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The UK’s National Crime Agency has reported a surge in suspicious activity reports (SARs) filed by banks and other regulated institutions since February, when Russia invaded Ukraine. SARs detail concerns around sanctions breaches as well as money laundering and terrorist financing. The NCA has set up a new Kleptocracy Unit to tackle the influence of Russian oligarchs and their enablers. “We are up against an opponent that is essentially the state,” an NCA spokesman said. “This is about starting to push back on this concept of ‘Londongrad,’ that people were free to come regardless of their money and do whatever they liked.” In total, around a dozen “enablers” working with wealthy individuals have been arrested since the war in Ukraine started, the NCA said, adding that there are signs the investigations and arrests are deterring Russian investment into London.

 

Bloomberg

Super-wealthy Chinese investors are coming to the rescue of London’s super prime agents ruing the crackdown on Russian money. “The Chinese have definitely taken up the slack,” says Paul Finch from Beauchamp Estates. “They have been quite prolific, especially the Hong Kong Chinese, in buying up properties in London.” The Sunday Telegraph notes that applicants from China have received 33% of the “golden visas” issued by the UK since the programme was launched in 2008, ahead of the 19% issued to Russians. But campaigners warn estate agents to be cognizant of the political realities in China, and the dangerous influence of the Chinese Communist Party, as per the recent warnings from the head of MI5 and the FBI. Rachel Davies Teka, advocacy director at Transparency International, says: "While investment from Russia has received significant attention, this should not distract from the money laundering risk posed by funds from countries where corruption is commonplace, like China.”

 

The Sunday Telegraph

Lex Greensill and other former directors of the supply chain finance group, Greensill Capital, have been contacted by the Insolvency Service in recent days, Sky News reports, in a move demonstrating the inquiry into directors' conduct prior to Greensill's collapse is now at a detailed stage. Greensill collapsed in March 2021, meaning that, under the Company Director Disqualification Act, the Insolvency Service has until March 2024 to bring disqualification proceedings. The unwinding of Greensill's corporate empire remains ongoing, with Grant Thornton overseeing the insolvency process. Separately, in a piece for the Mail on Sunday, Duncan Mavin, the author of The Pyramid Of Lies, details the revolving door between Westminster and the City which was critical to Lex Greensill’s success, and his relationship with former prime minister David Cameron, who lent his credibility to a deeply flawed firm.

 

Sky News

Mail on Sunday

The Serious Fraud Office (SFO) has lost an appeal over its unfair sacking of a former Unaoil case controller. Tom Martin was dismissed in 2018 after complaints by the Ahsani family, which owned and controlled the energy consultancy, and the US Department of Justice about his alleged conduct at a London pub after a meeting between SFO, DOJ and Federal Bureau of Investigation officers. Martin was said to have called an FBI agent a “spy” and a “quisling” – which he denied, arguing that the complaints were “motivated by a joint desire to see me removed as case controller and senior lawyer on the Unaoil case.” He brought a claim against the SFO at the employment tribunal, which last year decided that Martin’s claims of unfair dismissal and breach of contract were “well-founded.”

 

Law Gazette

Deutsche Bank has settled for €7.01m ($7.1m) an investigation by Frankfurt prosecutors examining whether the bank violated money-laundering prevention rules. Prosecutors found the bank failed to file 701 reports of suspicious activities. Deutsche Bank acted “thoughtlessly,” they said. The bank had processed payments related to the extended family of Syrian President Bashar Al-Assad, despite its role being limited to that of a correspondent bank for another lender. Prosecutors said Deutsche Bank should have reacted to red flags as early as 2017, including a French criminal case that later led to a conviction, and should have reviewed its involvement in the transactions.

 

Luxembourg Times

A former senior banker at now-defunct Dutch lender Fortis has been arrested in Spain over his alleged role in a dividend tax fraud in a major escalation of the criminal investigation into the ‘cum-ex’ scandal that cost German taxpayers €51m ($52m). The 56-year-old man was arrested on the Spanish Island of Mallorca, Frankfurt prosecutors said. They didn’t identify him or the bank he worked for – but according to a person familiar with the matter, the man worked for Fortis.

 

Bloomberg Tax

Financial Times

Halfords is launching a £1m legal claim against the former directors of Axle Group, which owned the National tyre servicing brand, which it bought for £62m last year. The retailer has launched a High Court claim alleging that Axle's former shareholders owed it £1m based on the company's accounts after closing. According to the court filings, under the terms of the deal, both sides were obliged to reimburse the other depending on whether there was a cash surplus or shortfall when the acquisition was completed in December last year. The acquisition of Axle was part of Halford’s push toward motoring services rather than shops, as rising prices for households are likely to put pressure on discretionary spending. 

 

The Sunday Times

Facebook, Google and telecom giants should pay hundreds of millions of pounds to help reimburse victims taken in by scammers on social media, Britain's biggest banks have said. Barclays, TSB, Lloyds and Santander are backing a so-called "polluter pays" principle in which tech companies would be required to contribute to a compensation fund for victims. Fraudsters cost people £583m last year in authorised push payment fraud, up more than a quarter compared with 2020. Sian McIntyre, head of economic crime at Barclays, says in a piece for the Telegraph that: “All companies and sectors involved in enabling scams should be mandated to regularly publish their data, including what action they are taking, and contribute to victim compensation.” A spokesman for UK Finance backed calls for online platforms and phone providers to help reimburse victims but said companies should first and foremost “stop fraud at source.”

