Fast facts
£4bn – amount lost annually to UK taxes through tax havens
$100bn – amount lost annually to US taxes through tax havens
26% – the world’s capital held in tax havens
1.2% – the world’s population living in tax havens
G20 catches tax havens
The future of tax havens seems in doubt, with G20 countries forcing the main tax havens to co-operate against tax avoidance. Switzerland, Liechtenstein, Luxembourg, Andorra and Austria have agreed to work with G20 countries in adopting new standards of transparency and exchange of information. Swiss finance minister Hans-Rudolf Merz complained that his country had been threatened by the OECD with sanctions if it did not accept new rules. Other tax havens have signed bilateral tax co-operation agreements, including between the UK and Jersey and between Germany and the Isle of Man. Another tax haven, the Turks and Caicos Islands, has had its constitution suspended by the UK Government, following a report into alleged corruption by members of the islands’ House of Assembly. Further action by G20 leaders is expected to be agreed at its summit, along with attempts at standarding regulation of banks and hedge funds and amending accounting standards.
Held back
Accountancy firms in the UK are at a disadvantage to European competitors because of the lack of an auditor liability cap, the Professional Services Global Competitivenesss Group has concluded. The group was set-up by the Treasury to report on the challenges facing professional service firms in the UK. It was jointly chaired by Treasury minister Lord Myners and Sir Michael Snyder of Kingston Smith. The report regrets that the US Securities and Exchange Commission has blocked registered firms from signing limited liability agreements, but hopes that this may change with the SEC’s new leadership. Proportionate liability is favoured by the report, which also argues for ending the rigid five year partner rotation rule in audits, with more flexibility permitted. The report finds that the UK accountancy profession employed 245,000 people in 2007, including 8% of all graduates; generated an export surplus of £1bn; and was responsible for about 1% of GDP.
Deloitte’s cars for all
Deloitte is one of the first employers to exploit the change in capital allowances on company cars. Capital allowances are now graduated according to cars’ CO2 emissions. Employers buying company cars emitting less than 120 g/km generating 100% can write-off the full value against their capital allowance in the first year of purchase. All Deloitte’s 12,000 UK employees can now obtain a company car with CO2 emissions below the 120g/km level. More than a third of the workforce is interested in participating.
Opacity ‘a cause of crisis’
The lack of transparency in company reporting has contributed to the financial crisis, according to the Global Reporting Initiative. A more transparent and accountable reporting framework – with more reliance on the use of sustainability indicators and the exercise of due diligence – would prove more effective, says the GRI’s Amsterdam Declaration on Transparency and Reporting. Governments should require companies to report on environmental, social and governance performance, or explain why they fail to do so.
ACCA welcomes Clarity
The International Auditing and Assurance Standards Board has completed its Clarity project, with all auditing standards written in a clearer and shorter way. The UK’s Auditing Practices Board is to bring its audit standards into line with the Clarity principles, effective from 15 December 2010. IAASB had hoped uniform audit standards would be adopted internationally from the end of this year. ACCA supports the Clarity project and is calling for national standard setters to declare as soon as possible when they will adopt the new auditing standards.
IASB warns regulators
Banks are expected to be required to accumulate larger reserves during periods of financial health to see them through future downturns, under plans being drawn up by regulators. But it is important that the reserves are taken from after-tax profits, rather than before tax, says the IASB. Sir David Tweedie, the IASB’s chairman, told the Financial Times that building-up pre-tax reserves risks allowing executives to mask underlying performance, releasing reserves during periods of weak profit to mislead investors and analysts.
Brits’ Spanish CGT refund
Up to 10,000 UK taxpayers may have overpaid Spanish capital gains tax, entitling them to an average £14,000 tax refund. A Spanish court has ruled that the country’s tax authorities breached European Community Treaty rules by requiring non-nationals to pay Spanish Non-Residents’ Income Tax at 35% on capital gains on property sales, compared to the 15% paid by Spanish nationals. The ruling could benefit thousands of other EU nationals who sold properties in Spain between mid 2004 and the end of 2006.
