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FORBES Thu, 15 Dec 2011 16:00:05 GMT
The economy doesn't kill business growth - poor leadership does. If you're the short-sighted CEO who cuts back on hiring, development, marketing, branding, and advertising budgets in an attempt to reduce costs, you're headed in the wrong direction. Top CEOs recognize that economic slow-downs are not all doom-and-gloom. In fact, the smartest executives understand that swimming upstream against the conventional wisdom of the risk adverse can actually create significant opportunities for growth. By making heavy operating investments into human resources, marketing, advertising, business development, and sales initiatives, the aggressive enterprise can create significant competitive separation during a time when many are pulling back on such expenditures. In today's column I'll make the business case for applying contrarian thinking by becoming very bullish in the face of tough economic conditions.
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GUARDIAN Tue, 13 Dec 2011 19:50:27 GMT
As the telecoms firm's latest CEO, Gavin Darby, begins his mission, it is getting harder to ignore signals of a break up
Gavin Darby, installed this month as chief executive of Cable & Wireless Worldwide (CWW), is keen to distance himself from the financial excesses of the previous regime, which saw senior managers take £88m of cash out of the struggling business in just five years. During contract negotiations, Darby set a new tone, declining the offer of a chauffeur-driven car as part of his pay package.
Now, as he tours the embattled telecoms group's major shareholders in the run-up to Christmas, Darby is in "listen-only" mode, out of respect to investors who have suffered an 80% collapse in the company's share price in the last year and a half.
There will be questions about how many millions were squandered on the "private-equity style "incentive scheme that wound up earlier this year and rewarded the top five executives with a pay bonanza of some £25m.
Cable & Wireless Communications, which owns telecoms operators across a number of Caribbean islands, Panama, Macau and Monaco, and was demerged last year from the UK arm Cable & Wireless Worldwide, paid out a total of £30m during the life of the scheme, while CWW splashed out £58m on its top executives, according to the annual reports.
But the most pressing question will be about what happens next: another long turnaround effort, or an auction. Analyst Morten Singleton at Investec bank says CWW "has been mismanaged for years", and is now worth five times as much broken up and sold off as listed on the stock exchange – where its market valuation languishes at less than £500m.
Investec puts the break up value at £2.5bn: around £500m for the tax assets alone, £1bn for the UK network, £350m for its data-centre assets such as servers, and £650m for its sub-sea cables. Breaking up will be hard to do, though: sources close to the company say there is no easy way to unstitch international from UK cables, or domestic from multinational clients.
A number of hedge funds are pressing Darby to hoist the for sale sign. His two biggest shareholders, Orbis Investment Management (with 16%) and Sky Investment Counsel (9%), specialise in underpriced equities and could be key in any bid or sale process.
"We are detecting growing curiosity from other UK telcos," said Singleton. "We suspect slide rules are out and the assets are in play."
Likely would-be buyers include Vodafone and Everything Everywhere. Mobile phone networks need more fibre in the ground to connect growing numbers of smartphones to the internet, and they may want to renew a push into household broadband. Rival business telecoms group Colt could take an interest, as could Virgin Media.
Darby will reveal whether he plans to rebuild or look for buyers when he unveils his strategy in February. A former Coca-Cola executive who ran Vodafone UK before overseeing its international investments, Darby was drafted in very much at the last minute, signing his contract the night before CWW's half-year results announcement on 15 November. It has now emerged that the search for CWW's third chief executive of 2011 began during the summer, only weeks after John Pluthero had vacated the chairmanship to take the job. Pluthero had picked up the reins after Jim Marsh quit after little more than a year in post, after issuing three profits warnings.
Darby has a track record in cost-cutting. He oversaw a 25% reduction to the UK workforce at Vodafone and if CWW is to remain whole, any turnaround will undoubtedly involve more axe wielding, even though reducing headcount has been a fact of life at Cable & Wireless for a decade. The firm traces its history back to telegraph companies founded in the 1860s, whose sub-sea cables became the British empire's communications network. Privatised before BT, Cable & Wireless employed 54,000 people around the world by the year 2000.
