Editor: John Arnold. E-mail jarnold@creditman.co.uk
Pat Williams. E-mail pwilliams@creditman.co.uk
Site: Business Credit Management UK
URL: http://www.creditman.co.uk
Issue: Vol 5 Issue 36
Dated: 30 September 2001
Welcome to the Business Credit News UK.
In this weeks edition you will find the following topics.
UKKPMG EXPECTS SMALL RATE CUT NEXT WEEK - WITH MORE ON THE WAY
UK Monetary Policy Committee Meeting, October 3-4, 2001: pre-meeting note
The global economy has received a major shock and, even if it is still too early to assess the impact on the UK, it is clear that the downside risks to growth have risen sharply. This alone should persuade the MPC to cut rates again in October - our guess is that it will be limited to the "other" quarter point - though there is a strong argument that the situation merits a half-point cut.
The balance of risks to the UK is even more heavily skewed on the downside….
This is not the best time to attempt monetary policy fine-tuning and it was therefore mildly disappointing that the MPC limited its immediate response to the events of September 11 to a ¼ point interest rate cut. One of the few things we can say with any degree of confidence is that the world has experienced an unambiguously deflationary shock in the short-term, which has unequivocally raised uncertainty going forward. Even if we cannot assess the impact on the UK, the shift in the balance of risk itself merits a more aggressive policy easing: the consequences of lowering interest rates "too far" (in retrospect) is at worst a mild stimulus to inflation at some point in the future; the cost of not reducing rates sufficiently could be a major recession.
…as global growth prospects ratchet down
From an economics perspective, one of the most worrying aspects of the current situation is that activity in the US now appears to have been experiencing a serious downward lurch even ahead of September 11. Unemployment jumped sharply in August, the leading indicator dipped and consumer confidence indicators were already dropping alarmingly. Without this knowledge at its last scheduled meeting, the MPC toyed with the idea that in America the worst might be over, speculating that the stock cycle could be about to turn and that the outlook could be improving. Instead, confidence and equity prices have been shocked lower, sparking off a renewed round of corporate retrenchment and job cuts. At best, this puts off an inventory-led upturn; at worst it threatens to turn into a downward spiral.
Of course, this comes against the background of a severely weakened world economy. Output continues to plummet in Japan, and in the major European countries industrial production remains on its downtrend and unemployment on its uptrend. The one positive aspect is that the ECB has finally woken up and started to make meaningful rate cuts.
The MPC's decision
In the UK itself, there is little evidence available as yet on how the economy has been affected by the September shock, apart from the visible impact on travel and tourism, but it is noteworthy that surveys were already showing a downturn in consumer sentiment over the summer and business surveys were suggesting that confidence might be starting to sag in services as well as manufacturing. Otherwise, the overall picture of the two-speed economy remains little changed with retail sales maintaining their strong trend in August and data revisions suggesting that in the first half of the year both consumption and investment were stronger than previously thought. In addition, underlying inflation has risen marginally above target although this is unlikely to over-concern the committee which has already noted that the path would be volatile.
The argument for lower interest rates in the UK thus rests not on domestic data but, first, on the worsening US and international environment even ahead of September 11 and, second, on the increased risks to the global economy thereafter. The ¼ point cut in interest rates at the special meeting, after the US and Europe cut by ½ point, should be regarded as an initial down payment - we expect the other quarter in October and a further easing by year-end.
MANUFACTURING RECESSION DEEPENS
Demand for manufactured goods is significantly below normal, the CBI's September monthly industrial trends survey reveals.
Total order books are showing their worst position for two and a half years and stocks of finished goods have risen to their highest level for six months.
Forty two per cent of manufacturers say total orders are below normal and 11 per cent say they are above normal. The negative balance of minus 31 per cent shows a slight worsening since August (-29 per cent). It is the most pessimistic situation for more than two and a half years going back to March 1999 (-34 per cent).
The impact of the global slowdown continues to hurt exports, with 50 per cent saying order books are below normal and nine per cent saying they are above normal. The minus 41 per cent result compares with minus 39 per cent last month.
Stocks of finished goods are at their highest level since March, with 59 per cent saying they are adequate to meet demand, 23 per cent saying they are more than adequate and just five per cent saying they are less than adequate.
Manufacturing output is expected to fall further in the coming months and the largest falls are expected in metal manufacturing and electronic and electrical engineering. However the sector as a whole is slightly less downbeat, as indicated by a balance of eight per cent saying output will fall. That compares with minus 13 per cent in August.
The vast majority of replies to this CBI survey came in before the terrorist activity in the US.
Sudhir Junankar, CBI Associate Director of Economic Analysis, said: "It is clear that recessionary pressures were tightening their grip on UK manufacturers even before last week's tragic events in America. The last thing they need now is a further deterioration in world trading conditions. This week's global cuts in interest rates should help over the medium term.The Bank of England should stand ready to take further action if conditions continue to worsen."
Manufacturers expect the steady decline in domestic prices to continue, with 27 per cent expecting average prices to fall, 56 per cent expecting unchanged prices and 11 per cent hoping for rising prices.
IRWIN LAUNCHES UK BUSINESS INCUBATION DIRECTORY
New businesses looking for a space in a suitable business incubator will from last week have access to the first UK Business Incubation Directory published jointly by the Small Business Service and UK Business Incubation.
This A-Z guide provides valuable information on what incubation facilities are out there that could be of help. Details of around 220 existing and planned projects are included in the Directory, including addresses and contacts, a brief description of each incubator together with information on total floorspace and those which have broadband connectivity.
