Tepco faces shareholder protests

28 June 2011 Last updated at 10:32 GMT There has been growing anger over the way Tepco has handled the Fukushima Daiichi radiation crisis Japan's Tokyo Electric Power Company (Tepco) faced the wrath of shareholders at its first annual meeting since the 11 March earthquake and tsunami.

One motion called for the company to abandon nuclear energy in the wake of the Fukushima Daiichi nuclear crisis, although this was defeated.

Tepco may have to pay compensation of almost $100bn (?63bn) following radiation leaks at its nuclear plant.

Tepco shares have plunged 85% since the tsunami damaged the Fukushima plant.

The disaster caused a meltdown at three of the six reactors, and more than three months on radioactive material continues to leak from the facility.

Shareholders have criticised Tepco's management for their slow response to the crisis, accusing them of putting out inaccurate data and displaying a lack of transparency.

Some 80,000 residents living close to the plant have been forced to abandon their properties.

Executives at the meeting in Tokyo issued an apology amid angry shouts and heckling by shareholders.

One shareholder said the senior executives should commit suicide by jumping into the damaged reactors.

"All of us directors apologise deeply for the troubles and fears that the accident has caused. We're working to resolve this crisis as quickly as possible," said Tepco chairman Tsunehisa Katsumata.

Tepco has said it hoped to achieve a cold shutdown of the plant by January next year.

Earthquake risk

The biggest debate among shareholders revolved around the future of nuclear energy and what the company's stand on the issue should be.

Opponents failed to win enough support for a motion that would have forced Tepco to scrap all reactors and halt any construction of new ones.

They said nuclear power did not have a feasible future, not least because of the ongoing Fukushima nuclear crisis.

"Japan has a lot of earthquakes and after this accident I just don't think there is such a thing as safe nuclear power here," said one shareholder, Takako Kameoka.

Japan relies on nuclear power for 30% of its electricity needs.

Although thousands of those present at the six-hour meeting supported the motion, the institutional shareholders that own most of the stock were not swayed, and the motion was defeated.

Analysts said that the current power shortage in Japan was proof that the country needed nuclear power in order to meet its energy demands.

"The question is, can Japan do without nuclear power?" said Mitsushige Akino, of Ichiyoshi Investment Management Company.

"How much are the Japanese people willing to sacrifice in terms of standard of living? The sentiment is understandable, but the reality is that this is difficult without considerable sacrifice to economic growth and activity."

View the original article here

2012 event 'faces legal action'

14 June 2011 Last updated at 17:00 GMT The London 2012 team said it must protect its brand

An art event called the Great Exhibition 2012 has said it has had legal action threatened by Olympics organisers over its use of "2012".

The exhibition is due to take place between the Olympic and the Paralympic Games, next August.

Julie Benson, the event organiser, said it was "preposterous" to be asked to withdraw their trademark application.

London 2012 team said it was "legally obliged" to ensure firms do not "create unauthorised association" with it.

Julie Benson, founder of The Great Exhibition Company based on the Isle of Wight, said she has spent the last 12 years planning the art event, including going through the trade-marking process.

'Apparent bullying'

More than ?2m has been invested in it by 47 shareholders, including herself. The firm's board includes Evelyn Thurlby from the Eden Project.

But she acknowledges that London winning the Games in 2005 led her to plan the timing and the name of the exhibition.

The location is yet to be finalised but it is likely be held outside the capital. The company said received the letter from London 2012 organisers, Locog, this week.

Ms Benson said: "This apparent 'bullying' from Locog to bring down an event aimed at championing Great Britain and supporting British tourism and industry gives a shocking insight in to the 'true spirit' of the Olympics.

"It's preposterous - they are threatening to take me to court if I don't drop 2012 from my application for the trademark."

She added that if London 2012 proceeded with their legal action after their end of June deadline, the event would become "untenable".

London 2012 confirmed it had challenged the Great Exhibition project over the use of the 2012 tag.