Problems were encountered during the dotcom boom, when chunks of.....
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GUARDIAN Fri, 04 Nov 2011 22:58:01 GMT
Former City grandee attacks fund management industry for sharp practices and a lack of transparency over charges
Small investors are paying nearly £8bn a year in hidden charges on their Isas and investment funds, which finance lavish salaries and bonuses in the City but deprive investors of about a third – or even more – of their gains, according to the former boss of a major asset management firm.
An investor who puts £10,000 into the stock market over 20 years, and sees share prices grow at an average of 7% a year, will get back around £22,770. But the fund managers, financial advisers and up to 16 layers of other fee chargers – such as stockbrokers, lawyers, accountants and custodians – will take £15,927 from the fund over the same period.
The figures come from David Norman, formerly chief executive of Credit Suisse Asset Management (UK), who is campaigning for transparency and fairness in fund management. He exposes a raft of practices in the industry which are leaving.......
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GUARDIAN Fri, 04 Nov 2011 18:23:45 GMT
Bilateral investment treaties were designed to protect European investments abroad. But now they've come back to bite Europe
The news that Germany's nuclear phase-out is being challenged by a Swedish company is not without irony. In doing so, the Swedish energy company Vattenfall is using the very mechanism designed by the German government to protect German investors from the actions of developing countries' governments.
Germany and Pakistan concluded the world's first ever investment treaty in 1959 and renewed their vows on its 50th anniversary in 2009. The blueprint of the German bilateral investment treaty (BIT), which set the template for most European BITs, was cast by the notorious Hermann Abs, chairman of Deutsche Bank in Germany, and Lord Shawcross QC, attorney-general in the UK. This was in 1957, when the Society to Advance the Protection of Foreign Investments, an organisation of German business people, published a draft instrument entitled International Convention.....
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BOSTON Fri, 28 Oct 2011 12:54:59 GMT
Iconix Brand Group Inc., which owns, licenses, and markets such brands as Joe Boxer, London Fog, Mossimo, Danskin, and Cannon, said it has agreed to buy the Sharper Image brand and intellectual property assets for $65.6 million. Iconix has agreed to buy the assets from a joint venture that includes Gordon Brothers Group, a Boston company that specializes in retail investments and restructuring. The joint venture also includes Hilco Consumer Capital and Bluestar Alliance.
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GUARDIAN Thu, 02 Jun 2011 06:15:04 GMT
London-based ad agency that counts BBC and Nintendo among clients sells stake to Phoenix Equity Partners to fund expansion
Karmarama, the London-based advertising agency that counts the BBC and Nintendo among its clients, has sold a 50% stake to the private equity firm that has invested in Jimmy Choo and LK Bennett, in order to raise tens of millions for acquisitions and international expansion.
The owners of Karmarama have struck a deal with Phoenix Equity Partners that will also see Charles Watson, the former group chief executive and current global chairman of City PR firm Financial Dynamics, join as chairman of what will become the Karmarama group of companies.
Watson, who led a management buyout and subsequent sale of Financial Dynamics in 2006, will work with existing Karmarama executives to look for acquisitions in the digital, data, experiential and direct marketing sectors as well as eying international expansion.
It is not known what the deal is worth, although.....
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GUARDIAN Tue, 18 Jan 2011 08:03:23 GMT
Cable dated:2008-11-24T14:44:00
C O N F I D E N T I A L SECTION 01 OF 02 MOSCOW 003394
SIPDIS
DEPT FOR EUR/RUS, FOR EEB/ESC/IEC GALLOGLY AND WRIGHT EUR/CARC, SCA (GALLAGHER, SUMAR) DOE FOR HEGBURG, EKIMOFF
E.O. 12958: DECL: 11/18/2018
TAGS: EPET, ENRG, ECON, PREL, RS
SUBJECT: BP VP TELLS AMBASSADOR COMPANY IS IN RUSSIA FOR LONG-TERM, GETTING OUT OF CPC
REF: A. MOSCOW 3297 B. MOSCOW 2855 C. ASTANA 2144
Classified By: Ambassador John R. Beyrle for Reasons 1.4 (b/d)
-------
SUMMARY
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1. (C) At a November 20 meeting, BP's new Group VP for Russia and Kazakhstan, David Peattie, told the Ambassador that BP is in Russia for the long-term. The troubled partnership in TNK-BP (ref A) is only a part of their involvement and he said BP would not be surprised to see the company split up and taken over by Gazprom and Rosneft within 2 years. BP is actively pursuing options with both companies for the future. In the interval, Peattie confirmed that BP has agreed to Denis Morozov,........