Launching the Directory at the UK Science Park Association dinner in Sunderland David Irwin, Head of the Small Business Service, said:
"This Directory is the result of the close working relationship between the Small Business Service and UK Business Incubation (UKBI). It follows an increasing demand for information from a wide range of parties such as start-up and early stage businesses, private sector organisations and regional agencies who wanted to know more about current business incubation provision.
"It's been compiled by UKBI following an in-depth questionnaire survey earlier this year that gathered information across the whole spectrum of incubators and highlights the sheer diversity of business incubation projects in the UK".
Malcolm Buckler, Chief Executive of UKBI said:
"The Directory is an important indicator of the massive growth and diversity of the business incubation industry and illustrates the broad range of development objectives that it can meet. It is a process that can clearly be applied to the development of high-growth, high-tech firms as well as those contributing to social and economic regeneration and development.
"In five years, the total number of business incubation projects has more than quadrupled. New versions of the incubation model continue to be developed as the industry matures. At UKBI we will be working hard with the SBS to build on the good practice being developed across the industry, and to ensure the growth of quality, sustainable projects into the future."
The directory is available at http://www.ukbi.co.uk
The Directory is available from UK Business Incubation (UKBI), Aston Science Park, Love Lane, Birmingham B7 4BJ Tel : 0121 250 3538 and will be available also from their web site: http://www.ukbi.co.uk
Business Incubation is a process which provides hands-on support for very small firms in order to stimulate their growth and development at a time when they can be most vulnerable. It is a process that can be applied equally to the development of high-growth, high-tech firms as well as contributing in a planned and strategic way to the social and economic development of localities and communities.
The Directory includes projects from across the entire spectrum of business incubation each established to achieve specific social and economic objectives. The diverse range of projects include those linked to universities, science parks and research establishments; corporate incubators which support start-up entrepreneurs from within the corporation or small companies linked to their core technologies; projects which focus on specific sectors or "clusters"; incubators with a mix of businesses; "virtual" or "without walls" projects which offer the same nurturing environment but without the physical property element; and those projects which offer support to disadvantaged groups within communities.
Although there is no one single definition of business incubation, there are common features such as providing business development assistance, networking opportunities, access to finance, shared space and office services, flexible leases, clear selection and graduation/ exit strategies and an environment supportive to early-stage development and growth.
75% of businesses that start in business incubation projects are still in business after 5 years, compared with only 33% which do not have such support.
The Government recognises the importance of the process of business incubation in helping the survival and growth of businesses at the start-up and early stages of their life-cycle, and is keen to encourage the development of business incubation as part of a comprehensive start-up policy.
The Small Business Service (SBS) is looking at the development of business incubation as part of its start-up policy. It will aim to ensure that all members of society, including those in disadvantaged groups and in deprived areas, who want to benefit from such help, have access to it.
UK Business Incubation (UKBI), the representative body for business incubation in the UK, acts as a catalyst for business incubation by promoting good practice, aiding better networking, assessing the impact of business incubation on the development of new firms and local economies, and encouraging the uptake of business incubation. Contact details for UKBI (Tel: 0121 250 3538; Web: www.ukbi.co.uk)
AIRLINES
The federal government agreed an aid package for America's Airlines to protect them from the aftermath of the terrorist attacks on America which left cabins nearly empty. The airlines, most of which were in trouble before September 11th, were promised grants and loans totalling $15 billion, to be distributed by size rather than long-term health.
Governments worldwide agreed to cover national airlines after insurers limited liabilities on Third-Party Damage for similar terrorist incidents to $50m per aircraft. Many airlines said that they could not afford to fly unless governments intervened.
Airlines responded to falling business by cutting staff and services. America's Delta Air Lines cut its workforce by 13,000, some 16% of the total, and reduced schedules by 15%. Italy's Alitalia announced that it would lay off 17% of its workforce and ground some planes. Air Canada said it would shed 5,000 staff and cut 20% of its schedule. KLM Royal Dutch introduced a surcharge on ticket prices and increased prices on fares to the Middle East.
LLOYDS OF LONDON
Lloyd's of London, the insurance market, estimated that its net share of the insurance bill for the attacks on the 11 September 2001 would be GBP1.3 billion ($1.9 billion). This would be Lloyd's biggest-ever single loss.
New Service Helps Businesses Manage Risk
ATLANTA, September 25, 2001 - Equifax announced the launch of Global Online, the company's new online commercial credit reporting system which will enable customers to access commercial reports on companies located in more than 200 countries worldwide including Europe, Latin America and other prominent regions. Located at www.globalonline.equifax.com, the new global portal provides businesses with an efficient and cost-effective solution to help minimize risk.
Global Online is a one-stop-shop that provides access to a global network of Equifax offices and locally based affiliates with online databases containing more than 10 million commercial credit files. The entire process, including ordering, delivering and invoicing is conducted online.
"Equifax is taking yet another innovative approach to managing vast amounts of data to benefit businesses," said William (Bill) V. Catucci, executive vice president, global operations, Equifax. "This solution gives our customers access to data for millions of businesses based outside of the U.S. - inevitably helping to provide critical information for making sound business decisions."
Equifax currently provides real-time online delivery of reports, via the Equifax e-PORT technology, for businesses located in Canada and the United Kingdom. Reports for businesses located in other countries are delivered online to customers via e-mail and will progressively begin to be offered via the e-PORT technology in the near future.
Unlike other applications that provide data in a report format, Equifax Global Online uses local suppliers and XML (extensible markup language) data. As the service enters its next phase of development, the data can be controlled and reports can be customized to customers' needs. Equifax also plans to offer reports translated into several European languages.
