Coronavirus cost to economy unveiled in new figures

Raft of key figures set to be released highlighting economic turmoil wrought by coronavirus crisis

A raft of key figures will be released this week highlighting the economic turmoil wrought by the coronavirus crisis. 

Employment figures due on Thursday will reveal how many more people lost their jobs in June over the 622,000 during the previous three months. 

Gross domestic product figures come out on Tuesday and are expected to show only a modest rebound in May after April’s 20.4 per cent collapse. 

Turmoil: Coronavirus has negatively impacted everyone’s day-to-day life both at home and at work

George Buckley, chief UK economist at Nomura, said the figure for the number of paid employees is the best guide to the health of the labour market. The benefits claimant count rose by 1.5million to 2.8million during March, April and May, but this includes unemployed and those whose incomes are topped up by Universal Credit. 

‘It would seem job losses peaked in April,’ said Buckley. ‘But this could lead to a false sense of security. Once the furlough scheme is wound down, firms will have to make tough decisions. 

‘There is a grave risk that, when Government support is withdrawn, a substantial number will look at parts of their workforce and say, ‘We need to get rid of these people.’ This will start to bite in August.’ 

Dhaval Joshi, chief European strategist with BCA Research, said: ‘A lot of firms have been waiting to see if the disruption to their business is temporary, in which case they can live through it, or structural, in which case they cannot and the current employment level is not viable.’ 

Tax advisers face scrutiny by State regulator

Ministers considering new State regulator to control activities of Britain’s thousands of tax advisers offering services to more than 12million people

Ministers are considering a powerful new State regulator to control the activities of Britain’s thousands of tax advisers offering services to more than 12million people.

It would cover accountants, book-keepers and possibly family or friends offering informal advice. The Treasury is launching its review in the wake of scandals, such as one where staff were paid via tax-avoiding loans not likely ever to be repaid. 

Scrutiny: Accountants and others are regulated by their professional bodies, but anyone can become a tax adviser

‘Many tax advisers are competent and adhere to high professional standards,’ said the Treasury. ‘But some are incompetent, some unprofessional, a few actively corrupt.’ 

Accountants and others are regulated by their professional bodies. But anyone can become a tax adviser, with no obligation to be regulated. 

Glyn Fullelove, head of the Chartered Institute of Taxation, said: ‘We are greatly in favour of raising standards, but believe this ought initially to be based on the professional bodies. It would raise tricky conflict-of-interest questions were the State to be the regulator.’

TalkTalk boss says: Home broadband can be as fast as in office

Company cars and work mobiles are perks of corporate life for many employees. But could there soon be such a thing as company broadband to use at home? 

Tristia Harrison is betting there will be – as ‘working from home’ becomes the new normal for many Britons. The chief executive of internet provider TalkTalk has just launched a new service that allows employers to splash out on ‘business grade broadband for the home’ for staff stuck in their houses. 

She says the plan eliminates the risk of freezing in the middle of an important Zoom call. 

Call of duty: Tristia Harrison says children gaming can slow work down

While Britain’s broadband network has coped pretty well with millions of people logging on at home, many have experienced problems – not least because homebound children clog up the connection by playing online video games or by streaming movies on Netflix. 

Business speeds, high security, and access to round-the-clock support from TalkTalk’s IT gurus could be attractive to smaller businesses now reconsidering the money they spend on a trendy office. 

‘Traditional working is a thing of the past,’ declares Harrison, who says she believes this will be how many companies operate in future, not just the next few months. 

‘Up to 20 per cent more people are expected to now work from home. What is interesting is the UK has managed remarkably well at working from home during this period. And most places will be thinking how to learn from this. I think looking forward there will be a much more flexible culture.’ 

She says in the few weeks since launch there’s already been an ‘amazing amount of interest for it’. 

‘We’re talking to some large organisations,’ she says. ‘You’ve seen all the announcements by companies saying they’re not going back till next year, not going back at all or partially going back.’ 

She says the huge surge in internet usage through lockdown was driven by demand for video streaming, adding: ‘Gaming’s been enormous through lockdown. And then you add to that everybody working from home and everybody trying to homeschool their kids as well.’ 

