Mafia link to Sicily wind farms probed4th May Financial Times Anti-Mafia magistrates in Sicily have opened a sweeping investigation into the wind power sector where local officials, entrepreneurs and crime gangs are suspected of collusion in the construction of lucrative wind farms before their eventual sale to multinational companies. Italian and EU subsidies for the building of wind farms and the world's highest guaranteed rates, £160 per kwh, for the electricity they produce have turned southern Italy into a highly attractive market exploited by organised crime.
Fair tipping law 'won't cost waiters their jobs'5th May TheIndependent The restaurant trade's warning that 45,000 jobs could be lost when ministers outlaw the use of tips to top up the earnings of staff paid less than the minimum wage has been rejected by an official government study. The review by the Department for Business, Enterprise and Regulatory Reform (DBERR) is likely to pave the way for the practice to be made illegal in November. The government crackdown was promised last July following The Independent's "Fair Tips, Fair Pay" campaign but no date for implementing it has been set. The campaign uncovered evidence that some waiting staff were being paid as little as £3 an hour, as restaurants used tips and service charges to bring their wages up to the national minimum of £5.73 per hour.
HR must be on watch for directors’ fraud5th May PersonnelToday.com HR must be extra-vigilant against a rise in fraud by company directors during the recession, a lawyer has warned. Statistics published by the government's UK Insolvency Service at the weekend revealed that the number of directors banned for criminal malpractice jumped by almost one third (31%), to 1,852 directors who were charged in the 12 months to March. Disqualification proceedings launched against directors for crimes such as fraud or theft rose by 72%, while cases of misappropriation of assets grew by almost 20%.
Shell at risk of investor pay revolt5th May Financial Times Royal Dutch Shell is facing the risk of a shareholder rebellion over pay for the second successive year after two influential investor advisory groups raised concerns about discretionary pay awards made to board-level executives. RiskMetrics, which provides advice on voting to investors including members of the National Association of Pension Funds, has recommended a vote against Shell’s remuneration report at its annual meeting on May 19. The Association of British Insurers’ voting service has also issued an "amber top” alert on Shell’s pay report, warning its members of a potential breach of good governance.
Whitehall gender pay gap outpaces business5th May Financial Times The pay gap between men and women is higher in the civil service than in the private sector, and is 25 per cent in some state institutions, according to official figures obtained by the Financial Times. The government has made it a priority to address pay differences and last week unveiled plans to require companies with 250 or more staff to give details of the average hourly pay of male and female workers. However, the official figures show striking pay differences among government employees. Median earnings in the civil service for full-time male employees were 14 per cent higher than for women in 2008, according to the Office for National Statistics. The figure for the overall economy is 12.8 per cent.
FSA threatens City with higher fines5th May Financial Times Financial wrongdoers could face significantly higher fines from the City watchdog under proposals it is due to put forward this summer. Hector Sants, chief executive of the Financial Services Authority, on Tuesday told City lawyers that the regulator was considering a "new framework” for the penalties it imposed, which would include higher fines. "The rationale for this is a perception that financial penalties have not been sufficiently large to deter wrongdoing in large institutions,” he told the Financial Services Lawyers Association. The lawyers, many of whom follow the FSA’s deliberations closely, expressed surprise at the announcement.
Heads of collapsed fund charged with fraud5th May Financial Times Senior officials of the $63bn US money market fund whose implosion last September helped deepen the global financial crisis were charged with fraud on Tuesday by the Securities and Exchange Commission. Bruce Bent Sr, who founded the Primary Reserve fund in 1970; his son, Bruce Bent II; and their company, Resrv Partners, were accused by the SEC of hiding or failing to provide key facts to investors and trustees in the two days after Lehman Brothers sought bankruptcy protection on September 15.
Investors turn militant over director pay 5th May Financial Times The shareholder voting season across Europe is just getting into full swing but already the militancy of investors is noticeable in the wake of the financial crisis. Xstrata suffered a stinging protest by shareholders over its pay policies on Tuesday as more than a third of votes cast on its remuneration report at its annual meeting failed to back it. BP experienced a similar protest vote against its remuneration plan last month and pay is expected to be a contentious issue at Shell’s annual meeting this month.
Job satisfaction on the up despite economic downturn5th May Personneltoday.com Job satisfaction has increased despite the impact of the recession, but relations between staff and their managers have strained, a survey has found. The 'employee outlook' survey, conducted by the Chartered Institute of Personnel and Development (CIPD), revealed employee satisfaction has increased by 20% since 2006 to 46%, but the HR professional body warned this could be due to employees' relief at still having a job. Women were found to be happier with their jobs with 51% claiming they were satisfied, compared to 41% of men.
Speed camera boss in 100mph drive6th May BBC news The boss of a speed camera firm has been banned from driving for six months after admitting speeding at more than 100mph on a 70mph road in Suffolk. Tom Riall, 49, is a chief executive of Serco, which has provided more than 5,000 speed cameras in the UK. He appeared at Sudbury Magistrates' Court and pleaded guilty to driving at 102.9mph on the A14 on 4 January, 2009.
Exposed: MI5's secret deals in Camp X-ray6th May The Independent MI5 secretly tried to hire British men held in Guantanamo Bay and other US prison camps by promising to protect them from their American captors and help secure their return home to the United Kingdom, The Independent has learnt. One of the men, Richard Belmar, was told he would be paid "well" for his services if he was willing to work undercover for MI5. A second detainee, Bisher Al Rawi, was told that if he agreed to work for the security service he would be "freed within months". Three other detainees were threatened with rendition and harsh detention regimes if they did not co-operate with their British and American interrogators.
Trader wins £20m in ‘lost profits’ case6th May Financial Times An independent day trader has won £20m in damages after being systematically defrauded by one of the world’s largest brokerages – in a landmark ruling likely to reverberate through the industry. Rajesh Gill, a prolific trader regarded as among the best in the City, has been locked in litigation with MF Global for more than seven years after being ripped off by a senior broker who has since left the firm. That broker, Matthew Bomford, may face criminal sanctions after a high court judge on Wednesday branded him a "complete stranger to the truth” who tried to cover up the fact that he repeatedly misled Mr Gill about his trading performance to inflate his own bonuses.