DUN & BRADSTREET RECEIVABLE MANAGEMENT SERVICES RECOMMENDS COMPANIES MODIFY CREDIT AND COLLECTION PRACTICES
September 25, 2001 — U.S. businesses need to modify how they do business in the wake of the World Trade Center and Pentagon tragedies, according to Dun & Bradstreet Receivable Management Services (D&B RMS). While debtors are paying-often a litmus test for whether the economy is entering a Recession, businesses need to modify their back office functions to avoid falling victim to the economic aftermath of the attacks.
``We are forecasting an adjustment period,'' said Forrest Old, executive vice president of Dun & Bradstreet Receivable Management Services. ``We are telling our customers that the adjustment period will be followed by an economic recovery; however, such a recovery is contingent on government expenditures, Federal tax strategy and potential rate cuts. The adjustment period could be lengthy.''
D&B RMS recommends several strategies to help businesses improve their bottom line:
— Implement risk management on the front end of any sale. Trade references are very important, as are commercial and consumer credit reports. ``Some of our customers are using company websites as sources of information,'' Old said. ``This is becoming an important tool coupled with third party information.''
— Once an order is approved a company should look to the credit terms, either tightening or loosening them, based on marketing considerations. ``With credible pre-qualified customers, a business might look to extend custom credit terms, if affordable, as a means of attracting business during a downturn,'' said Old. ``The key is not to adopt a one size fits all credit policy.''
— During this period of economic adjustment, companies should look to outsource their receivables portfolio earlier than 120 days out.
``Until the economy improves, businesses cannot depend on income a quarter away to pay current bills,'' said David Huebner, president and CEO, Dun & Bradstreet Receivable Management Services. ``They need to take into the account the uncertainty that is effecting the economy and adapt their business model accordingly.''
Dun & Bradstreet Receivable Management Services is the largest business-to-business receivable management company in the world with operations in the U.S., Canada and Hong Kong. Additional information about Dun & Bradstreet Receivable Management Services is available at www.dbrms.com
IRWIN UNVEILS PILOT TO OFFER TROUBLED SMALL BUSINESSES A SECOND CHANCE
Head of the Small Business Service David Irwin on the 23 September 2001 unveiled a pioneering scheme aimed at giving small business suffering from short-term financial difficulties a second chance.
Under the plan advisers will work as company 'doctors' and put together rescue packages that concentrate on long-term debt management through realistic assessments of businesses for creditors. The credibility of that assessment will be crucial as it will provide the basis for negotiation on payment arrangements with creditors.
They will then:
The groundbreaking initiative will run in Manchester, Newcastle, North Yorkshire, Wessex (Hampshire, Dorset and Isle of Wight), Leicestershire, Nottingham, West Midlands and the East of England. It will enable Business Link Advisers to identify small businesses that are running into trouble before they meet the point of no return and fall into bankruptcy.
Announcing the details of the project David Irwin said
"I want to change the way the business community behaves towards small firms that experience a cash-flow crisis.
"Too often, the liquidators are called in to viable firms due to short-term problems that can be solved. As a result, jobs and livelihoods are lost and the potential that the businesses had to generate wealth is gone.
"Small businesses account for 55% of GDP and 50% of jobs and rarely have the resources to appoint specialists to help them in times of need."
Some large companies avoid bankruptcy by hiring 'company doctors', to cure their problems. This programme is intended to offer small businesses access to the same kind of advice.
Business Link Advisers, enterprise agencies, various recovery specialists and the British Accreditation Bureau have agreed to take part in the project.
The pilot will initially run for between 6 and 12 months.
The pilot will cost around £125,000.
This scheme will complement the proposals for insolvency reform in the Enterprise Bill. This means that as well as having formal insolvency proceedings under the Insolvency Act, there will be informal rescue measures where all interested parties can agree that keeping the business alive is likely to be more mutually beneficial than insolvency.
The project is in part a response to the joint DTI/Treasury report - A Review of Company Rescue and Business Reconstruction mechanisms 2000, which called for greater flexibility from all (including the authorities), and more research into addressing firms' short-term problems.
Businesses interested in knowing more should contact their local Business Link.
For all Public enquiries please contact: SBS Enquiry Line Tel: 020 7215 5363
THE KAULKIN REPORT - DEBT COLLECTION: AN INDUSTRY IN TRANSITION
The $13 Billion debt collection industry is growing not only in revenues, but also in importance to corporate America as a provider of outsourced business services. With 68 pages, the 5th edition of the Kaulkin Report© is the most comprehensive information available on the industry. Considerable research went into this report. It will be invaluable to anyone interested in the industry as it describes the state of the industry, where it has been, and where it is heading. It forecasts industry growth patterns and identifies major industry players.
The report is loaded with charts, graphs, proprietary statistics, and quotes from industry figures, along with insights into many collection industry interests provided by the Kaulkin Ginsberg staff and Chris Pohl, the editor. If you are a part of the credit and collection industry, you will want to read this report. For more information or to purchase your copy go to http://www.collectionindustry.com/
ECGD REVEALS NEW PLANS TO HELP UK EXPORTERS
A new structure for the Export Credits Guarantee Department was unveiled on the 27 September 2001 as part of a major change to improve support for UK exporters.
The change programme follows a fundamental review of ECGD and includes the following:
Patricia Hewitt, Secretary of State for Trade and Industry, said:
"It is crucial that we do everything we can to boost UK exporters, and recent events have made this all the more important. These reforms will make ECGD more open, more active and more responsible. By giving ECGD the autonomy it needs ECGD will be able to provide an even better service to business.
"Giving each company a team dedicated to managing its entire business portfolio will help ECGD business managers to be much more proactive in meeting exporters' needs.
"In the future ECGD will have more flexibility and operational autonomy to underwrite individual cases. The £2.9 billion capital base planned for ECGD when the Trading Fund is set up, will enable it to support its current level of business and increase it where new opportunities arise."
