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Ministers are considering an amendment to the Procurement Bill which would introduce a traffic light system for government contracts, indicating value for money. The proposal put forward by John Penrose, the government’s former anti-corruption tsar, would force government departments to "state clearly what actual outcomes they are intending to achieve" when awarding a contract. For the most expensive projects, the results would be audited by an independent body, with a red, yellow or green rating applied and published. National Audit Office data shows that just 8% of government spending on major projects - £35bn out of £432bn - had robust evaluation plans in place. Where an evaluation had been carried out, spending had been reduced by two-thirds in some cases.

 

The Times

India has filed a case against BAE Systems and Rolls-Royce Holdings for “criminal conspiracy” in deals to supply fighter jets to the country, according to a federal police document. The case is based on the findings of an investigation launched by India’s Central Bureau of Investigation in 2016. The document said the firms paid commissions to intermediaries, violating Indian defence contract rules. The middlemen allegedly helped the manufacturers secure contracts by using “undue influence” on government officials. In 2012, Britain’s Serious Fraud Office launched an investigation into Rolls Royce for payments linked to transactions with countries including China, India, Indonesia, Malaysia and Thailand. Rolls Royce paid a fine of £497m to settle the case in 2017.

 

Financial Times

Reuters

Credit Suisse has been ordered to pay former Georgian prime minister Bidzina Ivanishvili $926m in a case dating back to a dispute relating to Credit Suisse private banker Patrice Lescaudron, who defrauded some of the bank’s clients, including Ivanishvili. A Singapore court told Credit Suisse to pay the sum after failing in its duty to safeguard Ivanishvili’s assets from fraudulent transactions by his relationship manager.

 

Barron’s

Forbes

Financial Times

Autonomy founder Mike Lynch has put up £44m worth of shares in the cybersecurity company Darktrace in order to secure bail in the US, where he’s facing trial for fraud. The shares have been frozen by US courts. The news comes after analysts at Bank of America raised questions over the ability of Darktrace to battle its competition, sending shares down 11% on Friday.

 

The Sunday Telegraph

The Times

The Information Commissioner has told companies using generative AI technology they are subject to data protection law, meaning they must gain consent or show there is a legitimate interest for collecting personal information on their users. Lorna Woods, professor of internet law at Essex University, points out that “Data protection rules apply whether or not you’ve made something public.” The Sunday Telegraph notes that Ofcom is also planning to impose tougher rules on AI companies, including risk assessments, while the competition watchdog has already launched an investigation into the AI market, including examining the safety implications of the technology.

 

The Sunday Telegraph

The Financial Conduct Authority is examining the market for sustainable loans amid concerns that environmental targets are too easy for companies to meet. Sources say the regulator is looking at loans that potentially reward borrowers with lower rates but fail to have a significant environmental impact. The FCA is particularly concerned that companies use undisclosed targets for their sustainable loans that may be easier to meet than other corporate targets that are usually made public, the watchdog’s director of Environmental, Social and Governance Sacha Sadan said.

 

Bloomberg

Financial Times

Attempts to create an affordable post-Brexit regulatory regime for the chemicals sector are in jeopardy, risking “irreparable damage” to British businesses, industry representatives have said.

 

Financial Times

Almost 100 organisations have reported breaches of personal data held by outsourcing firm Capita. The Information Commissioner's Office, the privacy and data watchdog, said that around 90 organisations had been in contact regarding Capita. The firm, which was hit by a cyber-attack in March, was recently found to have left a batch of files unsecured online. Capita is used by a large number of public and private organisations and many company pension schemes administer payments through the firm. The Pensions Regulator has written to over 300 pension funds asking them to check if their data had been put at risk.

 

BBC News

HMRC is targeting Chinese gangs using criminal cash to buy luxury goods in the UK that are then sold on in China. So-called "daigou" shoppers purchase luxury brands in the UK, shipping goods back to China and selling them on for profit. This is not illegal but the tax office is investigating whether criminal proceeds are being used to fund these shopping sprees. Sources have suggested that some daigou shoppers get the money they spend in the UK through Chinese underground banking brokers, who in turn source it from organised crime gangs. An HMRC spokesman said it is "aware of tax and money laundering risks associated with daigou trading." HMRC is also concerned that daigou traders are fraudulently claiming back tax on the purchases they make.

 

The Daily Telegraph

Experts have suggested that regulators could use central bank digital currencies (CBDCs) in the fight against fraud. Gilbert Verdian, chief executive of Quant, a firm which builds technology for blockchains, said: “When you look at CBDCs, it’s an opportunity to be able to embed fraud protection at a whole network level and then have fraud prevention done by the network itself.” He added that regulators would be able to look at the “pattern of fraud” across the payments network, identifying suspicious activity and targeting it directly. It is noted that the Bank of England’s consultation on a CBDC says “protection from fraud is a material consideration for the digital pound.” Keith Bear, of the Cambridge Centre for Alternative Finance, says a key consideration is how the digital pound would interact with other forms of money, like cash and bank accounts, warning that “the design for fraud prevention has to cater for that.” UK Finance figures show that £1.2bn was lost to fraud in 2022.

