BUSINESS WITH PERSONALITY
&
present
The POWER HUNDRED 2011
Issue 1,290 Wednesday 22 December 2010
CABLE DEMOTION
CHEERS MURDOCH
POLITICS
▲
BY DAVID CROW
JAMES Murdoch, the chairman of
British Sky Broadcasting, was said to
be “cock-a-hoop” last night, after
Vince Cable was stripped of his role
in deciding whether the satellite
broadcaster can be taken over by
News Corp.
Sources close to Murdoch, who is
also chief executive of News Corp
in Europe and Asia, said Cable’s
demotion was the “best Christmas
present he could have wished for”.
Cable’s responsibilities for
media, broadcasting and telecoms
were handed to another cabinet
minister, after he claimed to have
declared war on media mogul
Rupert Murdoch.
Referring to his power to block
News Corp’s proposed takeover of
BSkyB, Cable told undercover
reporters: “I have declared war on
Mr Murdoch and I think we’re
going to win.”
As business secretary, Cable was
supposed to decide whether News
Corp’s proposed buyout of BSkyB
would damage media plurality in
Britain, although that job will now
go to culture secretary Jeremy
Hunt.
Although there was relief within
News Corp at Cable’s demotion yes-
terday, senior insiders said the
firm was considering mounting a
FTSE 100 ▲ 5,951.8 +60.19 DOW ▲ 11,533.16 +55.03
The most influential people in the City
MERVYN
KING LEADS
THE WAY
THE DEFINITIVE
POWER LIST P2, P19
www.cityam.com FREE
legal challenge against his decision
to refer the deal to media watch-
dog Ofcom on the grounds of pub-
lic interest.
Earlier in the day, News Corp
said it was “shocked and dis-
mayed” by Cable’s comments.
Cable was also recorded saying
his departure from government
would cause the coalition govern-
ment to implode.
“I have a nuclear option; it’s like
fighting a war… If they push me
too far then I can walk out and
bring the government down and
they know that.”
In the event, Cable’s claims
proved more credible than many
thought. Although David Cameron
said his comments about News
Corp were “unacceptable and
inappropriate”, he stopped short of
sacking him or moving him to
another cabinet job.
But John Denham, the shadow
business secretary, told City A.M.
that Cable was a “complete lame
duck”.
He added: “He doesn’t have the
confidence of the Prime Minister
and key decisions have been taken
away.
“They’re keeping him for politi-
cal cover, not for anything he
brings to the job.
“If he were a minister in any
other government he would have
been sacked.” MORE: P2, P3, P5
Vince Cable said his departure from government would bring down the coalition Picture: REUTERS
NASDAQ ▲ 2,667.61 +18.05 £/$ 1.55 unc £/¤ 1.18 unc ¤/$ 1.31 unc Certified Distribution
1/11/10 - 28/11/10 is 113,348
 2 News
There’s plenty of News Corp
change in our could bring
Power Hundred
Johnson; and the owner of Arcadia
and government adviser on saving
money, Sir Philip Green.
Spookily enough, and reassuringly,
the readers’ top three choices are the
same as ours, although in a slightly
different order.
Readers plumped for Barclays’ new
DEPUTY EDITOR’S LETTER boss Bob Diamond, followed by Bank
of England governor Mervyn King,
DAVID HELLIER and then chancellor George Osborne.
Osborne is third in our list too,
INTRODUCING our City A.M./CityJet although King is our most powerful
Power Hundred list for 2011 one is man in the City, whereas the incom-
struck by the number of new ing Barclays boss comes in at number
entrants – 43 in all. two.
Admittedly the last list was put King’s position at the top of the
together a couple of years ago, but City A.M. list, reflects his growing
there really have been dramatic stature as a consequence of the finan-
changes since then. cial crisis. In 2011, the Bank will be
The biggest difference is the politi- taking on more and more of the
cal landscape. Gone are the big beasts banking regulation from the
of New Labour, such as Alistair Financial Services Authority and
Darling and Peter Mandelson, who King will also retain control over
have respectively departed to the interest rate policy.
worlds of the back benches and busi- King’s not without enemies, both
ness consultancy. political, and from within the ranks
Gone are some of the bankers, such at the Bank. But it is he, who was
as Eric Daniels and Sir Victor Blank, gutsy enough to travel to the lions’
who presided over a disastrous period den of the Trades Union Congress ear-
for the UK banking sector. lier this year to explain the back-
And also gone is the always illumi- ground to the cuts.
nating Adair Turner, who is still What to do with Business Secretary
around as chairman of the Financial Vince Cable?
Services Authority but whose future That’s a question many coalition
in the new regulatory set-up that is MPs have been asking after his embar-
being brought in by the new govern- rassing comments to a couple of
ment is uncertain. undercover reporters were published
Our readers’ competition, in which over the past 24 hours. But it’s also a
we asked readers to name their three question we asked several times dur-
most powerful people, came up with ing the compilation of our list.
some interesting names. Some sug- He makes it onto the list, just, but
gested personalities such as Angela would have been far higher had he
Merkel, the German chancellor; not yesterday been stripped of some
Martha Lane Fox, the internet cham- of his responsibilities.
pion; Metro Bank founder Vernon POWER 100: FROM P19
Hill; shadow chancellor Alan david.hellier@cityam.com
WHAT THE OTHER PAPERS SAY THIS MORNING
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Editorial helped power a 16 per cent rise in
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Deputy Editor David Hellier ity this year as companies moved to
News Editor David Crow spend their cash piles outside of
Night Editor Katie Hope their home markets. Companies in
Business Features Editor Marc Sidwell developing countries struck 2,570
Lifestyle Editor Zoe Strimpel deals worth a total $502.6bn in the
Sports Editor Frank Dalleres year to date – a 42.9 per cent increase
Art Director Craig Gaymer on last year’s $351.8bn total, accord-
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Beam Reach 5 Business Park, shy company revealed its perform-
Marsh Way, Rainham, Essex, RM13 8RS ance in a note to bondholders,
legal action
against Cable
▲ POLITICS
BY DAVID CROW
NEWS Corp was last night taking
legal advice on whether to challenge
Vince Cable’s decision to refer its bid
for BSkyB to the media watchdog.
Cable asked Ofcom to examine the
deal on the grounds of public interest
on 4 November – less than 24 hours
after News Corp notified the European
Commission of its intention to acquire
BSkyB.
Sources said the firm was “review-
ing the situation” and “taking advice”
from several parties, including its
lawyers.
A source close to News Corp said:
“We’ve now gone down a line that has
been initiated by someone who isn’t
impartial. We can’t help but feel the
whole process has been biased from
the start.”
News Corp insiders point out that
Cable used the past tense when he told
undercover reporters he was trying to
scupper the deal. “I have blocked it
using the powers that I have got and
they are legal powers that I have got,”
he said.
The timing of Cable’s claims could
not have been more ironic. They came
just hours after the European
Commission gave the green light to
News Corp’s bid for BSkyB.
Joaquin Almunia, the commission-
er leading the investigation into the
JONGLEURS POISED TO DELIVER THE
PUNCHLINE AND RETURN TO LONDON
The comedy club chain that launched
the careers of Michael McIntyre,
Eddie Izzard and Frank Skinner is in
talks to acquire a flagship site in the
West End of London. The move would
mark a return to the capital for
Jongleurs, which in effect disap-
peared from Britain’s high streets
after Regent Inns, the pub operator
that licensed the comedy brand, fell
into administration in October 2009.
SNAPPING UP A BARGAIN IN
WINCHESTER
A huge scheme to regenerate the cen-
tre of Winchester has been saved with
its sale to a global fund manager.
Henderson Global Investors complet-
ed the purchase of the Silver Hill
scheme yesterday from the adminis-
trator Deloitte. The proposed 630,000
sq ft retail-led project to redevelop
the Broadway Friarsgate area will
cover nearly a quarter of the city’s
centre, a short walk from its historic
cathedral. It had been on hold since
HBOS, part of Lloyds Banking Group,
pulled the plug on the previous
owner Thornfield Ventures.
proposed takeover, said he was “confi-
dent” that it would not weaken com-
petition in the UK.
However, the EC was only examin-
ing the deal on relatively narrow com-
petition grounds.
Culture secretary Jeremy Hunt, who
has been handed responsibility for
overseeing the deal, must now decide
whether the takeover would damage
media plurality in the UK, a much
trickier and politically sensitive ques-
tion.
Almunia said he was waving the
deal through because News Corp and
BSkyB were active in different UK mar-
kets and competed with one another
only to a “limited extent”.
News Corp owns News
International, the UK’s largest publish-
er of national newspapers, and 39.1
per cent of BSkyB, the biggest broad-
caster by revenue in the UK, with 10m
subscribers.
Last month News Corp offered 700p-
a-share for the 60 per cent of BSkyB it
does not already own. The offer was
dismissed as too low by BSkyB, which
said it would consider offers in the
region of 800p-a-share. Both sides
agreed to clear regulatory hurdles
before negotiating over price.
Ofcom, which is examining
whether the deal would hurt media
plurality in the UK, has already sig-
nalled that the case “raises potentially
material public interest issues”.
CITIGROUP WARNS OF FRESH WAVE OF
BANK FAILURES IN EUROPE
Citigroup has warned of a fresh wave
of bank failures and sovereign
defaults in Europe unless EU leaders
come up with a credible response to
the crisis. Prof Willem Buiter, the
bank's chief economist, said the euro-
zone was paralysed by a "game of
chicken" between the European
Central Bank and EMU governments.
oth sides are trying to shift responsi-
bility on to the other for shoring up
southern Europe and Ireland, raising
the risk of contagion spreading.
Both sides are trying to shift
responsibility on to the other for
shoring up southern Europe and
Ireland, raising the risk of contagion
spreading.
LUCASFILM SETTLES 'COLD-CALLING'
CHARGES OVER PIXAR STAFF
Lucasfilm has settled civil charges
over alleged 'cold-calling' to staff of
rival animation house Pixar, the US
Justice Department has said. Pixar, a
unit of Walt Disney, wasn't named in
Tuesday's legal complaint because it
was one of six companies that settled
similar charges in September, the
department said.
CITYA.M. 22 DECEMBER 2010
If News Corp and BSkyB fail to
resolve those issues before a deadline
of 31 December, Ofcom is likely to
refer the matter to the Competition
Commission (CC).
BSkyB is already under investigation
by the CC due to its dominant position
in the premium TV movies market. In
a bad sign for the satellite giant,
Almunia said his probe had “revealed
strong concerns over BSkyB’s exclusive
deals for premium movies with all six
Hollywood [studios]”.
ANALYSIS l BskyB 728.50
735 p 21 Dec
730
725
720
715
710
705
700
695
4 Oct 18 Oct 1 Nov 15 Nov29 Nov 13 Dec
MICROSOFT TO REVEAL NEW VERSION
OF WINDOWS
Microsoft Corp. next month plans to
discuss a new version of its widely
used Windows operating system that
targets low-power devices and adds
support for a second strain of chip
technology, according to people
briefed on Microsoft company's plans.
The software, expected to be demon-
strated at the Consumer Electronics
Show in early January, will be adapt-
ed to run on microprocessors sold by
ARM Holdings PLC as well as the tech-
nology popularized by Intel Corp.,
Microsoft's longtime partner in per-
sonal computers, these people said. It
is not expected to be available for two
or more years, they added.
BELARUS EXTENDS CRACKDOWN
Belarussian President Alexander
Lukashenko extended his crack-
down on opponents Tuesday, as
authorities charged around 600
activists with taking part in an
unsanctioned protest and threat-
ened to disband political parties
and organizations involved in
Sunday's protest against his land-
slide re-election.
 CITYA.M. 22 DECEMBER 2010
Bankers horse-trade
with coalition on pay
BANKING
▲
BY JULIET SAMUEL
CHANCELLOR George Osborne and
business secretary Vince Cable yester-
day summoned the chief executives of
Britain’s biggest banks to a two-and-a-
half hour meeting in which they tried
to strike a deal to avoid further action
on bonuses.
A source close to Santander UK,
whose new chief executive Ana
Patricia Botin attended the meeting,
told City A.M.: “It’s horse-trading: can
we make a commitment on lending to
small businesses and the Big Society
bank in return for leniency on pay.”
The government has emphasised to
pp y,
Culture secretary Jeremy
Hunt (right) will now
decide whether to allow
Rupert Murdoch’s News
Corp to buy BSkyB
Pictures: PA
banks that it wants a reduction in the
size of the bonus pool to accompany a
“change in culture” on pay, but is pre-
pared to strike a deal if banks give
other concessions. In response, the
UK’s banks have offered to lend £70bn
to small businesses next year, versus
around £60bn this year.
The meeting, which had been
delayed a day due to Osborne being
stranded in New York by the snow on
Monday, was part of a series of
planned gatherings as part of “Project
Merlin”, a cooperative initiative
between banks aimed at reviving the
industry’s image.
In place of attending the meeting
on Monday, bank chiefs held a phone
Culture secretary
to rule on BSkyB
POLITICS
▲
BY RICHARD PARTINGTON
THE OUTCOME of News Corp’s bid to
buy a majority stake in BSkyB will be
decided by Jeremy Hunt, in the wake
of Vince Cable’s comments that he
had “declared war” on Rupert
Murdoch.
The business secretary, who has
been stripped of his power to rule on
the takeover, will no longer play a
role in deciding whether the deal
will impact on the plurality of the
media.
Instead, culture secretary Jeremy
Hunt will take on the responsibility,
as well as a new role in charge of all
broadcasting competition issues.
Hunt, a Conservative who has pre-
viously openly backed Rupert
Murdoch, will pass judgment on an
Ofcom report into the takeover.
In 2008 the then shadow culture
secretary told Broadcast Magazine
conference to discuss a framework for
negotiations with the treasury.
The treasury is already reluctant to
take further action on bonuses in part
because of regulation already intro-
duced by the EU and the Financial
Services Authority.
Regulations published last week for-
bid financial institutions from paying
any more than 20 to 30 per cent of a
bonus in cash up front, with half of
any bonus obliged to be in the form of
non-cash instruments such as shares.
The scheme is the most stringent in
the world.
However, the government has said
that it does want action on pay disclo-
sure, a cause championed by Cable.
Coalition in Crisis
▲
additional Murdoch owned news
channels would not impact on media
plurality.
He said: “Rather than worry about
Rupert Murdoch owning another TV
channel, what we should recognise is
that he has probably done more to
create variety and choice in British TV
than any other single person because
of his huge investment in setting up
Sky TV which, at one point, was los-
ing several million pounds a day.”
A political backlash could be
sparked should Hunt decide not to
intervene, though blocking the
takeover could also raise concerns
over the impartiality of the inquiry
process from its inception.
Culture minister Ed Vaizey will
now work solely for the Department
of Culture Media and Sport (DCMS)
on media policy, whilst more than 70
Whitehall officials will move from
the business department to DCMS.
Left: Santander UK’s new CEO Ana Patricia Botin, and right: Barclays John Varley
3
Telegraph says
it was ready to
publish exposé
MEDIA
BY RICHARD PARTINGTON
THE Telegraph has defended its deci-
sion not to publish Vince Cable’s
explosive comments about Rupert
Murdoch’s News Corp.
The newspaper says it intended to run
his secretly recorded comments today,
as part of a fresh series of undercover
stings on MPs.
It yesterday featured Cable’s
remarks about the coalition, with-
holding details about his views on the
News Corp takeover of BSkyB.
The controversial quotes about the
bid were reported by Robert Peston,
after the withheld material was
passed to the BBC business editor.
A letter signed by Telegraph chief
executive Murdoch MacLennan,
along with other senior media execu-
tives, was sent in October urging the
business secretary to block News Corp
from buying BSkyB in full.
CITYA.M. 22 DECEMBER 2010 Coalition in Crisis 5

