the times | Saturday October 17 2020 2GM 47
Business
James Dean US Business Editor
The Boeing 737 Max is on course to
return to Britain’s skies before the year
is out after Europe’s aviation safety
chief declared it safe to fly.
After months of setbacks, Patrick Ky,
executive director of the European
Union Aviation Safety Agency (EASA),
said that an overhaul of a faulty flight
control system on the Max had met the
watchdog’s requirements.
This clears the way for the troubled
jet to return to service in Europe by
early December. The Civil Aviation
Authority, the UK regulator, has dele-
gated responsibility for airworthiness
to the EASA and typically adopts its
recommendations in full.
Boeing investors welcomed Mr Ky’s
blessing by sending the $100 billion
company’s shares up by 1.9 per cent, or
$3.11, to close at $167.35 in New York.
The Max fleet was grounded world-
wide in March last year after the second
of two crashes that killed 346 people
between them.
The disasters threw Boeing, the
world’s largest aerospace group, into
the deepest crisis of its 104-year history,
given that the Max is its bestselling air-
craft of all time.
The Max is the latest iteration of the
popular 737 series of narrow-body jets.
Before the second Max crash, Boeing
had accumulated 5,000 orders for the
aircraft worth $600 billion.
However, the company has suffered
from a deluge of cancellations, com-
pounded by a sharp drop in demand for
new aircraft because of the coronavirus
pandemic. The Max has lost significant
commodities currencies
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Sept 18 28 Oct 6 14The petrol station group whose owners
are buying a majority stake in Asda said
that it can withstand new shutdowns in
Britain and other markets.
EG Group, which is controlled by the
billionaire Issa brothers and TDR Capi-
tal, the private equity firm, said it would
continue to prosper even if govern-
ments impose new travel restrictions.
“While the impact of tightening
Asda buyer tries to ease investor nerves with record profit forecast
Simon Duke lockdown restrictions in a number of
markets is yet to be fully seen, EG
Group is strongly positioned to weather
these external challenges,” Mohsin
Issa, 49, who runs the company with his
brother Zuber, 48, said.
In a trading update, the company
said that it expected to report record
third-quarter earnings before interest,
taxation, depreciation, amortisation
and exceptional items of $478 million, a
rise of 54 per cent on an underlying
basis. EG Group did not provide
revenue figures.
TDR and the Issas agreed to buy a
controlling interest in Asda from Wal-
mart this month in a deal that values
the supermarket at £6.8 billion.
EG Group was thrown into disarray
this week after it emerged that Deloitte
resigned as its auditor because of con-
cerns over its governance.
The revelation sent the price of its
bonds tumbling. EG Group had netdebts of €8.1 billion, according to its
audited accounts for last year.
The Issa brothers founded EG Group
in 2001. After a string of debt-fuelled
takeovers, it has 6,000 sites and 44,000
employees in ten countries, including
the US, Australia and Germany.
Yesterday, the company said it was
“pleased to have commenced working
with KPMG” as its new auditor.
EG Group has no independent board
members; its five directors are the Issabrothers, two TDR executives and its
company secretary. The company is
controlled through a holding company
based in Jersey, a jurisdiction that offers
tax advantages to business owners. The
Issa brothers and TDR are buying Asda
through a Jersey-based entity.
Rishi Sunak, the chancellor, hailed
their acquisition, writing on Twitter
that the supermarket was “returning to
majority UK ownership for the first
time in two decades”.Jet was grounded worldwide after two crashes
Green light
for 737 Max
to fly again
market share to the A320neo, which is
built by Airbus, Boeing’s fierce rival.
Crash investigators said that a faulty
flight control system known as Mcas
contributed strongly to both crashes.
Mcas, which is unique to the Max, was
designed to automatically correct
changes to the jet’s handling caused by
its new, larger engines.
However, the system sometimes for-
cibly and repeatedly pushed down the
jet’s nose against the pilot’s will. The
fault was linked to erroneous readings
from an external “angle-of-attack” sen-
sor, which indicates the aircraft’s angle
relative to the oncoming airflow.
The EASA and the the Federal Avia-
tion Administration, the American air
safety regulator, refused to allow the
Max to fly again until Mcas was re-
paired. One fix they agreed with Boeing
was to link Mcas to the jet’s second
angle-of-attack sensor, rather than
using one alone. The EASA has also in-
structed Boeing to install a third, soft-
ware-based “synthetic” sensor within
two years.
On the Mcas fixes, Mr Ky told
Bloomberg: “Our analysis is showing
that this is safe, and the level of safety
reached is high enough for us. With the
third sensor, we could reach even
higher safety levels.”
The EASA intends to issue a draft
airworthiness directive early next
month, Mr Ky said, kicking off a four-
week consultation period. The FAA has
not cleared the Max to fly. At the start of
the month, Steve Dickson, the body’s
chief, praised the upgrades to the air-
craft but said that his agency was not
yet ready to recertify the jet.OLIVER BUNIC/BLOOMBERG/GETTY IMAGESHot property The Anglo-Indian metals magnate Sanjeev Gupta has tabled an offer for the steel operations of the German
conglomerate Thyssenkrupp. He described the potential deal, via his subsidiary Liberty Steel, as a perfect match. Page 49New blow for Boohoo as auditor ‘quits’
Robert Miller
PWC has reportedly resigned as audi-
tor to the fashion retailer Boohoo over
concerns about the risks of continuing
to work for the online group, which is
under scrutiny over suppliers paying
workers below the minimum wage.
The accountancy firm, which has
been Boohoo’s auditor since before it
went public in 2014, is understood to
have resigned within the past month,
according to the Financial Times.
A spokeswoman for Boohoo said last
night: “PWC has not resigned as
auditor to Boohoo but a process has
recently commenced to tender for a
new provider of audit services.” PWC
declined to comment.
The Manchester-based Boohoo has
been accused in recent weeks oftolerating abuses of employment law in
its UK supply chain. A review by Alison
Levitt, a senior lawyer, found that al-
though the company did not profit
from the abuses, it knew about them
and had not acted quickly enough.
The allegations included workers at
several sites claiming that they were
being paid less than the national mini-
mum wage. Auditors concluded they
had “no reason to disbelieve” such
allegations, but a lack of documenta-
tion prevented verification.
Boohoo’s oversight of its supply chain
had been “inadequate for many years”
and its internal processes were “well
below the standard which would be
expected of a company of its size and
status”, Ms Levitt said.
Several aspects of the company’s
wider governance have also raised con-cerns. This year it acquired the remain-
ing one-third of the fashion brand
Pretty Little Thing from Umar Kamani,
son of the Boohoo co-founder and
executive chairman Mahmud Kamani.
It said that the transaction did not re-
quire shareholder approval under rules
on the Aim market, where it is listed.
The reported PWC move would be
the second time in a matter of days that
an auditor has resigned. This week
Deloitte quit as auditor at EG Group,
the petrol station empire built up by the
Lancashire brothers Mohsin and Zuber
Issa, because of concerns that its
internal controls had not developed in
line with increasing revenues and
complexity.
Deloitte resigned as the company’s
billionaire owners agreed a £6.8 billion
takeover of Asda.