 

City AM

Britain's biggest retail bank has hit out at Facebook owner Meta for failing to stop a 'Wild West' surge in online shopping scams. Lloyds Bank claimed two-thirds of so-called 'purchase' frauds start on Meta-owned platforms, which also includes Instagram. Liz Ziegler, the banking group's fraud prevention director, said: “Social media has become the wild west of online shopping in recent years . . . This has left consumers increasingly exposed to ruthless fraudsters, with hundreds of new victims targeted every day and tens of millions of pounds flowing to organised crime gangs each year.” She added: “It's high time tech companies stepped up to share responsibility for protecting their own customers. This means stopping scams at source and contributing to refunds when their platforms are used to defraud innocent victims.” 

 

Mail on Sunday

The Guardian

Companies could see the cost of carbon offsetting double by 2030, according to research. A PwC report says FTSE 350 companies publicly reported voluntary carbon offset purchases totalling £38m in 2022. Analysis of BloombergNEF forecasts suggests that this same volume of offsets could cost companies more than £154m - an increase of 256% - by the end of the decade. At least 80% of the volume of offsets reported to have been bought by FTSE 350 firms in 2022 were classed as "avoidance offsets," which come from projects that avoid environmental impact. Looking at what would happen to prices if avoidance offsets were to be discounted, researchers found that the same volume of voluntary offsets purchased in 2022 for £38m would cost £483m by 2030 - a 1,051% increase. Ian Milborrow, sustainability partner at PwC UK, warned. "If we get to that stage where the use of offsetting to reach net-zero targets becomes sufficiently expensive so as to become unviable, and in the absence of other strategies, companies will be unable to meet their net-zero commitments in the timeframes they have published.”

 

The Independent

The total number of large insurers to have left the Net-Zero Insurance Alliance (NZIA) has reached nine after Australian insurer QBE and Lloyd's of London on Friday said they had also left the climate club. Germany’s Allianz, France’s Axa and Scor and Japan’s Sompo Holdings left on Thursday following more accusations from US Republicans that insurers are violating antitrust laws. NZIA is the insurance arm of the UN-backed Glasgow Financial Alliance for Net Zero, which was set up by former Bank of England governor Mark Carney.

 

Financial Times

Reuters

The Times

Amar Bhidé, a rebel director dismissed from the board of Scottish Mortgage Investment Trust, has accused the company of "seriously misleading" shareholders. He has written to the Financial Conduct Authority over the way Scottish Mortgage characterised the main reason for his dispute with the rest of the board, adding that it failed to mention his concerns over the way new board members were selected. Mr Bhidé said the company's version of events was "highly incomplete and, by virtue of its incompleteness, seriously misleading." Mr Bhidé was fired from the board after a public dispute in which he accused chairwoman Fiona McBain of lacking independence.

 

The Times

Energy suppliers are set to file a record number of winding-up petitions against businesses as companies struggle with soaring energy costs. Court filings show that there have been more than 400 attempts by suppliers to shut down companies to reclaim their energy debts over the past decade. Analysis by law firm Harcus Parker shows that if the rate of winding-up petitions filed in the first four months of the year continue at the same pace, 2023 will see a new record high. The firm notes that around half of petitions have typically resulted in the targeted companies being shut down.

 

The Times

The co-founder of Revolution Beauty has stepped down from his position as non-executive chairman after the online retailer unveiled results “significantly below” forecasts on Friday. Tom Allsworth’s departure comes after its auditor BDO flagged significant problems in its accounts, including undisclosed loans made by Allsworth and former CEO Adam Minto. The results show Revolution Beauty overstated profit by around £23m and revenues by £9.6m. But Allsworth’s replacement, Derek Zissman, insisted the business was “robust . . . with a strong brand, loyal following, and significant potential in terms of both sales and profitability.” Chief executive Bob Holt said: “Integrity and honesty in every aspect of our business is paramount. This has been the focus of the new leadership team as we reset internal controls and processes to ensure that we are in a position to achieve consistent operational excellence at a global scale, and in line with the standards of a UK plc.”

 

The Times

City AM

Daily Mail

London Evening Standard

The Institute of Chartered Accountants in England and Wales (ICAEW) has been criticised for collecting fines in respect of misconduct by its members. The ICAEW has been under increasing scrutiny over an arrangement called the Accountancy Scheme, in which the professional body pockets fines that result from investigations by the Financial Reporting Council. A report by Sheffield University and the Corporate Accountability Network said the ICAEW should use the £127m it has collected to improve the training provided to students of accountancy, and the wider financial education of 16 to 21-year-olds. Richard Murphy, a professor of accounting at Sheffield, said it was "wholly unreasonable" that the ICAEW "should be enriched every time one of its members is fined for harming the public by delivering substandard work." The ICAEW said it had always been "transparent" about its reserves. It noted that the Accountancy Scheme was being superseded by the regulator's Audit Enforcement Procedure for audit investigations, which was introduced in 2016 and under which fines go to the government.

 

The Times