KPMG ‘best to work for’
KPMG has been named the ‘Best Big Company to Work For’ in the Sunday Times Best Companies awards for the third time. Over 51,000 employees from 49 businesses gave their opinions on their employer. KPMG won a lifetime achievement award, after being in the top three for each of the past five years. KPMG also received the Highly Commended Award for the National Council for Work Experience’s Best Work Placement Scheme in the ‘international students studying in the UK’ category.
Firms cut back
Jobs are going in all the Big Four firms. About 1% of Ernst & Young’s workforce in the UK and Ireland are leaving – around 100 staff. Deloitte agreed 250 voluntary redundancies in the UK last year. It is now seeking 70 voluntary redundancies in Ireland, 6% of its staff, and pay cuts of 5% to 10%. PwC is promoting flexible working, career breaks and sabbaticals. KPMG reports that 85% of its staff have signed-up for flexible working arrangements, including four day weeks and sabbaticals of up to 12 weeks at 30% of pay.
Big 4’s strong brands
All the Big Four are in the top 20 British brands, according BrandFinance’s latest Brands of British Origin. PwC and Deloitte are in the top 10, at 7th and 10th, while KPMG is 12th and Ernst & Young 15th. PwC was considered to have a brand value of £9.5bn: some 24% of its enterprise value. The list was compiled as of 31 December 2008, at which time HSBC was rated as the most valuable British brand. Halifax, RBS, NatWest, Lloyds and Bank of Scotland were all in the top 50.
CPD in demand
Demand for professional development programmes is growing and outstripping supply, according to an ACCA survey. Programmes are usually not subject to formal external benchmarking and some organisations are not measuring the benefits achieved. ACCA warned that unless better practice is adopted, investment returns are likely to suffer. It is concerned that CPD provision will deteriorate because of the recession.
Unjust enrichment
Businesses owed money by HMRC for overpaid VAT on periods before 26 May 2005 whose claims were rejected on the grounds of ‘unjust enrichment’ can now seek recovery. A House of Lords’ judgement found in favour of Marks & Spencer and against HMRC, which had rejected a claim for a VAT refund. HMRC can refuse a claim to repay overpaid VAT where it can show this would unjustly enrich the claimant. But, until the law was changed in 2005, it only did this for particular categories of claimants. Marks & Spencer successfully argued this was discriminatory.
Ethical standards
The Auditing Practices Board is consulting on changes to its Ethical Standards for Auditors (ESs). It is asking for comments on the rotation period for audit engagement partners on listed company audits; the remuneration and evaluation policies for key partners involved in audits; the provision of non-audit services; direct assistance to the audit team by internal auditors; and the definition of an audited entity’s ‘affiliates’. The APB said that the length of the rotation period for audit engagement partners on listed company audits remains finely balanced.
Graduates not wanted
There are few opportunities for graduate recruitment in financial management this year, with over 90% of chief finance officers not planning to take on graduates, according to a survey from Robert Half recruitment advisors. Half of CFOs expect to cut staff, with an equal proportion predicting staff levels will remain constant. The biggest concern for CFOs is the challenge of financial forecasting in the current environment. At smaller companies, the main issue is cash flow management.
Non-doms leaving
A quarter of non-domiciled UK residents intend to leave the country because of changes to the tax regime, a survey by KPMG reveals. More than 90% of those questioned said that the reforms damage the UK’s tax competitiveness. KPMG estimates that if those who say they will leave actually do so, the UK will lose access to £90m in net assets. The desire to leave will accelerated with the effect of the recession on employment and investment opportunities, says the firm.
EU permits VAT cut
EU finance ministers have given approval to member states to cut VAT on labour intensive, locally supplied, activities. The move could lead to lower prices for homes renovation in the UK and in restaurants in France. Other activities include social care, childminding, hairdressing and shoe repair. It is a decision for individual governments whether to apply lower VAT rates for these activities. The Treasury says it will “apply a policy test” to decide whether the permitted reductions should be adopted in the UK.
