of how it would maintain its 'ethical' stance.


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Best Of British Gear Up For China Car Show

Some of Britain's most famous cars are on parade today at one of the most important days in the motoring calendar.

CHINA--ECONOMY-AUTO-FORD Ford cars on display at the 50 years celebration ceremony of Ford

UK brands such as Rolls-Royce, Jaguar and Land Rover are showing their new models at the China Motor Show in Beijing to help boost sales in an intensely competitive market.

CHINA--ECONOMY-AUTO-FORD An original 1965 Ford Mustang Convertible alongside today's model CHINA--ECONOMY-AUTO-FORD

More than 1,100 vehicles will be on display at the exhibition which will also be attended by General Motors, Toyota, Volkswagen and Hyundai, along with SAIC and Dongfeng, China's domestic carmakers.

Although sales growth is forecast to slow from last year's 15.7% to 8 to 10% this year, China remains the world's biggest auto market with 17.9 million vehicles sold last year.

CHINA--ECONOMY-AUTO-FORD Car sales are expected to slow in China this year

The expo comes as a growing number of Chinese cities are restricting the number of cars on the road in a bid to battle pollution and congestion, moves that analysts warn could cut into purchases.

The eastern city of Hangzhou, a popular tourist destination, last month became the sixth major city to implement such a restriction, with some estimates placing the limit at 80,000 cars a year.

CHINA-ECONOMY-AUTO-FORD More than 1,100 vehicles will be on display at the exhibition

The boss of Mercedez-Benz in China told Sky News earlier this year that survival in the automotive industry is based largely on success in China.

German auto giant Daimler also announced recently it had signed a $1.4bn deal with Chinese partner Beijing Automotive Industry Corporation to expand production at their joint venture in Beijing.     

Among the cars on display at the exhibition will be one of the first 1965 Ford Mustang Convertibles.


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Co-op Admits 'Disastrous Year' Amid £2.5bn Loss

Written By Unknown on Sabtu, 19 April 2014 | 18.56

The embattled Co-operative Group has confirmed a loss of £2.5bn for 2013, in what it described as a "disastrous year".

The loss comes on the back of a £529m figure recorded in its 2012 results.

Interim group chief executive Richard Pennycook said: "2013 was a disastrous year for the Co-operative Group, the worst in our 150-year history.

"Today's results demonstrate that but they also highlight fundamental failings in management and governance at the group over many years.

"These results should serve as a wake-up call to anyone who doubts just how serious the challenges we face are."

It said most of the losses were from "discontinued operations" of its banking arm, which totaled £2.1bn.

Group sales were £10.5bn, down from the £11bn recorded in the previous year.

Profit from its food division were down 8% at £247m but it also recorded a goodwill impairment charge of £226m for its purchase of Somerfield stores.

The Co-operative Group divisions The Co-operative Group consists of a number of divisions

However, it recorded more encouraging figures for some other divisions.

General insurance profit jumped from £13m in 2012 to £33m last year.

The pharmacy chain, which is being offered for sale, saw profit rise by about a fifth to £33m.

And its funeral services business saw sales up 3% to £370m and profit up £2m to £62m.

Co-operative Group chair Ursula Lidbetter said: "During 2013, it became apparent that our governance had fallen far short of the standards to which we aspire as a co-operative society.

"Now is the time to put that right through fundamental reform - we have to act with urgency if we are to lay the foundations for a stronger, healthier co-operative business in the future."

The group's bank division revealed a £1.5bn capital black hole last year and then in March announced a plan to raise another £400m.

Amid risks of the bank's collapse, the group reduced its stake in the institution to 30% as private equity bondholders provided capital - raising concerns of how it would maintain its 'ethical' stance.


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House Price Increases Create 'Generation Rent'

By Siobhan Robbins, Sky News Reporter

The booming housing market is causing a generation of young people to become increasingly pessimistic about their chances of getting on the property ladder, according to a new study.

Halifax's 'Generation Rent' report found that despite the launch of schemes like Help to Buy to give a boost to people with small deposits, 36% of 20 to 45-year-olds felt they have no realistic prospect of owning their home in the next five years.

Around half of those polled in England, Scotland and Wales agreed Britain will become a nation of renters in the next generation and 20% of people aged 23 to 27 said they have no desire to own their own home.

Houses in London A fifth of people surveyed said they had no desire to own their own home

Caroline Hill, 23, told Sky News she would rather rent than buy.

"I can see myself being able to buy in the future but I'm just really not interested in doing so," he said.

"My parents have always been renters and I think that has had a big effect on the way I feel about it."

Danny Palmer, 27, is frustrated the market is running away from him.

"I think it's going to be really difficult for me to get onto the property ladder purely because rent these days is taking up about 40% of my salary, and that's before bills, living costs and anything else," he said.

