Lloyds Banking Group (LLOY) has agreed to restart a compensation scheme it set up for victims of fraud after “serious shortcomings” were found. An independent review of recompense provided to small business owners who were damaged by the £1 billion HBOS scandal found that the scheme failed to deliver “fair and reasonable offers of compensation”. Sir Ross Cranston, a retired High Court judge, said that “claims to direct and consequential loss must be reassessed” as he accused Lloyds of an “unacceptable denial of responsibility”. The Financial Conduct Authority said that the bank’s failings needed to be addressed quickly. The City watchdog added that senior management must explain how and why the issues identified by Sir Ross occurred and that “further action may be required in light of those answers”.
M&C Saatchi (SAA) was cast deeper into turmoil last night after its co-founder and three independent directors resigned in the wake of an accounting crisis. Lord (Maurice) Saatchi, 73, who founded the company with his brother Charles a quarter of a century ago, has tendered his resignation. Lord Dobbs, 71, the Conservative peer who wrote the House of Cards drama series, Lorna Tilbian, a media industry financier, and Sir Michael Peat, 70, a former courtier and KPMG partner, have left the board with immediate effect. The departing directors are understood to have demanded that David Kershaw, 65, chief executive, and Jeremy Sinclair, 73, chairman, carry the can for an accounting scandal that has cut its market value in half since August. When Mr Kershaw and Mr Sinclair declined, they resigned instead, industry sources told The Times. A different source with knowledge of the situation said Mr Kershaw and Mr Sinclair sought outside counsel and were advised it would not be in the best interests of the company to step down immediately.
Further misery was heaped on Ted Baker (TED) investors yesterday after the fashion group delivered another profit warning that claimed the scalps of its long-serving chief executive and chairman. In an unscheduled trading update, Ted Baker said that its full-year profits would be as little as £5 million, a 90% nosedive on a year earlier. In response to the collapse in profits Ted Baker said that Lindsay Page, 61, would be stepping down as chief executive with immediate effect after 22 years with the business. David Bernstein, 76, the chairman, is accelerating his retirement plans.
Competition between Britain and the United States to help build Japan’s next fighter jet has intensified with defence officials on both sides of the Atlantic intensifying their lobbying of Tokyo. The Ministry of Defence and BAE Systems (BA.) have been forced to counter rising pressure on Japan from the American defence department and Lockheed Martin over a contract to build the F-3 fighter, sources said. Japan is seeking to replace its ageing fleet of single-engine F-2s with twin-engine jets capable of patrolling larger areas. It is concerned about China’s increased military presence in the South China Sea and North Korea’s repeated firing of long-range missiles into the Sea of Japan.
The two most senior non-executive directors of the healthcare technology company founded by Lord Drayson, the former science minister, have resigned suddenly after a corporate governance fiasco. Annalisa Jenkins, who was appointed as acting chairwoman of Sensyne Health (SENS) in October, and Andrew Gilbert, the senior independent director, have left the board. Sensyne has appointed Sir Bruce Keogh, 65, an existing non-executive, as interim chairman and has appointed Spencer Stuart, the headhunter, to find a permanent chairman and non-executive directors. Sensyne has had four chairmen and women since it floated on the London Stock Exchange’s junior Alternative Investment Market in August.
The biggest shareholder in Rolls-Royce Holdings (RR.) has resigned from the aerospace company’s board after almost four years, leading to expectations that the US activist investor could cut its stake. Bradley Singer, chief operating officer of Value Act, stepped down as a non-executive director of the engineer on Monday. The change, revealed yesterday, prompted shares in Rolls-Royce to drop by as much as 5%, putting it among the biggest fallers on the index. Value Act reduced its stake in March, taking its position from 10.94% to 9.48%, when it sold 1.9 million shares at about 20% above Monday’s share price. The board change has raised expectations that Value Act will sell more shares.
Ashtead Group (AHT) is planning to refocus its equipment rental business in Britain after its performance was hurt by subdued demand, which has forced the company to cut prices in an attempt to attract customers. Shares in the company fell yesterday after half-year results revealed disappointing figures for its UK division, which is called A-Plant. This year Ashtead named Brendan Horgan, 46, as its chief executive, replacing Geoff Drabble, 60, who grew the business into a FTSE 100 company during his 12-year tenure. Mr Horgan has been with Ashtead for more than 20 years and previously ran the Sunbelt division, which highlights the importance of the US to the group. The UK accounts for less than 10 per cent of Ashtead’s revenue but the performance of A-Plant concerned investors yesterday.
HSBC Holdings (HSBA) private Swiss bank has been fined $192 million for conspiring with United States citizens to evade taxes. The justice department said that the bank used various methods to help Americans hide their offshore assets from US authorities, such as using code-named and numbered bank accounts and otherwise “relying on Swiss bank secrecy”. The bank admitted that between 2000 and 2010, it conspired to defraud the US of taxes, commit tax evasion and file false federal tax returns. The justice department said that the bank had about 720 undeclared US client relationships in 2002 and held about $1.3 billion in undeclared assets for American clients in 2007. The department said yesterday that the bank had agreed to pay the fine and enter into a three-year deferred prosecution agreement.