Shareholders to adopt tougher stance 6th May Financial Times "No” votes at annual meetings will become more frequent as investors become tougher on companies, a leading figure in the asset management industry warned. Investors would no longer shy away from voting against board proposals, as they have in the past, said Michael McLintock, chief executive of M&G, which is owned by Prudential and is one of the UK’s top three investment institutions. He was speaking at a conference of the Association of British Insurers and the CBI aimed at looking at ways of restoring confidence in capital markets.
Windows release sparks complaints 6th May Financial Times Microsoft has stirred up fresh complaints of anti-competitive behaviour with its release this week of a late-stage trial version of the next Windows PC operating system. The complaints, from some of the leading makers of web browsers, look set to intensify the software company’s regulatory headaches just as it is seeking to head off swingeing anti-trust action from the European Commission over a related issue. The latest row has been stirred up by provisions in the next version of the operating system, known as Windows 7, which rivals say give an unfair advantage to Microsoft’s own browser.
Push for more women in City jobs7th May BBC News Online Labour's deputy leader wants to use controversial new legislation to help women get top jobs in the City. Harriet Harman told a campaign group, the Fawcett Society, that the forthcoming Equalities Bill would be "a catalyst for change". She said employers should be able to positively discriminate in favour of women, disabled people and ethnic minorities in certain circumstances. Ms Harman has said she wants to combat the male-dominated culture of the City, and banks in particular.
Google CEO says he expects more government scrutiny8th May Reuters Google Inc Chief Executive Eric Schmidt said he expects more regulatory scrutiny from around the world and the company is paying more attention to the way it approaches certain business issues as a result of the attention. But Schmidt told reporters it had not crossed his mind to stand down from the board of Apple Inc, even as the US Federal Trade Commission looks into whether the ties between the two companies violate antitrust laws. Schmidt, along with former Genentech CEO Arthur Levinson, sits on both companies' boards but said that he did not consider Google and Apple to be primary competitors.
Chairmen with more than one job make a comeback8th May The Guardian Chairmen with multiple roles are making a reappearance in City boardrooms as leading investors that take a hard line over excessive boardroom pay are proving more flexible in other areas of corporate governance, shareholder groups said today. Breaches of corporate governance guidelines are being treated on a "case-by-case basis" as shareholders support businesses through the downturn. One leading institutional investor said several firms had found themselves in crisis and needed to make boardroom appointments that would be frowned on in more buoyant times.
The danger of drugs … and data9th May The Guardian A fascinating court case in Australia has been playing out around some people who had heart attacks after taking the Merck drug Vioxx. This medication turned out to increase the risk of heart attacks in people taking it, although that finding was arguably buried in their research, and Merck has paid out more than £2bn to 44,000 people in America – however, they deny any fault. This time Elsevier Australia went the whole hog, giving Merck an entire publication which resembled an academic journal, although in fact it only contained reprinted articles, or summaries, of other articles. In issue 2, for example, nine of the 29 articles concerned Vioxx, and a dozen of the remainder were about another Merck drug, Fosamax. All of these articles presented positive conclusions. Some were bizarre: such as a review article containing just two references.
Anger over GSK's bonus for ex-boss10th May The Guardian Jean-Pierre Garnier, former boss of drugs giant GlaxoSmithKline, is at the centre of a new row over fat cat pay this weekend, after it emerged that his employment contract allows him to cash in share awards this year under a management incentive scheme - despite having left the company in May 2008. Garnier sparked outrage in 2003 when shareholders rebelled against a proposal that could have seen him collect £22m in the event that he resigned or was forced to step down as chief executive. Pirc is angry because Garnier could collect £7m if he vests shares awarded to him in early 2007, provided that the company meets certain performance targets by the end of 2009.
UK nuclear hopeful Areva attacked on safety10th May The Observer Areva, the French company pushing to have its nuclear reactor design adopted in Britain, has been accused of a "lack of professionalism" by safety authorities overseeing a prototype under construction in Finland, a leaked letter shows. Regulators are concerned they have not been furnished with some design details of the Olkiluoto 3 plant and warn the timetable of the delayed project will be further affected if nothing is done. In December, before the letter was sent to the French by STUK, Areva accused its Finnish client, power company TVO, of failing to make progress on measures to speed up the passing of technical details to the safety authorities there.
It's still Tory policy to look after City friends10th May The Observer The Conservatives are bankrolled by the City's powerbrokers. The Tory treasurer is Michael Spencer, founder of Icap - a leading broker in the Square Mile. His deputy is Stanley Fink, doyen of hedge fund managers. Though they have lost a substantial part of their fortunes during the financial crisis, they are charged with raising £40m for the Tories ahead of the next election. So far they appear to be meeting their target thanks to generous support from Michael Hintze, a fellow hedge fund tycoon. The Tories say bonuses should be tied to long-term incentives rather than short-term gain. But how well that sits with its City backers is unclear.
Taxmen to probe MPs over profits from home sales10th May The Observer The crisis over parliamentary expenses reached new heights last night as it emerged that HM Revenue and Customs is to investigate whether MPs have deliberately evaded capital gains tax when selling their second homes. News of an inquiry by tax officials, which follows days of leaks about the way MPs have exploited the Commons' allowances regime for private gain, will inflict further damage on the already battered reputation of parliament. In a separate development, in an article for today's Observer, Sir Alistair Graham, the former chairman of the committee on standards in public life, describes the behaviour of the home secretary, Jacqui Smith, as "near-fraudulent" in relation to her expense claims.
House of shame10th May The Observer What emerges from a world where David Miliband tries to charge the public for his son's pram, Jack Straw can argue for a free kitchen because his daughter considers theirs shabby and still be within the rules, and the multi-millionaire's wife Barbara Follett bills for private security patrols after being mugged near one of her four homes, is a culture of entitlement that risks undermining both politicians' moral authority and, critically, their ability to demand sacrifices from the rest of us. Over the next three years, public services have been ordered to find efficiency savings of £15bn – by a prime minister who himself spent more than £6,000 of public money paying his brother for a cleaner.