The case of the invincible business secretary

thought the famously grumpy busi-
ness secretary was indulging in a little
hyperbole. Few, if any, thought the
audacious claim would be tested just a
few hours later.
In the event, the Prime Minister
agreed with his business secretary.
Although David Cameron gave him a
public dressing down, and stripped
POLITICAL ANALYSIS him of key responsibilities, he stopped
DAVID CROW short of sacking him from the cabinet.
A plan to switch Cable with Andrew
Mitchell, the Tory international devel-
faced, there was much talk of a swift
return to government for David Laws,
the former Liberal Democrat chief sec-
retary to the Treasury who quit after
admitting he used his parliamentary
expenses to pay rent to his partner.
There is no doubt that Laws would
make an excellent business secretary
– in fact that job is likely too small for
his talents – but the investigation into
his expenses has not yet been pub-
lished. If the parliamentary standards
commissioner were to censure Laws,
it would still leave the coalition on
shaky ground. Cable is not just any
Liberal Democrat, he is one who still
commands the support of the party’s
left, former SDP members who are
increasingly aghast at the direction of
the coalition. That can’t be said for
Laws, an economic liberal who only
joined the Lib Dems in the 1990s
because of the Tory party’s views on
homosexuality. Most of the other
capable Lib Dems are also so-called
“Orange Bookers”, a term that denotes
already defecting en masse – could all
but disappear (most of them hold
views considerably to the left of the
party itself). Nick Clegg, currently at
11 per cent in the opinion polls, can’t
afford to let that happen.
Cameron’s decision to keep Cable
inside the tent isn’t without its risks.
Tory ministers know that they would
have been dismissed without a second
thought were they to act in a similar
way, while Tory backbenchers feel the
Lib Dems are wooed while they are

W
HEN Vince Cable told under-
cover reporters his depar-
ture from government
would bring down the coali-
tion, most Westminster insiders
opment secretary, was also aborted
before it got off the ground; the
Liberal Democrats want at least one of
their men in a key economic job.
As news of Cable’s predicament sur-
he could be forced to resign for the
second time in a year. Unlike Lord
Mandelson, it is highly improbable
that he could return for a third time.
Even if Laws were to replace Cable,
a passion for civil liberties combined
with a firm belief in the free market.
It is for that reason that Cable can’t
be sacked. Without a bleeding heart
in the coalition, Lib Dem activists –
ignored. This might buy Cameron
some time, but the problems will be
waiting for him when he returns from
his Christmas break.
david.crow@cityam.com

Cable has lost

all credibility,
say key critics
▲

POLITICS responsible for deciding whether

BY JULIET SAMUEL
BUSINESS leaders and politicians said
that it is now only a matter of time
before business secretary Vince Cable
is sacked after saying to two undercov-
er reporters that he had “declared war
on Rupert Murdoch”.
Sir Alan Sugar, founder of electron-
ics firm Amstrad, wrote on Twitter yes-
terday: “Cameron and his apprentice
Clegg will dump Cable soon”.
A backbench Tory MP told City A.M.
that Cable’s credibility is in tatters:
“The guy just makes himself look
ridiculous, like a precious prima
donna. It makes you realise that
babysitting some Lib Dem front-
benchers requires nursery school
patience.”
John Whittingdale, chair of the par-
liamentary select committee on cul-
ture, media and sport said: “This does
call into question his objectivity and
independence in reaching what is
essentially a quasi-judicial decision.”
Before yesterday, Cable had been
News Corporation would be permitted
to buy out Sky due to concerns about
media plurality. But Prime Minister
David Cameron stripped him of all
responsibilities relating to the media
after his comments.
Sources close to Santander UK also
said that Cable’s role in yesterday’s
government meeting with banking
chiefs was significantly undermined
by the furore over his boast that he
could “bring down the government”.
The source said: “There was initially
speculation that the Liberal
Democrats would try to kick around
bank bonuses to regain credibility
after the tuition fees vote. But we were
in a different place 24 hours later.”
The meeting had been convened to
discuss a deal on pay restraint in order
to revive the image of the banking
industry.
Cable has previously championed
the cause of further transparency in
banking remuneration, saying that
secrecy over pay could foster “poiso-
nous fungus”.

Liberal Democrat ministers hit

out at child benefit cutbacks
▲

POLITICS described the child benefit decision as

FRESH cracks appeared in the
Coalition government yesterday after
business secretary Vince Cable’s
unguarded comments to undercover
journalists as it emerged that several
other Liberal Democrat ministers
had attacked plans to scrap child ben-
efit for higher rate taxpayers.
The three senior ministers con-
demned chancellor George Osborne’s
proposed policy, which will hit tens of
thousands of stay-at-home mothers.
The ministers revealed their con-
cerns about the changes in benefits to
Daily Telegraph reporters posing as
Liberal Democrat voters.
The ministers also revealed efforts
to slow or stop Tory policies.
Scottish secretary Michael Moore
“blatantly not a consistent and fair
thing to do”.
Business minister Ed Davey said the
announcement had left him “gobs-
macked” and said it had been “dreamt
up out of the blue”.
Pension minister Steve Webb said
he had written to the chancellor to
complain about the policy because the
details were “not right”.
The three men also voiced fears
about other Coalition policies, includ-
ing housing benefit reductions and
the tuition fee increase.
It is the first time that Liberal
Democrat concern over child benefit
cutbacks has surfaced, with opposi-
tion to the proposal previously com-
ing from back-bench Conservative
MPs.
 6 Economics
Government
debts soar as
spending rises
▲
UK ECONOMY
BY JULIAN HARRIS
OUT of control government spending
drove the public deficit to a record
high for November, it was revealed
yesterday.
Despite rising tax revenues, govern-
ment borrowing shot up to £23.3bn,
almost £6bn higher than the same
time last year, the Office for National
Statistics (ONS) showed.
The news piles pressure on chancel-
lor George Osborne to get the public
finances under control.
“On this trend, borrowing will hit
£155bn, some £7bn above the Office
for Budget Responsibility’s (OBR) lat-
est forecast,” said Jonathan Loynes of
Capital Economics.
Yesterday’s figures “pretty much
wipe out all of this year’s reduction in
borrowing in one fell swoop,” said
Andrew Goodwin, economist at the
Ernst and Young Item Club.
“We should be starting to see the
impact of the coalition’s £6bn ‘effi-
ciency savings’ yet spending contin-
ues to grow strongly,” he added.
“Central government spending was
ECONOMIST VIEWS: WHAT IS YOUR TAKE ON
THE STATE OF PUBLIC FINANCES? Interviews by Julian Harris
PHILIP SHAW | INVESTEC
“ Today’s figures are a reality check which help justify
the extent of the government’s fiscal consolidation.
ANDREW LILICO | POLICY EXCHANGE
“ This may be a rogue month for results. But without
deficit reductions, things can soon turn for the worse.
SIMON WARD | HENDERSON
“ It is troubling that we’ve had two consecutive
months of bad figures. But deeper cuts are to come.
CITYA.M. 22 DECEMBER 2010
ANALYSIS l Central Government Spending
55
£bn Barclays chief: House prices to
2010-11
Inflation is good decline in 2011
50
▲
HOUSING
▲
UK ECONOMY
Incoming Barclays chief executive HOUSE prices will fall by two per cent
45 Bob Diamond told Sky News “a whiff next year, the Royal Institution of
2009-10
of inflation would be good news for Chartered Surveyors (RICS) said today.
Chancellor George the economy,” yesterday. While house prices are projected to
Osborne faces a Inflation rose to 3.3 per cent last slip, a drop in supply to the market
struggle to con- month, and inflation expectations will stop prices tumbling further, it
tain government 40 have jumped to 3.9 per cent. said.
spending and hit And 61 per cent of people think ris- And transactions are unlikely to
his fiscal targets ing prices will weaken the economy. pick up, with little more than 900,000
“Inflation erodes the value of expected to take place in 2011.
Picture: wealth and incomes, which can Yet “repossessions will decline mar-
GETTY Source: Office of National Statistics squeeze household spending and ginally,” and London and the south
35
Jun Sep Nov Dec reduce retail sales,” said Samuel east will “continue to outperform” the
Tax Year Tombes of Capital Economics. rest of the UK, the report said.
up almost 11 per cent over the year to
November.”
Spending increases in the depart-
ments of health (£0.9bn) and defence
(£0.4bn) contributed to the spiralling
costs, the ONS reported. Health serv-
ice inefficiency is the third worst
among peer countries, the
Organisation for Economic Co-opera-
tion and Development said recently.
The government is at risk of becom-
ing “a very large bank attached to a
hospital,” warned Andrew Lilico of
the Policy Exchange think tank.
And interest payments on the gov-
ernment’s debt increased to £4.5bn in
November from £3bn a year earlier.
Overall public sector debt at the
end of November reached £863.1bn,
excluding financial interventions,
some 58 per cent of GDP – up from
57.1 per cent of GDP in October.
Last month the OBR forecast debts
to reach a peak of 69.7 per cent of
GDP in 2013-14.
“The size of the state needs to
reduce far beyond the 40 per cent fig-
ure desired by government,” com-
mented Philip Booth of the Institute
for Economic Affairs.
”
”
”
CITYA.M. 22 DECEMBER 2010 Eurozone Debt Crisis 7

