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UK law enforcement is intensifying its focus on ESG-related money laundering, as highlighted in the ESG enforcement tracker by Peters & Peters. Maria Cronin, a partner at the firm, stated: "With sustainability rules tightening and regulators getting serious about ESG failures, international companies are facing a web of complex risks." The Advertising Standards Authority and the Competition and Markets Authority are leading this regulatory push, with the Financial Conduct Authority also increasing its enforcement efforts. Although private prosecutions for ESG breaches are currently rare, there is an anticipated rise in interest from shareholders and activists, suggesting that enforcement actions will continue to escalate in the coming years.

 

City AM

UK banking groups have been cautioned by the Financial Conduct Authority (FCA) against using a loophole in new fraud compensation rules meaning victims of fraud may not be protected if the fraud occurs between customers of the same bank. The regulator told executives they must still "deliver good outcomes" for victims who are not covered by the new regime, because firms are bound by "consumer duty" regulations.

 

The Times

Former Tory cabinet minister Sir David Davis has written to the secretary of state for science, technology and innovation, Peter Kyle, warning that the complexity of new online safety laws will present difficulties small British tech businesses. He wrote: “While the Online Safety Act’s intended purpose, to make the UK the safest place to be online is welcomed, its current design and scope pose substantial risks to our economy and society.” Sir David cited research from Ofcom suggesting smaller websites could face costs of up to £45 per user to comply with the new laws, whereas larger websites would only be spending 25p to 50p per user. Sir David said: “Such disparities could drastically stifle innovation and productivity and constrain our digital economy.”

 

The Daily Telegraph

Ministers are set to enhance oversight of the taxpayer-funded HS2 project due to "inconsistent" and "rapidly changing" cost figures. Transport Secretary Louise Haigh expressed her concerns, stating: "I have seen up close the scale of failure in project delivery – and it's dire." The project's costs have escalated dramatically, with estimates for the first phase rising from £30bn to as much as £59.7bn. Leaked documents reveal that HS2 has low confidence in its contractors, and civil servants share similar doubts about the project's financial projections. James Stewart, former chairman of infrastructure at KPMG, is reviewing the project and may recommend bringing HS2 under direct control of the Department for Transport. Haigh emphasised the need for efficiency, asserting: "Taxpayers have a right to expect HS2 is delivered efficiently."

 

The Sunday Times

The Sunday Times

MI5 has issued a significant warning to British businesses regarding potential sabotage attacks backed by the Kremlin, particularly highlighting the risk of "insider" jobs. This alert follows a suspected plot involving Russian spies attempting to send an incendiary device to the UK, which later ignited at a DHL depot in Birmingham. Ken McCallum, MI5's director-general, stated that sectors such as arms, logistics, and transport are particularly vulnerable. The guidance from the National Protective Security Authority (NPSA) stressed that "people are an organisation's biggest asset," but can also pose insider risks. 

 

The Sunday Times

Sky News reports on a company that unwittingly hired a North Korean hacker posing as an IT contractor, who quickly accessed sensitive data and exfiltrated it leading to a ransom demand. Rafe Pilling, director of threat intelligence at Secureworks, which investigated the incident, said the tactic was a new one for the North Korean regime, which was already trying to sneak its workers into UK companies and marked "a serious escalation" of risk for companies. "No longer are [the fake workers] just after a steady paycheck, they are looking for higher sums, more quickly, through data theft and extortion, from inside the company defences," he said.

 

Sky News

Over 100 customers have contacted the BBC reporting poor treatment by Revolut after being scammed. The e-money firm, which has nine million customers in the UK, has been linked to a high number of fraud reports, raising concerns about its security measures. Experts say several features, such as virtual debit cards and the option to hold money in different currencies, may be appealing but can also be a security weakness.