"The London Olympic Games and Paralympic Games Act 2006 prevents people from creating an unauthorised association between a person, organisation, business, goods or services and the London 2012 Games," a spokesman said.

"Locog is legally obliged to ensure that businesses are not able to create an unauthorised association with the Games.

"We cannot allow third parties to make a commercial association with the Games and we are unable to comment any further at this stage about a matter which is currently with the Locog legal team."

View the original article here

UK banking faces major shake-up

15 June 2011 Last updated at 13:26 GMT Ralph Silva from SRN Research says a ring-fence would make banking 'more expensive'

Chancellor George Osborne is backing proposals to force banks to ring-fence retail from investment banking.

In a speech on Wednesday he will say banks must be set up so that their High Street branches and savings and loans would not be damaged if their trading arms ran into trouble.

The legal separation of the functions of big banks was recommended by the Independent Commission on Banking.

He will also announce the privatisation of Northern Rock.

The former mutual was nationalised in February 2008, in the early stages of the financial crisis.

The BBC's business editor, Robert Peston, said the changes would represent "the most significant reform to our banking system since Big Bang in 1986 made it much easier for our giant banks to buy stock brokers and become huge in investment banking".

More protection

In his annual Mansion House speech, Mr Osborne will also say that banks should have to hold more capital to protect themselves against future losses than the new international minimum of 7% of their risky assets.

He will not put a figure on what minimum he will impose, but Treasury sources said that 10% would be "the right ballpark".

Continue reading the main story

The idea is not to make it impossible for banks to collapse - but to prevent their failures putting an unsustainable burden on taxpayers and the wider economy”

End Quote Robert Peston Business editor, BBC News The 10% minimum was another recommendation of the Independent Commission on Banking (ICB) in its interim report in April.

At the time, Mr Osborne welcomed the report, but he has not previously endorsed its findings.

The shadow chancellor, Ed Balls, has also given the commission his backing.

"To protect customers and taxpayers we need tough accountability and transparency and clear, workable and robust firewalls," he said.

The commission's final report, which is expected to give details of how banks' firewalls will work, is due to be published on 12 September.

The chancellor will announce in his speech how he plans to relinquish state control of Northern Rock.

The former mutual has been split into a "good bank", containing customers' savings and about 70 branches, and a "bad bank" containing the more toxic loans.

The former is set to be sold, while the latter will continue to be owned by the Treasury.

However, Mr Balls called for Northern Rock to be mutualised rather than sold off, and accused Mr Osborne of failing to give the option serious consideration.

Disagreement

According to Robert Peston, the purpose of ring-fencing is to ensure that in a major crisis "a retail bank could be hived off and saved by the Bank of England at less cost to taxpayers, because the investment banking part of the same bank would be allowed to fail".

"The minutiae of how retail banking operations are to be insulated from investment banking are yet to be worked out. The practical and legal challenges are formidable."

Angela Knight of the British Bankers' Association conceded that the banks had different views on how this should be done.

"There's a lot of issues and a lot of details that needs to be thought through and discussed," she said.

Stephen Hester, chief executive of the semi-nationalised Royal Bank of Scotland, told MPs last week that putting retail banks into separate subsidiaries could increase the riskiness of the banking system and put up costs for banks and their customers.

But the boss of HSBC, Doug Flint, told the same committee hearing that ring-fencing was a good idea.

Continue reading the main story

Bottom line - the price of the products is going to go up for everyone in the UK”

End Quote Ralph Silva Banking analyst, SRN Research Some commentators have said the government should go further, and completely separate investment banks from retail banking altogether, instead of allowing them to remain as ring-fenced businesses within the same company.

"While [ring-fencing] is intellectually a sound move, the problem is that in practice, with the pressures of the real world, the ring fence will not be completely... watertight," said Lord Lawson, who was Chancellor of the Exchequer under Margaret Thatcher.

"I'm quite sure the banks would like them to be permeable."