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PBS Fri, 23 Oct 2009
"We didn't truly know the dangers of the market, because it was a dark market," says Brooksley Born, the head of an obscure federal regulatory agency -- the Commodity Futures Trading Commission [CFTC] -- who not only warned of the potential for economic meltdown in the late 1990s, but also tried to convince the country's key economic powerbrokers to take actions that could have helped avert the crisis. "They were totally opposed to it," Born says. "That puzzled me. What was it that was in this market that had to be hidden?"
In The Warning, veteran FRONTLINE producer Michael Kirk unearths the hidden history of the nation's worst financial crisis since the Great Depression. At the center of it all he finds Brooksley Born, who speaks for the first time on television about her failed campaign to regulate the secretive, multitrillion-dollar derivatives market whose crash helped trigger the financial collapse in the fall of 2008.
"I didn't know Brooksley Born," says former SEC Chairman Arthur Levitt, a member of President Clinton's powerful Working Group on Financial Markets. "I was told that she was irascible, difficult, stubborn, unreasonable." Levitt explains how the other principals of the Working Group -- former Fed Chairman Alan Greenspan and former Treasury Secretary Robert Rubin -- convinced him that Born's attempt to regulate the risky derivatives market could lead to financial turmoil, a conclusion he now believes was "clearly a mistake."
Born's battle behind closed doors was epic, Kirk finds. The members of the President's Working Group vehemently opposed regulation -- especially when proposed by a Washington outsider like Born.
"I walk into Brooksley's office one day; the blood has drained from her face," says Michael Greenberger, a former top official at the CFTC who worked closely with Born. "She's hanging up the telephone; she says to me: 'That was [former Assistant Treasury Secretary] Larry Summers. He says, "You're going to cause the worst financial crisis since the end of World War II."... [He says he has] 13 bankers in his office who informed him of this. Stop, right away. No more.'"
Greenspan, Rubin and Summers ultimately prevailed on Congress to stop Born and limit future regulation of derivatives. "Born faced a formidable struggle pushing for regulation at a time when the stock market was booming," Kirk says. "Alan Greenspan was the maestro, and both parties in Washington were united in a belief that the markets would take care of themselves."
Now, with many of the same men who shut down Born in key positions in the Obama administration, The Warning reveals the complicated politics that led to this crisis and what it may say about current attempts to prevent the next one.
"It'll happen again if we don't take the appropriate steps," Born warns. "There will be significant financial downturns and disasters attributed to this regulatory gap over and over until we learn from experience."
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GUARDIAN Sat, 28 Mar 2009 18:34:23 GMT
Treasury refuses to bail out Scotland's biggest building society, which is expected to be taken apart and sold off
Scotland's largest building society is to be broken up after the government refused to bail out another financial institution and instead decided to put it on the market.
The Dunfermline Building Society had been in rescue talks with financial regulators for weeks but the Treasury decided today it had no future, bringing down the curtain on its 140 years of independence.
Like Bradford & Bingley, it is expected to taken apart with profitable parts sold to another bank or building society and the government left to take on the "toxic loans" that felled it.
The decision follows a weekend of tense negotations between the chancellor, Alistair Darling, and the Scottish first minister, Alex Salmond. The Treasury vetoed a Scottish plan to plough more than £20m into the society. A support package from the Building Societies Association was also rejected as a "short-term" fix, with Darling keen to end the uncertainty.