Harrison is talking from personal experience. Her two teenage sons have been learning from home, and she says they have been good at getting on with their schoolwork, as well as trying to get her into video games such as Call Of Duty. 

‘I’ve tried, but I’m terrible at it,’ she laughs, adding of her boys: ‘They’re quite hilarious. They’ve done the usual things like giving each other buzz cuts.’ 

We’re doing a video call, with Harrison back in TalkTalk’s former headquarters in west London for the day, having moved its base up to Salford last year. One of the downsides of working from home, she says, is that she’s had to hide away in the bathroom for video calls to get some peace and quiet, so this makes a nice change. 

Harrison has led TalkTalk since 2017, taking over from Dido Harding after the company’s infamous cyber-attack in 2015, which damaged its reputation. She has effectively been at TalkTalk since 2003, when it was part of Carphone Warehouse, where she was marketing director. In 2008, she moved to TalkTalk, which officially separated from Carphone Warehouse in 2010, and helped it forge sponsorship deals with hit TV talent show The X Factor. 

Her promotion to chief executive in 2017 coincided with a return to the fold for TalkTalk’s founder and its largest shareholder Sir Charles Dunstone, who became executive chairman. 

Harrison explains their plan was to simplify TalkTalk and take it back to its roots by offering no-frills broadband so that ‘we’re not cluttered up or distracted by doing anything else’. 

It has left its mobile business and recently sold its new fibre broadband firm FibreNation for £200million. The sale was put on hold last year when Labour unveiled plans to nationalise the entire industry if elected. Harrison said the announcement – on the eve of the unveiling of the deal – came as ‘quite a shock’. 

While she says nationalisation is not the answer to the UK’s slow broadband speeds – it lags behind most other developed countries for full-fibre coverage – she agrees with the need for change. 

‘The UK cannot hope to compete if it stays so far behind any other European or global market on full fibre. We desperately need it. The period through lockdown has only shown that to be even more the case,’ she says. 

She praises Boris Johnson’s ambition to connect Britain to full-fibre broadband by 2025, but warns that the industry will need to be smart to entice customers to switch to even faster speeds when the network is ready – or else there will be no point building it. 

The row over Huawei does not directly affect TalkTalk and Harrison manages to tiptoe around the issue, merely saying she will be watching the Government’s decision closely on whether to strip the Chinese firm’s equipment from the new 5G mobile network. 

Despite being one of the few women running a major listed company in Britain, Harrison says she is ‘not a big fan of lots of targets’. But she hopes more home working will help women climb the career ladder more easily. 

‘I hope that this trend towards a much more flexible approach to work will really help,’ she says, referring to part-time female workers or women returning to work after having children. ‘It isn’t just about women. It’s about having flexibility for everyone. It’s good to be able to get back to the kids and have a flexible work experience.’

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Energy boss ‘took £12m secret payout from City fraudster’

Senior director at Nostrum Oil and Gas accused of accepting ‘illegal’ £12m payment from wanted fraudster in High Court claim

A senior director at a London-listed oil and gas company has been accused of accepting an ‘illegal’ £12million payment from a wanted fraudster in a High Court claim. 

Mark Martin – the senior independent director at Nostrum Oil and Gas, operating in North-western Kazakhstan close to the Russian border – is described as having over 20 years of investment banking experience with Barclays, Baring Securities and ING. 

Nostrum is not otherwise linked to the legal case or accused of any wrongdoing. 

Accusation: It is alleged that Mark Martin accepted the ‘secret’ payment from Maksat Arip

It is alleged that Martin, whilst chief executive of London-listed Exillon Energy, accepted the ‘secret’ payment from Maksat Arip, who has been described as one of Britain’s most brazen fraudsters. 

Court papers allege agreements between Cambridge-educated Martin and Arip were ‘dishonest and improper’. The case plunges Martin, 51, into the centre of one of the City’s most extraordinary legal battles in recent years. 

It centres on the £250million collapse of Arip’s giant recycling and packaging firm Kazakhstan Kagazy, which was also listed on the London Stock Exchange. 

The conglomerate’s collapse and subsequent de-listing in 2016 saw many British investors suffer substantial losses. A subsequent probe revealed Arip and his business partner had defrauded the company. 