More evidence of MPs 'claim culture' disclosed10th May The Observer Yet more damning evidence of the 'claiming culture' in Westminster was disclosed today, with a further assortment of politicians embarrassed over their expenses activity. Five Sinn Fein MPs were facing questions over nearly £500,000 in taxpayers' money they received for running second homes in London - despite not even taking up their seats in the Commons. One current minister, Kitty Ussher, set out a two page wish-list of improvements to her house in the capital and merely instructed parliament officials: "Please pay as much as you are able." Another, Kevin Brennan, apparently had a £450 television delivered to his family home in Wales, even though it had been claimed on expenses for use at his London home.
In-house fraud cases surge10th May Financial Times Fraud committed against companies by their own employees has surged this year, new data suggest, providing fresh evidence that the recession is fuelling a rise in crime. Whistleblower hotlines operated by The Network, a US group that provides compliance services to some of the world’s biggest companies – including Aviva, the UK insurer, Cisco and Yahoo, the US tech companies, and Delta, the US airline – have received a deluge of tip-offs about fraud in recent months. Reports of fraudulent activity including theft, corruption and insider trading made up 21 per cent of all calls to the hotline in the first quarter, compared with 16.5 per cent last year and just 11 per cent three years ago.
Auditors to monitor MPs’ expenses10th May Financial Times The House of Commons’ discredited expenses system will be monitored by external auditors under plans to be approved on Monday. However, further disclosures are likely to distract from the new auditing body, with Conservative party politicians preparing for a public drubbing after details of their expenses receipts were put in the public domain. Alan Duncan, shadow leader of the House of Commons, saw the publication of his claims for thousands of pounds of gardening work, while other allegations against senior Tories included the claim that Andrew Lansley, shadow health secretary, spent thousands of pounds renovating a thatched cottage before selling it.
Intel braced for billion-euro fine under European antitrust rules11th May, Financial Times Intel, the world's biggest chipmaker by sales, is bracing itself for one of the heaviest penalties levied in Europe for anti-competitive behaviour. The European Union is expected formally to approve action against Intel at its weekly meeting of commissioners on Wednesday. It will be the climax of a near-decade-long investigation into the group's marketing practices. Lawyers say the fine could top those heaped on Microsoft, which, combined, exceeded €1billion.
BP brings 'green era' to aclose 11th May BBC News Environmental groups have accused BP of dropping its pledge to be green and replacing it with a commitment to be "responsible". The oil giant was widely recognised as the first oil company to both acknowledge and tackle climate change. However, a change of chief executive has led to an apparent change of policy. In April, CEO Tony Hayward announced that safety was the company's "number one priority". Some environmental groups saw this as an attempt to move away from "green" as a brand value, which was introduced by Mr Hayward's predecessor, Lord Browne.
M&S whistleblower claims sacking breached his human rights11th May PersonnelToday.com Whistleblower Tony Goode, who was dismissed by Marks & Spencer (M&S) after telling the media about planned redundancy pay cuts, is claiming the sacking breached his human rights. The case is being held this week at the London Central Tribunal where Goode is being backed by his union, the GMB. Its legal officer Maria Ludkin said: "The GMB will contend that the sacking of Tony Goode, who had an unblemished record, by M&S was unfair and in breach of his human rights. "He opposed the cuts in redundancy pay and for that he was summarily dismissed. GMB will claim that M&S is in breach of the Human Rights Act with this sacking."
FDA warns Cheerios over health claims12th May Financial Times The Food and Drug Administration has taken issue with health claims made by Cheerios, America’s best-selling breakfast cereal, signalling a new approach to food industry marketing under the Obama administration. The FDA warned General Mills that it was, in effect, marketing its Cheerios breakfast cereal as a drug, because the cereal’s familiar yellow boxes carry unapproved claims about lowering cholesterol and reducing the risks of heart disease. The claims – a central plank of Cheerios marketing for more than two years – go beyond the tightly defined health benefit claim for foods with soluble fibres, such as Cheerios, approved by the FDA for use in food marketing.
Met police HR manager accused at racism tribunalclaim12th May PersonellToday.com Metropolitan Police HR manager was accused of "pulling faces and making racist gestures" during a meeting with a Muslim catering manager called because he refused to cook bacon, an employment tribunal was told yesterday. Hasanali Khoja, 60, said when he called a meeting to discuss his objections to cooking pork for religious reasons his line manager told him he could lose his job if he failed to follow instructions. Khoja claimed he felt he was at risk of contact with pork products at his interview for a senior catering manager job with the Metropolitan Police Service, but said he was assured he would not have to handle food as it was a supervisory role.
FSA may end 'liar loan' mortgage fraud12th May The Guardian Controversial "self-certification" mortgages – dubbed "liar loans" – may be banned after the Financial Services Authority revealed today that almost half of all Britain's new home loans at the height of the property boom were being granted without checks on earnings. Jon Pain, the regulator's retail markets managing director, admitted that the FSA may have made a mistake in giving into the mortgage industry, which fought its proposals to tighten up the rules on self-certification loans. In a speech, Pain said a key problem was that lenders stopped verifying income when considering home loan applications. He said that in 2007, 45% of all mortgages were made without a check on the stated income. "Many of the specialist lenders heavily marketed and sold self-certified products, and a large percentage of these have led to correspondingly high levels of arrears and fraud," he said.
MPs start repaying expense claims13th May Financial Times Politicians from all parties on Tuesday night opened their chequebooks to repay excessive expenses claims, as they buckled after five days of rising public anger over abuses of the Westminster system. A "shocked” David Cameron ordered Conservative MPs to start refunding some claims in an attempt to counter revelations of the taxpayer subsidising the lifestyle of Tory grandees. The dramatic move wrong-footed Gordon Brown, but within hours the prime minister announced the creation of an independent team to study every expenses claim made by MPs over the past four years. "It’s extreme action but necessary because politicians must show themselves worthy of public trust,” he said. MPs making unreasonable claims would have to repay them or could face disciplinary action.
Airlines bow to Brussels ticket sale pressure13th May Financial Times Dozens of European airlines, including budget carriers Ryanair, EasyJet and Wizz Air, have caved in to demands from Brussels to improve their websites in a move that should make booking tickets online cheaper and less confusing. European Commission officials will announce on Thursday that more than 50 airlines have reformed their online booking sites, or will do so shortly, after the Commission threatened to "name and shame” them in its first EU-wide consumer enforcement action. There have also been worries about the use of pre-ticked boxes, which forced consumers to opt out of taking insurance, for example, and about the advertising of special offers.