The building society's woes came to the fore last week amid reports that losses exceeded £20m in 2008. The society's effective collapse is another blow for Scotland's financial services sector, which has been battered by the state bailout of Royal Bank of Scotland and the rescue of Halifax Bank of Scotland by Lloyds.
The society, with 34 branches across the country, has almost 500 employees, half at its Fife headquarters. It is also close to home for the prime minister, Gordon Brown, whose constituency is in Fife.
It is not clear how much of Dunfermline's bad debt the government will have to take on. "The Treasury is looking to see if there is a merger partner to take on some or all of Dunfermline Building Society," said a spokeswoman.
The Treasury said all customers were guaranteed, as it sought to prevent the upset that surrounded the demise of Northern Rock in 2007.
Salmond said he was "deeply disappointed" that the Dunfermline could not retain its independence but accepted it could "not continue as a going concern". It was a key lender to social housing projects in Scotland. He confirmed the Scottish government had offered to make a capital contribution and said "that offer remains on the table". But he conceded any deal required Treasury approval.
"We hope that the Treasury has not closed its mind to the idea that both in terms of employment, and value for money for the public purse, maintaining Dunfermline Building Society as an independent and ongoing concern could well be the strongest option," added Salmond.
Banking
Scotland
Banks and building societies
guardian.co.uk © Guardian News & Media Limited 2009 | Use of this content is subject to our Terms & Conditions | More Feeds
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ABCNEWS.GO 16 March 2009
The hot seat is getting even hotter for AIG Chairman and CEO Edward Liddy. Not only has President Barack Obama called on his Treasury Secretary to do everything possible to block the bailed-out insurance company from doling out $165 million in bonuses, but now the New York Attorney General has set a deadline of 4pm Monday for Liddy to release the names and job descriptions of those receiving bonuses stating that if the information is not received this afternoon that he will seek a subpoena to force compliance.
AndrewCuomo
"Taxpayers of this company are now supporting AIG, and they deserve at the very least to know how their money is being spent," wrote Attorney General Andrew Cuomo in a letter he sent to Liddy Monday. "And we owe it to the taxpayers to take every possible action to stop unwarranted bonus payments to those who caused the AIG meltdown in the first place." AIG has received over $170 billion from the government so far.
"We are in contact with the Attorney General, and will of course respond to his request," said Joe Norton, a spokesperson for AIG.
Liddy has told Treasury Secretary Tim Geithner that the company's "hands are tied" when it comes to distributing the bonuses because of contractual obligations.
Cuomo's letter has asked Liddy to turnover the contracts "you now claim obligate you to make these payments."
"Moreover, you should immediately provide us with a list of who negotiated these contracts and who developed this retention plan so we can begin to investigate the circumstances surrounding these questionable bonus arrangements," said Cuomo.
Cuomo's letter in particular refers to AIG's plan to award millions of dollars in bonuses to members of the Financial Products subsidiary.
"Financial Products was, of course, the division of AIG that led to its meltdown and the huge infusion of taxpayers funds to save the firm," wrote Cuomo. "Previously, AIG had agreed at our request to make no payments out of its $600 million Financial Products deferred compensation pool."
Cuomo has led the crusade against bailed-out companies continued use of bonuses since last fall. He has said he is investigating all of AIG's finances back to January 2007.
Cuomo is also seeking the names and compensation information of those at Merrill Lynch who received bonuses shortly before the firm merged with Bank of America. In that case, Cuomo has accused Bank of America of undermining his authority, interfering with his investigation and attempting to influence the government's witnesses, according to court documents.
Bank of America has argued that releasing the names and numbers to the public would be detrimental to the company.
"Bank of America has cooperated with the attorney general's investigation into Merrill Lynch bonuses and will continue to do so," spokesman Scott Silvestri said in a statement. "Regarding the bonus information requested, Bank of America has continually offered to provide that information subject to reasonable confidentiality."
Cuomo's office said that the bank has not demonstrated that it had ever "treated the information in a confidential manner."
A ruling is expected later this week on whether or not the company will have to turn over the information.
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