New Charges for SBF
The charges are stacking up against Sam Bankman-Fried, one-time billionaire and founder of the now bankrupt cryptocurrency exchange, FTX. SBF, as he is widely known, will be charged with bribing Chinese officials and orchestrating an illegal donation scheme in Washington. He is already facing fraud and conspiracy charges concerning the collapse of FTX, to which he has entered not guilty pleas. The latest legal update also provided a glimpse into SBF’s bail conditions: he is holed up in his parents’ home with just a ‘basic’ mobile phone (an old Nokia brick perhaps?) which doesn’t allow internet access. His parents have been told by the court not to give him passwords to their devices. His laptop has restricted internet access, which apart from FTX information is limited to news, sport and takeaway. It’s all a far cry from life as part of the 1% in a $40 million Bahamas penthouse, but perhaps equally removed from how we imagine incarceration in the US.
Government Ditches Plans for NFTs
The Royal Mint won’t be joining Sesame Street, Liverpool Football Club, former Twitter boss Jack Dorsey, auction house Sotheby’s and Uncle Tom Cobley and all by launching its own non-fungible tokens. The Mint was charged by the government last summer to look at developing these crypto assets. But this week the chancellor confirmed plans had been dropped due to “a question of demand” amid changing global circumstances. Maybe the collapse of FTX, which massively impacted crypto prices, has saved us from digital holograms of Queen Elizabeth II, in which case we might owe SBF a big thanks.
BoE Paints a Gloomy Picture
There was a worrying overtone to the Bank of England’s Financial Policy Report, which said the international financial system still has “vulnerabilities” which could be exaggerated by hedge funds if markets moved against them. This, it said, could lead to further volatility or sharp movements in asset prices, and therefore tighter credit conditions. To address this issue, the BoE is now working with other central banks and regulators to try to limit systematic risks as there’s an “urgent need” to address the resilience of financial markets. After Credit Suisse and Silicon Valley Bank, could there be further victims to come?
AG Barr Succession Secured
Its advertising slogan famously claimed Irn-Bru was made with girders. While this seems unlikely, we can’t be too sure as only a few family members are trusted with the exact recipe of this iconic Scottish drink. One of them, 85-year former chairman Robin Barr, announced this week he was stepping down from the board of AG Barr. He is the great-grandson of Robert Barr, who founded the business back in 1875. His role on the board will be taken by his daughter, Julie, who is currently company secretary and one of the select secret recipe holders. Fortunately, this succession story doesn’t seem to have the acrimony and family bust ups as the Roy family, which returned to our screens this week for its final run. With sales of Irn-Bru booming in England and Wales helping boost profits, the board will no doubt be raising a glass of orange fizz at Barr’s final AGM.
The Next Chapter for Cath Kidston
The Cath Kidston brand known for its polka-dot handbags and ditsy floral print homeware has been bought by the Next for £8.5 million after it went into administration for a second time. Next, which announced upbeat results this week, will buy the company’s brand name and intellectual property, but the Cath Kidston stores will close with inevitable job losses. Next said existing Cath Kidston stock will be sold online by the administrator for the next year, ahead of a brand relaunch in Next stores, which may, just possibly, involve ditsy floral print handbags and polka-dot homeware.
Spring Boost for Housing Market
Estate agents might not be popping the champagne corks yet, but there were signs this week of a turnaround in the housing market. Mortgage approvals are up for the first time since August, suggesting that buyer confidence is returning after months of interest rate rises. However green shoots in the housing market still remain vulnerable to a late spring frost, and further increases in inflation or interest rates could dampen this nascent demand again. It is worth noting that despite this uptick, mortgage borrowing remains around a third lower than pre-pandemic levels. This latest Bank of England data shows overall mortgage lending fell from £2 billion in January to £700 million last month, which outside of the pandemic period, is the lowest level since April 2016.
Own Goal for HMRC
Investors who lost money in the Ark pension scandal will have to pay HMRC more than £5 million in unpaid taxes after they lost a tribunal case. The Ark LLP scheme wrongly claimed people could access their pensions tax-free before the age of 55. Most of the money went into high-risk overseas investments and complicated debt arrangements, where investors ultimately lost the lion’s share of the capital. The money that was extracted after the scheme collapsed will now be subject tax charges. It is not yet clear whether the people in charge of the scheme will face regulatory action.
However, HMRC wasn’t as successful in another legal ruling this week, after football pundit Gary Lineker won his appeal over a £4.9 million tax bill. A judge has ruled that Lineker was a freelancer while working for both BBC and BT Sport in recent years. HMRC had argued he was an employee of both companies and was therefore liable to pay additional taxes.
Cool Credit Suisse Hat, Bro
It might not be the first thing you think of when you’re handed your P45. But if you work for a bank – or fintech start up, or crypto currency exchange – that is very publicly going bust, it might be worth scouting around for branded souvenirs on your way out. A week after Credit Suisse was bought by UBS, ski caps, notebooks and gold bars, all stamped with the bank’s old logo, were being sold online at a premium. There’s been a similar rush for Silicon Valley Bank and FTX ‘merch’. But perhaps it pays not to sell too quickly. If there’s a film, Disney+ miniseries or award-winning West End play about the company’s demise, your collectibles could soar in value. Last week on eBay a Lehman Brothers baseball cap was selling for $75, while a Theranos-branded gift card, which had an original retail value of $100, was on the market for $10,000. Though as this article went to print there did not appear to be any bidders for the ‘collectible’ gift card from a disgraced blood-testing firm.
Slow March of Progress
The number of women running FTSE 100 companies has now reached double figures, with the news this week that Diageo has appointed Debra Crew as its new CEO. The world’s biggest spirit manufacturer is now one of five FTSE giants that have both a female CEO and female chief financial officer. While Diageo’s actions are to be toasted, it remains the fact that progress on gender equality at board level has been painfully slow. The first female chief executive of a FTSE 100 companies was Marjorie Scardino, appointed to the top job at Pearson in 1997. Given it has taken more than 25 years to get from one female CEO to 10, it might be sometime next century before there is a more equal split.
Uproar Over Liontrust Chair
Investment trust board meetings seem to be getting fractious. Two non-executive directors have now quit the Liontrust board in protest about the decision that the chairman should remain in post for more than nine years. The code on corporate governance states it is ‘best practice’ that a chair served a maximum nine-year term, to ensure independence isn’t compromised. However, Liontrust’s board has agreed that Alastair Barbour will stay in place beyond this period to help oversee the integration of new acquisitions. Liontrust, manages around £33 billion and has promoted itself as being a strong ESG investor. Perhaps the directors that left were keenly aware that this three-letter acronym doesn’t just concern environmental issues, with the ‘G’ standing for good and transparent governance.