Spain’s borrowing costs soar CHINESE READY TO HELP EURO

as Portugal faces rating cut

up on the country’s last short-dated adjusted downwards by a notch or
▲

EUROZONE ECONOMY
BY JULIET SAMUEL
SPAIN’S borrowing costs soared
again yesterday at an auction of
short-dated bonds, while the cost of
Portuguese borrowing jumped after
Moody’s put the country’s debt on
review for a downgrade.
Spain sold €3.9bn euros of three
and six-month bills and was forced
to pay interest of 1.8 per cent and 2.6
per cent respectively. Both rates were
auction, just a month ago, when it
paid 1.7 per cent and 2.1 per cent for
equivalent loans.
The yield on Portuguese ten-year
notes, meanwhile, leapt over 6.55
per cent from 6.48 per cent after
Moody’s warned that it has put the
country’s debt on review for a down-
grade A1 long-term and Prime-1
short-term government bond ratings
on review for possible downgrade,
warning that “the rating could be
two” within the next three months.
Moody’s cited Portugal’s growing
borrowing costs as one of the rea-
sons for the review, which will take
three months, and said that the
country’s long-term growth
prospects are hampered by the
immediate need for fiscal cuts. The
ratings agency said: "Fiscal consoli-
dation and private sector deleverag-
ing mean its outlook may no longer
be consistent with an A1 rating.”

CHINA is willing to step in to prop up the euro “if necessary”, a Chinese minister said yes-
terday at the China-EU High Level Economic and Trade Dialogue. Vice-premier Wang
Qishan (pictured) said that China would take “concerted action” to prevent the collapse of
the main currency in Europe, which is the biggest importer of Chinese goods. Trade
between the EU and China has grown by a third since last year, to $434bn so far this year.

E&Y sued over

Lehman audit
remove liabilities from a balance
▲

ENFORCEMENT
BY MARION DAKERS
NEW YORK prosecutors started a civil
lawsuit against accountancy firm
Ernst & Young yesterday over the
company’s audits of Lehman Brothers
ahead of the bank’s collapse.
It is the first government-led legal
action to be brought against those
involved in Lehman’s bankruptcy in
September 2008, which sparked the
global credit crisis.
New York attorney general Andrew
Cuomo is seeking the return of more
than $150m (£97m) in fees that Ernst
& Young made auditing Lehman
between 2001 and 2008, as well as
other damages.
Ernst & Young encouraged Lehman
to engage in “massive accounting
fraud”, according to the lawsuit.
It alleges billions of dollars worth
of Repo 105 transactions, using an
accounting technique to temporarily
sheet, without telling investors, were
used according to the 32-page filing
at the New York Supreme Court.
Lehman justified the deals with
written opinions from Linklaters,
despite the law firm’s advice in 2001
to place limits on the use of Repo 105,
said the filing.
“This practice was a house-of-cards
business model designed to hide bil-
lions in liabilities in the years before
Lehman collapsed,” Cuomo said in a
statement.
“Just as troubling, a global account-
ing firm, tasked with auditing
Lehman’s financial statements,
helped hide this crucial information
from the investing public.”
Ernst & Young did not comment
last night, but the firm is expected to
fight the case.
Lehman’s bankrupcty examiner
Anton Valukas said earlier in the year
criminal charges could still emerge.

Deutsche Bank to pay $554m to

settle US tax shelter fraud case
government effort to crack down on
▲

BANKING
DEUTSCHE Bank admitted criminal
wrongdoing for taking part in fraudu-
lent tax shelters that let clients hide
billions of dollars, and agreed to pay
$553.6m (£357.6m) to settle the case,
US prosecutors said yesterday.
Deutsche Bank said it had already
set aside money to cover the fine and
that it will not affect profits.
The settlement is part of a larger US
banks that help Americans evade taxes.
Prosecutors last year settled with
Swiss bank UBS, which paid $780m in
fines for helping clients with roughly
$20bn in assets hide their accounts
from the US Internal Revenue Service
(IRS). The Deutsche Bank fine repre-
sents the fees the bank earned setting
up tax shelters, the taxes and interest
the IRS was not able to collect and a
civil penalty of $149.8m.
 The Capitalist
8 CITYA.M. 22 DECEMBER 2010
EDITED BY
JULIET SAMUEL
GOT A STORY? EMAIL
thecapitalist@cityam.com

LIB DEMS GEAR UP FOR A BUMPY

RIDE WITH CABLE ON THE ROPES
EVEN as the story of business secre-
tary Vince Cable’s indiscretions
broke late on Monday, the office of
Liberal Democrat leader Simon
Hughes was frantically sending out
press releases.
Surely an example of an impres-
sive scale-up of the famously scatty
Lib Dem media operation?
Er, not quite.
“Don't use King’s Stairs Gardens
for your tunnel, Simon Hughes tells
Thames Water,” announced the
urgent release, with quotes aplenty
from Hughes on the importance of
preserving a local park in
Rotherhithe.
And, to show his appreciation for
the place, Hughes was kind enough
to include a snap of himself on a sled
geared up for a steep downhill ride.
Be careful what you wish for, Simon!
Meanwhile, foreign secretary
William Hague’s office would have
us believe that he was standing by on
Twitter at the very moment Cable
was arriving in Downing Street for
crisis talks.
“Good news that an Iraqi govern-
ment has now been formed –
improves prospects for stability,” he
tweeted at 4.20pm. Radio silence on
the coalition’s state of affairs, alas.

B E ST E V E R S U I T SA L E
S TA R T S S U N D A Y 2 6 TH D E C E M B E R Lib Dem leader Simon Hughes: ready for a speedy slide downhill

But even as Labour MPs flooded
social networking sites with
demands that Cable resign, Lib Dems
were taking a lead from their festive-
minded leader. Jo Swinson, deputy
leader of the Scottish Lib Dems, was
posting pictures of Christmas trees
on Twitter, while the left-leaning
party activists’ group the Social
Liberal Forum was soliciting entries
for its “question time with Vince
Cable”, suggesting that members
might like to query him on university
funding. It seemed it hadn’t quite hit
home that media regulation was, by
then, a little further up the agenda.
SATELLITE TWEETS
Luckily, Paddy Power was a little
more on the ball than the Lib Dems.
Scarcely a day had gone by before the
bookies jumped on the Cable-bashing
bandwagon, announcing that odds
on the business secretary to resign
had shortened from 5/4 to 1/6 after
his comments on Murdoch emerged.
As for those willing to take a really
long punt, you can now bet on what
Cable is likely to be up to on
Christmas Day.
You can get 40/1 for a bet that he’ll
be spotted removing a Sky satellite
dish from his family home, 250/1
that he’ll be editing the Times, and
500/1 that he’ll be invited over to the
Murdochs for a Christmas Day kiss
and make-up.
Still, the prize for the quickest off
the mark has to go to Labour MP Ian
Cawsey, who tweeted at 4pm: “Vince
v Rupert it’s that age old argument
cable or satellite!” Time for a career
move sideways into stand-up, surely?
Until now, that is. The Capitalist
hears that the bank’s chairman Sir
Win Bischoff was less than amused
by his swift recruitment of two of his
loyal lieutenants from Santander UK.
In response to a light-hearted joke
asking whether they’d now be speak-
ing Portuguese in Lloyds board meet-
ings, we’re told Bischoff pulled a
terrible scowl.
And sources close to Lloyds tartly
reminded The Capitalist that the new
recruits “are Spanish anyway”. So
there.
HELLO, GORGEOUS
Given their unpopularity, banking
lobbyists have a reputation as a care-
ful bunch. But it seems it’s not
beyond the goons of the British
Bankers’ Association (BBA) to add a
little colour to the job.
The BBA’s out-of-hours contact
number yesterday was going straight
to voicemail – understandably, per-
haps, given the time of year – but
who was the saucy lady whose
answerphone we’d reached?
“Well, hello,” said the voice,
“You’ve reached gorgeous me. Please
leave your message.”
But who is the gorgeous owner of
this appealing voice? Let us know.
FINN-KISS
Speaking of gorgeous, The Capitalist
hears rumour of a delightful picture
of finnCap chief executive Sam
Smith circulating among brokers.
We’re told she appears clad in a love-
ly Santa-themed mini-dress, posing
under the mistletoe with a similarly

