Starbucks has taken the ‘unprecedented’ step of pledging to pay 20m pounds corporation tax, even if it makes no profit – only for the move to appear to backfire and fuel the fiasco surrounding its UK operation. In a bid to end the pressure on the coffee chain, the US giant dramatically broke off talks with HM Revenue & Customs (HMRC) to offer to “pay or pre-pay somewhere in the range of £10m in each of the next two years”. Starbucks has paid just 8.5m pounds corporation tax in 14 years, despite UK sales of 3bn pounds – a tax rate of less than 1pc. [The Telegraph]
Britain’s former top financial watchdog is in talks about taking a senior role at Barclays, raising fresh questions about the revolving door between regulators and the big banks. Hector Sants is understood to be considering accepting a senior compliance and regulatory job at the bank he once believed was too aggressive. The former investment banker stepped down as chief executive of the Financial Services Authority in June, after guiding it through five years of turmoil in the wake of the banking crisis. One of the FSA’s last acts under his leadership was to impose a record £59.5 million fine against Barclays for rigging Libor, the key inter-bank interest rate. [The Times]
One of the banks being investigated over the Libor lending rate scandal was behind some of the unusual deals that triggered a separate inquiry into suspected attempts to manipulate the wholesale gas price. US investment bank Citigroup has confirmed that traders in its London office made two of a series of six gas deals that prompted inquiries by the Financial Services Authority and the energy watchdog, Ofgem. The sales were made around the “window” in which so-called price reporting agencies set the benchmark price for gas. In both deals, late in the afternoon of 28 September, Citigroup sold gas at 58.00p per therm – substantially below the price of other deals earlier in the day and later. [The Guardian]
Netflix has said securities regulators plan to take action against the company because of a Facebook post by chief executive Reed Hastings that allegedly violated public disclosure rules. “We remain optimistic this can be cleared up quickly through the SEC’s review process,” said Hastings, in the letter the company submitted alongside a regulatory filing announcing the receipt of a “Wells Notice” from US Securities and Exchange Commission staff. The notice informed Netflix that the SEC intends to bring a civil action against the company because of comments Hastings made on Facebook in July announcing that members of the online video streaming service were watching more than one billion hours of video a month. Hastings said on Thursday that he did not believe the Facebook posting was “material” information, Reuters reported. [The Telegraph]
Better Capital, the private equity firm run by veteran investor John Moulton, is in rescue talks to salvage the coal mining operations of ATH Resources. Doncaster-based ATH, which operates all four of its open cast pits in Scotland, fell into administration on Wednesday night, although its subsidiary, Aardvark TMC, continues to trade. But Better Capital yesterday revealed that it is in talks with all the company’s “stakeholders” – including customers, local councils and staff – to find a way to keep Aardvark trading. [The Scotsman]
Asian shares rose to an eight-month high, encouraged by a bigger-than-expected fall in weekly US jobless claims ahead of non-farm payrolls data later on Friday. The MSCI Asia Pacific index gained 0.1 per cent with Japan’s Nikkei 225 Stock Average up 0.2 per cent, South Korea’s Kospi Composite index 0.6 per cent higher and Australia’s S&P/ASX 200 index rising 0.8 per cent to a six-week high. Hong Kong’s Hang Seng index and the Shanghai Composite index each added 0.3 per cent. Investors are awaiting the key monthly US jobs report for further clues on the US economic outlook. Non-farm payrolls in November are expected to have risen just 93,000, compared with October’s 171,000 job gain, due to the impact of superstorm Sandy on US economic activity. [Financial Times]
Fresh curbs on welfare spending for those hit hardest by George Osborne’s autumn statement will be needed to spare Whitehall departments from the full impact of £27bn in savings needed in the next phase of the government’s eight-year austerity programme, Britain’s leading experts on the public finances have warned. The Institute for Fiscal Studies said that without further savings – either from benefits or tax increases – some areas of the public sector would be faced with “inconceivable cuts” in the next parliament. [The Guardian]
A US electronics company is creating 130 jobs after announcing plans for a second Scottish factory in a £9 million expansion. Plexus is moving its Livingston design centre to larger premises at Bathgate where it will also open a manufacturing facility to complement an existing one in Kelso. Work is expected to begin later this year and the site is expected to be operational by February. [The Scotsman]
