the times | Saturday December 18 2021 61Business
based businesses were unpre-
pared for a forced shift en masse to re-
mote working. Almost two years on,
however, and many white-collar firms
and their employees are adept at doing
their jobs at home, meaning they have
easily adapted to the government’s lat-
est advice.
Indeed, the pandemic has encour-
aged some companies to adopt hybrid
working models permanently, encour-
aging staff to spend at least some of the
week at home.
Aviva, the FTSE 100 insurer that em-
ploys 16,000 people in the UK, has been
able to shed 491,000 sq ft of office space,
30 per cent of its property needs, since
the Covid crisis began, saving £20 mil-
lion a year in rent and other property
costs. Amanda Blanc, its chief execu-tive, told The Times: “The era of sitting
in long rows of desks sending emails
and writing reports, when that sort of
thing can be done just as well from
home, is over.”
In August Schroders, the fund man-
agement group that employs 5,500
people worldwide, introduced flexible
working, with no set number of office
days required.
That does not mean, however, that
companies have welcomed the latest
shift away from offices.
Rachel Osborne, the boss of Ted
Baker, the fashion retailer, said she be-
lieved creativity suffered because de-
signers and buyers want to work to-
gether closely and touch and feel prod-
ucts. “Working from home can drive
and reinforce silos in a workforce.”
Blanc said that being at home all the
time was possible but not ideal because
of the lost benefits of team building and
collaboration: “You can do a decent job
but you’re not the best you can be.”
Similarly, James Bardrick, who
heads the UK operations of Citi, the
American bank, said the group had
learnt that “a lot more was possible
in a flexible model than we would
have assumed before the pandemic”
but he added: “That doesn’t, how-
ever, mean that we’re convinced
that remote working is the best ap-
proach for everyone, indeed we
think we are better together most of
the time.”
Citi had required its UK staff to
work in the office at least three
days a week before the latest move
to remote working. He said: “We
were concerned that we might
start to see signs of performance
degradation due to the loss of con-
nectivity and collaboration, learn-
ing from being with seniors and
sense of belonging.”
His worries about the impact of
prolonged remote working were
echoed by Mitchinson, who said: “We
know we can do it, I wouldn’t want to do
it for ever for the reasons of training,
learning and development, and cul-
ture.”
Mitchinson said that his company
would be guided by government regu-
lations and the scientific advice but that
he hoped the Omicron-induced shift
away from offices would be short-term.
“I do slightly worry that I don’t quite
see what the trigger is to relax these
working from home rules because it’s
clear cases are going to increase,” he
said. “My only worry is that this is for a
number of months, rather than weeks.”
Additional reporting by Patrick
Hosking, Ashley Armstrong,
Tom Howard and Jonathan AmesF
irst NatWest. Now HSBC.
Anyone would think
Christmas was a time for
money laundering. Or at
least for the Financial
Conduct Authority to toughen up
over Britain’s banking laundromat.
On Monday came its first
criminal prosecution against a UK
lender: the one formerly known as
£45.5 billion bailout king Royal
Bank of Scotland, still 54 per cent
taxpayer-owned. What a caper that
was, too, complete with £365 million
of soapy antics from Yorkshire gold
dealer Fowler Oldfield.
The farrago, running from 2012 to
2016, included a top bit of cash and
carry: £700,000 waltzed through a
Midlands shopping centre in black
bin liners before being deposited at
the bank’s Walsall branch. Over at a
NatWest cash centre in Tyne and
Wear, staff reckoned the mountain
of notes had a “prominent, musty
smell, indicative of long storage,
rather than business use”. Still, not
pongy enough to alarm NatWest,
now stung with a £265 million fine.
Topping that was always going to
be a stretch. But at least HSBC has
given it go. And who’s surprised to
see this particular bank get in on
the act? In 2012 it was fined
$1.9 billion by the US Department of
Justice for failing to stop Mexican
drugs gangs from laundering their
loot. Famously, the cocaine cartels
even crafted specially shaped cash
boxes for a snug fit through the
teller windows. For allowing that
carry-on under its nose, HSBC was
also landed with an independent
monitor for five years to verify it
had tightened up controls.
To boot, the monitor, spanning
much of the 2011-2018 tenure of ex-
boss Stuart Gulliver, was approved
by the forerunner to the FCA. So,
it’s not the biggest shock that the
regulator has found enough historic
failures between March 2010 and
2018 to warrant a £63.9 million fine.
The key issue, as FCA enforcement
chief Mark Steward pointed out?
That “remediation took such a long
time”: a period when the bank may
have failed to detect such things as
terrorist financing.
HSBC used a Customer Activity
Monitoring Program: one with
impressive flaws. It failed to spot
“Customer A”, a director of a
construction company with “a gross
annual income of £40,000”. In April
2010 he received 18 payments — 16
in a single day — totalling £127,000.
It turned out he “had a leading role
in a criminal gang”, receiving a
custodial sentence in May 2014 after
pleading guilty to VAT fraud.
Customer B declared an annual
income of £81,851. But in February
2010 five payments come out of his
account in a single day, each of a
precise £9,830.32, adding up to
£49,151. Again, no alerts. Even after
he was banged up for smuggling
fags, his still-open account saw “a
sustained period of unusual activity”
between July 2014 and March 2017.