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Incoming Lloyds CEO Antonio Horta-Osorio
BOARDROOM SCOWLS
It seems that not everyone is
entranced with incoming Lloyds
chief executive Antonio Horta-Osorio.
Known as an incorrigable charmer,
the Portuguese Horta-Osorio has
wowed media and bankers alike,
with few at Lloyds having a bad word
to say about him despite his reputa-
tion as a ruthless cost-cutter.
CITY FACES
Following on from The Capitalist’s
notice last week about Winkball, the
online video site, the website held a
successful “faces for the forces” cam-
paign day on Friday.
The aim is to collect 500,000 short
videos of celebrities and members of
the public giving Christmas messages
of support for the armed forces, with
the campaign already over 400,000,
including videos from David
Cameron, Nick Clegg and a variety of
footballers and singers.
And they added an impressive
1,500 to that headcount in just six
hours in the City last week. Among
those taking part were at least a cou-
ple of workers from Lloyds, including
Jo Scott, digital comms manager, and
Neil Barclay. “Happy Christmas to you
all,” said Scott, with Barclay saying,
“Keep the good work going”. Well
worth a few minutes out of the day.
CITYA.M. 22 DECEMBER 2010
Alexon warns
on profits as
the big freeze
hits its sales
RETAIL
▲
BY ALISON LOCK
WOMENSWEAR retailer Alexon yes-
terday said the UK’s big freeze had
hurt the past three weeks’ trading
and could wipe up to £1.5m off its
full-year profit forecast.
The retailer said sales fell 19.9 per
cent for the three weeks to 18
December in stores open for more
than a year – leaving it with a 4.7 per
cent like-for-like sales decline for the
full-year.
Between 40 and 60 of its 990 stores
were forced to close in each of the
three weeks, while its older customer
base had simply stayed at home, its
trading update said.
The profit warning due to snow fol-
lows similar warnings from fellow
retailers HMV, Game Group and JJB.
The revenue slump could also
cause Alexon to breach a bank debt
covenant agreement.
The news is fresh concern for
Alexon after it finally stabilised trad-
ing in November, following a pro-
BAA re-opens runway and apologises for chaos
TRANSPORT
▲
BY PHILIP WALLER
AIRPORT operator BAA last night re-
opened the southern runway at
Heathrow airport in a bid to end the
snow chaos that has left thousands of
passengers stranded.
Airport bosses hope the move will
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longed contraction and a major sales
slump due to snow in January.
Alexon’s shares have lost more
than half their value this year and
yesterday closed 20 per cent lower at
about 12.25p.
Analysts, which had forecast a con-
sensus £2.8m full-year pre tax profit,
downgraded expectations to between
£1.5m and a loss.
Philip Dorgan, an analyst at Altium
Securities, described Alexon as the
“the first casualty of Christmas.”
He said he downgraded the retailer
from a £2.6m full-year profit to an
£0.8m loss after seeing it both start
and end this calendar year with a
profit warning.
Seymour Pierce analyst Kate Calvert
said the news showed how highly
geared Alexon was. “Small changes
can have a big impact,” she said.
Brewin analyst Michael Vassello
said Alexon’s new clothing collec-
tions were performing well. He fore-
cast £1.3m full-year 2011 profit and
£3.5m profit in 2012 but warned it
had missed valuable Christmas sales.
help them to reduce the delays and
cancellations caused by the weather,
with 700 flights axed yesterday and
only a third of services taking off dur-
ing the day.
Despite the runway opening and
snow being cleared from aircraft
docking bays, thousands of passen-
gers were expected to spend another
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Recent snow has
hit retailers hard.
Picture: PA
HAS THE SNOW HIT YOUR CHRISTMAS SHOPPING?
MATT HAWKER | ZENITH BANK
“I wasn’t really affected as I did most of my shopping
early – although I have done less shopping online than
other Christmases.”
GRAEME IRWIN | ALEXANDER DAVID SECURITY
“No, I’m an old fashioned shopper so tend to buy pres-
ents and take them home from work with me. I’ve
done less online shopping than usual though.”
JACKIE ASSER | BOOTS
“I’ve done more shopping on Amazon as I couldn’t
get out, but the amount of money I’ve spent has-
n’t really differed from previous years.”
night camping out at the airport last
night.
BAA’s chief executive Colin
Matthews apologised for the disrup-
tion but warned it could be some time
before normal operations resume.
He said BAA was arranging more
hotel rooms, setting up marquees for
stranded passengers, asking its office
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Snow Disruption 9
ANALYSIS l Alexon
19
17 p
15
12.25
21 Dec Weather is just
13
11
the final straw
27 Sep 15 Oct 4 Nov 24 Nov 14 Dec
ANALYSIS l HMV IT isn’t just the snow that has
60 p
27.00 stymied Alexon.
50 21 Dec True, the combination of closed
40 stores and customers staying at
home has been an immediate issue.
30 But for too long Alexon’s clothes
27 Sep 15 Oct 4 Nov 24 Nov 14 Dec haven’t been the indispensable buy
needed to haul shoppers in during
ANALYSIS l Game Group the recession.
80 p 65.50 It has also been crippled by mil-
21 Dec
lions of pounds of lease commit-
70
ments on shops that have closed or
60
have been losing money. The past
two years are a litany of falling sales
27 Sep 15 Oct 4 Nov 24 Nov 14 Dec and margins that only stabilised in
the four months to November.
This underlying weakness is
what extra pressures such as the
Interviews by Tom Chatfield current snow exposes.
Though its interim sales tiptoed
into the black at 0.4 per cent
growth, it will lose far more than
that – after all, the big freeze at the
start of the year saw Alexon’s inter-
im sales fall 14.3 per cent year-on-
year.
It is still to feel the benefits of a
turnaround strategy that has seen
new design teams hired, new cloth-
ing collections launched and £20m
capital raised to pay off the leases.
But these lost sales alone have
the potential to strip £1.5m from its
full-year profit forecast – half the
£3m hoped for.
That’s a massive impact from a
short period of time and a sign that
until Alexon can show sustained
strong sales, it is out in the Arctic in
investors’ terms.
BOTTOMLINE
Analysis by Alison Lock
staff to turn up for duty to help trav- space at Heathrow to store the quanti-
ellers and bringing in extra contrac- ty of de-icer needed to tackle the prob-
tors to clear snow. lems had emerged as a key cause of
Prime Minister David Cameron said the travel chaos that has hit thou-
the disruption was understandable sands of passengers at the UK’s biggest
given the severe weather, but said he airport days before Christmas.
was frustrated that it was taking so Elsewhere, international train oper-
long for the situation to improve. ator Eurostar said it hoped to run a
It is understood that a shortage of near normal service today.
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 10 News
AstraZeneca
counts cost
of risky drug
▲
PHARMACEUTICALS
BY MARION DAKERS
DRUGS company AstraZeneca has
binned its experimental infant lung
disease drug following objections
from US regulators, costing the firm
upwards of £286m.
The company said yesterday its
motavizumab drug would be discon-
tinued, after Food and Drug
Administration (FDA) advisers asked
for more information on trials in June.
The costs are linked to intellectual
property and ongoing research, but
AstraZeneca said yesterday the sum
will be excluded from core financial
figures and should have no impact on
earnings per share for 2010.
The news comes a week after
AstraZeneca’s heart medicine Brilinta
was also blocked in the US, though
the drug has been approved in
Europe, leading to questions about
the firm’s risky strategy.
“All pharmaceutical companies are
exposed to regulatory hurdles, but at
least firms like GlaxoSmithKline have
experience in emerging markets and
in consumer products to offset some
of the risk,” said Seymour Pierce ana-
lyst Mike Mitchell. “It also shows the
inability of the FDA to naturally
respond to the demands and require-
ments of drug developments.”
A spokesperson for AstraZeneca
said investors are aware of the risks of
a company focused on experimental
drugs. “We are confident we can cre-
ate value for shareholders, and are
doing a lot of work around under-
standing the regulatory environment
better,” she said.
ANALYSIS l AstraZeneca
3,400 p
3,300
2,953.50
21 Dec
3,200
3,100
3,000
2,900
20 Sep 15 Oct 4 Nov 24 Nov
CITYA.M. 22 DECEMBER 2010
NEWS | IN BRIEF
Anglo to restructure debts
Bondholders at Anglo Irish Bank have
voted to support a restructuring of the
bank’s debts. More than 90 per cent of
holders of two sets of outstanding
bonds have agreed to take part in the
restructuring in exchange for an offer of
20 per cent of the face value of their
claims. The exchange, which offers less
AstraZeneca chief executive David Brennan said 2010 earnings are on track Picture: REUTERS
ANALYST VIEWS: WHAT DOES THE NEWS MEAN
than market value for the bonds, is
being seen as a test case for bank debt
restructurings.
BG appoints new finance chief
Former Vale finance chief Fabio de
Oliveira Barbosa is to join BG Group as
FOR ASTRAZENECA? chief financial officer. Long-standing
Interviews by Marion Dakers
finance chief Ashley Almanza will stand
down from the UK-based oil and gas
SAVVAS NEOPHYTOU | PANMURE GORDON company in March. Oliveira Barbosa will
“
help to spearhead the firm’s expansion
in Latin America.
It’s never a good sign when a pipeline asset is with-
Ofcom warns BT on competition
”
drawn, but this is financially fairly painless. It’s more evidence Communications regulator Ofcom has
of AstraZenca’s struggle with its pipeline delivery. warned BT it has infringed on competi-
tion law over its wholesale calls prices.
The telecoms giant strongly denies the
MIKE MITCHELL | SEYMOUR PIERCE claims it squeezed margins by setting
“
the price charged to other providers for
its wholesale service at a level that
It shows that AstraZenca’s strategy is higher risk than would hit other operators between July
2008 and April 2009.
”
previously thought. Regulatory hurdles are hitting hard, and it
has less experience in emerging markets than peers. TD Bank buys Chrysler Financial
Toronto-Dominion Bank is buying
Chrysler Financial for $6.3bn (£4.1bn).
JEREMY BATSTONE-CARR | CHARLES STANLEY Yesterday’s cash deal, which includes
“
about $400m in goodwill, will make
Canada’s second largest bank one of
The price drop since the Brintilla news was more North America's biggest bank-owned
auto lenders. The bank won't issue any
”
sentiment-led than due to a change in earnings. But the deci- stock to fund its purchase from
14 Dec sion raises questions about medium-term options. Cerberus Capital Management.
CITYA.M. 22 DECEMBER 2010 News 11

The SFO’s Richard Alderman said BAE should pay the fine issued by Judge David Bean (inset) asap

