Having pulled off one of the most sensational boardroom coups in European corporate history the newly installed wholly
Posted in General on 02. Oct, 2010
Having pulled off one of the most sensational boardroom coups in European corporate history, the newly installed, wholly French, slate of directors at Eurotunnel is planning to – er – carry out exactly the same restructuring plan as the substantially British board that preceded it. He added that the FSA’s handling of the process had been a farce, with none of the companies believing the regulator’s claims that it has concrete evidence against them “The FSA’s mediation process is in tatters,” he said.. From the sublime to the ridiculous. However, only three of the 21 have agreed so far, with the rest willing to fight the FSA through any internal hearings – or even in the courts – if they do not agree to their compromise.A chief executive of one of the 21 accused firms said the process looked likely to carry on for at least another three years, and possibly longer. These will probably take up to a year each, and they won’t be able to run them all concurrently – they won’t have the resources,” he said.Another of the chief executives said firms were now agreeing to put up some money for compensation just to put an end to the saga. “If the deal isn’t signed then the FSA will have to start internal disciplinary hearings for each of the firms. The directors have taken extensive legal advice and do not believe that there have been breaches of regulation or failures in duties to customers or investors, and in many instances there has been a strong recovery in values.
Therefore no provision has been made for redress or compensation.”If BFS is found guilty of mis-selling or collusion, it will be able to pay only a fraction of the kind of fines or compensation that the regulator is hoping for, having also refused to make provisions in previous accounts. Profits for the year to 30 September 2003 were just £44,716 after tax. However, Tony Reid, the company’s chief executive and founder, has paid himself almost £8m over the past four years, including £1.5m last year when the FSA’s proceedings were already under way.The FSA is currently mulling over a compensation package of around £100m, after Terry Smith, the chief executive of Collins Stewart, called each provider to ask them how much they were willing to contribute. The proposal was put to the FSA’s chief executive, John Tiner, two weeks ago.Mr Tiner claims to have incriminating dossiers on each of the 21 firms, which he will allow them to see if they sign a confidentiality agreement.
This will be of major concern to the City’s chief regulator, the Financial Services Authority, which hopes to secure a voluntary compensation scheme for investors who are estimated to have lost more than £600m in the saga.BFS said it had put aside £350,000 to cover any legal or consultancy costs which may arise from the “protracted” splits investigation.The accounts said: “The director’s have considered the FSA’s [Financial Services Authority] ongoing review of the sector, and the consequences for retail customers. One of the firms at the centre of the split-capital investment trusts fiasco has made no contingency plans for the event of it having to pay compensation to investors, it emerged yesterday.
According to the latest annual accounts for BFS Invest-ments, which were filed at Companies’ House last week, the investment house said it did not believe there was any need to make provisions either for investor compensation or for potential fines imposed by the regulator. Britain’s Treasury said yesterday that Opec had set a target price band of $22 to $28 a barrel and it should try to meet this. Opec, however, blamed a shortage of refining capacity in the US and heavy betting by speculative investment funds on oil futures for price gains of 22 per cent since the start of the year. “The reasons that are affecting the world oil market are really beyond Opec’s control,” said its president, Purnomo Yusgiantoro. “The gasoline markets in the US are really tight, and secondly, there is speculation. It is very difficult to control speculation.”Analysts have said that Saudi Arabia no longer has the incentive to cushion the US by restraining the cartel’s price hawks.
“The political message coming from Saudi Arabia over the last three years has made it clear that the days when the kingdom was willing to blindly accommodate US interests are gone,” said PFC Energy.. When Opec cut output earlier this year, it based its decision on fears that prices might collapse. The cartel of oil-producing countries will now not meet until June. In trading yesterday, US light crude touched $40 for the first time since October 1990, after Iraq’s invasion of Kuwait in the crisis that led to the Gulf War It later eased to $39.58, 21 cents higher on the day.