Buffet supports fair value
The man often described as the world’s most powerful investor, Warren Buffet, has given his support for fair value accounting. “I believe in mark-to-market,” he told CNBC. “I don’t think anybody gets hurt by telling the truth on that sort of thing…. once you start putting phony figures into financial statements, you get in a lot of trouble.” But Buffet warned that mark-to-market should not be used by regulators to assess minimum capitalisation. That acted, he said, as “gasoline on the fire in terms of financial institutions… [forced] to sell stock at ridiculously low prices”.
Rest of world news
G20 catches tax havens
The future of tax havens seems in doubt, with G20 countries forcing the main tax havens to co-operate against tax avoidance. Switzerland, Liechtenstein, Luxembourg, Andorra and Austria have agreed to work with G20 countries in adopting new standards of transparency and exchange of information. Swiss finance minister Hans-Rudolf Merz complained that his country had been threatened by the OECD with sanctions if it did not accept new rules. Other tax havens have signed bilateral tax co-operation agreements, including between the UK and Jersey and between Germany and the Isle of Man. Another tax haven, the Turks and Caicos Islands, has had its constitution suspended by the UK Government, following a report into alleged corruption by members of the islands’ House of Assembly. Further action by G20 leaders is expected to be agreed at its summit, along with attempts at standarding regulation of banks and hedge funds and amending accounting standards.
Dubai rescued
Dubai has been rescued from a severe financial crisis by the injection of $10bn from neighbouring Abu Dhabi. Dubai had looked unable to repay debt obligations of $10bn to $15bn this year without the capital injection, which was made via a purchase of five year bonds by the central bank of the United Arab Emirates. It is thought that companies associated with Dubai’s rulers have liabilities of about $70bn, or about 85% of the nation’s GDP. The bonds were priced at 4% over Libor, significantly below recent market prices for loans to Dubai. Much of Dubai’s property boom was financed by international lending, with a lot of it falling due for repayment this year. But with a collapse in property prices of up to 50% in recent months, Dubai became unable to service its debts.
‘Anti-Madoff’ rule
Stronger regulation and supervision of auditors of broker-dealers has been proposed in response to the Madoff fraud. Paul E. Kanjorski, chairman of the House of Representatives’ Financial Services Committee, says that a legal loophole exists that prevented the Public Company Accounting Oversight Board from exercising proper oversight of Friehling and Horowitz, a small firm that audited Madoff’s investment funds. PCAOB can only inspect auditors of public broker-dealers. “If this legal loophole had not existed, Bernard Madoff’s storefront auditing company would have had to register with the PCAOB,” says Kanjorski. “Inspection and examination of Mr. Madoff’s accountant by the PCAOB could have identified his Ponzi scheme much earlier.”
UBS settles
UBS will pay $780m to settle charges from the US Securities and Exchange Commission and the Department of Jusice alleging that the bank enabled clients to avoid paying US taxes, while earning itself $120m to $140m a year as a result. A summons issued by the US Inland Revenue Service requiring UBS to disclose the names of US taxpayers who are UBS clients, which the banks claim it is prevented from disclosing by Swiss privacy laws, remains outstanding.
IASB warns regulators
Banks are expected to be required to accumulate larger reserves during periods of financial health to see them through future downturns, under plans being drawn up by regulators. But it is important that the reserves are taken from after-tax profits, rather than before tax, says the IASB. Sir David Tweedie, the IASB’s chairman, told the Financial Times that building-up pre-tax reserves risks allowing executives to mask underlying performance, releasing reserves during periods of weak profit to mislead investors and analysts.