 

BBC News

ITN has been directed to reassess its use of non-disclosure agreements (NDAs) following allegations of gender pay discrimination, harassment, and bullying. A report by Simmons & Simmons, commissioned by ITN, highlighted "low trust and psychological safety" within the organisation, impacting employees' willingness to raise concerns. The report, based on interviews with 45 current and former staff, urged ITN chief Rachel Corp to oversee a review of existing NDAs and improve whistleblowing policies. Krishnan Guru-Murthy, a prominent anchor at ITN, remarked: "There is no trust...that people will be treated fairly." In response, ITN plans to enhance its "speak-up" service for confidential complaints and has committed to a culture of openness and trust. The company has also ceased imposing confidentiality provisions on departing employees regarding their experiences.

 

Financial Times

The Guardian

Senior executives at Blockchain.com, a £5bn cryptocurrency firm, are facing prosecution for failing to file accounts on time. Co-founder Nicolas Cary and operations executive Al Turnbull received a summons from Companies House in May, with a hearing held on September 25 and another scheduled for November 26. The company only submitted its accounts for the year ending 2020 this month, and the legal issues stem from its failure to provide accounts for the year ending December 2022. Cary stated that the late filing was due to a "significant reduction in the wider group's workforce," which has "taken a period of time to stabilise." Blockchain.com is taking steps to ensure compliance with statutory filing requirements.

 

The Daily Telegraph

AJ Investments, an activist investor with a £20m stake in Entain, has urged the board not to obstruct potential takeover attempts. In a letter to CEO Gavin Isaacs and chair Stella David, Juraj Krupa, the leader of AJ Investments, stated: "We believe Entain is undervalued compared to its peers." The company, which owns Ladbrokes and Coral, previously rejected an £8.1bn bid from MGM Resorts in 2020 and had merger talks with DraftKings in 2021. Entain's shares have plummeted by two-thirds since their peak in October 2021, partly due to a £585m penalty related to a bribery probe.

 

The Sunday Times

BBVA's attempt to acquire Banco Sabadell has led to significant shareholder fallout, with GQG Partners selling its entire stake due to opposition to the €10bn bid. GQG, a major investor in European banks, expressed concerns that the acquisition would be "too time-consuming and distracting," potentially diluting their focus on emerging markets.

 

Financial Times

Reuters

Reaction Engines is facing a critical funding crisis as talks with the Abu Dhabi-based Strategic Development Fund (SDF) have stalled. The company, which has developed advanced cooling technology for hypersonic flight, requires millions of pounds urgently to avoid administration. Strategic shareholders BAE Systems and Rolls-Royce Holdings have been approached for more flexible terms. Reaction Engines has previously raised £40m in equity, totalling around £150m from investors. Founded in 1989 and chaired by Philip Dunne, the company reported a 400% increase in commercial revenues last year, indicating a strong pipeline of opportunities despite current challenges. PwC has been put on standby to act as administrator if new funding is not secured.

 

Sky News

The Centre for Economics and Business Research (CEBR) has concluded that the Government's economic policies may severely damage the nation's finances, predicting a nearly 9% reduction in GDP by the end of the decade. Douglas McWilliams, deputy chairman of CEBR, stated: "The three most economically damaging potential policies are bringing capital gains tax into line with income tax, the package of workers' rights, and premature adoption of net-zero." Overall, the CEBR warns that the Government's plans could create a financial black hole exceeding £80bn annually.

 

The Mail on Sunday

The number of companies facing insolvency remains high, with 1,973 firms going bust in September, a 2% increase from August. According to the Insolvency Service, voluntary liquidations accounted for 80% of these insolvencies. Despite signs of economic improvement, such as controlled inflation, businesses continue to struggle under the weight of rising interest rates and sluggish demand. David Hudson, a restructuring advisory partner at FRP, stated that the economic recovery has “not been nearly enough to compensate for the pressure that's been gradually building in some businesses for months, even years, now.” The Centre for Economics and Business Research (CEBR) predicts that insolvencies could reach 33,000 this year, surpassing the previous year's 30-year high.

 

City AM