Morgan Stanley fined over trader’s mispricing13th May Financial Times Morgan Stanley has been fined £1.4m ($2.1m) by the UK’s financial regulator after weak control of its credit derivatives desk allowed a rogue trader significantly to overprice his position for six months. The Financial Services Authority on Wednesday penalised the bank for its failure to prevent the mispricing by Matthew Piper, then a trader in complex credit derivative products. The problem came to light in May last year and Mr Piper was fired in September following an internal investigation. On Wednesday the regulator said it had banned him from the industry and fined him £105,000.
Papers prove Trafigura ship dumped toxic waste in Ivory Coast 13th May The Guardian Documents have emerged which detail for the first time the potentially lethal nature of toxic waste dumped by British-based oil traders, Trafigura, in one of west Africa's poorest countries. More than 30,000 people from Ivory Coast claim they were affected by the poisonous cocktail and are currently bringing Britain's biggest-ever group lawsuit against Trafigura. An official Dutch analysis of samples of the waste indicate that it contained approximately 2 tonnes of hydrogen sulphide, a killer gas. The documents have been obtained by the BBC.
Firm denies 'bullying' customers14th May BBC News A Newsbeat investigation has found evidence of a major rent-to-buy chain bullying and pressurising customers who are falling behind with their payments. BrightHouse sells home furniture and electrical goods. But a debt charity is warning that it treats people in "an appalling way", and wants the Office of Fair Trading to investigate.
Women gain in City jobs battle14th May Financial Times Women are receiving a greater proportion of City job offers than a year ago, in a sign the recession may be narrowing the gender gap in the Square Mile, according to a survey by a leading recruitment company. Women received 48.4% of all job offers, up from 44.9% this time last year, according to Joslin Rowe, the recruiter. The proportion of job offers received by men fell from 55.1% last year to 51.6% this year. The study adds to a growing body of evidence that suggests the recession is hitting men harder than women, despite government fears that the reverse might be true.
MPs attack 'self-pitying bankers and naive Myners' in new report15th May The Independent The Treasury minister Lord Myners has been singled out for humiliating criticism in a report by MPs into the banking crisis. In a scathing verdict, the Treasury Select Committee accused Lord Myners, a former chairman of Marks & Spencer appointed by Gordon Brown last October, of "naiveté" in his handling of the former RBS chief Sir Fred Goodwin's pension and a failure to exercise tight enough control of the issue. They also blamed the City bonus culture for creating a "lethal combination of reckless and excessive risk", contributing to the crisis that has tipped the nation into recession.
Tesco 'breaking promise' to South African fruit pickers15th May The Guardian Anti-poverty campaigners have accused Tesco of breaking a pledge to improve the pay and working conditions of South African fruit pickers who have helped the retail giant to record annual profits of more than £3bn. Three years ago the company agreed to look at the plight of the workers – predominantly women – who are at the bottom of Tesco's lengthy but highly profitable fruit supply chain, after embarrassing scrutiny of its overseas labour practices. But interviews by the Guardian with female workers on Tesco supplier farms near Cape Town reveal they are still only being paid South Africa's "minimum" rather than a "living" wage – which they complain leaves them barely enough to feed and clothe their children. Those interviewed are receiving just 1,231 rand, equivalent to £97.90, per month.
Serious Fraud Office launches dawn raids over collapsed hedge fund15th May The Guardian Two men have been arrested in connection with the collapse of the Mayfair hedge fund Weavering Capital, which went into administration in March with its leading fund owing investors more than $600m (£395m). The men, aged 43 and 45, were taken to a police station for questioning after dawn raids on two homes in Kent and Surrey today by the Serious Fraud Office and the City of London police. In a statement, the SFO said the investigation centred on a series of suspicious transactions with a related firm in the British Virgin Islands that had inflated the apparent value of the Macro Fixed Income Fund. No charges have yet been made.
Alan Wainwright: The lonely life of a construction industry whistleblower15th May The Guardian Alan Wainwright is a whistleblower who appears to have had a significant hand in changing government policy. The one-time construction manager used his inside knowledge to expose the clandestine use by companies of blacklisting that has prevented trade unionists and alleged "troublemakers" getting jobs. By going public, he set off a chain of events which resulted, on Monday, in an announcement from the business secretary, Lord Mandelson, that the government was finally going to outlaw covert blacklists. Mandelson had been forced to act after a watchdog closed down a private investigator allegedly at the heart of blacklisting in the construction industry.
Executives drop out after FSA scrutiny17th May Financial Times Several executives lined up for senior positions at British financial institutions have withdrawn after the Financial Services Authority questioned their competence for the job. The news is further evidence of the City regulator’s increasingly hands-on approach in vetting executives and directors of large banks following the near-collapse of several large lenders. Until last year, FSA scrutiny of senior executives was limited to weeding out those with a history of fraud or other misconduct.
Alexander calls for boardroom diversity17th May Financial Times Boards composed entirely of white males can damage their businesses by indulging in narrow "groupthink”, says Helen Alexander, who is nominated on Monday as the first female president of the CBI employers’ group. Ms Alexander, senior adviser to Bain Capital, criticised the slow growth in female appointments to FTSE 100 boards, where women still occupy under 12 per cent of directorships. In an interview with the Financial Times, she said that while "most sensible companies” were starting to take the issue seriously, "you might just be losing real talent and at an important time”.
ABF poised to act over Primark suppliers17th May Financial Times Primark is expected this week to step up efforts to ensure clothes are sourced more ethically at the discount fashion chain after allegations over its supply network. Paul Lister, company secretary at Associated British Foods which owns the chain, acknowledged the group needed to catch up with some competitors, but said it had taken a number of initiatives to improve Primark’s ethical sourcing. He said. "There is an element of catch up with the market leaders, but we are catching up very quickly. "We have taken the issue seriously. We continue to take the issue seriously.”
Payment protection complaints triple17th May Financial Times The Financial Ombudsman Service expects to report that complaints about payment protection insurance tripled to more than 30,000 in the 2008-9 financial year, when it publishes its annual review later this month. "It accounts for about a quarter of our incoming work at the moment,” says the service, whose role is to step in when a consumer reports that a complaint has not been resolved by their bank, insurer or other financial company.