Since then there has been a forensic investigation to trace assets salted away by Arip. According to court papers revealed last October in The Mail on Sunday, he owns a Swiss mansion, a Kensington mansion and a fleet of luxury cars. The scale of the looting only became public late last year. The documents revealed that Arip’s wife, who is not accused of defrauding the company, claimed her average monthly living expenses were nearly £220,000. 

In the latest twist, High Court papers claim Martin was given shares worth over £10million at the time and a £650,000 salary to join Isle of Man-registered Exillon in 2011. But documents allege ‘shortly prior to this Mr Martin had entered into a secret agreement with Arip, under which Arip was to pay a minimum of $15million [£12million] to Mr Martin’. The court papers allege: ‘Martin, as CEO of Exillon, had authorised a number of substantial payments to a company called Verlass Management Services…Verlass was controlled, directly or indirectly, by Arip; and Mr Martin knew, or shut his eyes to the obvious fact, or ought to have known, that Arip was profiting at Exillon’s expense.’ 

Arip, who owned 30 per cent of Exillon’s shares, subsequently sold off a substantial tranche. 

But by 2014, Exillon had seen the value of its shares plunge by two thirds amid boardroom controversy and shareholder unrest. Martin left the company after a boardroom coup in March 2014. But, according to the claim, just a month earlier Arip handed over the money. 

Investigators, according to High Court papers, allege Exillon and its directors were ‘in ignorance’ of the £12million payments. Further Martin ‘was at all times on notice of the facts that meant the (payment) represented the… proceeds of sums of which the Claimants had been defrauded’. The claim states: ‘Mr Martin did not receive the (payment) in good faith’ which were ‘secret and confidential… to hide and disguise them’ from Exillon. 

Martin denies the claims. A spokeswoman added: ‘The Claimant’s claims against Mr Martin are being defended and are subject to ongoing litigation in the Commercial Court.

Private hospital company NMC Health set to be sold

Private hospital company NMC Health set to be sold after collapse of its former owner earlier this year

A private hospital company that aided the NHS during its battle with Covid-19 is set to be sold after the collapse of its former owner earlier this year. 

City sources said the administrators to NMC Health, which folded amid allegations of fraud, have appointed advisers from US firm Perella Weinberg to find a buyer for Aspen Healthcare as part of a break-up of the stricken company. 

Gulf-based NMC Health bought Aspen Healthcare in 2018 for £10million from Tenet Healthcare as part of its expansion into the UK. It runs eight private hospitals in Britain which have provided support to the NHS during the coronavirus pandemic. 

On the front line: NMC Health runs eight private hospitals in Britain which have provided support to the NHS during the coronavirus pandemic

NMC Health was set up in 1975 by Bavaguthu Raghuram Shetty, an Indian pharmacist, who emigrated to the United Arab Emirates. Initially, the company focused on running private hospitals in the UAE. Shetty floated NMC Health on the London Stock Exchange in 2012. It grew to become one of the world’s largest privately-owned hospitals through a series of mergers and acquisitions, including fertility clinics in Spain. 

NMC Health was promoted to the FTSE100 index in 2017 and grew to have around 20,000 medical staff across almost 20 countries. 

However, in April this year NMC Health collapsed into administration when it emerged it had amassed a debt pile of $6.6billion (£5.2billion) – far bigger than previously disclosed. Abu Dhabi Commercial Bank is owed around $1 billion (£800 million) and launched a criminal complaint against several members of the group’s senior management and some shareholders in Abu Dhabi. 

Shetty was forced to step down as chairman amid the allegations. 

The collapse of NMC Health came after Muddy Waters, the US short seller run by Carson Block, issued a critical report on the company and its finances. 

Recent reports suggested Alvarez & Marsal, administrators to NMC Health, hired Perella Weinberg to run a separate sale of the company’s international fertility business which could be worth more than $500million. 

NMC Health acquired a controlling stake in Spain-based fertility business Clinica Eugin in 2015 and has IVF operations in several other countries, such as Sweden, Latvia and Colombia. 

A spokesperson for NMC Health and the administrators at Alvarez & Marsal declined to comment.