Ireland uncompetitive
Ireland has fallen from the fourth most competitive EU member state to the second least competitive in a year, according to a report from the EU’s European Growth and Jobs Indicator. Only Italy is now less competitive than Ireland of the most established 15 member states. Finland, Poland and the Netherlands are the most competitive. Of the largest countries, the UK is seventh, Germany ninth and France 13th. Ireland’s fall to 14th place reflects the collapse of its financial services sector, on which it was over-dependent, and the disastrous state of its public finances.
EU permits VAT cut
EU finance ministers have given approval to member states to cut VAT on labour intensive, locally supplied, activities. The move could lead to lower prices for homes renovation in the UK and in restaurants in France. Other activities include social care, childminding, hairdressing and shoe repair. It is a decision for individual governments whether to apply lower VAT rates for these activities.
PwC India changes course
PwC is establishing an advisory board for its Indian firm, following the reputational damage incurred from the scandal involving its Satyam former client. “This board will comprise five members, four of whom will be from outside the PwC network and will be leading individuals of repute and standing in India,” said PwC. Two PwC partners have been charged with involvement in an alleged fraud at Satyam.
G20 ‘must redesign regulation’
G20 leaders must agree a new structure for global co-ordination of financial regulation, ACCA has demanded. It says that addressing the crisis of the world economy must not be allowed to sideline longer-term necessities of reforming the financial architecture. An ACCA discussion paper “The G-20 summit, April 2009” says that the financial regulatory framework needs to be re-designed to cater for increasingly complex financial structures, with steps taken to improve the transparency and stability of financial markets. The G20 should recognise that IFRS is the mechanism to bring transparency, comparability and clarity to financial reporting.
US examines fair value
Fair value needs to be reformed, but should be persisted with, the United States’ Office of the Comptroller of the Currency told the House of Representatives’ Committee on Financial Services. “We support current efforts of the SEC, standard setters, the Basel Committee and other groups to enhance current practices, especially as it relates to the application of fair value measurement in illiquid markets and the treatment of assets whose value is impaired on a more permanent basis,” said Kevin J. Bailey, the deputy comptroller.
Buffet supports fair value
The man often described as the world’s most powerful investor, Warren Buffet, has given his support for fair value accounting. “I believe in mark-to-market,” he told CNBC. “I don’t think anybody gets hurt by telling the truth on that sort of thing…. once you start putting phony figures into financial statements, you get in a lot of trouble.” But Buffet warned that mark-to-market should not be used by regulators to assess minimum capitalisation. That acted, he said, as “gasoline on the fire in terms of financial institutions… [forced] to sell stock at ridiculously low prices”.
Corruption in Dubai
Seven people have been charged with defrauding the Dubai Islamic Bank of Dh1.8bn ($500m), the largest alleged corruption case to go to court in Dubai. Five businessmen and two former exectuves of the bank are charged with producing false documentation to fraudulently obtain financing for a non-existent transaction, with the bank staff alleged to accepted bribes to take part in the scheme. Two people who have left the country are being pursued by the prosecuting authorities.
PwC Ireland cuts wages by 10%
PwC Ireland is reported to be cutting staff’s wages in Ireland by 10%. The firm declined to comment, saying it was promoting flexible working, career breaks and sabbatical opportunities. Deloitte is seeking 70 voluntary redundancies from its Ireland practice. Ernst & Young says about 1% of its Irish workforce is leaving. KPMG reported that about 85% of its staff in the UK and Ireland have signed-up for its flexible working scheme, which avoids a major redundancy programme by reducing their paid working week by a day, or taking a sabbatical of up to 12 weeks at 30% of pay.
Wall Street accused
A division of Goldman Sachs and 13 other Wall Street trading firms have agreed to pay a total of nearly $70m to settle charges brought by the Securities and Exchange Commission, alleging they traded unlawfully with clients. The firms were accused by the SEC of creating a complicated network of trades on behalf of clients to generate additional intermediary fees for their firms. The traders settled the charges without accepting or denying guilt.