Strike threat over Qinetiq pay freeze17th May Financial Times Workers at Qinetiq, the UK defence research company, could be on strike in a matter of weeks, potentially disrupting key military equipment programmes, after discussions with the management over pay broke down last week. Unions including Prospect, Unite and GMB, which claim to represent just less than half of Qinetiq’s 8,000-strong UK workforce, will send out ballot papers on Monday, asking their members whether they should take industrial action. David Luxton, national secretary of Prospect, which has more than 2,000 members at Qinetiq, said that the results would be announced on June 1 and without "some movement” from the company a strike was likely from the middle of June.
Soapbox: working with greed17th May Financial Times Blaming MBA programmes for encouraging the behaviour that has led to the current economic crisis is a popular pastime. But from the perspective of neuroscience, such criticism is misplaced, as are most of the attempts at reforming the programmes. It would be better to help students pursue their natural inclinations rather than vainly trying to thwart them. In response to the public outrage, many schools have revamped their curricula to emphasise "holistic thinking”, "values” and "ethics”. If we want MBA students to change their thinking and behaviour, we have to make the case that longer-term thinking, a different set of values and ethical behaviour will help them to realise their goals.
Expenses scandal: House of frauds17th May The Times Cheer up,” said a Labour backbencher to his glum colleague nursing a pint of bitter in a House of Commons bar last week. "You don’t understand,” replied the second MP. "My wife, she doesn’t do budget. It’s the conservatory she ordered.” The first MP said: "Don’t worry, mate, a lot of us have conservatories.” Such laments were repeated a hundred times in the Palace of Westminster last week as once-proud parliamentarians contemplated the demolition of their careers and the trashing of the Commons as an institution. Amid publication of the excesses and abuses of MPs’ expenses, the mother of parliaments stood revealed as the mother of all fiddles.
Legal actions rise over job losses Financial Times 17th May Financial Times Growing numbers of City workers who lost jobs in the recession are bringing legal actions against former employers, lawyers say. Employers are noticing a change in strategy as sacked staff opt for an "everything and the kitchen sink" approach by bringing multiple claims in the hopes of maximising pay-outs. Other workers are trying to circumvent statutory financial limits on compensation by raising discrimination, whistleblowing and other non-standard complaints, experts said.
One small step for whistleblowers18th May The Guardian Congratulations for highlighting Alan Wainwright's courageous stand (The lonely life of a construction industry whistleblower, 15 May). However, his case is just the latest evidence that the Public Interest Disclosure Act 1998 is failing to deter many employers from victimising those who blow the whistle on injustice, fraud and unsafe practices. Less than half of the UK private companies surveyed last year have any whistleblowing procedures in place and, as recent public sector health and social scandals have shown, even when such procedures are in place and staff are principled enough to expose wrongdoing, they often suffer detriment.
Male MBAs retain high expectations18th May Financial Times Men graduating from European MBA programmes this summer expect to earn almost 30 per cent more than their female counterparts, according to the latest research from Universum, the Swedish recruitment and educational research organisation. As the global economy wavers and unemployment figures rise, men graduating from the 80 European business schools surveyed were bullish about their employment prospects. On average they expect to earn €67,696 plus bonuses and commission. Their female counterparts, who made up 38 per cent of the total, expect to earn just €52,232.
Qinetiq staff threaten strike over pay freeze19th May PersonnelToday.com Qinetiq employees are being balloted for strike action after the defence firm's decision to freeze pay. The decision was made to freeze pay this year despite a rise in the company's underlying operating profits from £106m in 2007 to £127m in 2008. The UK arm of Qinetiq saw profits rise sharply by 30% in the six months to September 2008.
Charity to bridge drug R&D gap19th May Financial Times A British cancer charity is to fund clinical trials of a drug owned by GlaxoSmithKline in a pioneering programme to develop promising experimental medicines that are neglected because of limited corporate funding. Cancer Research Technology, the commercial arm of Cancer Research UK, will shortly begin tests in patients of GSK's 1070916A, and retain a share of the profits if the drug is successfully.
Shell and Next face investor anger over pay19th May The Times The outcry over executive remuneration will break out again at two annual meetings today, when the boards of Royal Dutch Shell and Next, the retail group, come under fire from angry shareholders over alleged overly generous bonus packages. At Shell, investors are concerned that the remuneration committee has "moved the goalposts" and agreed awards even though the necessary performance targets have not been met. The influential Association of British Insurers (ABI) claims that Next has flouted good corporate governance by changing the rules over bonuses part way through the financial year.
Gordon Brown pledges to end self-regulation for parliament19th May The Guardian Gordon Brown proposed an end to centuries of parliamentary self-regulation and sovereignty in response to the collective failure by MPs and officials to prevent systematic corruption in MPs' expenses claims. The prime minister said he wants to end the process by which MPs govern their own finances, with a new independent parliamentary standards regulator to be responsible for pay and allowances. This new structure would be kept regardless of the specific proposals on the future structure of MPs' allowances advanced by Sir Christopher Kelly, the chairman of the committee on standards in public life. Brown's proposal is a serious rebuff not just to MPs, but also to the parliamentary fees office, the body responsible for checking MPs' expenses claims.
Tolerance of fraud in business rises20th May The Times One in seven employees at large British companies feel that using cash bribes or personal gifts is an acceptable way to win business in a tough economy, according to new research that reveals widespread tolerance of unscrupulous behaviour. The survey, released today by the auditors Ernst & Young, suggests that senior managers may be cutting ethical corners as they struggle to stabilise their businesses amid the economic downturn. More than 60 per cent of UK respondents said they expected fraud to increase over the next few years - one of the highest percentages in Europe.
Wildcat strikes over foreign workers20th May The Independent A number of contract workers at a power station and other sites walked out on an unofficial strike in a dispute over the hiring of labour yesterday. The wildcat action hit a liquefied natural gas site in Milford Haven, Pembrokeshire, west Wales, and the Aberthaw power station in south Wales and involved laggers and thermal insulation engineers. It is believed the strikers complained that an agreement by contractors to offer jobs to local labour had been broken. Sources said the action could spread to other sites across Britain unless the dispute was resolved quickly.