Commenting on the new approach, John Rose, Chief Executive of Rolls Royce, said:
"For many years now a sectoral team at ECGD has dealt with our commercial aviation business enabling us to develop a strong relationship with those underwriters. I believe that the benefits of a sectoral approach have a wider application and should benefit other ECGD customers for whom it is still new."
Ian Bill, Chairman of Foster Wheeler, also said:
"ECGD have been long-term allies in helping us to win overseas business. We welcome the drive to sharpen their customer focus."
Roy Tazzyman, Managing Director of VAI Industries (metallurgical engineers) also welcomed the news:
"The relationship we have with ECGD is very important to us. We therefore welcome the opportunity that ECGD's new Business Group structure provides for the business team assigned to us to gain a clear understanding of our exporting needs. With its increasingly customer-focused emphasis, we believe that ECGD will be able to offer us a more responsive service and we look forward to strengthening our relationship in the future."
The new Business Group replaces the Underwriting Group. This has been re-organised to focus on customers and sectors rather than geographical markets. Expertise in the key markets will be retained.
The Business Group will have four divisions - Division 1 will cover civil aerospace; telecommunications; transport; other business areas and overseas investment insurance. Division 2 will cover oil; gas; petrochemicals and process plant; mining and metals (including steel) and construction and airports. Division 3 will cover power; defence; water and environment. There will also be a support division that has overall responsibility for the customer relationship management programme.
Once an export credit guarantee has been issued the case will be transferred to a dedicated Post Issue Management team who will ensure active monitoring and management of the issues and risks associated with issued guarantees.
A consultation document on establishing the ECGD Trading Fund was also published on the 27 September (available on ECGD's website at www.ecgd.gov.uk). A Trading Fund is a means of financing trading activities undertaken by the Government without the need for the annual vote from Parliament. Whilst operating within a framework agreed with Ministers, a Trading Fund has greater freedom to manage its financial affairs. In particular it can use its income to settle its liabilities and retain any cash balances at year-end. However it is still subject to the same centrally applied administrative rules and procedures as a Government department.
A KPMG report on risk management in 1999 recommended that ECGD should strengthen its risk management by introducing a capitalised framework based on best commercial practice.
ECGD introduced a shadow-capitalised framework in April this year. Comments on the consultation document are invited by 16 November and it is planned that the Trading Fund will operate from April 2002.
ECGD's Business Principles, establishing an ethical framework for its operations, were introduced in January this year. Details are available on ECGD's website at http://www.ecgd.gov.uk
ECGD, the Export Credits Guarantee Department, Britain's official export credit agency, is a separate Governmental department responsible to the Secretary of State for Trade and Industry. One of its main functions is to underwrite bank loans to enable overseas buyers to purchase capital and project related goods/services from the UK, and to ensure the return on investments made by UK companies in overseas enterprises.
BUSINESS CALLS ON EU TO QUICKLY ACCEPT NEW CONTRACTS FOR TRADE IN PERSONAL DATA
The CBI is calling for a quick response to a new version of the standard European contract governing international trade in personal data. The CBI and six other business organisations from around the world have submitted their own version of the contract and are urging the Commission to approve it swiftly for use across the fifteen member states.
To comply with EU data protection legislation, companies sending personal data - such as customer information, sickness records, or payroll figures - abroad may need to use a contract. Earlier this year the EU introduced a standard contract which companies exporting data outside the Union are able to use. It has the advantage of being accepted in all the member states.
Launching business's alternative version of the contract the CBI said that the Commission had, rightly, emphasised the rights of the person who is the subject of the data. But the commercial needs of importers and exporters of data also needed to be taken into account.
Rod Armitage, CBI Head of Legal Affairs said: "We like the idea of a standard contract but it must be unambiguous and flexible. Our proposed contract still protects the rights of individuals. It sets out clear obligations for importers and exporters covering issues such as security measures and the rights of third parties to see what information is held about them.
"This new contract, which has been developed with companies inside and outside the EU, will help their cross border operations by providing common standards while enabling them to comply with EU legislation. At this critical time it will provide a boost to global trade."
The CBI has criticised the current version of the contract for being inflexible and for ignoring the needs of companies outside the EU. Some who operate both inside and outside the EU feared having to keep two entirely separate databases; one for European and one for non-European data.
The intention of the new contract is to provide greater flexibility so that companies can incorporate extra clauses to meet the specific circumstances of each deal. It provides for a simplified dispute resolution clause, a provision for due diligence to be exercised over who receives data, and a more detailed termination clause in line with standard commercial practice. That would allow data flows to be stopped in the event of a suspected breach of contract. It also provides for each party to be liable only for its own actions and for confidential business information to remain so.
The Commission itself has recently published an alternative draft of clauses for use when the transfer is for processing purposes only. The latest draft can be found on the Commission's website at:
http://europa.eu.int/comm/internal_market/en/dataprot/news/persdataoutcome.htm
On 5 September 2001 The Secretary of State for Trade and Industry presented a petition in the High Court to wind-up Hilands Consulting Company Limited in the public interest. This followed enquiries made by the Companies Investigation Branch of the DTI under the provisions of section 447 of the Companies Act 1985.
On the application of the Secretary of State the Court appointed the Official Receiver as the provisional liquidator of Hilands Consulting Company Limited until the hearing of the petition.
Hilands Consulting Company Limited was incorporated in June 1999 and traded as a provider of project finance.
The registered office of Hilands Consulting Company Limited is 23 Station Road, Chapeltown, Sheffield S35 4XE
The petition was presented under s124A of the Insolvency Act 1986.