On top, one system glitch was so
bad that about six million clients
could up their spending activity by
5,000 times without triggering a red
flag. And, for a while, the system
“suppressed” 89,000 alerts for iffy
transactions in Wales: a boon for
sheep-country’s money-launderers.Time to put bank
chiefs in wash
HSBC says these were “legacy”
faults, that it’s revamped its systems
and is “committed to combatting
financial crime”. But, as with
NatWest, no individual’s taken the
rap. For the future, the FCA needs
to put some names in the frame. A
hot wash for bank directors might
produce a brighter, whiter clean-up.Travel problems
S
ome new chief executives get all
the luck. Take Christian
Schreyer, the Go-Ahead boss.
He arrived on November 5 to find
the transport outfit vanishing down
a tunnel: the result of a bust-up with
the Department for Transport that
saw it stripped of its Southeastern
rail franchise. He was then forced to
admit a week ago that such was the
delay to the full-year figures that
the shares were being suspended on
January 4. That sent them down
another 15 per cent to 600p.
Investors still don’t know how big
a DfT fine Go-Ahead will get. But
Southeastern is not the only rail
problem that comes with Schreyer’s
inheritance. He’s also got contracts,
in Germany and Norway, unluckily
started shortly before Covid.
Last year Go-Ahead ran into
“significant”, though unquantified,
losses in Germany and also took a
£30.4 million one-off charge, mainly
against “set-up costs”. Last week it
said it would be taking another
£35.9 million provision this year. As
for Norway, begun in December
2019, it has a “revenue risk
contract”, so is on the hook for
lower passenger volumes. Here it is
warning of a potential “material
provision”, though the Norwegian
government has at least extended its
pandemic funding of 70 per cent of
losses until the end of March.
Investors worry about the parent
group’s liabilities against these
contracts. At June 2020 it had £28
million of bonds against Germany
and £22.5 million against Norway.
Plus a parental guarantee of £122
million in Germany. Any figure for
Norway is undisclosed. So a fair bit
of money riding on two loss-making
operations at a group valued at
£227 million after a partial recovery
in the shares to 642½p. Not least
when it’s got £299 million of net
debts, excluding train leases. It’s not
just the UK where Schreyer has
problems coming down the track.It’s a rat-trap
M
ore proof American rats can
be tough to digest. Rentokil
boss Andy Ransom started
Tuesday with the shares at 654p.
But that was before his $6.7 billion
Terminix buy, four fifths funded
with 643 million new Rentokil
shares. Their price now? 535p.
Rentokil investors seem to like his
deal. But that’s tricky to spot when
merger arbitrageurs are switching
between the companies. Rentokil’s
falling shares have left Terminix’s at
around $45, well below the headline
$55 bid price. It’ll take time to sort
out the share register. Ransom could
find his deal has quite a long tail.[email protected]business commentary Alistair Osborne
divides City bosses
include the Wall Street banks JPMor-
gan and Goldman Sachs, which employ
19,000 people and 6,000 staff in the UK
respectively, mainly in London. It is
thought that traders, who require spe-
cial equipment and reliable internet
connections, are more likely to be in the
office, while support staff are more easi-
ly able to work from home.
Generally many workers are staying
away. Data from Transport for London
shows there was a 31 per cent fall in en-
tries and exits on the London Under-
ground on Thursday at peak time
before 10am compared with a week
earlier, with stations in the City and Ca-
nary Wharf seeing the biggest declines.
When the first lockdown was im-
posed in March last year most office-shareholder and cryptocurrency inves-
tor. A Spac, also known as a blank-
cheque company, is a shell corporation
listed on a stock exchange with the pur-
pose of buying a private company and
taking it public without going through
the initial public offering process.
Rezolve, registered in London, bills
itself as a software platform that can
turn physical advertisements into
shoppable merchandise by consumers
pointing their phones.
Wagner, 58, Rezolve’s chief executive
and founder, started as a salesman in a
hi-fi shop in London before pursuing
business ventures that included Dialog,
an information company that was sold
to Thomson for $275 million in 2000.
Other directors include John Wag-
ner, Wagner’s octogenarian father, and
Sir David Wright, 77, a former British
ambassador, ex-head of UK Trade and
Investment and former vice-chairman
of Barclays Capital focusing on the Asia
Pacific region. Justin King, the former
boss of J Sainsbury, is an adviser.JP Morgan fined $200m over
staff using personal devices
Katherine Griffiths Banking EditorJPMorgan has been fined $200 million
for allowing staff to use personal
devices and services such as WhatsApp
to send work messages.
The penalties were imposed for
failing to keep proper records of the
“widespread” use of unapproved com-
munication channels between January
2018 and November 2020. WhatsApp,
personal emails and other systems were
used by more than 100 staff to send tens
of thousands of messages.
The US Securities and Exchange
Commission said it discovered that the
broker-dealer subsidiary, JP Morgan
Securities, had been violating rules that
require firms to preserve written busi-
ness communications when the brokerwas unable to produce records during
the course of other investigations.
Gary Gensler, chairman of the SEC,
said: “As technology changes, it’s even
more important that registrants ensure
that their communications are
appropriately recorded and are not
conducted outside of official channels
in order to avoid market oversight”.
The fines were issued by the SEC and
Commodity Futures Trading Commis-
sion. JP Morgan Securities admitted
the charges and violating securities
laws. It also agreed to implement robust
improvements to compliance policies.
The bank said: “Communications
were sent or received by employees
over electronic messaging channels
that had not been approved for employ-
ee use by JP Morgan Securities”.basedbusinesseswerh
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sdetheWallStreetb k JPVUK VALCIC/ALAMY; JAMES MANNING/PA