AstraZeneca 'pushed drug for untested uses'21st May The Independent AstraZeneca launched a public relations push to get doctors to prescribe its best-selling psychiatric drug Seroquel for a string of uses that were not approved by safety regulators, according to a damning internal document released yesterday. The UK's second biggest drug maker is being sued by 16,000 patients in the US for "spinning, skewing and concealing" information on the drug's potential side-effects, including diabetes and weight gain, and lawyers unearthed emails and strategy documents showing what they say are repeated violations of the law. The company was forced on to the defensive yesterday after more than 230 internal documents were made public, supporting a legal assault that wil cost it hundreds of millions of dollars if successful.
Two arrested over alleged £50m fraud21st May The Guardian Two men have been arrested by City of London police in connection with an alleged £50m fraudulent investment scheme. A third man is expected to hand himself in after seven officers arrested a 40-year-old man following three dawn raids at addresses in London and Surrey. A second man, aged 43, was arrested after he went to a City of London police station. Both men were arrested on suspicion of conspiracy to defraud, money laundering and fraud by misrepresentation. The first man has been released on police bail while the second was still in custody earlier today.
Pakistani gang 'pocketed millions' in bogus college scam21st May The Guardian A Home Office investigation is under way today into a Pakistani gang alleged to have pocketed millions of pounds enrolling hundreds of men from the militant heartland of al-Qaida into bogus UK colleges. One of the young businessmen thought to have helped mastermind the scam, Mir Ahmad, was arrested yesterday, according to a report on Times Online. A subsequent report on the site says he is also alleged to be linked to two murders in Pakistan. Hundreds of men paid at least £1,000 to the gang to be admitted into sham colleges, it is alleged. Some paid £2,500 for fake diplomas, attendance records and degrees.
The pervasive business of fiddling expenses21st May Financial Times Fraud is fraud. But standards of what is a reasonable expense vary by sector. Pharmaceutical executives, for example, often lodge in swanky hotels whose cost would inspire paroxysms in the finance director of a retailer. It was not unusual, until recently, for brokers to withdraw wads of cash from compliant accounts departments to take clients to lap-dancing clubs. Their bosses, who valued their banks' respectable image, preferred to leave no paper trail. There are suggestions - doubtless unfair - that thousands of pounds for "fruit and flowers" shelled out by music promoters in fact disappear up the nostrils of rock musicians. Some weird claims are perfectly legitimate. An exotic dancer called Chesty Love wrote off the cost of her breast implants against tax with the blessing of a US court.
Police raid scheme accused of £50m 'scam'22nd May The Independent City of London Police appealed for hundreds of victims of a suspected investment scam to come forward yesterday after arresting two men it believes helped to orchestrate the alleged £50m fraud. The appeal follows a series of dawn raids yesterday on three addresses in London and Surrey in which a 40 year-old man was arrested on suspicion of conspiracy to defraud, money laundering and fraud by misrepresentation. A 43 year-old man was arrested later after attending a City of London police station, and a third man is still being sought. All the properties raided were searched by the police team. The investigation is linked to three consultancy firms whose assets and operations were frozen by the Financial Services Authority, the chief City regulator, in November last year.
Commons officials helped culture secretary beat tax24th May The Times ANDY BURNHAM, the culture secretary, has apparently avoided thousands of pounds in capital gains tax by channelling a £16,600 property windfall through the parliamentary expenses system. Burnham was given the money by a property developer to persuade him to move out of a flat he rented in Dolphin Square, a desirable apartment block near the Palace of Westminster. Tax experts say he would normally have been liable for a tax bill of up to £6,665 on the windfall.
RBS chiefs handed £5m in bonuses24th May The Times ROYAL Bank of Scotland has handed four of its senior executives share bonuses worth close to £5m, risking fresh accusations of excessive executive pay at banks that had to be rescued by taxpayers. Ellen Alemany, the head of the bank’s American business, could receive close to 6m shares in RBS under the bonus deal – worth £2.4m based on Friday’s closing price. Three other senior executives have been promised shares under the scheme, including corporate banking bosses Alan Dickinson and Chris Sullivan, and the bank’s chief administration officer, Ron Teerlink
Pay rises for energy watchdog ‘failures’24th May The Times ENERGY regulators who have presided over rip-off gas and electricity prices have been awarded 16% pay rises and given interest-free property loans to their staff. Fifteen staff have been allowed to borrow up to 100% of their salary to help buy property in London. Employees have 10 years to pay back the loans, which saves them tens of thousands of pounds in interest. Details of the home loans and the inflation-busting pay rises emerged in Ofgem’s latest accounts as industry figures said it had been "naive” and "blind” and had "systematically failed” to represent consumers.
Council uses terror law to spy on shirker in shower 24th May The Times A LOCAL council has used surveillance powers designed to catch terrorists and prevent serious crime to check how long a member of staff spent in the shower. Burnley borough council invoked laws set up to safeguard national security to mount a covert operation against one of its own officials because it suspected he was using a gym during office hours. Internal council papers, obtained under the Freedom of Information Act, revealed that the council decided to mount a "direct surveillance” operation against the official.
Ukip leader Nigel Farage boasts of his £2m in expenses24th May The Guardian The leader of the UK Independence party (Ukip), which wants to lead Britain out of the EU, has taken £2m of taxpayers' money in expenses and allowances as a member of the European Parliament, on top of his £64,000 a year salary. But the success rapidly turned sour as one of the dozen, Ashley Mote, was expelled from the party - and later jailed - for benefit fraud. Another, Tom Wise, is now facing prosecution for alleged false accounting and money laundering relating to his EU expenses.
Sorrell bonus plan to face investor test25th May Financial Times The strength of the backlash against boardroom bonuses will be tested further next week when WPP asks investors to approve a scheme that could see its chief executive Sir Martin Sorrell earn as much as $95m (£60m). Known as the Leadership Equity Acquisition Plan III (Leap), the scheme has been put in the spotlight after the Association of British Insurers last week gave members a so-called "red top” warning, encouraging them to look closely at the scheme before approving it. That warning comes amid growing shareholder anger over remuneration and bonuses. Royal Dutch Shell shareholders last week voted against its executive pay plan.
