Daily Mail - 28.08.2019

Daily Mail, Wednesday, August 28, 2019 Page 63

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Toxic bond

boss signs

up ex-SFO

legal eagle

THE former top lawyer at

the Serious Fraud Office

(SFO) has been hired to

defend a businessman at

the centre of one of its most

high-profile cases.

Alun Milford, who was the

SFO’s general counsel,

joined law firm Kingsley

Napley in February.

It is representing Paul

Careless, 43, the marketing

boss at the centre of the

London Capital & Finance

(LCF) scandal being inves-

tigated by the SFO.

Careless’s firm, Surge

Financial, raked in huge

fees promoting toxic bonds

on behalf of LCF, which

went bust in January owing

£237m to 11,500 people.

That prompted the SFO

to launch a probe in March.

Careless has been arrested

and interviewed by police.

He denies any wrongdoing.

Milford, 54, was one of the

most senior figures at the

SFO before he left and in

his role would have involved

overseeing its cases.

He joined Kingsley Napley

in February, according to

filings on Companies House.

His appointment was not

referred to Whitehall’s advi-

sory committee on business

appointments, a spokes-

man confirmed. The SFO

declined to comment. Mil-

ford also declined to com-

ment last night.

P

ArTNErS at Deloitte are a

resilient bunch. They

haven’t let little things like

multiple reviews into the

shortcomings of audit in

the UK, or the huge fines they have

incurred for sub-standard work,

get in the way of their most lucra-

tive payday for ten years.

Top partners will receive an average of

just over £880,000 – not bad going for a

profession under such heavy fire.

It also puts in perspective some of the

recent fines for misconduct and ineptitude.

Deloitte’s latest disgrace is over its audit of

outsourcer Serco, which got into hot water

with the Serious Fraud Office after it

charged the authorities for putting elec-

tronic tags onto the ankles of prisoners who

were either back in jail, abroad or dead.

Auditors failed to stop these shenanigans

and as a consequence Deloitte was hit with

a £6.5m fine, along with a penalty of £150,000

slapped on partner Helen George.

These sound like painful sums, but they

aren’t, not really. That £6.5m – discounted

to £4.2m for settlement – is a tiny fraction of

Deloitte’s near £4bn revenues.

George’s fine, which was reduced to

£97,500, would be ruinous and life-altering

for most people. But assuming she took

home average partner pay or thereabouts,

she could have cleared it within months.

Deloitte’s results are accompanied by

lashings of ‘woke’ self-praise.

Dimple Agarwal, its managing partner for

people and purpose, explains how hard it is

working to increase the numbers of senior

women. More than 40pc of the 78 new part-

ners were female, which is laudable, pro-

vided they are better at auditing than

George and some of her male colleagues.

The insistence that it wants to change

and come up with an audit fit for the future

is undermined by its defence of the status

quo. The quality of its audits is, it claims,

‘considerably enhanced’ by being part of a

big diverse firm with money to invest.

Exactly the type of company it is now, in

other words: the type that produced audit

triumphs like Serco.

Auditors have adopted a tone of injured

self-righteousness and are full of reasons

why reforms will have unintended conse-

quences. It’s rather reminiscent of the

banks after the financial crisis and should

be viewed with similar scepticism.

Marks down

THE bottom of the blue-chip league table

reads like a roll call of corporate Britain.

Centrica, Direct Line, Kingfisher and the

supermarkets Sainsbury’s and Morrisons

are in the nether reaches of the FTSE 100.

Marks And Spencer, in the lowest place, is

on the brink of being kicked out. Whilst the

big domestic names huddle in the relega-

tion zone, the upper echelon is dominated

by globetrotters: the oil barons, the con-

sumer goods giants, the international

banks, drugs companies and miners.

What’s going on?

Although the Footsie is sometimes pre-

sented as a barometer of British business,

that is far from the truth.

Our flagship index has for a long time been

a home to companies from around the world

and in the main, that is a good thing.

At the moment, there is Brexit-related

wariness around UK-focused companies

and the weakness of sterling doesn’t help.

But there are other factors. In the case of

M&S, the blame can be pinned on the state

of the High Street and, more pertinently,

two decades of management failure, which

I hope will be reversed by the chairman,

Archie Norman, and his tie-up with Ocado.

Other laggards have their particular prob-

lems. These range from rising claims costs

and changes to the Ogden rate (used to

calculate personal injury payouts at Direct

Line) to the botched Asda merger which

has dented Sainsbury’s so badly.

Candidates for promotion next week

include russian metal producer Polymetal

and generic drugs business Hikma.

Another that might move up is Meggitt, a

Bournemouth engineering firm founded as

a machine tool operation just after the Sec-

ond World War, which has been out of the

FTSE 100 for almost four years.

That would be a welcome return for a Brit-

ish manufacturer, assuming it does not suf-

fer the same fate as Cobham and catch the

eye of an overseas predator.

The Footsie’s geographical diversity has

been a great strength, giving UK savers

exposure to some exciting investment

opportunities worldwide and shielding

them when the domestic economy is weak.