Speaking to BBC Radio 4's Today programme, he said there would need to be two totally different cultures - "prudence and caution" in retail banking, and a "go-go" culture in investment banking.

"If investment bankers make a mistake, they should go bust," he said, and it was "absolutely intolerable" that they could be bailed out along with the retail banks.

Subsidy removed

The reforms are not expected to make the UK banking system completely risk free, according to Alistair Milne of the Cass Business School.

"I don't think anybody on the Vickers Commission thinks [ring-fencing] is a magic solution that will make all potential banking problems go away," he told the BBC, although he said it would make High Street banking safer.

Instead, Mr Milne said it was about "removing the clear subsidy that has existed in the past" that enabled banks to "borrow cheaply on the basis of having all their retail activities, and use that for quite risky business".

However, removing this subsidy will not be cost-free for banks' customers, according to banking analyst Ralph Silva of SRN Research.

"Bottom line - the price of the products is going to go up for everyone in the UK," he told the BBC, estimating that the increase in cost for customers would be 10-15%.

View the original article here

HSBC faces investor anger on pay

27 May 2011 Last updated at 16:08 GMT Mr Flint said HSBC was committed to improving investor returns HSBC bosses faced shareholder anger over lacklustre returns and high executive pay, at the bank's annual general meeting.

Chairman Douglas Flint admitted that shareholder returns had been disappointing and inadequate.

A fifth of investors refused to back the bank's remuneration plan, marking stronger opposition over pay than that faced by other banks in the UK.

Under the plan, chief executive Stuart Gulliver could earn up to ?12.5m.

The remuneration report contained new arrangements for paying board members in the wake of protests at last year's shareholder meeting.

But some investors at this year's meeting were still unhappy.

"How greedy is this board of directors?" asked private shareholder Michael Mason-Mahon.

Ahead of the AGM, both share advisory group Pirc and the Association of British Insurers had raised concerns about the scheme.

But another institutional investor, Standard Life - which had been one of the bank's fiercest critics over executive pay last year - backed the plan.

Libya questions Mr Gulliver became chief executive earlier this year and stands to earn up to ?12.5m in 2011

Earlier this month, HSBC revealed details of a large cost-cutting programme, aimed at saving up to $3.5bn (?2bn; 2.4bn euros).

The programme involves a retreat from retail banking, although the number of job cuts that will be made has not yet been disclosed.

It could also involve HSBC, which is Europe's biggest bank, selling its US credit card business.

At the meeting, the bank also faced questions over its relationship with the Libyan government and leader Muammar Gaddafi, after a leaked report earlier this week named HSBC, together with other well-known institutions, as holding Libyan state funds.

Mr Flint said Libya had been rehabilitated by the international community in 2006, which was why it had access to the international financial system again, before being cast aside this year.

But he refused to be drawn on whether HSBC had any connection to the Libyan government.

View the original article here

Blatter faces Fifa ethics inquiry

Blatter is bidding for a fourth presidential term at Fifa Fifa has opened an ethics investigation against its president, Sepp Blatter.

The action follows a charge by Mohamed Bin Hammam, his rival in next week's presidency election, that Blatter knew about alleged cash payments.

Bin Hammam and vice-president Jack Warner will also be at Sunday's hearing to answer charges of bribery.

Blatter issued a statement saying: "I cannot comment on the proceedings that have been opened against me. The facts will speak for themselves."

The ethics committee are bound by their rules to investigate any complaint by an executive committee member under article 16 of the ethics code.

Bin Hammam and Warner face allegations from executive committee member Chuck Blazer that they offered bribes at a meeting of the Caribbean Football Union (CFU) on 10 and 11 May.

A file of evidence claims bundles of cash of up to $40,000 were handed over to members of the CFU at the meeting in Trinidad.

Fifa needs to take the opportunity to change - Hugh Robertson

In turn, Bin Hammam is effectively claiming Blatter was aware of some wrongdoing but did not report it, in itself a breach of the code.