PwC urges transparency as priority25th May Financial Times Accountants risk being sued into collapse and investors could lose vital information if policymakers emphasise the importance of financial stability over transparency, according to Samuel DiPiazza, head of PwC, the world’s largest accounting firm. His comments come as politicians and regulators are drawing up a new framework for financial regulation to avoid a repeat of the recent market meltdown. Many have blamed "fair value”, or mark-to-market, accounting rules for exacerbating the scale of banks’ losses and unnecessarily weakening the institutions at a dangerous time. As a result, they want a greater acknowledgement of the need for financial stability to be considered in new rules.
US cracks down on corporate bribes25th May Reuters The US Justice Department is increasing its prosecutions of alleged acts of foreign bribery by US corporations, forcing them to take costly steps to defend against scrutiny, The Wall Street Journal reported yesterday. At least 120 companies are under investigation, the paper cited Mark Mendelsohn, a deputy chief in the Justice Department division overseeing the prosecutions, as saying. That is up from 100 at the end of last year.
Scientologists in France go on trial for fraud25th May The Guardian The Church of Scientology in France went on trial today on charges of organised fraud. Registered as a religion in the United States, with celebrity members such as actors Tom Cruise and John Travolta, Scientology enjoys no such legal protection in France and has faced repeated accusations of being a money-making cult. The group's Paris headquarters and bookshop are defendants in the case. If found guilty, they could be fined €5 million ($7 million) and ordered to halt their activities in France. Seven leading French Scientology members are also in the dock. Some are charged with illegally practising as pharmacists and face up to 10 years in prison and hefty fines.
NHS 'loses' thousands of medical records25th May The Independent The personal medical records of tens of thousands of people have been lost by the NHS in a series of grave data security leaks. Between January and April this year, 140 security breaches were reported within the NHS – more than the total number from inside central Government and all local authorities combined. The sacred principle of doctor-patient confidentiality is being compromised, Richard Thomas, the Information Commissioner, has warned. Britain's information watchdog has ordered an urgent overhaul of data security in the health service. Some computers containing medical records have been left by skips and stolen. Others were left on encrypted discs – but the passwords allowing access were taped to the side.
‘Too few women’ ready to become directors26th May Financial Times Forget the glass ceiling - the real gender problem for Britain's boardrooms is a lack of women ready to take on the role of director, according to Kathleen O'Donovan, one of the country's most senior non-executives. Research by a company co-founded by Ms O'Donovan, who became the FTSE 100's first female finance director at BTR in 1991, has found that businesses want to appoint women to their boards but cannot find enough experienced female candidates. "Time and again, we were told there are too few women in the pipeline - too few rising up career paths, too few gaining experience in running things, too few in the top executive roles," says the report by Bird & Co Board and Executive Mentoring.
Shell ontrial26th May The Independent Royal Dutch Shell will revisit one of the darkest periods of its history tomorrow as a potentially groundbreaking court case opens in New York. The oil giant stands accused of complicity in the 1995 execution of Ken Saro-Wiwa, a Nigerian environmental activist. The world's boardrooms are watching the case, which is seen as a test of whether transnational companies owned or operating in the US can be held responsible for human rights abuses committed abroad.
BA chief gives up a month’s salary and invites staff to take unpaid leave as losses announced26th May Personnel.Com British Airways chief executive Willie Walsh will work without pay for a month and has called on staff to consider taking unpaid leave, to counter huge losses announced last week. On Friday (22 May) the firm announced an operating loss of £220m in its preliminary results to March 2009, compared to a £878m profit in 2008. To save costs during the "bleak trading environment", Walsh has offered employees the chance to take unpaid leave and increase temporary or part-time working.
BT shelves pay rise plans for executives27th May Financial Times BT has cancelled plans to boost potential future bonuses for executives after a year of underperformance from its struggling IT services division, but the former head of the unit still walked away with a £1.6m pay-off, the company’s annual report has revealed. The telecoms group had already pledged to freeze pay for all of its 85,000 UK staff this year, including for top management, but plans to increase potential bonuses and financial targets have been abandoned, the report said. Very few bonuses were paid for 2008, with some directors agreeing that pay-outs would be distributed in shares instead of cash.
Unions and publishers join to fight piracy27th May Financial Times Unions on both sides of the Atlantic are joining forces with media companies to lobby for tougher action against piracy, as rising unemployment levels focus their attention on the threat to members’ jobs and incomes from copyright breaches. Representatives from media unions, including the the Federation of Entertainment Unions and the Broadcasting, Entertainment, Cinematograph and Theatre Union (Bectu), joined rights owners at a London conference this month to co-ordinate their approach to the government’s Digital Britain report on the future of the UK’s creative industries.
ExxonMobil investors reject calls for reform27th May Financial Times ExxonMobil investors on Wednesday rejected shareholder proposals aimed at bringing the policies of the world’s biggest publicly listed oil company in line with competitors. In stark contrast to rebellions at Royal Dutch Shell and BP, shareholders voted against requiring Exxon to review its executive compensation policies – an issue taking investors by storm in Europe. While 41.4 per cent supported giving shareholders a non-binding advisory vote on executive compensation, only 11.6 per cent voted for a detailed report on the $23.9m paid to Rex Tillerson, Exxon’s chief executive, last year. There have been protests that Mr Tillerson’s pay was 541 times that of the average worker last year.
FSA bans another Morgan Stanley trader27th May The Independent The Financial Services Authority yesterday fined and banned a senior trader at Morgan Stanley for improper conduct, the third employee to fall foul of the regulator this month. The UK markets watchdog imposed the £140,000 fine on Nilesh Shroff as well as banning him, "for deliberately disadvantaging his customers by 'pre-hedging' trades without their consent". Pre-hedging refers to trading by a broker to benefit the firm before carrying out the trade for his customer, but using information that customer has provided. The FSA found seven instances of Mr Shroff pre-hedging between June and October 2007. Morgan Stanley fired him for gross misconduct in the December of the same year.