 

The Daily Telegraph

The Competition and Markets Authority (CMA) has said six banks have broken rules about keeping customers informed about changes to interest rates for overdrafts. Lloyds, NatWest, HSBC, Barclays, Metro Bank and Bank of Ireland all breached regulations, the regulator said. Adam Land, at the CMA, said: “Customers have been let down, some of whom will receive refunds, so these high street names must get their act together.”

 

The Times

Daily Express

Daily Mail

The British arm of EY has brought in bankers from Rothschild to advise on the implications of a separation of its audit and consulting businesses, Sky News reports. The accountancy giant has been working on plans for months to carve out its consulting business from its audit firm in the belief that by removing conflicts of interest between the two sides, each would be more highly valued on a standalone basis. Carmine Di Sibio, EY's global chairman, told the FT last week that it could land a $10bn consulting fees bonanza from multinational technology companies by extricating itself from such conflicts. If EY went ahead with a break-up, it would almost certainly become an outlier among the big four audit firms. Deloitte and PwC have both pledged to retain the existing integrated model while KPMG's global chairman Bill Thomas recently implied EY’s plans amounted to an act of corporate vandalism.

 

Sky News

City AM

Volkswagen’s chief executive Herbert Diess has been forced out by union leaders and shareholders. A rare outsider within VW, Diess will be replaced by Porsche executive Oliver Blume from the start of September. Diess leaves three years before his contract expires and during a pivotal moment for the company as it tries to list Porsche on the stock market to fund its ambitious €52bn electrification programme.

 

Financial Times

The Daily Telegraph

Saleh al-Ateeqi, the head of the Kuwait Investment Authority’s London office, has been fired with immediate effect in the wake of high staff turnover and legal battles with former employees.

 

Financial Times

Proxy advisor ISS is calling for James Richards to be sacked as chairman of financial services firm CMC Markets at the company's annual meeting on Thursday over the company's failure to hire enough female directors. CMC will have only two women on its board after Clare Salmon steps down at the meeting, meaning female representation will be just 25%. This falls short of the 33% target for FTSE 350 companies set by the Hampton-Alexander review. The proxy adviser said: "As chair of the nomination committee, it is James Richards' responsibility to ensure that the board promotes gender diversity in line with emerging good practice.”

 

The Sunday Telegraph

LV has declined to rule out handing outgoing CEO Mark Hartigan another bonus for the current financial year after the mutual was heavily criticised for paying Hartigan a £511,000 bonus – dubbed a “reward for failure” by MPs and campaigners – on top of his £435,000 salary in 2021. That bonus was awarded in a year which saw LV spend more than £30m on an attempt to sell itself to private equity firm Bain Capital – a deal voted down by customers. Hartigan then resigned following a no-confidence vote. LV's policyholders are threatening to rebel at the firm's annual meeting, when they will be asked to approve last year's pay report.

 

The Mail on Sunday

Experts say they will be looking out for early warning signs that borrowers on the continent are struggling to afford their loans after the ECB raised interest rates by a surprise 50 basis points on Thursday. UBS, Deutsche Bank, Credit Suisse, BNP Paribas and UniCredit are set to report second-quarter results this week and Santander and BBVA also report at the end of the month. Michael Rohr, an analyst with Moody's, says German banks may have to set aside more for resulting loan losses. Elsewhere, one senior Spanish economic official said there were a worrying number of loans under special surveillance for default.

 

Daily Mail

Forecasts from the consultancy arm of EY suggest inflation could hit 15% this winter. The worse-case scenario modelled by economists at EY-Parthenon assumes Vladimir Putin cuts gas supplies to Europe, food prices soar and inflation expectations become entrenched among the population. EY-Parthenon also has a scenario in which inflation peaks at just over 10% and then starts to fall back. Mats Persson, a partner at EY-Parthenon and a former Downing Street adviser, said clients were war-gaming for higher inflation. “While clearly not the central forecast, firms are now scenario modelling a 15% inflation peak over the winter in the event that Russia turns off the taps and food inflation continues to rise,” said Persson.

 

The Sunday Times

The director-general of the CBI has said Britain’s next prime minister must accelerate the pursuit of trade deals to prevent a further sharp rise in costs. Tony Danker argues that more trade agreements should be pursued not just to take advantage of Brexit but to cushion the blow of deglobalisation. Danker says: “I understand why there are political drivers to escalate deglobalisation, but if we do them without thinking about our economic resilience, that’s incredibly expensive for everybody.”

 

The Times

New research by the Low Pay Commission shows textile manufacturers in Leicester are still underpaying and exploiting workers, despite a clampdown by enforcement agencies and retailers cleaning up their supply chains.

 

Financial Times

The Financial Conduct Authority’s executive director for consumers and competition, Sheldon Mills, has warned insurers that customers struggling with their finances could cancel or cut back on insurance, leaving them under-protected.

 

Financial Times