All public enquiries concerning the affairs of Hilands Consulting Company Limited should be made to the Official Receiver at:
The Insolvency Service
Public Interest Unit
PO Box 203
21 Bloomsbury Street
London WC1B 3SS
CABOT HOUSTON CORPORATION LIMITED CONNAUGHT CORPORATION LIMITED
On 11 September 2001 the Secretary of State for Trade and Industry presented a petition in the High Court to wind-up Cabot Houston Corporation Limited and Connaught Corporation Limited in the public interest. This followed enquiries made by the Companies Investigation Branch of the DTI under the provisions of section 447 of the Companies Act 1985.
On the application of the Secretary of State, the Court appointed the Official Receiver as the provisional liquidator of both companies until the hearing of the petition.
Cabot Houston Corporation Limited was incorporated in November 1999 and traded as asset managers and investment agents. Connaught Corporation Limited was incorporated in January 2001 and has been engaged in the same type of business.
The registered office of both Cabot Houston Corporation Limited and Connaught Corporation Limited is at 36b The Colonnades, Albert Dock, Liverpool L3 4AA.
The petition was presented under s124A of the Insolvency Act 1986.
All public enquiries concerning the affairs of both companies should be made to
Lina Anagnostou at The Insolvency Service Public Interest Unit PO Box 203 21 Bloomsbury Street London WC1B 3SS
http://www.dti.gov.uk
SHEARS TRAVEL BUREAU LIMITED WOUND UP ON DTI PETITION
A Chiswick-based travel agency has been shut down following a DTI investigation.
A winding up order was made on 5 September 2001 in the High Court against Shears Travel Bureau Limited in the public interest.
The company carried on business as a travel agency under the name "Shears World Travel" from shop and office premises at 261 Chiswick High Road, London, W4.
The petition was presented following an investigation carried out by the Department's Companies Investigation Branch under section 447 of the Companies Act 1985 which enables investigators to require a company to produce its records.
On the application of the Secretary of State the Court appointed the Official Receiver as provisional liquidator of the company on 23 July 2001. The role of the Official Receiver as provisional liquidator was to protect and preserve the assets and financial records of the company until the hearing of the winding-up petition.
By virtue of the winding up order the Official Receiver is now the liquidator of the company. The Official Receiver is responsible for investigating the circumstances of the company's failure and the conduct of the directors in relation to its affairs.
The principal grounds for the winding up were that:
The company claimed to be an international network of travel agents but in fact traded from only one address, namely 261 Chiswick High Road, London W4.
The company's accounting records were inadequate, particularly with regard to its dealings with a lifestyle membership organisation (referred to below) with whom the financial position was written off for £1 in full and final settlement on 25 June 2001.
The company is insolvent with accumulated losses shown to total £507,485 as at 31 December 2000.
Shears Travel Bureau Limited was incorporated on 16 September 1957. Its registered office has, since 22 October 1998, been at 90 Whitton Road, Hounslow, Middlesex TW3 2DQ, the address of Rizvi & Co, the company's accountants and auditors.
The directors of the company after 22 October 1998 have been Miss Vanessa Best (who resigned on 6 December 1999), Mr Dario Bellandini (who resigned on 25 June 2001), Mr Mohammad Nawaz (who was appointed on 6 December 1999 and resigned on 12 March 2001) and Mr Abid Ali Khan (a former employee of Rizvi & Co) who was appointed on 12 March 2001. The secretary since 6 December 1999 has been Eurowise Accountancy Services Limited.
On 22 October 1998 Miss Best and Mr Bellandini had acquired from the then directors/shareholders the whole of the company's issued share capital on trust for a lifestyle membership organisation. The activities of the company were subsequently expanded to include the provision of travel services to members and executives of this organisation whose UK arm then also operated from 261 Chiswick High Road, London, W4.
On 25 June 2001 the company's entire share capital, by then all held by Mr Bellandini, was acquired by a consortium comprising Mr Syed Salim Rizvi, Mrs Meena Rizvi, Miss Saira Rizvi and Mr Abid Ali Khan.
The petition was presented under Section 124A of the Insolvency Act 1986. [When the public is at risk, the Secretary of State may ask the Court to stop a company trading at once by appointing a provisional liquidator and winding it up. This is the quickest action DTI can take. The Court demands detailed and substantial evidence for this very serious step]
The petition was initially opposed by the company, as was the application for the appointment of the Official Receiver as provisional liquidator. However, no evidence opposing the winding up petition was served and on 6 August 2001 the company withdrew its application to discharge the appointment of the Official Receiver as provisional liquidator.
All public enquiries concerning the company should be made to:
THE OFFICIAL RECEIVER Public Interest Unit 21 Bloomsbury Street
London WC1B 3SS Tel No: 020 7637 1110
DTI PRESENTS PETITIONS TO WIND UP YORKSHIRE CAR DEALERS
The Secretary of State for Trade and Industry has presented petitions in the High Court to wind up in the public interest Motordome Limited and Black Cat Finance Limited.
Motordome Limited was involved in the supply of new and second hand vehicles to members of the public. Black Cat Finance Limited provided certain finance facilities to customers for such sales. Both companies traded from Motordome House, Leathley Road, Leeds.
The petitions were presented following investigations carried out by the Department's Companies Investigation Branch under section 447 of the Companies Act 1985 and are listed for hearing on 3 October 2001.
Motordome Limited was incorporated on 7 October 1997. Its registered office is at Burley House, 12 Clarendon Road, Leeds, West Yorkshire. The directors of the company are Mr Carl Alan Pallister and Mr Peter Thomas Cavanagh. The secretary of the company is Mr Mark Patrick Keane.
Black Cat Finance Limited was incorporated on 15 June 1998. Its registered office is at Burley House, 12 Clarendon Road, Leeds, West Yorkshire. The directors of the company are Mr Carl Alan Pallister and Mr Peter Thomas Cavanagh. The secretary of the company is Mr Mark Patrick Keane.