BT calls time on employees working from home27th MayThe Times BT, a pioneer of flexible working, has put out a call to about 200 of its work-from-home staff to come back to the office. The group is trying to restore the fortunes of its failing IT services unit and unions said that the recall was aimed at ensuring that BT could "better monitor" workers as it seeks to improve the division's performance and squeeze maximum profitability from it. The unions fear that, as the recession continues to bite, more companies will seek to call time on flexible working.
Watchdog rules ecotown advert misled public27th May The Guardian Developers hoping to build an ecotown misled the public about its benefits, the Advertising Standards Authority ruled today. A regional press advert for the Middle Quinton ecotown, near Stratford-upon-Avon, included claims by St Modwen Properties and the Bird Group of Companies for which they did not have sufficient evidence, said the advertising watchdog. Claims made included that the "zero-carbon sustainable community" would create 4,700 jobs and 6,000 homes, and the £100 million infrastructure investment would also deliver Stratford's western bypass.
Big business and moral responsibility27th May The Independent Today's court hearing in New York against Shell for complicity in the execution of the Nigerian writer Ken Saro-Wiwa and his fellow Ogoni activists in 1995 is about much more than a single company and one terrible act of violent suppression. Ultimately, it is about the moral responsibilities of multinational companies operating in the developing world. Companies such as Shell argue that they can only obey the rules as laid down by the government which has given them the licences. They claim that their primary responsibility is to their shareholders. But, in saying that, they are absolving themselves from any responsibility for the wider effects of their activities.
Should Britain import the US method of dealing with fraud?27th May The Times The headlines in The Times this week that "City police warn of huge rise in fraud cases” was accompanied by the astonishing report that the number of reported frauds has risen by 64 per cent in the past year "with people from all walks of life falling victim”. Certainly, the City of London police have embarked on a serious campaign to try to combat fraud and catch the perpetrators. But is there actually more financial fraud going on? Speaking to a range of City solicitors this week the view was that an increasing number of frauds are emerging because of the economic downturn.
British man accused of £4.4m Ponzi scam in US28th May The Guardian A British man faces jail in the US after being charged with a £4.4m investment fraud. Robert Tringham, 64, from Knebworth, Hertfordshire, is accused of running a Ponzi (pyramid) scheme in which investors were tricked into handing over millons of pounds. They believed they would receive high returns on their investments but instead Tringham allegedly used the money for his own gain. Tringham, who lived in Diamond Bar, California, used some of the money to buy a home and Land Rover, the indictment filed by prosecutors in California alleges.
Abu Hamza sons jailed over luxury car scam28th May The Guardian Three sons of the jailed cleric Abu Hamza were today jailed today for their involvement in a £1m luxury car scam. Hamza Kamel, 22, and 27-year-old Mohamed Mostafa helped run the two-year fraud with the cleric's stepson, Mohssin Ghailam, 28, Southwark crown court was told. The judge, Gregory Stone QC, sentencing seven men for their involvement in the case, said it involved "serious criminality" and he had no alternative but to jail them. He said Kamel, of Acton, west London, had pleaded guilty to counts of dishonest handling of stolen cars and money laundering and would go to prison for two and a half years.
FSA bonuses rise by 40pc in spite of financial crisis29th May The Telegraph The move comes as fresh questions have been raised over the "unforseeable" nature of the collapse of Northern Rock and HBOS. The FSA paid out £19.7m in bonuses last month, compared with £13.9m the previous year, with one official receiving £90,000. The regulator, which is cracking down on bonus payments across the banks, defended the increase, saying it had about 250 extra staff in 2008 compared with 2007, and that it had to pay more to attract and retain the highly-qualified people needed to improve regulation in the wake of the financial crisis.
MPs' £1m payoff (and another £12.5m for pensions)29th May The Independent The dozen MPs who are quitting at the next election in the wake of the expenses scandal will receive from the taxpayer "golden goodbyes" worth more than £1m combined. Their continuing salaries will cost a further £600,000 if the Prime Minister Gordon Brown delays calling the polling day until next spring. And they will leave Westminster knowing that they sit on a combined taxpayer-subsidised pension pot of some £12.5m – more than £1m each. The hidden cost to the voters of the expenses storm emerged as the Conservative MP Julie Kirkbride and Labour's Margaret Moran bowed to overwhelming pressure yesterday and announced that they would step down at the next election.
Iraq faces the mother of all corruption scandals29th May The Independent Iraq plans to arrest 1,000 officials for corruption after a scandal which has forced the resignation of the Trade Minister and is threatening the food supply of millions of Iraqis. Corruption at the Trade Ministry is an important issue in Iraq because the ministry is in charge of the food rationing system on which 60 per cent of Iraqis depend. Officials at the ministry, which spends billions of dollars buying rice, sugar, flour and other items, are notorious among Iraqis for importing food that is unfit for human consumption, for which they charge the state the full international price.
FSA bonuses rise by 40pc in spite of financial crisis29th May The Telegraph The move comes as fresh questions have been raised over the "unforseeable" nature of the collapse of Northern Rock and HBOS. The FSA paid out £19.7m in bonuses last month, compared with £13.9m the previous year, with one official receiving £90,000. The regulator, which is cracking down on bonus payments across the banks, defended the increase, saying it had about 250 extra staff in 2008 compared with 2007, and that it had to pay more to attract and retain the highly-qualified people needed to improve regulation in the wake of the financial crisis.
Brown to launch 'code of conduct' forMPs31st May The Independent Gordon Brown said today there were "clear cases" of MPs who may have broken the law over expense claims but insisted that only "a few" MPs had abused the Westminster perks system. The Prime Minister said he planned to introduce a binding "code of conduct" for MPs and warned other public institutions they would also face tougher scrutiny as part of a bid to clean up the system. He also hinted that an independent review of the pay and perks system would call for a ban on controversial "golden handshake" pay-offs for MPs who stand down.
British supermarkets accused over destruction of Amazon rainforest31st May The Guardian British supermarkets are driving rapid destruction of the Amazon rainforest by using meat from farms responsible for illegal deforestation, according to a three-year investigation of the global trade in Brazilian cattle products. The report names Tesco, Sainsbury's, Asda, Morrisons and Marks and Spencer among dozens of high-profile companies it says profit from products supplied by Brazilian farms on illegally deforested land. Much of the trade is in processed beef, used for pies, canned meat and frozen ready meals. The supermarkets insist it is not from the Amazon.