Estate Agents Estate agents say high prices mean potential buyers are moving into rentals

Halifax mortgages director Craig McKinlay, said: "We may be heading towards the point where the aspiration to own a nice home will be replaced by the aspiration to simply live in one.

"It seems that people are now beginning to accept a lifetime of renting and this would not only change the way the property ladder looks in the future, it could even bring into question whether or not it will exist at all for some people."

The report warned that any future collapse in the number of first-time buyers - the "life blood" of the housing market - will have a knock-on impact on people trying to move up the property ladder.

If some existing home owners are unable to trade up because of a lack of potential buyers for their property, the market will be brought to a standstill, the report warns.

Woking estate agent Yassar Latif, said: "People who were thinking of buying, but have been let down by the rise in prices, have moved towards rentals now."

The Government has said that Help to Buy and plans to build more houses should ease the problem. But despite this, only around 30% of the people polled believed Help to Buy was working.


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British Gas Bonus Claims To Be Investigated

Claims that British Gas workers have been paid large bonuses to inflate customer bills are to be investigated by the energy regulator, Ofgem.

It comes after a former employee claimed the energy company encouraged its sales staff to sign up charities, churches and small businesses to its highest-priced tariffs in order to boost their own earnings.

British Gas has strongly denied the allegations.

The whistleblower, who worked for the company between 2010 and 2013, told the Daily Mail the firm's policies were designed "to rip off" customers.

He claimed sales agent typically earned between £4 and £37 in commission per deal if they persuaded existing customers to renew contracts.

But by moving a customer to a more expensive deal they could earn more than £400 a time, he alleged.

"People were desperate to make the salaries they had been promised, so everyone inflated the prices," he told the paper.

"Scout clubs was a favourite one; churches, charities, small businesses, where people would just go for the maximum 5p notch-up," he added.

Ofgem headquarters Millbank London Ofgem will investigate whether the sales activities were 'honest and fair'

A British Gas spokeswoman said: "British Gas strongly refutes any suggestion that employees are paid commission on any prices charged to residential customers."

British Gas Business managing director Stephen Beynon said his sales agents are paid commission, but he denied any suggestion that contracts were negotiated inappropriately.

"This is a highly regulated market, and every part of the sales negotiation process is closely monitored," he said.

"Sales agents in British Gas Business do receive commission, but we are reducing its importance.

"We're leading the way in addressing the variability in price that customers face in this market, and we'll continue to do so."

Ofgem said in a statement: "There are strict rules in place which require suppliers to take all reasonable steps to ensure information provided is accurate and not misleading, and that sales activities are conducted in a fair, honest, transparent and professional manner.

"Ofgem is an evidenced-based regulator and we would encourage anyone with information that an energy company is not complying with Ofgem rules to provide us with this."

Energy and Climate Change Secretary Ed Davey said: "This is a very serious and deeply disturbing allegation that comes as we are doing all we can to make the energy markets work better for all consumers - whether domestic or businesses.

"The Government fully supports Ofgem's recommendation for a full market investigation.

"In the meantime, we'll continue to help people pay less for the energy they use, driving the competition that has seen the number of energy suppliers triple since 2010 and people switching supplier in record numbers."

The allegations come days after Ofgem fined British Gas Business for a series of failures including blocking firms from switching to other suppliers.

Ofgem said British Gas Business would pay a total penalty of £5.6m of which £800,000 would be in fines, on top of £1.3m already paid to 1,200 customers who paid higher bills because they were not notified when their contracts were due to expire.


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PayPal Warns Users Over Sharing Computers

Written By Unknown on Jumat, 18 April 2014 | 18.56

Online payment firm PayPal has announced plans to prevent users from sharing their computers, smartphones and tablets with anyone else, even family members.

On Tuesday, the company started sending registered users email alerts of upcoming amendments to terms and conditions.

The "Notice of changes to our Legal Agreements" showed policy changes effective June 17, in an email that ran to more than 8,000 words.

A number of the amendments covered improved buyer and seller protection for users, as the company is owned by auction site eBay.

However, the firm also warns against sharing devices under a heading of "Keeping your Payment Instrument Safe", in which changes to security procedures required by users are explained.

Paypal's new system uses photos to help identify and speed payments PayPal is tightening usage terms as more people use it for transactions

Two new sub-sections have been added amid a rise in PayPal usage by people using smartphones, tablets and other portable devices, heightening the risk of misuse by people other than the rightful owner.

The first clause relates to keeping personal account details up to date and the second to pin and password security.

The second clause adds that users must agree to "Take all reasonable steps to protect the security of the personal electronic device through which you access the Services (including, without limitation, using pin and/or password protected personally configured device functionality to access the Services and not sharing your device with other people)."

No exceptions are listed and owners are in breach of their user agreement if they do not adhere to the clause.