BAE fined over

Tanzania deal
The judge wanted to know what the
▲

DEFENCE
BY PHILIP WALLER cash paid to the adviser had been used
for before deciding on the fine.
ARMS group BAE Systems yesterday “The victims of this way of obtaining
received a £725,000 penalty after a probe business, if I have correctly analysed it,
into allegations about an arms sale to are not the people of the UK, but the peo-
Tanzania, but a judge criticised a deal it ple of Tanzania,” Bean said.
struck with the Serious Fraud Office BAE acknowledged paying commis-
(SFO) to end the investigation. sion money to the agent, but denied cor-
A London court handed down the sen- ruption. “The company accepts the
tence, including a £500,000 fine plus decision of the court and will abide by
costs of £225,000, to BAE for failing to it,” BAE said.
keep proper records of payments to a After the sentencing, SFO director
Tanzanian marketing adviser. Richard Alderman said: “I expect BAE to
But Justice David Bean criticised a plea honour the agreement. I expect the com-
bargain deal with the SFO, under which pany to pay it as quickly as possible.”
it avoided admitting to claims it made
payments to win a £28m radar deal with ANALYSIS l BAE
Tanzania, which it denies. 370 p
Under the deal, BAE agreed to pay a
£30m fine and last month pleaded 360
335.10
guilty to a charge of breach of duty over 21 Dec
350
keeping of accounting records covering
payments made to the adviser. 340
Bean said the agreement was hastily
drafted and he was unable to “sentence 330
(BAE) for an offence which the prosecu-
tion failed to charge”, such as false 320
accounting or conspiracy to corrupt. 27 Sep 15 Oct 4 Nov 24 Nov 14 Dec
 12 News
Watchdog relaxes
Rolls’ engine checks
▲
AEROSPACE
EUROPEAN air safety regulators are to
relax tight inspections on Rolls-Royce
engines involved in a blow-out on a
Qantas A380 superjumbo last month.
The European Aviation Safety
Agency (EASA) is to lift some checks
on Rolls’ Trent 900 engines after an
engine on a Qantas flight to Sydney
from Singapore failed on 4 November.
EASA ordered all three operators of
Rio Tinto chief exec-
utive Tom Albanese
is on the acquisi-
tion trail again fol-
lowing its takeover
of Canadian alu-
minium group
Alcan in 2007
Picture:
Micha Theiner
/City A.M.
the A380 – Qantas, Singapore Airlines
and Lufthansa – to do the checks
after the accident, which forced the
Qantas jet to return to Singapore.
But investigators have since gath-
ered enough data on the likely cause
of the incident to enable them to
reduce the inspections, EASA said.
The agency is expected to order
checks after engines had undertaken
200 flights and again after the next
100, rather than every 20 outings.
Rio Tinto is in
talks to raise
Riversdale bid
▲
MINING
BY MARION DAKERS
RIO TINTO is in talks with Australian-
listed coal miner Riversdale about
raising its A$3.8bn (£2.5bn) friendly
takeover bid, sources close to the
companies said yesterday.
Riversdale suspended its shares in
accordance with Australian rules yes-
terday, reporting that it was set to
make an announcement “about a
possible control transaction”.
The company has requested a trad-
ing halt until the markets open on
Thursday, meaning a statement on a
new offer could appear today.
Rio is understood to be considering
an increased bid of A$16 a share, up
from the offer of A$15 on the table
since the start of the month, though
the firms are still discussing the
details.
The new price would be a 13.5 per
cent premium to Riversdale’s close on
3 December, the company’s last trad-
ing price before news of Rio’s interest
was announced.
Some reports have also named Tata
Steel, which owns a 24 per cent stake
in Riversdale, and Anglo American as
other potential bidders for the com-
pany, though Riversdale has only
named Rio so far. Both declined to
comment yesterday.
ADVISERS
MACQUARIE BANK
MACQUARIE Bank’s resources team in
Australia is advising Rio Tinto on its
efforts to take over Riversdale.
The Antipodean bank, which has
offices in the City, has long acted as
adviser for the mining giant. It coordi-
nated and underwrote its $15.2bn
(£9.8bn) rights issue in 2009 and
worked at Rio’s side during BHP
Billiton’s $189bn merger offer in
2008.
This year, the resources team has
worked as joint sponsor for Canadian
CITYA.M. 22 DECEMBER 2010
Spokespeople for Rio Tinto and
Riversdale also declined to comment.
Investors said Rio Tinto might still
turn to rivals to mount a joint ven-
ture rather than a full takeover to get
a deal past Riversdale’s major share-
holders, which also include Brazilian
steelmaker CSN and US Investment
firm Passport Capital.
“Rio are really long on thermal coal
but short on coking coal so this
would propel them into the big
league over time into coking coal,”
said Constellation Capital
Management analyst Peter Chilton. “I
think it could be some kind of joint
venture or arrangement like that
rather than an out-right purchase.”
Shares in Rio Tinto closed 2.5 per
cent up at £45.32 yesterday, in line
with a broader increase in mining
stocks in the FTSE 100.
ANALYSIS l Rio Tinto
4,600 p
4,537.00
21 Dec
4,400
4,200
4,000
3,800
3,600
3,400
27 Sep 15 Oct 4 Nov 24 Nov 14 Dec
energy firm SouthGobi during its
C$463m (£294.3m) global offering
and secondary listing in Hong Kong.
Several other firms including Real
Gold and UC Rusal have used
Macquarie to help them raise funds
from the Hong Kong market.
The bank also helped create the
world’s fourth-biggest gold miner ear-
lier in the year, when it advised Lihir
Gold during its A$24.5bn merger with
Newcrest Mining.
Macquarie also managed African
Mineral’s £80m private placement
earlier this year.
The bank has also worked with
Lloyds Banking Group, QBE and the
Agricultural Bank of China during
fund raisings – the latter, at A$19.2bn
(£12.4bn), breaking the record for the
world’s largest IPO.
UBS is advising Riversdale.
CITYA.M. 22 DECEMBER 2010 News 13

Hurd’s HP exit
probed by SEC
service provider Electronic Data Systems
▲

TECHNOLOGY (EDS) in 2008 before it was publicly

BY ALISON LOCK
US REGULATORS are investigating alle-
gations around former Hewlett-
Packard (HP) chief executive Mark
Hurd’s exit from the company, it was
announced yesterday.
The Securities and Exchange
Commission (SEC) is probing allega-
tions that Hurd shared inside informa-
tion with former HP events contractor
Jodie Fisher, whose sexual harassment
accusations led to an expenses investi-
gation that caused him to resign.
The SEC is looking into all the allega-
tions, including the internal inquiry
that led to his departure. The investiga-
tion may not result in a formal claim
against HP or Hurd, however.
“HP is cooperating fully with the SEC
on its investigation,” a HP spokesperson
said in the company’s only statement
on the matter so far.
HP has reportedly given SEC investiga-
tors a letter sent by Fisher to HP’s board
detailing the claims against Hurd.
The insider trading claims allege that
Hurd told Fisher about HP’s plans to buy
known. Fisher has denied that she used
the information or profited from it.
Hurd has always denied having an
inappropriate relationship with Fisher
and HP’s board conducted an internal
probe that concluded Hurd didn’t vio-
late the company’s sexual-harassment
policy. But when investigating the alle-
gations, the board found that Hurd
had filed misleading expense claims to
secure money for Fisher.
Hurd’s resignation in August caused
a backlash at HP as shareholders
responded furiously to the decision. He
is credited with building the company
into a tech giant – not least by engi-
neering the $13.9bn (£9bn) takeover of
EDS. To add to the controversy, Hurd
was immediately appointed co-presi-
dent at Oracle, HP’s major rival, after
resigning.
“Mark acted properly in all respects,”
said a spokesman for Hurd. “It is under-
standable that the SEC is looking into
the events surrounding Mark’s depar-
ture, which was followed by a precipi-
tous drop in the value of HP’s stock.”

The SEC is investigating ex-HP chief executive Mark Hurd’s exit from the company Picture: GETTY

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 14 News CITYA.M. 22 DECEMBER 2010

Toyota pays BEST OF THE BROKERS

ANALYSIS l Easyjet
480 p
428.90
EASYJET
Morgan Stanley rates the airline “equal-
NEWS | IN BRIEF
US Treasury to sell more of AIG
The US Treasury plans to sell a large
piece of its stake in American

£21m fine for

460 21 Dec weight” with a target price of 510p. The
broker hopes to see evidence of the firm’s International Group (AIG) in two stock
440 offerings next year. It would sell any
recent operational shake-up for the rest of remaining stock in AIG in 2012. The
420
the financial year, starting with an interim government will own 92.1 per cent of
400
management statement on 20 January. It AIG after a recapitalisation plan closes
by the end of first quarter, and perhaps

car recalls
380 believes EasyJet can double its earnings
as soon as 31 December. The sale would
360 per share in 2011 simply by removing one- mark a major step in getting the govern-
off costs. ment out of its investment in AIG, which
27 sep 15 Oct 4 Nov 24 Nov 14 Dec received a $182.3bn (£117.9bn) bailout
package during the financial crisis. The
ANALYSIS l Rolls-Royce 650.00 ROLLS ROYCE stock sale will help the government
660 p 21 Dec Citigroup rates the engineering firm “buy” make a profit on the bailout if the offer-
AUTOMOTIVE ment that accompanied the late ing is roughly $30 per share or higher.
▲

night announcement in Washington

BY HARRY BANKS
TOYOTA has agreed to pay the maxi-
mum fine of $32.4m (£20.95m) relat-
ed to two US probes into its handling
of a spate of vehicle recalls which
hurt sales and tarnished its once
impeccable reputation for quality.
The settlements conclude a tumul-
tuous year for the world’s largest
automaker over the recalls of 11m
vehicles in the US and disclosure of
problems blamed by safety advocates
for hundreds of crashes and the
deaths of dozens of people.
The crisis prompted unprecedented
government scrutiny over unintend-
ed acceleration complaints, a total of
three heavy fines, and a loss of pres-
tige and consumer confidence in
Toyota’s best-selling cars.
“I am pleased that Toyota agreed to
pay the maximum possible penalty
and I expect Toyota to work coopera-
tively in the future to ensure con-
sumer safety,” Transportation
secretary Ray LaHood said in a state-
on Monday.
Toyota said it agreed to the
National Highway Traffic Safety
Administration (NHTSA) fines with-
out admitting any violation of law.
Toyota said separately yesterday
that it planned to boost its group-
wide global vehicle sales by three per
cent to 8.61m units in 2011, led by
nine per cent growth in the US to
1.90m vehicles.
Toyota was the worst performer
among major automakers in the US
this year, with a rise of just 0.2 per
cent in its single-biggest market,
which expanded 11.2 per cent in the
year to date. The stock has fallen
more than 15 per cent this year, com-
pared with a flat performance for
Japan’s main index – the TOPIX.
Jesse Toprak, a senior analyst with
Truecar.com, said settlements with
the government are a good first step,
but that regaining consumer trust in
a hotly contested US market would
take years.
with an upgraded target price of 760p fol- The Treasury’s stake is now worth about
640
lowing recent share underperformance.
$90bn. It spent $49.1bn for that stake.
620 The broker has raised its earnings per
share estimates, excluding the effect of the Apple TV sales hit the 1m mark
600 Trent 900 engine problems, to reflect a Apple expects sales of Apple TV to top
1m units this week, showing that the
faster-than-expected recovery in civil aero- device is gaining traction in bringing the
580
space. It expects 2012 earnings per share Web to TV. Apple also said yesterday
of 54.14p. that iTunes users are now renting and
27 sep 15 Oct 4 Nov 24 Nov 14 Dec buying more than 400,000 TV shows
and more than 150,000 movies per day.
ANALYSIS l Ladbrokes LADBROKES “One million is a real benchmark,” said
Daniel Ernst, an analyst with Hudson
145 p Goldman Sachs rates the gambling group Square Research. “To put it in perspec-
“sell” with a six-month target price of 125p. tive, they are within shooting range of
140
The broker believes that a reported trans- some of the smaller cable operators like
action with 888 would increase Ladbrokes’ Cablevision with 3m subscribers.”
135
125.40 scale online and would broaden its geo-
21 Dec Xcite shares surge on discovery
130 graphical exposure, but would not deliver Shares in AIM-listed Xcite Energy
an improvement in its key sportsbook sales. jumped almost 20 per cent yesterday
125
It remains bearish on the firm in light of after tests at its well at the Bentley field
the uncertain outlook for UK retail. in the North Sea returned more than
27 sep 15 Oct 4 Nov 24 Nov 14 Dec 2,000 barrels of oil. The results show
the well is both commercially viable and
To appear in Best of the Brokers email your research to notes@cityam.com has a reservoir at the top end of the
company’s expectations, it said.

