Lobbyists for insolvency practitioners and restructuring advisers are calling for reform of CVAs, as more landlords accuse retailers of using the procedure to railroad them into agreeing to rent cuts. A report by R3 highlights research by the universities of Wolverhampton and Aston which recommends several measures, including: A cap on CVA lengths; more time for companies to plan the arrangements; clearer roles for directors and CVA supervisors; more engagement from public sector creditors and the introduction of standard terms. R3 said that CVAs made up only 1.8% of insolvencies in 2017, but the number of retailers considering the arrangement appears to have increased significantly this year. However, Adrian Hyde, an R3 spokesman, added: “CVAs can be criticised, particularly given that not all of them meet their objectives and creditors can feel like they have been left out of pocket. Ultimately, however, we’re talking about insolvent companies and without procedures like CVAs, the outcomes for creditors would be worse.” Dan Simms, head of retail agency at the real estate firm Colliers, said landlords were often forced to agree rent cuts because in many cases CVAs are voted on not just by landlords but by other creditors who will not share the pain of rent cuts.
The Times publishes an extract from The Big Four, The Curious Past and Perilous Future of the Global Accounting Monopoly by Ian D Gow and Stuart Kells. The book, published this month, argues that the global accounting firms are at a critical point following recent tax scandals. “Ours is a new era of transparency and digital disruption, and in no area of Big Four services are those forces more intense than in tax advice,” write Gow and Kells.
RBS has failed to appreciate the impact of its decision to close dozens of branches in Scotland, a report by MPs has found. The Scottish Affairs Committee described the move as a “devastating blow” for communities affected. The report has been welcomed by the Federation of Small Businesses, which has demanded ministers “stop sitting on their hands” and intervene to stop the damage to the rural economy. RBS executives are expected to face questions from shareholders over dividends, branch closures and reprivatisation at the lender’s annual meeting this week.
BBC News The Press and Journal, Page: 3 Yorkshire Post, Page: 4 Daily Express, Page: 44
Offshore landlords cash in on student housing
The Guardian reports that thousands of undergraduates are paying for accommodation at universities where developers are cashing in on the privatisation of student housing using offshore companies. More than 20,000 students were found to be paying for rooms owned by companies based in places such as Jersey, Guernsey, the British Virgin Islands and Luxembourg. The holding structure means overseas investors are able to sell on the rooms without paying tax on their gains and allows buildings to change hands without a stamp duty bill. Complex company arrangements also give firms the opportunity to minimise the tax they pay while charging students up to £14,000 a year in fees.
The Guardian, Page: 13
WEALTH MANAGEMENT NEWS
Wealth managers ripe for mergers
A new report from JP Morgan concludes the wealth management industry is ripe for consolidation. The sector is one of the most fragmented in global finance, with the 32 largest companies holding a collective market share of just 50%, the report found.
Hopes of summer rate rise dashed by fading inflation
A slowdown in inflation has seen economists slashing their forecasts for price rises, reducing the scope for the Bank of England to step in to raise interest rates. Financial markets now believe savers will have to wait until November to see the base rate rise from 0.5% to 0.75%. However, even this increase might be delayed into next year after inflation fell unexpectedly in April to 2.4%, down from 3% at the start of the year.
The Times reports that investment bankers, City lawyers and British diplomats are among the figures paying £1,000 a year for curated profiles to appear near the top of Google search results for their names. Hundreds of entrepreneurs and businessmen have signed up for a new service – The Marque – that uses ‘search engine optimisation’ techniques to secure a high Google ranking for its biographies. This allows customers to promote a more polished and accurate online profile than may appear on their Wikipedia page, which can be edited by anyone.