The notification advised: "You do not need to do anything to accept the changes as they will automatically come into effect on the above date.

"Should you decide you do not wish to accept them you can notify us before the above date to close your account immediately without incurring any additional charges."

PayPal is owned by online auction giant eBay A number of the new legal clauses relate to PayPal's interaction with eBay

A PayPal statement issued to Sky News said: "We are not banning people from sharing devices.

"The new wording in our User Agreement says that users should take reasonable care when sharing devices so their PayPal account is not compromised. For example, users are advised not to log in to PayPal and then leave their computer unattended.

"This new wording is in line with many other financial services providers and similar agreements."

The existing PayPal user agreement, which runs to more than 20,000 words, was last updated in November 2013.


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Co-op Admits 'Disastrous Year' Amid £2.5bn Loss

The embattled Co-operative Group has confirmed a loss of £2.5bn for 2013, in what it described as a "disastrous year".

The loss comes on the back of a £529m figure recorded in its 2012 results.

Interim group chief executive Richard Pennycook said: "2013 was a disastrous year for the Co-operative Group, the worst in our 150-year history.

"Today's results demonstrate that but they also highlight fundamental failings in management and governance at the group over many years.

"These results should serve as a wake-up call to anyone who doubts just how serious the challenges we face are."

It said most of the losses were from "discontinued operations" of its banking arm, which totaled £2.1bn.

Group sales were £10.5bn, down from the £11bn recorded in the previous year.

Profit from its food division were down 8% at £247m but it also recorded a goodwill impairment charge of £226m for its purchase of Somerfield stores.

The Co-operative Group divisions The Co-operative Group consists of a number of divisions

However, it recorded more encouraging figures for some other divisions.

General insurance profit jumped from £13m in 2012 to £33m last year.

The pharmacy chain, which is being offered for sale, saw profit rise by about a fifth to £33m.

And its funeral services business saw sales up 3% to £370m and profit up £2m to £62m.

Co-operative Group chair Ursula Lidbetter said: "During 2013, it became apparent that our governance had fallen far short of the standards to which we aspire as a co-operative society.

"Now is the time to put that right through fundamental reform - we have to act with urgency if we are to lay the foundations for a stronger, healthier co-operative business in the future."

The group's bank division revealed a £1.5bn capital black hole last year and then in March announced a plan to raise another £400m.

Amid risks of the bank's collapse, the group reduced its stake in the institution to 30% as private equity bondholders provided capital - raising concerns of how it would maintain its 'ethical' stance.


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House Price Increases Create 'Generation Rent'

By Siobhan Robbins, Sky News Reporter

The booming housing market is causing a generation of young people to become increasingly pessimistic about their chances of getting on the property ladder, according to a new study.

Halifax's 'Generation Rent' report found that despite the launch of schemes like Help to Buy to give a boost to people with small deposits, 36% of 20 to 45-year-olds felt they have no realistic prospect of owning their home in the next five years.

Around half of those polled in England, Scotland and Wales agreed Britain will become a nation of renters in the next generation and 20% of people aged 23 to 27 said they have no desire to own their own home.

Houses in London A fifth of people surveyed said they had no desire to own their own home

Caroline Hill, 23, told Sky News she would rather rent than buy.

"I can see myself being able to buy in the future but I'm just really not interested in doing so," he said.

"My parents have always been renters and I think that has had a big effect on the way I feel about it."

Danny Palmer, 27, is frustrated the market is running away from him.

"I think it's going to be really difficult for me to get onto the property ladder purely because rent these days is taking up about 40% of my salary, and that's before bills, living costs and anything else," he said.

Estate Agents Estate agents say high prices mean potential buyers are moving into rentals

Halifax mortgages director Craig McKinlay, said: "We may be heading towards the point where the aspiration to own a nice home will be replaced by the aspiration to simply live in one.

"It seems that people are now beginning to accept a lifetime of renting and this would not only change the way the property ladder looks in the future, it could even bring into question whether or not it will exist at all for some people."

The report warned that any future collapse in the number of first-time buyers - the "life blood" of the housing market - will have a knock-on impact on people trying to move up the property ladder.

If some existing home owners are unable to trade up because of a lack of potential buyers for their property, the market will be brought to a standstill, the report warns.

Woking estate agent Yassar Latif, said: "People who were thinking of buying, but have been let down by the rise in prices, have moved towards rentals now."

The Government has said that Help to Buy and plans to build more houses should ease the problem. But despite this, only around 30% of the people polled believed Help to Buy was working.


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Mulberry's Profit To Get A Handbagging

Written By Unknown on Kamis, 17 April 2014 | 18.56

Luxury fashion brand Mulberry has warned its full-year profit will be below expectations.

The company said pre-tax profit for the year ended March 31 is expected to be around £14m.

The Somerset-based firm, famous for its high-end handbags, said new, lower-priced items would effect the results.