The petitions were presented under Section 124A of the Insolvency Act 1986.
All public enquiries concerning either company should be made to:
The Treasury Solicitor
Queen Anne's Chambers
28 Broadway
London SW1H 9JS
Tel No 020 7210 3522
VIASYSTEMS TYNESIDE LIMITED: IN ADMINISTRATIVE RECEIVERSHIP
KPMG Corporate Recovery, the administrative receivers at Viasystems Tyneside Limited, have implemented the restructuring of the business which had been announced by the company prior to their appointment on 21 September 2001.
In total, 750 employees have been made redundant. This includes 400 workers at the Longbenton site who had already been sent home at the beginning of September.
Peter Terry, one of the joint administrative receivers at KPMG, said that he hoped there would not be any further redundancies in the short term whilst a buyer was sought. He added:
"We are talking to customers and suppliers to ensure that trading can continue. The business is being advertised and we are keen to talk to any interested parties."
HOLIDAY COMPANY WOUND UP AFTER DTI INVESTIGATION
A company which misled people into buying its shares in order to obtain exclusive holidays has been wound up following a DTI investigation.
Essex-based company Somerville Leisure plc was wound up by the High Court on 19 September 2001, in the public interest.
The company sold its own 'non-voting' shares to investors who were then entitled to join a holiday club called the Dream Leisure Club.
A petition to wind up the company showed that members of the public had been misled into believing that they could sell their shares on the open market, when in fact there was no effective market for these shares. There was inadequate separation of the affairs of the company and the club.
Those involved with the company were taking excessive commissions for sales of shares and there were no adequate accounting records for either the company, Somerville Leisure plc, or the holiday club, Dream Leisure Club. The investigation also discovered that the company was insolvent.
Investigators also reported that the directors had been unwilling to co-operate with the enquiry.
The petition was presented following an investigation carried out by the Department's Companies Investigation Branch (CIB) under section 447 of the Companies Act 1985 which enables investigators to require a company to produce its records. If it is in the public interest the Secretary of State may use the information obtained to petition the Court to wind up a company or to disqualify the company's directors.
The petition was presented on 1 August 2001 and the Official Receiver was appointed provisional liquidator of the company on 6 September 2001. The Official Receiver's role was to protect and preserve the assets and financial records of the company until the hearing of the winding-up petition.
By virtue of the winding up order on 19 September, the Official Receiver is now the liquidator of the company and has a responsibility to investigate why the company failed and the conduct of the directors in relation to its affairs.
The company was incorporated on 9 July 1998. Its registered office and trading address is Stapleford Aviation Centre, Stapleford Aerodrome, Stapleford Tawney, Essex, RM4 1SJ. Its former registered office and trading address was at Somerville House, 20/22 Harborne Road, Edgbaston, Birmingham, B15 2AA.
The directors of the company are Mr Paul Edward Harris, Mr Jonathan Christian O'Brien (both appointed on 9 July 1998) and Mr John Patterson (who was appointed on 3 December 1999). The secretary of the company is Mr Paul Edward Harris.
On 1 December 1999 a Gibraltar based company of which Mr Patterson was the sole director at the time, acquired all 500,000 10p voting shares issued by the company. The shares were purchased from Mr Andrew John Harris (no relation to Mr P Harris), who was a director of the company from 27 November 1998 to 1 September 2000. Mr A J Harris trading as A J Harris Associates entered into the only agreement with the company to supply holiday accommodation.
The petition was initially opposed by the company, as was the application for the appointment of the Official Receiver as provisional liquidator. In opposing the matter the company gave various undertakings to the Court to cease offering any new shares or club memberships and not to dispose of any of its assets until the Court reached a decision.
In the event, the company did not serve any evidence opposing the petition but in the meantime, during the currency of the adjournment, on 21 August 2001, without reference to the Court or to the Secretary of State, resolved to be wound up voluntarily and appointed Mr Hasam Iman Mirza and Mr Clive Robert Hammond, Insolvency Practitioners, as joint voluntary liquidators.
The adjourned hearing of the Secretary of State's application to appoint the Official Receiver provisional liquidator came on before Mr Justice Rimer on 6 September 2001. Rimer J ordered the appointment of the Official Receiver as provisional liquidator notwithstanding the intervening appointment of voluntary liquidators. In making the order Rimer J stated that the directors had:
"... displayed, it would seem, a somewhat secretive enthusiasm to appoint voluntary liquidators and with it, at least initially, an enthusiasm to maintain themselves in the saddle as managers".
On 19 September 2001 the petition to wind up the company was heard by Mr Registrar Jaques. The matter was unopposed and a winding up order was made.
All public enquiries concerning the company should be made to:
THE OFFICIAL RECEIVER
Public Interest Unit
21 Bloomsbury Street
London WC1B 3SS
Tel No: 020 7637 1110
*** FORTHCOMING CREDITORS MEETINGS ***
For detailed information on all the British Isles insolvency's (liquidation's, receiverships, administrations, dividends, creditors) please visit http://www.insolvency.com/cgi-bin/gazette/liq/nots.pl
TW LW TW LW
USA 1.47 1.47 Canada 2.32 2.31
Austria 22.05 21.97 Portugal 321.26 320.12
France 10.51 10.47 Belgium 64.64 64.41
Finland 9.52 9.49 Italy 3102.82 3091.73
Germany 3.13 3.12 Sweden 15.70 15.47
Holland 3.53 3.51 Switzerland 2.36 2.39
Spain 266.63 265.68 Ireland 1.26 1.25
Australia 3.01 2.95 Denmark 11.91 11.92
Hong Kong 11.50 11.53 Euro 1.60 1.59
Africa Com 13.10 12.74 Saudi Arabia 5.53 5.54
India 70.69 71.53 Malaysia 5.61 5.61
Singapore 2.61 2.56 Norway 12.91 12.84
Japan 174.08 176.64
TW This week LW Last week.
