This week’s news includes; Oxfam’s donations fall due to scandal, Barclays charged by the SFO, Uber posts widening losses and Kanye West settles with Lloyd’s.
Here are some of the big stories you may have missed last week , Why did the US stock markets crash? (RT), Louboutin faces red bottom legal battle (BBC News), Snap posts good user growth (Reuters)
Below are our top 10 stories that you need to know about. Be sure to check our twitter page and Facebook page for regular posts of important headlines. Get all the important stories and insights straight into your inbox by subscribing to our mailing list here.
Opinion articles of the week:
- BBC News asks who is the world’s biggest car maker?
- City A.M looks at Why 2018 will be a better year for the shipping industry.
- Bloomberg explains Why the pound may rise over the coming weeks, despite the Brexit uncertainty
- The Guardian looks at Goldman Sachs boss’ view on Trump tax plan: ‘Odds of a bad outcome have gone up’
1. OXFAM DONATIONS FALL
The scandal at Oxfam has begun to hit donations at the charity. Over 1,270 people cancelled their regular direct debit payments over last weekend. Oxfam usually only faces 600 direct debit cancellations per month.
Oxfam is under fire for allegedly concealing claims that staff hired prostitutes while providing aid in the aftermath of the Haiti Earthquake in 2011. There is evidence showing the charity knew officials were involved but failed to take appropriate actions. The Charity Commission has launched an inquiry into Oxfam. They denies the allegations of the cover up.
BBC News looks closer at the scandal.
2. US GUN SALES
The Trump presidency has ironically, ushered in the end of the golden era of gun sales. Gun manufacturer Remington has filed for Chapter 11 bankruptcy. The company has debts of $950 million and will seek to dispose of $700 million of this. Remington was founded in 1816 and supplied weapons to soldiers in the civil war.
Across the board, gun companies have been struggling. The largest US gun manufacturer Sturm Ruger posted a 35% decline in revenues. The owner of Smith & Wesson, American Outdoor Brands, posted a 90% fall profits and a 36% decline in sales. The primary reason for this is declining overall gun ownership. Gun sales rose under Obama due to fear from existing owners of tighter gun controls. The US has 88 guns for every 100 people.
The Guardian looks closer at the US firearm market.
3. CARILLION – ONE MONTH ON
A month on from the collapse of Carillion, the full effects are still to be revealed. The full scale of collapse is still being pieced together. Until inquiries are concluded we will see prolonged difficulties for those involved. Carillion staff have been made redundant but there is no clarity on when redundancy or statutory notice payments will be received.
The 30,000 small companies that supplied Carillion are still holding their breath. So far the expectation is that these companies will get at most, one penny for every pound owed. Lloyds, RBS, HSBC have put together a £225 million fund to support affected small businesses.
Most large scale building projects and public services have continued as normal. The Insolvency services has obtained new contractors and been able to pay workers in crucial public services.
The firm had a massive pension deficit totalling £990 million. The Pension Protection Fund will cover a record £900 million of this. The 30,000 pension scheme members will face a 30% cut.
The Guardian reports on the current state of affairs with Carillion.
Last week, Clifford Chance acquired Carillion Advice Services, a Newcastle based legal services firm. This acquisition has saved 60 jobs. The firm was initially in-house legal team but eventually grew to support third parties. City A.M explores closer at the acquisition.
4. EU GROWTH
The European Union grew at the fastest rate since 2007. The 28 European Union countries grew by 2.5% in 2017, showing full recovery from the financial crisis as a collective. Most of this growth was primarily driven by Germany, Spain, Italy and France. Latvia and Slovakia also showed strong growth.
Some analysts attribute this growth due to strong stimulus policies introduced by the European Central Bank. There is a renewed sense of optimism in the EU as steady 2% growth across the Eurozone is expected going forward. The outcome of the Brexit decision, however, will undoubtedly have a huge material impact on the future growth of the EU.
BBC News analyses the state of the European Union economy.
5. BARCLAYS CHARGED BY SFO
Barclays has been charged by the Serious Fraud Office in relation to its dealings with Qatar. SFO alleges Barclays gave unlawful financial assistance in relation to funds received from Qatar in 2008.