A junior biotechnology company testing a treatment for erectile dysfunction was taken aback to find that it flopped — while a placebo got the desired result instead. Now Futura Medical (FUM) wants to get the placebo approved by regulators. It had been working on a gel — MED2005 — for more than a decade but it proved of only limited use in a late-stage clinical study, while the placebo drug with which it was being compared yielded “statistically significant and clinically meaningful” improvements in patients’ conditions. James Barder, chief executive of Futura, said the outcome was “surprising” and added that he and his team “did not entirely know” why the placebo had the effect that it did.
Marks & Spencer Group (MKS) has boosted its efforts to revive its clothing division by hiring a senior Adidas director to take charge of its supply chain. Paul Babbs, who has been with the German sportswear company for the past 12 years and was most recently its chief supply chain officer, will take the same role when he joins in late spring, according to a staff memo seen by The Times. The move comes three months after the retailer fired its previous supply boss, Gordon Mowat, and ousted its clothing chief executive, Jill McDonald, in July after a disaster in its denim department. Steve Rowe, Marks’s chief executive, said that a failure to order enough pairs of jeans had resulted in the “worst availability I have ever seen”. The mistake, which resulted in empty rails of the jeans popularised by a Holly Willoughby marketing campaign, was internally called “jeansgate”.
A plan to shorten the long hours worked by stock market traders and fund managers has moved a step closer after the London Stock Exchange Group (LSE) began to canvass the City on the proposals. The exchange yesterday started a consultation to examine whether the trading day should be cut in a move aimed at improving work-life balance. It comes after the Investment Association, whose members manage about £7.7 trillion of assets, and the Association for Financial Markets in Europe last month called for market hours to be reduced from between 8am and 4.30pm currently to between 9am and 4pm.
A warning that shoppers have reined in their Christmas spending before the election hit the share prices of supermarkets. November is usually a good month for the nation’s grocers as consumers begin to load up their cupboards before the festive season. Tomorrow’s election, coupled with recent wet weather and a lacklustre Black Friday, have put paid to that this year. Total British grocery sales growth slowed to 0.5% in the 12 weeks to December 1, with all of the “Big Four” supermarkets losing market share to the discounters Aldi and Lidl, according to research by Kantar. Tesco (TSCO) was the best performing of the big supermarkets with sales falling by 0.8%. Sainsbury (J) (SBRY) sales declined by 1.1% and Asda’s shrank by 1.9%, while sales at Morrison (Wm) Supermarkets (MRW) fell by 2.9%. Lidl’s sales rose by 9.3% over the period and its German rival Aldi enjoyed a 6.2% rise. As a result the Big Four’s combined share of the grocery market fell to 67.7%, down from 69.1% last year.
Tullow Oil (TLW) was a big riser, climbing 5¾p to 45¾p after it slashed its production outlook, suspended the dividend and announced the exit of its chief executive. Yesterday’s rise was something of a “dead cat bounce”.
Petra Diamonds Ltd.(DI) (PDL) was forced to close its three mines in South Africa amid an energy crisis in the country. The state-owned electricity supplier, Eksom, had asked the company to cut their energy usage to relieve pressure on the national power system. After the close Petra said that its operations, including the Cullinan mine, where the famous diamond was found, were running again, although not at full capacity. Bosses said that the impact of the stoppages would depend on how long it was until normal service was resumed.
The convenience stores group McColl’s Retail Group (MCLS) found itself in the red, as it cautioned that adjusted profits this year would come in at about £32 million, worse than analysts had expected. McColl’s blamed poor weather and lower consumer confidence throughout the second half.
Just Eat (JE.) swatted away the latest bid from Prosus yesterday but the takeover battle is likely to rumble on, according to Liberum, the City stockbroker. The Dutch investment company, increased its offer to 740p a share this week, which valued Just Eat at £5.1 billion. The online takeaway marketplace said that the improved bid “significantly undervalues” the business and urged shareholders to back the all-share merger it agreed this summer with Takeaway.com. Just Eat shares closed at 781½p yesterday, which suggests that the market is readying itself for more offers, and Liberum expects Prosus to oblige. “We see the bid of 740p per share as unlikely to be accepted, but we do not believe that Prosus will stop its pursuit of Just Eat,” the broker said. Liberum argues that Takeaway.com will also have to respond with a better offer, as the deal on the table values Just Eat shares at about 697p, 12% shy of their current market value. In addition, two big shareholders, Eminence Capital and Aberdeen Standard Investments, have previously said that they would need more money to give their blessing to any transaction.
Tempus – Smith & Nephew (SN.): Hold. New chief executive expected to continue predecessor’s promising strategy and scope for acquisitions
Tempus – Berkeley Group Holdings (The) (BKG): Buy. Cash buffer will enable it to weather political uncertainty
