It has been alleged that the Stanford Financial Group has been involved in an $8billion fraud since company formation in the 1980s.
The owner of the investment group, Sir Allen Stanford, is currently being investigated by the US Government who consider him responsible for a fraud of ‘shocking magnitude’, which revolves around the company’s $8billion certificate of investment scheme, which reportedly offered improbable and unsubstantiated interest rates.
Stanford himself is a fifth generation Texan, most famous in the UK for funding the ‘20/20 for 20’ cricket match between England and a West Indies XI. The name referred to the Twenty20 format of the game and also the fact that the winning team picked up $20million in prize money – the biggest one-off prize for a single sporting event of all time.
Many in the world of cricket were offended by the explicitly financial nature of the contest and the event itself was widely derided in the UK and even considered a failure, despite the substantial media interest it generated.
Stanford had originally committed to putting on several of these 20/20 for 20 matches over subsequent years, but since the beginning of the fraud investigation, these plans have obviously been abandoned.
The mobile phone giant, Vodafone, will be posting about £12 billion profit for the year ending March, 2009. But it has decided to freeze pay rises for its 10,000 strong UK staff, stopped bonuses and asked sales representatives to curtail car travel. Vodafone is targeting savings of £1 billion from its costs.
Chief executive of Vodafone’s UK business, Guy Laurence, in his email last month had hinted at axing 500 jobs. The email was sent to all employees detailing freeze in pay and terming the decision as tough, but responsible one.
Laurence explained that had company decided to raise salaries, it would have been forced to cut number of jobs. He added that company was asking drivers to keep their cars for longer.
Vodafone is also changing bonus plans for next financial year; incorporating new profit shares based targets.
Employees feel totally shafted. Their morale is rock bottom. An insider accused that despite working like hell this year to register profit, company has stabbed them in the back. According to latest annual report for 2008, former chief executive Arun Sarin took home £2.13 million as bonus whiles his successor Vittorio Colao, pocketed £1.3 million. Chairman Sir John Bond received £560,000 and the entire non-executive directors took home £110,000 each.
According to a spokesman of Vodafone, there will be no pay rise for Vodafone UK staff as well as management for the coming year.
Department store chain Debenhams, defying gloom on high street with better than predicted first-half performance, is going to create 1,200 new jobs over next 2 years. The retailer would open additional 8 stores in the UK, including outlets in Newcastle-upon-Tyne, Wakefield and Kidderminster, before end of 2011.
Debenhams claimed that it was not an acceleration of store opening programme, but reaffirmation of management’s confidence in its business strategy when many retail rivals were cutting back on their expansion plans.
Debenhams’ like-for-like sales for 26 weeks to February 28 fell by 3.6%. This was more than expectations and included single day loss of £200,000 at its Oxford Street store due to bad weather in early February. Sales growth was attributed to its own bought ranges namely Designers at premium lines.
According to its chief executive, Michael Sharp, Debenhams had increased market share in men’s and childrenswear.
Debenhams’ 26 weeks’ gross transaction value was up 0.3% than previous year. This, coupled with higher gross margins, would result in first-half pre-tax profit exceeding £92 million it registered in same period last year.
However, Debenhams did not clarify on plans to raise capital for expansion, although it already has net debt of over £900 million. Lack of clarity on the issue unnerved investors and resulted in plunge of 5p or 10.87%, reversing 15% gain made on Monday.
The airport operator BAA has been ordered by the Competition Commission to sell 3 of its seven airports, bringing an end to BAA’s monopoly of airports ownership in London and Scotland. In the toughest ever corporate divestiture ordered by the competition watchdog, BAA, a subsidiary of Ferrovial, Spain, will have to sell Stansted, Gatwick and one of either Edinburgh or Glasgow airports within 2 years. Most prized Heathrow airport will remain under BAA control.
The total value of three airport sales is estimated between £3.5 and £4 billion, by the analysts. Infrastructure funds, foreign airports, pension and sovereign wealth funds are expected to bid for the sale.
The Competition Commission has reserved the right to carry out sales by appointing an independent divestiture trustee if BAA fails to comply with completion of disposal within specified dates.