Barclays was one of the few major UK banks to avoid taking a government bailout in 2008 crisis. It took a £12 billion loan from state-owned Qatar Holdings and subsequently Barclays loaned £2.3 billion back to Qatar Holdings. The Serious Fraud Office claims the loan was used directly or indirectly, to buy shares in Barclays. This conduct is “unlawful financial assistance”. The SFO have not released further details about the investigation.
BBC News analyses the significance of the charge.
6. OIL SECTOR
Oil prices are falling again but Shell have now invested more in renewable to mitigate losses. After reaching a high of $71 a barrel last month, Brent crude fell to $62 a barrel. This is due to increasing stockpiles of US oil. Despite this recent rally, the era of high oil demand is waning.
Shell has now agreed to provide a credit line and loan facility for Inspire Energy Holdings (Inspire). Inspire is a “clean-power, smart-home and energy management company”. Further terms of the agreement have not been disclosed.
This appears as part of a general shift in the sector towards renewable. Exxon Mobil has announced that it will be investing $1 billion per year in renewable energy projects/research.
Bloomberg reports on Shell’s latest bet on renewable.
7. UBER LOSSES
Uber’s latest financials make sour reading for investors, despite improvements from the new CEO. Uber posted a loss of $4.5 billion last year, a 61% increase from the a year before. Dara Khosrowshahi decreased losses by $300 million from the start of his incumbency in the last quarter of 2017.
The company has been entangled in numerous issues over the past 12 months. They faced; a sexual harassment scandal, the departure of their CEO Travis Kalanick and the loss of their license in London. Despite this, the incumbent CEO hopes to make an underlying profit by next year before its planned IPO. Uber currently has revenue of $37 billion.
Sky News looks closer at Uber’s financial situation.
Check out our insight article; The Future For Uber. We explore whether Uber’s employment structure as a whole is sustainable.
8. KANYE WEST SETTLES LAWSUIT WITH LLOYD’S
Kanye West has reached a $10 million settlement agreement with Lloyd’s of London insurers. The legal dispute arose from Lloyd’s refusing to pay out Kanye West’s insurance claim for cancelled shows. Kanye West cancelled 21 shows of his Saint Pablo tour in 2016 after falling ill and saw him spend time in a psychiatric hospital.
Lloyd’s initially countersued and alleged that Kanye’s use of marijuana caused his illness. Lloyd’s stated that their insurance policies do not cover losses arising from drug usage. Lloyd’s have now confirmed that they have settled the case. (City A.M)
9. PREMIER LEAGUE TV RIGHTS SOLD
Premier League football TV Rights have been sold, but for less than at the last auction. Sky and BT Sport have purchased rights to show Premier League games from 2019 untill 2022 for £4.464 billion. Although there are 2 packages left to be sold, this will still be notably less than the £5.14 billion cost in 2015. Sky has won the rights to 128 live matches, while BT Sport won 32 games.
It appears the premier league broadcasting auctions appears to have hit a ceiling. The 2015 auction smashed expectations as Sky was fearful of BT Sport so bid way over the odds. Sky paid 70% more in the 2015 deal than the 2012 deal. With concerns over falling viewers, we may be seeing the end of overinflated Premier League TV rights auctions.
For more on the sports broadcasting market read BBC News report.
In December, Sky and BT struck a deal to sell some of each other’s channels. BT Sports channels will be available on Sky. Sky’s Now TV Service will be available to purchase on BT. The threat of upcoming online rivals was the main driver for this move.
10. AMAZON ADDS 2000 JOBS IN FRANCE
Amazon has announced that it will create 2000 jobs in its 3rd largest European market. It will now employ over 7500 in France, bringing its total investment in the country to 2 billion euros over the past 8 years. Amazon recently settled a 200 million euro tax dispute with France.
Amazon’s expansion appears to be relentless. It recently opened Amazon Go, its first supermarkets without checkouts. The company also teamed up with JP Morgan and Berkshire Hathaway to create its own healthcare company. Amazon began as a bookshop but is now set on world dominations.
Reuters explores the rapid growth of Amazon.