The company said: "Since the appointment three weeks ago of Godfrey Davis as interim executive chairman, a review of operations and strategy has been undertaken with the management team.

"The primary objective is to reinvigorate sales by the introduction of more affordable new product."

Although the company still plans to expand internationally, the pace of new openings has been slowed by nearly 40%.

It said for the 2014-15 fiscal year only five own store openings would occur, down from eight in the previous year.

The company said it would reduce the openings to control costs while allowing existing stores to "achieve greater traction".

Mulberry also confirmed its new UK factory is fully operational, having taken on 300 additional staff.

In January, around £400m was wiped from the company's share value after it reported a drop in its crucial Christmas period sales.

Last year, the company lost its top creative star, Emma Hill, and the group is still looking for a new chief executive after the departure in March of Bruno Guillon.

It also appears that an ongoing appetite for high-priced items is diminishing, even for its regular shoppers.

Releasing the trading update, Mr Godfrey said: "Following the recent change in management, we are focusing on achieving sales growth through the reinforcement of product offering at more affordable prices to meet the expectations of our loyal customers.

"This will have short-term financial consequences but is necessary to ensure the future strength of the Mulberry brand."


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Co-op Admits 'Disastrous Year' Amid £2.5bn Loss

The embattled Co-operative Group has confirmed a loss of £2.5bn for 2013, in what it described as a "disastrous year".

The loss comes on the back of a £529m figure recorded in its 2012 results.

Interim group chief executive Richard Pennycook said: "2013 was a disastrous year for the Co-operative Group, the worst in our 150-year history.

"Today's results demonstrate that but they also highlight fundamental failings in management and governance at the group over many years.

"These results should serve as a wake-up call to anyone who doubts just how serious the challenges we face are."

It said most of the losses were from "discontinued operations" of its banking arm, which totaled £2.1bn.

Group sales were £10.5bn, down from the £11bn recorded in the previous year.

Profit from its food division were down 8% at £247m but it also recorded a goodwill impairment charge of £226m for its purchase of Somerfield stores.

The Co-operative Group divisions The Co-operative Group consists of a number of divisions

However, it recorded more encouraging figures for some other divisions.

General insurance profit jumped from £13m in 2012 to £33m last year.

The pharmacy chain, which is being offered for sale, saw profit rise by about a fifth to £33m.

And its funeral services business saw sales up 3% to £370m and profit up £2m to £62m.

Co-operative Group chair Ursula Lidbetter said: "During 2013, it became apparent that our governance had fallen far short of the standards to which we aspire as a co-operative society.

"Now is the time to put that right through fundamental reform - we have to act with urgency if we are to lay the foundations for a stronger, healthier co-operative business in the future."

The group's bank division revealed a £1.5bn capital black hole last year and then in March announced a plan to raise another £400m.

Amid risks of the bank's collapse, the group reduced its stake in the institution to 30% as private equity bondholders provided capital - raising concerns of how it would maintain its 'ethical' stance.


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RBS 'Cleared' Of Ill-Treating Small Firms

A review ordered by the Royal Bank of Scotland has cleared the lender of fraud against small and medium-sized business customers.

The bank commissioned an independent review by law firm Clifford Chance over claims RBS systematically set out to defraud its business customers.

It was launched following an allegation made by Lawrence Tomlinson in his report that the bank's global restructuring group (GRG), targeted small companies that were in financial difficulties.

Clifford Chance concluded that there was no evidence to support the claim, which the bank described as a "damaging and serious allegation".

In compiling their report, Clifford Chance interviewed 138 small business customers in the recovery unit, 45 employees and reviewed 130 files.

This involved examining 400,000 pages and 1,200 documents.

RBS CEO Ross McEwan said: "The trust that a bank has with its customers is fundamental. That trust was put at risk at RBS by the allegation of systematic abuse made in the Tomlinson report.

"I welcome the Clifford Chance findings which show no evidence of the serious and damaging allegation that we had set out to deliberately defraud our business customers."

He added: "Following the reckless lending that led up to the financial crisis, the bank's shareholders and customers lost billions of pounds on bad loans.

"The bank, through its restructuring team, helped minimise those losses where it could, successfully turning round thousands of businesses, safeguarding hundreds of thousands of jobs."

RBS said it would now ensure that it can further enhance support for small and medium-sized enterprises (SMEs) when they get into financial trouble.

It also set out further steps to rebuild trust with its customers, building on changes made in response to the findings from the separate Sir Andrew Large review.

The City regulator is still conducting its own inquiry into actions of the bank's GRG division.

RBS also said it will not charge default interest for the first 90 days when an SME customer defaults, effective until May 31, 2015.

It has also stopped what it describes as "other smaller fee practices", as it seeks to improve the "the experience for customers" when they first go into financial distress.


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