CITY MOVES | WHO’S SWITCHING JOBS Edited by Juliet Samuel in association with

Transnational Auditors David Benson. be in charge of shaping the firm’s risk

RSM Tenon
Ruth Hiley (pictured) has joined RSM Tenon as
the accountancy firm’s new head of out-
sourced payroll services. Hiley has a back-
ground in bureau management: she has
worked at Moorepay, the UK’s largest payroll
services firm, and has also been head of the
payroll teams at BDO Stoy Hayward and PKF.
She will be responsible for helping businesses
outsource and reduce their payroll costs. She
will be reporting to the national head of out-
sourcing, Margaret Laidlaw.
David Maxwell, a partner and board
member of Grant Thornton, the finan-
cial services firm, has been appointed
the chair of the Transnational Auditors
Committee – a commitee of the
International Federation of
Accountants. The appointment will be
in effect from January for a term of
two years.
Nomura
Nomura Holdings has appointed a new
chairman of risk and regulatory affairs:
Benson has been chief risk officer for
the firm since November 2008 and has
worked at Nomura for 11 years in total.
He will now move into this newly creat-
ed role in order to draw together
Nomura’s regulatory planning services
and will supply advice on legislative
developments. He will remain on the
company’s board.
Lewis O’Donald will succeed Benson
as chief risk officer. He moves over from
Morgan Stanley, where he has spent 18
years in risk management roles. He will
appetite.
Equity Development
Investment research company Equity
Development has appointed Gilbert
Ellacombe as head of corporate.
Ellacombe brings more than 25 years of
capital markets experience to the firm,
having previously worked at both
Panmure Gordon and Kaupthing Singer
& Friedlander. He will be responsible for
expanding the corporate client base
and equity financings.

To appear in CITYMOVES please email your career

updates and pictures to citymoves@cityam.com SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT +44 (0)20 7557 7245
morganmckinley.com

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 16 Investment | Foreign Exchange CITYA.M. 22 DECEMBER 2010

THE BULLISH
ARGUMENT Currency wars
FOR THE EURO
BORIS SCHLOSSBERG
and rate hikes:
another year
DIRECTOR OF CURRENCY RESEARCH, GFT

A
S WE approach 2011, no currency is less
liked than the euro. Only yesterday, the
euro was at all-time lows against the
Swiss franc with the pair sliding towards
the SFr1.2500 level. It appears as though all of
Europe is trying to exchange the single currency
in favour of the Swiss franc, creating a massive
one-way move in the pair.
In fact, sentiment has become so extreme in
the market that you would be hard pressed to
find even a few currency strategists who are
in emerging FX
bullish on the euro. No doubt the fear in the mar-
ket is legitimate. The problem of sovereign debt
financing in the periphery economies continues
It will be more of the remain competitive among the emerging
markets, currency wars have been, and
to haunt the single currency as we enter the new
year, with Spain remaining the primary worry. If same for developing will remain, on the agenda.
China’s attitude to yuan revaluation
it becomes the next Greece or Ireland the possi-
bility of a Eurozone fracture could quickly countries’ foreign and internationalisation will be central to
how emerging market currencies move
become an ugly reality. As the region’s fourth next year. Many countries are feeling the
largest economy, Spain is simply too large for exchange rates, pressure to keep their currency cheap in
the EU to rescue by itself. order that their exports remain competi-
However, there may be a white knight on the writes Jessica Mead tive relative to China.
horizon. Yesterday, Chinese vice-premier Wang Given that emerging markets are strug-
Qishan said his nation had taken “concrete gling with inflationary pressures and
action” to help the EU with its debt problems. appreciating currencies, it will be difficult

C
With more than $2.5 trillion (£1.6 trillion) of for- HEAP money and attractive returns for authorities to bring both under con-
eign reserves, China is the one actor on the glob- have seen investors plough their trol. After all, the standard response to
al economic stage that could stop the euro’s slide money into emerging market cur- higher inflation is to hike rates, but this
dead in its tracks. rencies. Yet hot money inflows have will only serve to encourage hot money
Why would China want to help the EU? forced currency appreciation despite inflows, especially in a strong growth envi-
Simple. It has both economic and political rea- authorities’ best efforts at capital controls ronment.
sons to do so. The EU is China’s largest trade and other methods of weakening their This week, we take a look at the Bric cur-
partner and China is the region’s second-biggest exchange rates. rencies as well the South Korean won,
export market, with bilateral trade increasing Thanks to highly accommodative mone- which has been in the news as a result of
more than 33 per cent in the past 11 months to tary policy in the West and efforts to geopolitical pressures.
November from a year earlier.
Yet political considerations may be even more EMERGING MARKET FX | FOCUS EMERGING MARKET FX | FOCUS
important than the economic concerns. As a ris-
ing global power, China is loath to see a return to RUSSIAN SOUTH
a unipolar world with the dollar again the only sion about the CBR [Russian central month, perhaps partly in response to
medium of exchange for trade. Therefore the ROUBLE KOREAN
bank] intervention policy. We increased geopolitical risk on the
Chinese are likely to do everything in their power WON
expect the rouble to catch up mate- Korean peninsula. Traders see this
to preserve the euro as a viable alternative to
the buck. This is why assuming that the end of rially when the redemptions are out only as a short-term risk, with RBC
the euro is near may be a mistake. of the way.” Capital Markets’ analysts continuing
Boris Schlossberg and Kathy Lien are direc- David Hauner, emerging Europe He also points out that the rouble Heated exchanges and escalating “to see significant downside to dol-
tors of currency research at GFT. Read commen- strategist at Bank of America- has held up well throughout the tensions were not able to prevent the lar-won when tension with the north
tary at www.GFTUK.com/commentary or e-mail Merrill Lynch, makes the Russian Eurozone sovereign debt crisis, South Korean won from making has eased”.
borisandkathy@gftuk.com
rouble one of his strongest convic- thanks to the country’s balance gains against the US dollar in 2010. A bank levy on banks’ non-deposit
tion calls for 2011, provided that oil sheet strength. Over the past six months, the won FX debt, announced on Sunday, is
prices remain well supported. “The Higher oil prices and the likelihood also delivered the best performance expected to weigh on the won
rouble has lagged commodities and that monetary policy will soon be among Asia’s 10 most-traded curren- against the dollar in early 2011, says
equities since September due to tightened will support the value of cies excluding the yen. But the won Standard Chartered. But it sees
large redemption flows and confu- the rouble. has weakened slightly in the last scope for a rally later in the year.

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CITYA.M. 22 DECEMBER 2010 Investment | Foreign Exchange 17

EMERGING MARKET FX | FOCUS THE

INDIAN
RUPEE
But although the expectation is for TIPSTER
a stronger rupee, India’s lower
exposure to the global economy and THE POUND
relatively weak public finances sug-
gest it may underperform other
HOLDS THE
The Indian rupee has strengthened
some 2.3 per cent against the US
regional currencies, says Nick
Chamie at RBC Capital Markets.
UPPER HAND

EMERGING MARKET FX | FOCUS
CHINESE
YUAN
The Chinese authorities will
approach FX policy in 2011 in the
same way they have always done:
slowly, steadily and with a strong
Emerging markets try dislike of external interference.
to keep a lid on FX It was a momentous step in June
appreciation when China announced that it
would start to let the yuan revalue
Picture: GETTY
and six months on, the dollar-yuan
is trading at 6.67 yuan, a rise of
2.47 per cent since depegging.
Yet a government think-tank urged
China to widen the yuan's trading
band against a basket of currencies
in 2011.
With concerns over asset bubbles
forming, Beijing has already hiked
borrowing rates and reserve rate
requirements. Standard Chartered
economist Jin Yang says: “We think
that the yuan will appreciate by as
much as 6 percent next year – so
faster than this year.”
dollar over the course of 2010. The With the governor of the Reserve
expectation among analysts is for
Bank of India Duvvuri Subbarao
the rupee to remain within a trad- stating that inflation is still above
ing band, never falling below 47.20 his tolerance level, analysts predict
to the greenback and never that benchmark rates will rise to 7
strengthening beyond 43 rupees – a per cent by end-2011. This should
level predicted for March 2011. encourage flows into the rupee.
EMERGING MARKET FX | FOCUS
BRAZILIAN prospects have made Brazilian assets
REAL
OR
DEM
E PROGRESS
O very attractive.
Many economists see the central
bank hiking rates – the consensus pre-
dicts rates to rise to 12.25 per cent by
The real is still described by Goldman the end of 2011. In the near-term, the
Sachs as the most overvalued curren- real is not in favour – Brazilian finance
cy in the world, in spite of capital con- minister Guido Mantega has stated
trols imposed earlier this year. that the government is “ready to take
Overseas investors have flooded into new steps” to contain real gain and
Brazilian equities and debt, driving up
that the currency war will continue
the real by 36 per cent against the due to the European debt crisis. BNP
dollar since the start of 2009. Rates Paribas’ end-2011 forecast is 1.63 real
of 10.75 per cent and strong growth to the dollar.
ANALYSIS l The appreciation of Asian currencies has been largely
due to dollar weakness
118 115
Broad dollar index (RHS) ADXY index (LHS)
114 111
107
110
103
106
109
102
Source: Barclays Capital
95
Jun 05 Jun 07 Jun 09
S
IGNIFICANTLY worse-than-expected
public sector borrowing levels from the
UK have somewhat eclipsed the marginal
undershoot in German consumer confi-
dence. As a result, the common currency is push-
ing higher against the pound. But for as long as
the ratings agencies remain supportive of British
efforts at fiscal reform then there’s a good argu-
ment to suggest sterling still has the upper hand
in the longer term. The current IG Index price on
euro-sterling is £0.8491-£0.8493.
The rating agencies certainly aren’t getting
into the festive spirit with threats of a further
downgrade for Portugal. Markets may have
taken this in their stride so far, but it does
heighten the risk that the common currency
could be poised for another run lower early in
the new year. One big beneficiary however
seems to have been the Swiss franc. Euro-
Swiss franc is now trading at fresh all-time
lows as a result. The current IG Index price for
euro-Swiss franc is SFr1.2620-SFr1.2624.
The US dollar has generally been in a down-
trend for around six months against the South
African rand. This is mainly due to continually
increasing precious metals prices and commod-
ity exports. Gold and platinum make up a fifth
of South Africa’s exports and there looks to be
little stopping this bull-run from continuing.
Capital Spreads is quoting R6.815-R6.830 for
dollar-rand.
It is amazing to think that a pound used to
get you Au$3 a few years back, but Australia
has proven very robust throughout the world
slowdown. There are fears that Australia is
going to slow down soon, however. This could
lead to a weaker Aussie. But inflation is rising in
the UK and we could see a hike in rates sooner
than people expect. Spreadex offers a spot
price on sterling-Australian dollar at
Au$1.5500-Au$1.5515.
The Aussie dollar is just below parity with
the greenback; the Aussie looks set to make
another attempt at its all time high of around
$1.0180. Capital Spreads quotes $0.9975-
$0.9977 for Australian dollar-US dollar.
Donata Huggins