The committee, chaired by Namibian judge Petrus Damaseb, will also be investigating two other CFU officials - Debbie Minguell and Jason Sylvester.

Bin Hammam issued a statement via his website on Friday concerning the "increasing evidence of a conspiracy against his candidacy" and attempted to clear up the bribery allegations made against him.

"After having analysed and answered the accusations of bribery made against Mohamed Bin Hammam, it seems obvious that they are without substance," the statement read.

"It is true that Mr Bin Hammam addressed representatives of the CFU at an extraordinary meeting in Port of Spain, Trinidad on May 10 and 11. Nobody has ever tried to hide the fact that Mr Bin Hammam paid for the delegates' travel and accommodation expenses and covered the meeting's administrative costs.

"Mr. Bin Hammam reiterates that any allegations about him trying to buy votes are completely false.

"It is quite obvious that, following previous failed attempts, this is part of a final effort to prevent Mr. Bin Hammam from running for the Fifa presidency."

The move to place Blatter, one of the most powerful men in football, under investigation is the latest twist in an increasingly bitter fight for the presidency of the sport's global governing body.

And it also follows weeks of damaging headlines and allegations in the wake of the vote for the 2018 and 2022 World Cups.

BBC sports editor David Bond said: "Fifa is now an organisation completely at war. They cannot possibly continue in this way and many people will say they should suspend the presidential election, which takes place next Wednesday.

"Under Fifa's ethics code, they are duty bound, if a member of the executive committee makes a complaint to the ethics committee, to then investigate it.

"So, it may be that the allegations against Blatter don't come to much, and the allegations against Bin Hammam and Warner could be far more serious. Ultimately it seems the evidence against Blatter is only Bin Hammam's word against his.

"It is very difficult to predict exactly what will happen next, but it's hard to see this as anything other than a watershed moment for Fifa.

"It feels like at last the dam is breaking around them. It is a bit like the scene at the end of Reservoir Dogs when everyone has a gun pointed at each other's heads."

Blatter has been president of Fifa since 1998. Michel Platini, the president of European football's governing body, Uefa, who is tipped to run for the Fifa presidency in four years' time, described the latest development as "a very interesting moment".

He said there would only be a postponement of Wednesday's presidential elections if three-quarters of Fifa's general assembly agreed.

But sports minister Hugh Robertson was in no doubt that the election should be postponed.

"The Fifa presidential election campaign has descended into a farce," he said. "With both of the candidates having allegations of corruption aimed at them the election should be suspended."

Platini, whose organisation have thrown their weight behind Blatter's bid for re-election, described himself as "incorruptible".

"You know the people who are corrupt, they know who can be corruptible," he said. "They know I am incorruptible."

He also argued that corruption was an issue not only in football, but the whole of society. "Football is the most beautiful and popular game in the world and we have to resolve these problems," he said.

Michel Platini dismisses football's 'little problems'

"[But] it is not only a fight in football. Football is a mirror for the society and what happens in football can arrive in every part of the society."

Meanwhile, an FA inquiry into claims by ex-chairman, Lord Triesman, that Warner and three other executive committee members made improper requests during England's 2018 World Cup bid has found evidence of several possible rules breaches.

The report, written by barrister James Dingemans QC, has been sent to Fifa and raises "outstanding issues" with Fifa's ethics code and bidding rules.

It is understood that only the claims against Warner have been corroborated by witnesses.

The claim that Warner asked for financial help to build an education centre has been backed up by Premier League chairman Sir Dave Richards, while Dingemans' file also includes an email from Warner to Triesman asking the FA to pay for Haiti's World Cup TV rights.

An FA spokesman said: "Mr Dingemans cannot make a final determination on whether there has been any wrongdoing because he does not have jurisdiction to speak to the Fifa executive committee members.

"It is for Fifa to do this and for Fifa to determine whether any of its rules have been breached."

View the original article here