ACCA welcomes Clarity
The International Auditing and Assurance Standards Board has completed its Clarity project, with all auditing standards written in a clearer and shorter way. The UK’s Auditing Practices Board is to bring its audit standards into line with the Clarity principles, effective from 15 December 2010. IAASB had hoped uniform audit standards would be adopted internationally from the end of this year. ACCA supports the Clarity project and is calling for national standard setters to declare as soon as possible when they will adopt the new auditing standards.
CPD in demand
Demand for professional development programmes is growing and outstripping supply, according to an ACCA survey. Programmes are usually not subject to formal external benchmarking and some organisations are not measuring the benefits achieved. ACCA warned that unless better practice is adopted, investment returns are likely to suffer. It is concerned that CPD provision will deteriorate because of the recession.
ABSA go forensic
A forensic audit team has been brought in by South Africa’s ABSA Bank to investigate allegations that R24m ($2.4m) has disappeared from client accounts in one of the bank’s local agencies. The police are also investigating. The bank’s head office has taken over the running of the agency concerned at Laudium, an Indian community in Pretoria. A spokesman for the bank declined to comment in case it damaged the investigation.
Ireland’s ‘cronyism’
Ireland suffers a high level of ‘legal corruption’, according to a report from anti-corruption pressure group Transparency International. Without breaking laws, undue influence is exerted through personal relationships, patronage, political favours and political donations, observers told Transparency International. Problems are exacerbated by the absence of transparency regarding political funding and lobbying. But the report praises the country for low levels of ‘petty corruption’ and for seeming to have tackled the ‘grand corruption’ that blighted the country in the 1980s and 1990s.
Politics
PFI life saver
The Treasury is guaranteeing £13bn of public infrastructure investment through the Private Finance Initiative. PFI schemes were under threat from the collapse in lending capacity from UK and European banks, including RBS, HBOS and Dexia – all of which have been state rescued. The guarantees should enable £3.5bn of waste schemes, £3.1bn of transport projects and £2.4bn of school building programmes to go ahead and overcome recent procurement delays. It is expected that the Government will provide short to medium term lending to PFI schemes where there is a shortfall in funding commitments from commercial banks. Its actions will be similar to those of the European Investment Bank, an EU-backed finance house that is already a major lender to PFIs and other Public Private Partnerships. An in-house lending institution is being set-up by the Treasury to provide the financial support.
Mind the fiscal gap
The UK should adopt efficiency programmes to save £20bn in the next four years as part of a strategy to address the fiscal gap of about £43bn, says a new report from PwC. This might be achieved by a real reduction in total public spending of 1.4% per annum in the three years to 2013/14, instead of the Government’s plan to increase spending by 1% a year in real terms. But, says PwC, this would be an unprecedented achievement. An alternative would be to freeze in real terms public spending in the three years to 2013/14, plus raising an extra £25bn from tax increases from 2011 onwards. This would still require cuts in departmental spending of 1% a year in real terms. Options for efficiency savings suggested by PwC include £24bn from collaborative procurement; £8bn from new back office and IT provision; and £5bn through rationalisation of the public property portfolio.
G20 ‘must redesign regulation’
G20 leaders must agree a new structure for global co-ordination of financial regulation, ACCA has demanded. It says that addressing the crisis of the world economy must not be allowed to sideline longer-term necessities of reforming the financial architecture. An ACCA discussion paper “The G-20 summit, April 2009” says that the financial regulatory framework needs to be re-designed to cater for increasingly complex financial structures, with steps taken to improve the transparency and stability of financial markets. The G20 should recognise that IFRS is the mechanism to bring transparency, comparability and clarity to financial reporting.
Tax lost
The UK Government will lose £28bn in tax revenues this year from the financial services industry because of the recession, according to a report from the Centre for Economics and Business Research. Tax income this year is likely to be £39bn, not much more than half the £67bn generated in 2006/7. According to CEBR, the loss of tax income represents a greater threat to UK government finances than the bank recapitalisations and asset guarantee schemes. The Exchequer will lose £9bn from falling corporation tax revenue, £10bn less in income tax and National Insurance, £2bn on stamp duty and £3bn from withholding tax. Analysis conducted by PwC suggests that the initial impact of the recession has cost each adult in the UK £40,000 – equivalent to 130% of annual GDP.