FOREX ANALYST PICKS

FOREX STRATEGIST FOREX STRATEGIST FOREX STRATEGIST
ILYA SPIVAK DAVID RODRIGUEZ JOEL KRUGER

My pick: Stay long dollar-yen
Expertise: Global macro
Average time frame of trades: 1 week-6 months
I bought dollar-yen at ¥83.08 in mid-November expecting the pair to
rise along with US Treasury yields after the size of the Federal
Reserve’s QE matched expectations and opened the door for profit-
taking. Prices pulled back to support at the bottom of a rising channel
set from November’s swing low and I expect a rebound from here to
lead prices up toward my initial target at ¥85.87 as yields march high-
er. A stop-loss will be activated on a daily close below ¥81.72.
My pick: Short euro against US dollar in the New Year
Expertise: System trading
Average time frame of trades: 2-10 weeks
Limited liquidity in the holiday-shortened week ahead warns of choppy
and unpredictable price movements. As such, I will stay flat until traders
get back to their screens in the new year. However, one of my top trades
for next year remains buying the US dollar – especially against the at-
risk euro amid a continued fiscal crisis. Traders should look to January
for what promises to be another eventful year for the euro-US dollar cur-
rency pair.
My pick: Long euro-Swiss franc at SFr1.2750
Expertise: Classic technical analysis
Average time frame of trades: 1 week-6 months
The market has come under some intense pressure since breaking below
SFr1.3000 – the latest falls resulted in a drop to record lows below the
September bottom of SFr1.2765 . We still retain a longer-term construc-
tive outlook at current levels. With daily studies once again looking over-
sold, further declines below SFr1.2700 are not expected to be sustained.
Look for a break and daily close above SFr1.3000 to help confirm bias
and accelerate gains. Target SFr1.4000 with a stop at SFr1.2390.
 Markets&Investment
18 CITYA.M. 22 DECEMBER 2010

LONDON’S TOP 250

Company Name Closing Price Price Change 52wk high 52wk low Company Name Closing Price Price Change 52wk high 52wk low Company Name Closing Price Price Change 52wk high 52wk low Name Closing Price Price Change 52wk high 52wk low
(p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p) (p)Company (p) (p) (p) (p)

3i Group 335.25 4.50 335.25 250 COBHAM 206.50 3.25 276 192.25 John Wood Group 554.50 16 554.50 293 RSA Insurance Grp 125.75 1 136.50 114.75
3i Infrastructure 120 2 121.50 99.25 Colt Telecom 131.50 0.75 142.50 109 Johnson Matthey 2077 29 2077 1446 SABMiller 2279 28 2279 1650
A.B. Foods 1149 21 1149 819 Compass Group 584 1.50 588.50 425 Jupiter Fund Man 302.50 -2.50 310 180.25 Sage Group 274.75 -0.25 289 220
Aberdeen Asset.Man. 202 -1 205 112.75 Cookson Group 644.50 5 644.50 367.50 Kazakhmys 1612 34 1630 965 Sainsbury (J) 376 3 395 313
Admiral Group 1553 -8 1693 1114 Croda International 1595 18 1610 751 Kesa Electricals 162 -2 174 99.25 Schroders 1828 -3 1831 1116
Aegis Group 139.75 0 145.50 103.50 Daily Mail & Gen 568.50 7 568.50 414.25 Kingfisher 258.25 1.25 259 198.50 Schroders NV 1435 -5 1440 929.50
Afren 143 3 143.25 79 Davis Service 424 -2.25 435 360.25 Ladbrokes 125.50 -0.50 162.75 123.50 Scot.& Sth. Energy 1203 3 1203 1010
African Barrick Gold 595 2 670 503 De La Rue 837 -12.50 1005 549.50 Lancashire 543.50 3 647 424 Scottish Mortgage 709 7 709 475
Aggreko 1524 -46 1685 882 Debenhams 70.75 0 80 53 Land Securities 663 8 696.50 545 SEGRO 296.50 1.25 352 250.25
Alliance Trust 375 1 375 293.50 Derwent London 1536 -7 1605 1208 Legal & General 98.75 -0.25 106.25 69.75 Serco Group 585.50 -2 651 494.25
Amec 1168 9 1168 733.50 Diageo 1199 3 1199 1000 Lloyds Banking Grp 68.50 1.50 77.50 46.50 Severn Trent 1461 9 1468 1072
Amlin 401.75 6 433 357.25 Dixons Retail 23.25 0.50 38 22.75 Logica 129 1 148 101.75 Shaftesbury 447 1.25 460 349.25
Anglo American 3272.50 131 3272.50 2254 Domino’s Pizza 557.50 -3 560.50 293.25 London & Stamford Property Ltd.130.75 0.75 132 110.25 Shire 1517 1 1567 1198
Antofagasta 1594 47 1594 761 Drax Group 377 6.50 444 326.25 London Stock Ex. 840 1.50 840 544 SIG 122.50 -0.50 137.75 90.75
Aquarius Platinum 345 6.50 458 227 DS Smith 204.75 1.50 210 104 Lonmin 1915 26 2157 1355 Smith & Nephew 661 4.50 696.50 537.50
ARM Holdings 403.50 11.50 414.50 173.25 Dunelm 537.50 9.50 550 325.25 Man Group 296.50 -0.25 327.50 202
Smiths Group 1270 19 1285 978
Ashmore Group 347.75 2.75 383.75 218 easyJet 429 1.50 496.50 348.50 Marks & Spencer 370 -3 427.50 323.50
Soco International 363.25 1.25 484.25 292
Ashtead Group 169 4.50 169 75.50 Edin.Inv.Tst. 452.25 5.50 464.25 360 Meggitt 375.50 5.75 375.50 251.50
AstraZeneca 2953.50 16 3385 2732 Electrocomponents 269.75 1.25 279.50 161.75 Melrose 307.50 1.75 307.50 162 Spectris 1320 24 1320 706.50
Atkins (WS) 727.50 15 792.50 556.50 Enquest 140.75 2.25 146.50 89.25 Mercantile Inv Tst 1091 17 1091 828 Spirax-Sarco 1950 -10 1987 1200
Autonomy 1528 8 1975 1271 Essar Energy 585 3 586 383 Michael Page 553.50 -3 556.50 346.50 Spirent 150 0 160.25 97.25
Aveva Group 1602 14 1602 980.50 Eurasian Nat Res 1031 31.50 1266 818 Micro Focus 406 0.25 546.50 276 Sports Direct 153.50 -0.50 154 92.25
Aviva 395 5 423.50 294.25 Euromoney Inst. 687 -2.50 727 435.75 Millennium & Cop. 558.50 0.50 570 359 St James’s Place 266.50 -2 292 204.25
AZ Electronic Materials SA (WI)299.50 1.50 301 249 Experian Group 813 0 813.50 572 Misys 317.50 3.25 317.50 201.50 Stagecoach Group 209.75 1.75 224 160.75
Babcock International 563.50 3.50 635 492.75 Ferrexpo 407.25 10.50 407.25 184 Mitchells & Butlers 346 -4.25 360 247.50 Standard Chartered 1765 12.50 1950 1351.75
BAE Systems 335 7.50 388.75 294.75 FirstGroup 396 0.75 426 336 Mitie Group 231.50 -0.50 241 188.75 Standard Life 215 4.50 236 173
Balfour Beatty 315.75 2 315.75 229.75 For.&Col.Inv.Tst 308.75 3.75 308.75 251.50 Mondi 509.50 24.50 557.50 323.75 Supergroup 1261 -73 1638 535
Barclays 268.25 7.25 383.25 255.25 Fresnillo 1594 47 1605 669.50 Monks Inv.tst. 359 3 363 271 TalkTalk 167 -1.50 168.25 108.50
Barratt Development 86.75 1.75 142 70 G4S 255.50 2.75 283.50 237.75 Morrison (Wm) 266.50 2 306.25 257.50 Talvivaara Mining 569 9 581 342.50
BBA Aviation 214.25 -1 217.25 156.50 Genesis E.m.f. 547 10 547 399 Murray Int.Tst 952 8 952 734.50 Tate & Lyle 533.50 -2 544.50 388.75
Bellway 641 19 826 511 GKN 218.75 1.50 218.75 102 National Express 243.50 1 259.50 189.50 Taylor Wimpey 29.25 -0.25 44 22.25
Berkeley Grp Hldgs 899.50 13.50 932.50 742 GlaxoSmithKline 1256 -7 1339.50 1095 National Grid 564 1 613.25 484.25 Telecity Group 480.75 0.25 532.50 360
Betfair Group 994 19 1550 975 Great Portland Est. 354 0 364 279 Next 1964 -4 2344 1817 Templeton Emrg. 655.50 4.50 685 471.50
BG Group 1317 -14.50 1333.50 984 Greene King 486.25 3.75 491.50 376.25 Northumbrian Water 337.50 2.50 361.50 252.75 Tesco 431.25 1.25 454.50 377.50
BHP Billiton 2584 72 2584 1684.50 Halfords Group 451 1 550 372.75 Ocado Group 164 4 170 123.50 Thomas Cook Group 186.75 2.50 272 171.75
BlackRock Mining 799.50 19.50 799.50 492 Halma 360.50 1.50 366.50 223 Old Mutual 121.50 1.50 145.25 97.25 Travis Perkins 1024 11 1024 664.50
BlueCrest AllBlue 167.75 -3 174.50 154 Hammerson 422.25 0.75 434.50 336.25 PartyGaming 212 0 334.50 206 TUI Travel 239.50 2 308.50 190
Booker Group 60 1 60.25 38.75 Hargreaves Lansdown 577 6.50 577 276.50 Pearson 1021 5 1051 855 Tullett Prebon 383 7.25 417.25 262
BP 472.50 3.25 655.50 303 Hays 127.50 0 127.75 88.50 Pennon Group 641 0 641 483 Tullow Oil 1268 17 1369 991.50
Brit Insurance 1041 1 1045 728 Henderson Group 133 2.50 151.75 112.75 Persimmon 412.50 3.50 507.50 336.50 UK Commercial Prop 84.50 1 85 72.75
British Airways 268.50 3.25 286 184.25 Heritage Oil 426 1 581 296.75 Petrofac 1556 5 1556 876.50 Ultra Electronics 1702 30 1895 1265
British Amer.Tob 2485 22 2485 1959 Hikma 795 -21.50 829.50 510 Petropavlovsk 1123 23 1365 852 Unilever 1982 13 2015 1688
British Empire Tst 493 8.25 498.50 396.50 Hiscox 375 3.25 375 309.50 Phoenix Group Hldgs 610 0.50 758 557.50 United Utilities 592 6 628.50 488.25
British Land 522.50 -2.50 525 418.25 Hochschild Mining 615 3.50 658 234 Premier Farnell 289.25 0.25 304.50 171.50 Utd Business Media 681 2 682.50 409.75
Britvic 484.50 -3.50 518 384.75 Home Retail Group 190 -2 295.50 190 Premier Oil 1977 18 1977 1017 Vedanta 2473 78 2934 1839
Brown (N.) Group 294.50 -1.50 301.75 206.50 Homeserve 455 0.75 487.50 326.25 Provident Financial 859 -1 974 728.50 Victrex 1490 -22 1522 799
BSkyB 728.50 -5 736 524.50 HSBC Holdings 662.75 6 740.50 596.25 Prudential 675 3.50 675 487.50 Vodafone Group 170 -0.25 175 129.50
BT Group 185.75 -1.25 187 110 Hunting 707.50 -2.50 724 439.50 PZ Cussons 396.50 4.50 409 234.75 Weir Group 1811 0 1861 698.50
Bunzl 736 8 777 616.50 ICAP 536 -2 539.50 294 QinetiQ Group 131.50 -0.25 167 96.75
Wellstream Holdings 788.50 0.50 793 436
Burberry Group 1142 10 1156 581 IG Group 511.50 -1.50 553 362.50 Randgold Res 5490 -110 6655 4209
WH Smith 499.25 -2.75 523 398.25
C&W Comms 52 1 63.75 44.25 Imagination Tech 378 0.50 441.75 215 RDS ‘A’ 2103.50 34 2103.50 1624
C&W Worlwide 69.25 -0.25 100 60.50 IMI 942.50 3 948 516.50 RDS ‘B’ 2093.50 28 2093.50 1554 Whitbread 1814 13 1814 1266
Cairn Energy 415 -5.25 493.25 318.25 Imperial Tobacco 1982 27 2154 1753 Reckitt Benckiser 3597 -2 3655 3037 William Hill 165.50 0.25 216.50 155.50
Caledonia Inv. 1910 30 1910 1512 Inchcape 352.25 1.50 368 237 Reed Elsevier 532.50 4.50 563 460.50 Witan Inv Trust 514 5.50 514 410
Capita Group 706.50 4 826 635.50 Informa 413 -0.50 448 304.50 Regus 85 2.50 120 66 WOLSELEY 1998 30 1998 1220
Capital & Counties 146.50 -0.50 157 100 Inmarsat 685.50 -1 821 606.50 Renishaw 1263 -43 1306 545 WPP Group 794.50 8 794.50 572.50
Capital Shop Centre 416.75 -3.25 420 301 InterContinental Htl 1255 6 1255 887 Rentokil Initial 98 0 138.50 87.75 Xstrata 1506 51 1506 845.75
Carillion 374 2.50 374 273 Intermediate Cap.Grp 332 2.75 351 240.50 Resolution 235.25 0.25 349 211.25
Carnival 2905 104 2920 2037 International Pers Fin 365 3.50 365 183.25 Rexam 333.25 1.50 346.75 276.50
Catlin Group 374.50 10.25 393 320 International Power 445 6 445 284.50 Rightmove 801.50 0.50 810 483.25
Centamin Egypt 172.50 6.25 197 106.75 Intertek Group 1862 -17 2000 1150 Rio Tinto 4537 115 4537 2812 LONDON TOP 250 BY MARKET CAPITALISATION
Centrica 337 1.75 346 264 Invensys 357.25 5.50 357.25 230.25 RIT Capital Partners 1240 12 1240 971.50
Charter 829 0 848.50 567 Investec 516.50 8 562 417.75 Rolls-Royce Group 650 13 654.50 473.50 POWERED BY
Chemring Group 2959 100 3663 2598 ITV 71.50 0 74.25 48.25 Rotork 1814 12 1895 1186
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FTSE surges to a 30-month high as risk Investor optimism drives