Even so, if Marks And Spencer does fall

out of the index after 35 unbroken years, it

will be a very sad day indeed.

Auditors are still cashing in

by Francesca Washtell

Mortgages’ 10-year high Harry Ramsden’s sold Astra drug on fast track

Ruth

Sunderland

BUSINESS EDITOR

Ministers

urged to probe

Cobham bid

THE battle for Cobham

has intensified after the head of

Parliament’s influential defence

committee urged the

Government to scrutinise the

£4bn takeover.

Conservative MP Julian Lewis

blasted Advent International’s bid

for the 85-year-old company as ‘the

latest in a series of disturbing devel-

opments’ for the defence industry.

Cobham’s board has backed the

165p-per-share deal but a growing

opposition wants the Government

and Defence Secretary Ben Wallace

to intervene.

Lewis told the Mail: ‘I would

strongly advise the Government to

have their tackle in order so that

they have a good explanation ready

as to why they’re prepared to allow

this latest shrinkage of the defence

industrial base.’

The defence committee launched

a review into defence industrial pol-

icy earlier this year to examine how

the sector can boost the UK.

Lewis added: ‘Any reduction in

British sovereignty over its defence

capabilities and its military indus-

trial resources is inherently undesir-

able. Clearly the secretary for

defence should take the closest

interest because he is certain to be

questioned upon it very closely in

the course of the inquiry.’

Cobham traces its history back to

1934 and pioneered technology

(pictured) that allows planes to

refuel while still in the air.

It now makes the technology for

use on Airbus planes and F-35 fight-

ers, and provides training services.

It is Britain’s third-largest defence

manufacturer and listed on the

FTSE 250 index. A sale to Advent

would take it off the stock market.

Criticism of the deal has been led

by the firm’s founding family since

the offer was revealed. Lady Cob-

ham, the widow of former chief

executive and chairman Sir Michael

Cobham, has written to Wallace

urging him to block the buyout.

Wallace has said he will ‘look into’

the concerns surrounding the deal.

The Liberal Democrats have

warned it is an example of ‘one of

the jewels in the crown of the UK’s

industrial base being sold on the

cheap’. And John Myers, who was a

director at Cobham subsidiary Fr

Aviation from 1988 to 2002, has said

the thought of the firm being ‘hived

off to an American company that

will basically tear it apart, is awful’.

But Cobham chief executive David

Lockwood has shrugged off con-

cerns as ‘noise’ it is ignoring, and

said the worries were unfounded.

Boston-based Advent has pledged

to invest in the firm, vowed to keep

its HQ in Dorset and only cut 1pc of

its 10,000-strong workforce,.

Cobham chairman Jamie Pike

said it was seeking higher offers

after its largest investor, US group

Silchester, said it was a cut-price

takeover. Cobham shares rose the

day the bid was announced, lifting

stock above the 165p offer price.

The firm has struggled and share-

holders stumped up £1bn in bail-

outs in 2016 and 2017. Cobham said:

‘We are providing extensive infor-

mation to support the Government

in assessing this transaction.’

Advent said: ‘We are in active dis-

cussions with business department

and the MoD, to ensure the acquisi-

tion of Cobham reflects its respon-

sible ownership principles and long-

standing support for maintaining

great British businesses.’

HARRY Ramsden’s has been

snapped up by a rival fish

and chip shop chain.

Deep Blue Restaurants,

part of the Boparan Res-

taurant Group, will take

over Harry Ramsden’s 34

sites, as well as its brand, in

a debt-free deal. It comes

after a slow decline for the

Yorkshire business, as the

casual dining sector fights

against rising costs and

fewer customers.

Harry Ramsden’s was

started 90 years ago in

West Yorkshire but has

struggled recently, after

falling to a £5m loss in its

most recently filed

accounts, and closing a

number of restaurants.

A DrUG developed by

Astrazeneca for treating

patients with chronic kid-

ney disease is to be fast-

tracked by US regulators.

The US Food and Drug

Administration (FDA) is

looking at Farxiga’s poten-

tial to prevent heart and

kidney failure in people with

and without type-2 diabe-

tes. The drug is already

approved for treatment of

people with type-2 diabe-

tes, the most common form

of the condition.

The fast-track designation

means regulators will make

a quicker decision on

whether to give regulatory

approval to the drug for

new uses. The FDA fast-

tracking could pave the

way for broader use of the

treatment – a change that

would lift sales.

THE number of mortgages

approved by banks is at its

highest rate in a decade.

A total of 95,126 mort-

gages were approved last

month, according to UK

Finance. This included

51,160 loans for home pur-

chases, 33,792 remortgages

and 10,174 other loans.

The number of loans for

homes was up 16.4pc from

43,967 during the same

month last year, while

remortgages had increased

by 19.4pc from 28,294.

The total number of mort-

gage approvals was the

highest since July 2009. The

value of loans was £26.1bn,

up from £25.4bn a year ago.

Experts suggested bor-

rowers were prompted to

act swiftly by the possibility

of a No Deal Brexit by Octo-

ber 31.