Corporate
Cattles clears out
Financial services company Cattles has delayed announcing its preliminary results for last year, with a forensic review being conducted into the previous year’s financial statements. The company expects to declare a “significant loss” for 2008 and to restate its accounts for 2007. Cattles’ board now believes the company is in breach of its debt covenants. Finance director James Corr; chief operating officer Ian Cummine, who is also chairman of the company’s Welcome Financial Services division; and the compliance and risk director of Welcome, Adrian Cummings, have all been suspended. The company had earlier suspended Welcome’s managing director, John Blake; its finance director, Peter Miller; and its operations director, Mick Belcher. The suspensions arise from a review conducted by Deloitte, Cattles’ internal audit and its legal advisors of the company’s impairment provisions. Welcome is the principal trading division of Cattles, providing loans and insurance to individuals.
Shell’s new CFO
Simon Henry has been appointed Shell’s new CFO. He is currently Executive Vice President Finance in Shell International Exploration and Production. Henry takes-up position in May. He began working for Shell in 1982 as an engineer at a UK refinery, qualifying as an accountant in 1989 and has subsequently worked for the group in postings in the Middle East and Asia Pacific, as well as Europe. Henry replaces Peter Voser, who becomes Shell’s chief executive from July. Voser began working for the Shell group in 1982, but left in 2002 to become CFO for Asea Brown Boveri, before returning to Shell as CFO in 2005.
Yahoo finance director pushed out
Yahoo’s CFO Blake Jorgensen has left the company as part of a wide-ranging shake-up of executive positions, carried out by new CEO Carol Bartz. A replacement CFO is being sought as part of the introduction of a simpler structure. “I’m rolling out a new management structure that I believe will make Yahoo! a lot faster on its feet,” said Bartz. “For us working at Yahoo!, it means everything gets simpler. We’ll be able to make speedier decisions, the notorious silos are gone, and we have a renewed focus on the customer.”
Enterprise
No reporting for micros
The European Commission proposes to reduce accounting requirements for micro-enterprises, allowing member states to abolish financial reporting obligations. The Commission says the move could save the smallest companies – with a turnover less than $1m, balance sheet totals under €500,000, or with no more than ten employees – €6.3bn annually. The proposal passes to the Council of Ministers and the European Parliament for decision. It was criticised by ACCA, which said confidence in small businesses “risks being seriously undermined” and increases the chances of fraud. John Davies, ACCA’s head of business law, said: “While we agree that needless bureaucracy should be removed, this move will mean that millions of stakeholders, including potential investors, trading partners and creditors will no longer be guaranteed access to credible accounting information from these small companies.” FEE – the Federation of European Accountants – said that it doubted that the proposal was “fit for purpose”.
Going concern
The FRC has updated guidance to small firms on going concern. Most small companies may opt out of an audit, filing abbreviated accounts at Companies House. A full set of financial statements is still required, which may use the Financial Reporting Standard for Smaller Entities. This requires them to assess whether the use of the going concern basis of accounting is appropriate and to make disclosures of any material uncertainties. Although full financial statements are not required to be filed, they are often produced for customers, banks and others to enable the firm to continue trading.
Accountants set for boom times [reserve only]
Accountants are regarded as increasingly important providers of advice during the recession, the QBE Business Sentiment Survey has found. A majority of SMEs expect to use accountants for advice this year, compared to just 28% last year. Half of providers of business and professional services regard the current economic conditions as the worst they have experience and 15% of professional firms do not believe they can survive a sustained downturn. However, 67% of SMEs expect to increase or maintain sales this year.