Kvaerner, a heavily indebted Anglo-Norwegian engineering company, teetered on the brink of bankruptcy. Banks agreed to extend short-term loans but the company's plans to raise some NKr2 billion ($230m) with a rights issue were met with little enthusiasm by investors. The company's shares lost 80% of their value over the past week.
EMI revealed that pre-tax profits for 2001 would be down by around 20% compared with the year before; its shares responded by plummeting 35% in one day. The British music group, which failed to clear regulatory hurdles in merger attempts with both Bertelsmann and AOL Time Warner, looks an invitingly cheap target for a takeover.
Advanced Micro Devices, the world's second-largest chip maker, announced that it would cut 2,300 jobs, some 15% of the total, after Gateway, a big PC maker, phases out its line using AMD's chips.
Procter & Gamble, the world's leading consumer-goods company, abandoned a health-drink and snack joint-venture with Coca-Cola, the world's biggest soft-drink firm. After reconsidering the much-heralded deal, claimed as a trailblazer for the future of global distribution and marketing, the two firms decided to pursue separate strategies.
Source - The Economist
A G Barr, the soft drinks maker, announced pre-tax profits of 5.72 million pounds, on turnover of 59.4 million, for the six months ending 28th July 2001. Earnings per share stand at 21.2p.
Barratt, the housebuilders, announced pre-tax profits of 178.4 million pounds, after exceptional credit, on turnover of 1,515 million, for the year ending 30th June 2001. Earnings per share stand at 55.1p.
Bloomsbury Publishing announced pre-tax profits of 2.55 million pounds, on turnover of 22.7 million, for the six months ending 30th June 2001. Earnings per share stand at 9.9p, on increased capital.
Smiths, the engineering group, announced pre-tax losses of 112.3 million pounds, on turnover of 4,958 million, for the year ending 31st July 2001.
MERGER NEWS
The Secretary of State for Trade and Industry has decided, on the information at present before him, and in accordance with the recommendation of the Director General of Fair Trading, not to refer the following merger/s to the Monopolies and Mergers Commission under the provisions of the Fair Trading Act 1973:Proposed acquisition by DB Capital Partners (Europe) 2000-B LP of Oasis Holiday Village from Bourne Holidays Ltd
Completed acquisition by Hibernia Foods plc of the assets of Sara Lee Bakeries UK Ltd and Finnegans Famous Cakes
Proposed acquisition by Vinci SA of TBI plc
Proposed acquisition by Innogy Holdings plc of the electricity and gas supply activities of Northern Electric plc
Proposed acquisition by Pitney Bowes Inc. of Secap S.A.
Completed acquisition by SIG plc of Woods Insulation Limited
Proposed acquisition by Kerry Group plc of Golden Vale plc
Proposed acquisition by The Royal Bank of Scotland Group of Euro Sales Finance plc
Completed acquisition by Granada plc of Border Television Ltd
Douglas Alexander, E-commerce minister, on the 26 September told an international conference of the need for increased awareness for internet security following the attacks in America.
Speaking to the Information Security Solutions Europe Conference, the major international internet security forum, he stressed the importance of collective responsibility in dealing with any threat posed to the whole of the electronic information system.
Assuring the internet community of the high priority the Government attaches to the issue, Mr Alexander said:
"We have, of course, long recognised the need for practical solutions to the information security problems which face us. The recent tragic events in the United States have, however, put a new and intense focus on how we approach security and the protection of both our people and assets.
"In an interconnected world, there is a collective responsibility to ensure that the entire system is secure. Increasingly society will view those businesses who inadvertently spread viruses or act as platforms for denial of service attacks as failing in their duty to both the business and wider communities."
Detailing the role of Government and business to work together to improve standards Mr Alexander continued:
"The UK Government recognises information security as an ongoing 'process'. The translation of the information security standard ISO 17799 - which originated in the UK - from a national to internal standard is a significant development. We believe it takes forward the integration of information security into core business processes on the basis of a realistic approach to risk assessment and the identification of appropriate levels of control.
"The standard can therefore be the basis of an effective corporate response to the challenge of information security. We have the management tools and we have the technologies to improve security.
"To address the needs of smaller companies who inevitably struggle with these issues, the DTI is taking forward work to meet those concerns. This work we aim to act as a resource for those companies we want to make the leap to trading online - but to do so in a secure manner."
Mr Alexander also recognised that the process of achieving a secure business information environment is a responsibility which has been taken up by business itself. He further highlighted internet security as an "end to end" process which must embrace the consumer as well.
"This Conference marks the coming of age of tScheme, a private sector led approach to the creation of confidence in the provision of trusts services. The Government has fully supported this imaginative self-regulatory response to real market needs. "
ISO 17799 is the International Standard on Information Security Management which provides a well-proven framework to initiate, implement, maintain and document information security within an organisation. The standard is a business- led approach to best practice on information security management. It originated in the UK as BS 7799.
tScheme is an independent, industry-led, self-regulatory scheme. It is a not-for-profit organisation whose aim is to increase trust and confidence in electronic trust services. tScheme defines standards of good practice for electronic trust services, evaluates individual electronic trust services against these standards, and awards approval to those which meet the standards. tScheme's objective is to continue to be the preferred option for fulfilling Part I of the UK Electronic Communications Act 2000.
