December 7 2013 Latest news:
By Ben Woods, Business writer
Wednesday, January 2, 2013
Business writer Ben Woods looks back at how the business world fared from July to December in the second part of his review.
Bob Diamond blamed a “series of unfortunate events” for his shock departure from Barclays as the former chief executive told MPs on the Treasury select committee that he felt “physically ill” when he heard the key Libor rate had been fiddled, although he denied he was “personally culpable”.
It later emerged he waived a potential £20m in bonuses and share awards, but still walked away with up to £2m. Bank of England boss Sir Mervyn King also told MPs he was not to blame for failing to spot the rate-rigging scandal amid mounting accusations over the central bank’s role.
Lloyds Banking Group made £8m available to help former customers of the collapsed Farepak Christmas hamper business after a judge suggested it should look to its morals. Mr Justice Peter Smith accused it of taking a “hardball approach” and suggested the owner of HBOS, former banker to the company, should seriously consider adding to the £2m it put into a distress fund in 2006. The payment meant business recovery firm BDO was able to announce that customers were in line to receive about half the money they lost in the collapse.
The Co-operative Group hailed its deal to buy 632 Lloyds branches for up to £750m as “the biggest shake-up in high street banking for a generation”, tripling the size of its banking arm to nearly 1,000 outlets.
Shares in Olympics security provider G4S slumped after it admitted that it would incur a loss of up to £50m on the contract following its admission it would not be able to provide enough staff for the Games.
In an exclusive interview with the EDP, energy giant Centrica announced its grand ambitions to invest hundreds of millions of pounds in the North Sea oil and gas industry – with hopes of employing local people to deliver the work.
Elsewhere in Norwich, start-up business FX Home revealed its plan to forge a major deal with Sony to bundle its specialist video edition software on products sold by the company.
The deal was set to help the firm conquer the US video and photo editing market – despite being virtually unheard of in this county.
The banking industry was mired in fresh scandal after Standard Chartered was branded a “rogue institution” for covering up billions of pounds of illegal transactions with the Iranian government. The 160-year-old bank saw shares plunge 24pc, wiping £10bn from its value.
Barclays handed the job of restoring its tarnished reputation to an insider – just as another scandal threatened to engulf the UK bank. Antony Jenkins, who had been retail and banking boss since 2009, vowed to overhaul the bank after being named as immediate successor to Bob Diamond, who left the lender in the wake of revelations over rate-rigging.
Spain’s economic crisis and the “deep and structural” problems of its main airline Iberia plunged the owner of British Airways into the red with losses of 253m euros (£199m) for the six months to June 30.
Bosses at US-based Hain Daniels Group unveiled plans for a multi-million-pound expansion of its frozen-foods factory in Fakenham which produces the Linda McCartney meat-free range, New Covent Garden Soup, Johnson’s Juices and the Farmhouse Fare range of traditional desserts.
The Hain Daniels Group said the move could see the number of staff at the factory increase from its current 245 to 395.
In Lowestoft, leading energy industry boss Martin Jolley, managing director at AKD Engineering, urged the government to slash red tape and back the east in its quest to become “a centre of excellence” in the decommissioning industry.
He wanted to cut back the time it took to decommission an oil and gas platform to help the region harness a potential £8bn industry in the North Sea.
Defence giant BAE Systems confirmed talks over a potential merger with Airbus aircraft manufacturer EADS to create the world’s biggest aerospace and defence company.
BAE said a tie-up with EADS would form a “world class” firm in its sector, with combined sales of £60bn and around 220,000 staff. BAE said the proposed deal would be a merger, but with BAE shareholders owning 40pc of the combined group and EADS shareholders holding 60pc.
Britain’s banks were told to expect a major clampdown on the commission payments that have been blamed for fuelling recent mis-selling scandals.
The Financial Services Authority said it would look to introduce new rules if the sector does not address the use of incentive schemes, which it said were driving staff to mis-sell products to receive a bonus. It revealed that a review of incentive schemes at 22 banks, building societies, insurers and investment firms had uncovered a range of serious failings.
General-secretary Brendan Barber told the annual TUC Congress that lessons should be learned from the Olympics on how to rebuild the economy. In his final speech to Congress before stepping down at the end of the year, he said that the lessons of the summer were that the private sector was not always best and that the market does not always deliver.
“We can’t muddle through greening our economy. We need investment, planning and an Olympic-style national crusade,” he added.
JJB Sports – once the biggest sports retailer in Britain – admitted defeat as it announced plans to appoint administrators.
Sky was deemed “fit and proper” to hold a broadcasting licence but its former chairman James Murdoch was spared no criticism after the media regulator slammed his handling of the phone hacking scandal.
An EDP investigation discovered that small firms were becoming increasingly fearful of being placed under a cashflow squeeze by some of their larger customers.