Practice
HMRC warns: be prepared
Businesses, charities and tax advisers have been warned by HMRC to be ready for the application of tougher tax inspectors’ powers, that came into effect in April. HMRC now has more information and inspection powers that impose greater record-keeping requirements on taxpayers, revised time limits on tax assessments and claims and other obligations on taxpayers and their agents. HMRC now has a single set of powers that apply to PAYE, VAT, income tax, capital gains tax, corporation tax and the Construction Industry Scheme. Tax inspectors are now more likely to visit taxpayers with a record of weak tax compliance, with a legal power of entry to the work and home addresses of people running businesses. HMRC’s permanent secretary for tax, Dave Hartnett, said: “This new approach to compliance checks will improve HMRC’s ability to ensure that the right tax is paid at the right time.”
Johnston Carmichael expands
Scottish accountancy firm Johnston Carmichael has expanded by taking over the Edinburgh-based Duncan Young & Co. Johnston Carmichael has 11 offices throughout Scotland and 450 partners and staff, while Duncan Young has 23 partners in Edinburgh and at Burntisland in Fife. Three new partners, Morris Duncan, Alan Young and Ian Roy, join Johnston Carmichael as a result. The enlarged firm is interested in expanding further. Johnston Carmichael was established in 1935, is the largest independent firm in Scotland and is one of the UK’s top 25 firms.
Public sector
5% rise ‘too much’
Local authority business rates will rise by 5% this year. This is in line with the inflation rate last September, despite it subsequently falling to a mere 0.1%. The CBI has called for government to scrap this year’s rise, which it says will cost businesses £1.15bn. It is also campaigning against the introduction of the business rate supplement to pay for infrastructure projects that could cost an extra £800m a year. John Cridland, CBI Deputy Director-General, said: “These extra taxes on business could harm local economies by placing extra financial demands on firms when they can least afford it. They could make the difference between companies surviving the downturn or going to the wall.” Meanwhile, the Federation of Small Businesses is urging action to support small firms that are unaware they are entitled to tax relief on rates – calling on the £400m of unclaimed entitlement to be applied automatically.
Treasury’s new MD
The Treasury has appointed a career civil servant as managing director in charge of its Public Services and Growth Directorate (PSG). Andrew Hudson rejoins the Treasury from his current role as chief executive of an arms-length agency, the Valuation Office Agency. Prior to that he was deputy chief executive of Essex County Council. His earlier career involved him in several high profile roles within government, including as press secretary for Norman Lamont at the time of the Black Wednesday crisis. PSG has 350 staff, an annual budget of £25m and includes the Prime Minister’s Delivery Unit, which focuses on public sector performance improvement.
Financial services
Anglo Irish investigated
Offices of Ireland’s nationalised Anglo Irish Bank have been raided by police, following a series of damaging disclosures. These include reciprocated deposits with Irish Life and Permanent, which had the effect of appearing to increase the strength of Anglo Irish’s deposits at its year end. Anglo Irish has been strongly criticised for lending substantial sums to ten leading Irish business leaders on non-recourse terms for them to buy Anglo Irish shares at a time when the share price was under severe pressure. Anglo Irish arranged with the Irish Nationwide Building Society for loans issued to Anglo Irish’s chairman to be transferred to Irish Nationwide on a ‘bed and breakfast’ basis for the Anglo Irish year end. There has since been a sequence of boardroom resignations at Anglo Irish, Irish Life and Permanent and Irish Nationwide – with some of the same directors resigning their positions at other companies and institutions.
FSA looks to enforce
The FSA has strengthened its enforcement team, amid warnings by chief executive Hector Sanz that financial services companies should be “very frightened” of his team. David Kirk has been appointed chief criminal counsel, joining from the Crown Prosecution Services where he was director of the Fraud Prosecution Service. The FSA said the appointment reflects its commitmenet to bringing criminal actions for insider dealing and market abuse. Keith Foggan has also been appointment to the enforcement division as manager of the Digital Evidence Unit, another area regarded as a priority for the FSA. Foggon previously headed the Serious Fraud Office’s Digital Forensics Unit.