The National Infrastructure Security Co-ordination Centre (NISCC), is an interdepartmental organisation set up to co-ordinate and develop existing work within Government departments and agencies and organisations in the private sector to defend the Critical National Infrastructure (CNI) against electronic attack. NISCC operates under a Director, who is a member of a Management Board chaired by the Home Office. The other members of the Board are drawn from the Cabinet Office, the Communications Electronic Security Group of GCHQ, the Security Service, Ministry of Defence and the Police.
MANAGEMENT CONSULTANCIES FEEL E-BENEFITS
Major new survey shows positive impact of e-commerce on sector
A new survey published today reveals that the management consultancy sector is one of a number in the UK already feeling the benefits of e-commerce in major aspects of their business.
The survey, commissioned by the DTI and conducted by PricewaterhouseCoopers, was carried out to assess the impact of e-commerce in the sector.
It shows that management consultancies are advanced in their use of e-commerce technology.
The key findings show:
A high take-up rate of client facing e-commerce technology, including 100% of firms with external e-mail, 84% with websites and over half (excluding micro-firms) with intranets;
68% of firms indicate that e-commerce has led to improvements in service provision;
66% stated that e-commerce has had a positive impact on productivity.
The companies surveyed also confirmed that this technology is transforming the way they do business. Examples include an increase in the provision of financing of e-ventures such as incubators and in strategic alliances, particularly with IT firms.
Douglas Alexander, Minister for E-commerce and Competitiveness, welcomed the survey's findings. He said:
"These companies have made good progress in adopting e-commerce and developing e-business solutions. But there is no room for complacency. Confidence, vision, and creating the right management culture are key to identifying new opportunities and ensuring that a company can seize the competitive advantage."
The surveys were developed following the publication of the Performance and Innovation Unit report on e-commerce - "e-commerce@its.best.uk". The report recommended a series of sector-specific e-commerce impact assessments be undertaken to identify opportunities, threats, and barriers in each sector.
The report is part of a wide-ranging DTI programme that is examining more than thirty key business sectors in the UK.
The purpose of the studies is to assist the DTI to accelerate the take-up of e-commerce and therefore further the Department's overall competitiveness agenda.
Mr Alexander said:
"Our research is central to the Government's aim of making the UK the best place in the world for e-commerce. It highlights the major issues which most businesses need to address if they are to remain competitive in the modern high technology world ."
Copies of the report are available at the following web addresses: http://www.ukonlineforbusiness.gov.uk/Government/impactstudies.htm for impact studies
1 to 2 October Experian UK Conference 2001 Managing customers outside in Celtic Manor Hotel UK 5 October 2001 ICM Annual Dinner Drapers Hall, London EC2 Tickets £74.00 plus vat To reserve your place/s please telephone the ICM Training Department on 01780-722907 8th and 9th October 2001 FCIB's 107th International Round Table Conference In Europe Brussels Hilton Hotel 38 Boulevard de Waterloo, 1000 Brussels, Belgium FCIB's International Conference 'The Art of Country Risk Analysis' Further information can be obtained from: Tim Lane, Director of European Operations, FCIB Corporation, 7200 The Quorum, Oxford Business Park North, Garsington Road, Oxford OX4 2JZ, England Tel: 44 1865 481630 Fax: 44 1865 481482 (From within the UK, substitute zero (0) for 44) E-mail: timlane@fcib-europe.org Monday 15 October Wessex Branch of the ICM Retention of Title - Speaker/Sponsor Fanshawe Lofts Venue - Royal Southampton Yacht Club 1 Channel Way, Ocean Village, Southampton SO14 3QF Time : 7.00 pm for 7.30 pm Refreshments provided Wednesday and Thursday 17-18 October Softworld Finance and Accounting Exhibition, NEC, Birmingham http://www.softworld.co.uk/af2001a/register.html Thursday 18 October Magazines in Credit 2001 Conference and Awards Grosvenor House Park Lane, London W1 Telephone Justin Barry on 020-7400-7534 for more information or e-mail justin.barry@ppa.co.uk or visit the website at www.ppa.co.uk/events/credit2001 Tuesday 30 October Collections 2001 Credit Today National Motorcycle Museum, Birmingham The inaugural Credit Today conference for the UK on Debt Management, Collections Procedures as well as the political issues and regulatory changes affecting your work For more details contact Carleen Bennett on 020 7407 4700 or visit www.credittoday.co.uk Monday 12 November Wessex Branch of the ICM European Credit Checking - Speaker/Sponsor ICC Information Ltd Venue - Royal Southampton Yacht Club 1 Channel Way, Ocean Village, Southampton SO14 3QF Time : 7.00 pm for 7.30 pm Refreshments provided Thursday 22 November Sussex & Surrey Branch of the ICM Factoring/Invoice Discounting/Asset Finance Speaker: To be advised Venue - HSBC, Farncombe Road, Worthing Time: 7.00 for 7.30 p.m. Sponsored by HSBC 23 November Debt Sale & Purchase Credit Today, Savoy Hotel, London The second annual debt sale and purchase conference chaired by Rob Levick. For details e-mail carleen@credittoday.co.uk 4-6 December Online Information 2001 Olympia Grand Hall, London Monday 10 December Wessex Branch of the ICM Quiz Night - Sponsor Virtual Mailroom Ltd Venue - Royal Southampton Yacht Club 1 Channel Way, Ocean Village, Southampton SO14 3QF Time : 7.00 pm for 7.30 pm Refreshments provided Thursday 24 January 2002 Sussex & Surrey Branch of the ICM Annual General Meeting Followed by Dinner. Speaker: To be advised Venue - The Imperial Hotel, Hove Time: 7.00 for 7.30 p.m. If you have an event coming up which is credit management related and you would like us to make an entry in the Diary section please e-mail the details to jarnold@creditman.co.uk
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