The world’s biggest airport operator hit back at Commission’s unprecedented move, alleging that it was based on flawed analysis and the recommended remedies were impractical in existing economic conditions. BAA has 2 months to appeal to the Competition Appeal Tribunal against Commission’s order.
The Commission would appoint a monitor to oversee sales. Approving suitable purchasers will be watchdog’s prerogative.
BAA has been given concession to decide which of the Scottish airports it would like to sell.
Tesco won its key appeal against Competition Commission over competition test which had put restrictions on its growth plan. But the victory could be short-lived since the Competition Commission is bent up on bringing new proposal to restrict growth. Read the rest of this entry »
Although slide in the Britain’s manufacturing sector continued, its pace has slowed down a bit in January 2009. Purchasing Manager Index (PMI) released by the Chartered Institute of Purchasing and Supply (Cips) rose to 35.8 in January up from 34.9 in December. PMI is a measure of orders and output and the level above 50 is the indicator of rise. Read the rest of this entry »
UK citizens will have to wait till first quarter of next year for the opening of Best Buy’s first store in the UK.
Best Buy Europe, which is the joint venture between Carphone Warehouse and US electrical giant, was scheduled to open its first store in the UK this year. The revised plan is to open 4 more stores in quick succession next year. Read the rest of this entry »
Standard Chartered not only bucked market turmoil but made record annual profits and announced increase in full-year dividend. Read the rest of this entry »
The Bank of England’s hope that export sales would pull the UK economy out of recession appear getting dashed with manufacturing downturn continuing unabated and export sales going from bad to worse.
The rate of fall in industrial output and employment is unprecedented, according to latest data from the Chartered Institute of Purchasing and Supply (Cips). Domestic orders as well as overseas sales are collapsing in spite of weak pound. The UK exports are finding it difficult to compete in the shrinking overseas markets.
According to Cips director, Roy Ayliffe, the UK manufacturing sector has started degenerating as the rate at which it is contracting is reminiscent of conditions that prevailed in 1980s.
The grim figures of survey would further add to pressure on the Bank of England to make cuts in interest rates again despite these being at an all-time low of 1%. Experts are predicting that Bank’s Monetary Committee may decide to cut down rate to 0.5% and inject more money into the economy.
The Bank has very few options before it. Despite allowing sharp fall in Sterling to boost exports and take economy out of recession, there is big stagnation particularly in the UK car industry which is heavily export-oriented.
The rate of production declined is 12% and the contraction in employment is 30,000 jobs per month, while manufacturing’s lobby group is forecasting 140,000 redundancies in 2009.
Online bingo has been one of the fastest growing sectors within the online gambling industry in the UK, with white label operators joining the competition. However, reports suggest that this growth has now slowed, mainly as the traditional offline bingo brands such as Mecca have gone online.
UK Online Bingo authority website BingoPort.co.uk reported that the number of people playing real money online bingo in the UK remained flat in the final quarter of 2008, with only a 1 percent increase in player numbers across the board. This follows a large increase of over 10 percent in the September quarter.
Scott Logan, Managing Director of BingoPort.co.uk explained:
“This is the first sign that the UK online bingo market is feeling the effects of both the recession and market saturation. It signals the beginning of what we see as a period of mergers and acquisitions across the industry.”
It was also reported that overall prize values in online bingo rooms decreased for the first time ever as the number of new players has dropped and players are spending less money online.
Scott Logan added:
“This report will not come as a surprise to many industry experts who have been predicting this downturn for some time. We still expect to see strong spending in advertising by the bigger operators as they work to extract the maximum value out of their existing customer base.”
This has been put down to the fight for market share from the big players. Scott Logan said:
“We’re seeing more innovative marketing campaigns from the likes of Foxy Bingo, Gala Bingo, Ladbrokes Bingo and Mecca Bingo. These operators, among others, have introduced a range of different concepts to their real money sites. One of the biggest and most successful of these is free bingo games in between their pay to play games on new sites such as Cheeky Bingo and Minxy Bingo.”
Logan expects this trend to continue:
“In addition, the well established operators are pulling out all of the stops to keep their players from going to competitors. We expect to see a cutthroat 2009.”
White label operators will have to find more innovative ways to try and outwit the big players in the UK bingo market. Things are set to get ugly.