It was revealed that some big firms were adding new contract terms to delay paying their bills, with the imposition of changes from 30 days to 60-day payments, while at the more extreme end some large businesses said they would not pay for 90 days.
Future government rail plans were thrown off track after ministers scrapped a deal which would have seen Sir Richard Branson’s train company lose its west-coast franchise.
Sir Richard had mounted a legal challenge to the decision by the Department for Transport to award a new 13-year franchise for the west coast to rivals FirstGroup. Transport minister Patrick McLoughlin pulled the contract award due to “unacceptable mistakes” in the way the DfT managed the franchise bids.
Bruised BAE Systems stepped up its efforts to reassure staff, customers and investors in the wake of its abandoned attempt to merge with EADS. In a letter to national newspapers, BAE chairman Dick Olver and chief executive Ian King said the defence giant did not “regret” the failed £28bn bid, which collapsed in the face of German opposition. It left many fearful over BAE job security, while others felt the group was more vulnerable to a takeover.
A new chapter in the 77-year history of book publisher Penguin was written with a deal to merge the business with rival Random House, creating a firm with a one-quarter share of the market for English language book sales.
A new era for mobile phone use began as superfast 4G products and services were made available by Everything Everywhere in 11 cities across the UK.
A family stationery business Colman Wholesale was set to breathe new life into the former One Account call centre on the outskirts of Norwich after buying the freehold for the unit in the Pinetrees Business Estate in a deal worth almost £550,000.
There was also good news for the Norfolk-based facilities management and contract services provider Norse Commercial Services, which said it was set to grow by nearly 50pc after securing more than £1.5bn worth of business on its books.
City trader Kweku Adoboli, who gambled away £1.4bn in the UK’s biggest banking fraud, was jailed for seven years in a “spectacular” fall from grace.
He brought Swiss bank UBS to its knees by exceeding his trading limits and failing to mitigate the risk of reckless deals. Jurors at Southwark Crown Court found him guilty of two counts of fraud, but cleared him of four counts of false accounting. UBS was later fined £29.7m by the City watchdog for management systems and internal controls that were “seriously defective”.
Chancellor George Osborne shocked the City as he unveiled Canadian Mark Carney as the first non-British citizen to be appointed as governor of the Bank of England. Beating a host of financial heavyweights to the £300,000 a year post, the current governor of the Bank of Canada will succeed Sir Mervyn King when he steps down next June. The appointment was dubbed a “huge surprise” and “unprecedented” by experts who had, until the last minute, backed the Bank’s deputy governor Paul Tucker as the likely successor.
Electricals chain Comet collapsed into administration, prompting an “urgent” search for a buyer to protect 6,600 jobs at the 236-outlet chain.
The EDP hosted business leaders, leading firms and ex-Norfolk Olympians for a special round table to gauge the impact the Olympics had made on the local economy.
Keith Fenwick, chief executive of insurance giant Marsh in Norwich, said it was vital to build on the feelgood factor brought about by the Games.
Aviva ended its six-month search for a new chief executive by unveiling Mark Wilson, as its new boss who vowed to listen to stakeholders and customers and restore the fortunes of the insurance group.
Starbucks said it would pay “somewhere in the range of £10m” in UK corporation tax for each of the next two years after a row blew up in the wake of revelations it paid just £8.6m in 14 years of trading in Britain and nothing in the last three years.
The coffee chain, which has more than 700 outlets in the UK, made the announcement amid increased public pressure on multinational corporations to pay a fairer share of tax. The chain, together with Google and Amazon, was accused of “immorally” minimising UK tax bills in a damning report by spending watchdog the Public Accounts Committee.
Sir Richard Branson scotched rumours that a new airline joint alliance will mean the end of Virgin Atlantic. His comments came after news that giant American carrier Delta was replacing Singapore Airlines in taking a 49pc stake in Virgin – for £224m. There had been speculation that Delta’s European partner Air France-KLM might buy part of Sir Richard’s 51pc stake, leaving the entrepreneur without majority control of the airline.
Luxury carmaker Aston Martin announced that a new shareholder, European investment group Investindustrial, is to invest £150m in the firm, taking a stake of 37.5pc.
HMV warned the terms of its bank loans were not likely to be met in January and April, placing the future of the 238-strong chain under threat. It came as HMV said like-for-like sales fell 10.2pc in the 26 weeks to October 27.
Bosses of King’s Lynn-based Bespak won a major deal to manufacture a tobacco-free alternative to cigarettes.
Parent company Consort Medical said that Bespak had signed a multi-year exclusive contract with Nicoventures Ltd, a stand-alone company within the British American Tobacco Group, focusing on the development and commercialisation of licensed nicotine products.
Two hundred jobs are set to be created after one of west Norfolk’s largest businesses was granted permission to expand its King’s Lynn facilities.