appetite boosted by strong US earnings shares on Wall St higher
Miners rose, with Anglo American South Korea held live-fire drills on Northern Trust, which has $657bn

THELONDON and Xstrata the best sector perform-

ers, up 4.2 per cent and 3.5 per cent
respectively, as copper hit record
Yeonpyeong island on Monday, rais-
ing fears of all-out war, but the North
did not retaliate.
THENEW YORK in assets under management, recent-
ly reduced its cash allocation and
increased investments in US large cap
REPORT highs, fuelled by supply concerns.
Gains in metals prices were also
underpinned by import data showing
Integrated oil stocks found favour
as the crude price rose, supported by
cold weather conditions, with Royal
REPORT equities and fixed income.
Adobe Systems jumped six per
cent to $30.93 after it gave an upbeat

M
INERS and banks drove continued strong demand from top Dutch Shell climbing 1.6 percent. forecast, while coal miner Massey

U
Britain’s top share index to a consumer China, prompting more Banks rebounded after recent S stocks rose yesterday as solid Energy rose on expectations the com-
30-month closing high yester- speculation on the global growth weakness caused by Eurozone debt earnings and a flurry of merger pany was lining up potential buyers.
day, as risk appetite rose due story. exposure fears. Comments from a activity underpinned a steady Massey gained 1.2 per cent to $52.45.
to easing tensions on the Korean Rio Tinto climbed 2.6 per cent Chinese vice-premier that it supports upward trend that reinforced The Dow Jones industrial average
peninsula and upbeat earnings from amid media reports that it is talking efforts by the EU to calm global mar- investor optimism for the coming added 55.03 points, or 0.48 per cent,
US software maker Adobe Systems. to Australia-listed coal miner kets in the wake of the debt crisis year. to 11,533.16. The Standard & Poor’s
The FTSE 100 index ended up 60.19 Riversdale about a higher $3.8bn helped ease concerns. Royal Bank of Financials led the way higher, con- 500 Index gained 7.52 points, or 0.60
points, or one per cent, at 5,951.80, its takeover, ahead of a possible bidding Scotland was the top FTSE 100 riser, tinuing their December rally after per cent, to 1,254.60 – marking a
highest close since early June 2008, war. Traders said investor nerves were up 4.5 per cent. Carnival was another underperforming the broader market fresh two-year high. The Nasdaq
albeit in thin trade in the run-up to soothed as the situation on the strong gainer, up 3.7 per cent, on for much of the year. The KBW bank Composite Index rose 18.05 points, or
the Christmas holidays. Korean peninsula failed to escalate. higher earnings and forecasts. index 1.9 per cent. 0.68 per cent, to 2,667.61.
 Power
&
present
The The most influential

22 DECEMBER 2010 Hundred 2011 people in the City

The City is back 1 Mervyn King, Bank of England

The Bank’s Governor has
emerged from the crisis as the
in persuading David Cameron’s
coalition government that

but under new

UK’s commanding figure on
economic policy. His sure-foot-
ed handling of the crisis post-
Lehman, enhanced formal
powers and influence place
him in top spot.
early and big budget cuts are
needed to put the country’s
finances back on a secure
footing.
Recent disclosures at the
Treasury Select Committee

management
After winning a turf war with
the Financial Services
Authority the Bank will be
responsible for regulating
firms and macroprudential
supervision from 2012.
The Governor has also exer-
43 new entrants. 15 new chairmen and cised great informal influence
and by Wikileaks have raised
questions about King’s forays
into fiscal policy. This highly
political Governor has made
plenty of enemies but that is
to be expected when money is
the biggest political question
of the day.

chief executives. Sean Farrell documents

the changes in the City’s balance of power 2 Bob Diamond, Barclays

B
RITAIN’S financial landscape has
been transformed since we last
shone a light on the City’s most
powerful figures two years ago.
The City A.M./CityJet Power Hundred
2011 list ranks the most influential fig-
ures in UK finance as we head into the
new year. It should be no surprise that it is
very different from 2009.
Then, the City was reeling after the
bankruptcy of Lehman Brothers had
almost caused the collapse of the world’s
financial system. Politicians were calling
the shots over humbled financiers.
But markets and financial institutions
have since regained much of their confi-
dence. Stock markets are up and the bond
market has called to account heavily
indebted governments.
In the UK, the new chancellor has taken
decisive action to get the country’s
finances under control and has vowed to
ensure Britain remains attractive in a
fiercely competitive market.
There are a stunning 43 new entries on
the list. Much of this upheaval is down to
the huge turnover of business leaders in
the wake of the financial crisis. Barclays,
HSBC, Lloyds and Santander are among
the giants that supply the 15 new chair-
men and chief executives in the list. Big
names that have left include former HSBC
chairman Stephen Green and Lord Turner,
the FSA chairman.
There were no dealmakers in the previ-
ous top 10 but with the economy out of
recession, stock markets up and compa-
nies sitting on cash, this year we highlight
the top investment bankers companies
will turn to when opportunities arise
Politicians and regulators will continue
to play a greater role in the City. Bank of
England Governor Mervyn King tops our
list because of his dominance of economic
policy and regulation while the inclusion
of European Commissioner Michel
Barnier in the top 10 reflects the threat
Brussels poses for London.
The City is back doing what it does best
– allocating capital, advising Britain’s top
companies and creating wealth. Drawing
on the expertise of our reporting team
and on the views of a number of senior
City figures, whom we thank profusely,
our list showcases those driving this
revival.
The publication of the list has been sup-
ported commercially by CityJet, the airline
that operates out of City airport.
Yesterday CityJet’s CEO Christine
Ourmières said: “As the airline that flies
from the heart of London to Europe’s
most important business capitals, CityJet
is the obvious choice for the Power 100.”
3 George Osborne, Chancellor
The chancellor’s decisive
action to cut the deficit has
calmed markets and reas-
sured most who doubted his
abilities. Osborne has tem-
pered his anti-banks rhetoric
and knows a thriving City will
play an important role in
recovery and Britain’s long
term prospects. His pragmatic
Diamond will finally get the top free of direct state interfer-
job as Barclays chief executive ence.
on 1 January after losing out to Diamond defied his doubters by
John Varley in 2004. emerging from the crisis with
As the City’s most public high BarCap stronger than before.
earner and head of Barclays The American’s audacious
Capital, Diamond has faced takeover of Lehman Brothers in
attacks from Vince Cable and the US made Barclays a serious
Peter Mandelson among others player on Wall Street – some-
and his elevation is a show of thing no other UK bank has
strength by the bank. achieved. Now Diamond needs
Barclays shunned the Labour to prove he can manage a retail
government’s bailout two years bank - unless he decides to split
ago, and he will lead a bank the group.
approach to taxation should
also help preserve Britain as
an attractive base for compa-
nies and prosperous people.
With David Cameron taking
care of the big picture,
Osborne is the man who
counts on the economy. Now
he will be hoping there aren’t
too many blips along the way.
CITYA.M. 22 DECEMBER 2010
4 Antonio Horta-Osorio,
Lloyds Banking Group
In the previous Power Hundred
we put Horta-Osorio in third
spot and predicted he would go
far after he built Santander UK
into a real threat to the big four
banks. Only the addition of the
new chancellor nudged him
down a place this year.
Now the dapper Portuguese has
switched sides to become chief
executive of Lloyds Banking
6 Stuart Gulliver, HSBC
Gulliver emerged from this
year’s unseemly and very non-
HSBC leadership feud as the
global bank’s new chief execu-
tive – a job he has long coveted.
The 50-year-old is an HSBC vet-
eran and takes credit for
reshaping his global banking and
markets business to capitalise
on HSBC’s corporate relation-
ships and emerging market
strengths after a failed attempt
to rival the US bulge bracket.
Based in London in recent years,
Gulliver will be based in Hong
Kong to take up his post as the
bank continues to refocus on its
Asian roots after suffering huge
losses in the US during the
credit crunch.
HSBC pulled out of talks to buy
South Africa’s Nedbank earlier
this year but Gulliver may want
to make his mark with a signifi-
cant deal to drive growth with
group revenues under pressure.
9 Ian Hannam, JPMorgan Cazenove
JPMorgan Cazenove’s chairman
of capital markets nearly quit
the broker when he was passed
over for the chief executive’s job
in 2008 but stayed on to keep
driving the business as it capi-
talised on the joint venture with
JPMorgan. A former member
of the Territorial Army’s version
of the SAS, he was one of the
main architects of the deal and
is most responsible for trans-
11 Peter Sands, Standard Chartered
Sands is the last UK bank
chief executive standing from
the start of the credit crunch
and it is easy to see why.
The emerging markets bank
had record profits throughout
the crisis and Sands helped
devise the 2008 bank bailout,
increasing Sands’s influence
and moving him up from the
20s two years ago.
Group – the giant retail lender
that is home to a third of all
British current accounts. At
Lloyds he will have to continue
the integration of HBOS while
persuading the government
that the bank should not be bro-
ken up. With his government
owners under pressure to tame
the banks, he will also need to
make sure customer service is
forming the old-school broker
into a money-making machine.
Relentless in the gym and in
negotiations, the fitness fanatic
is renowned for submerging
everything for his clients and
has led a series of mining deals,
notably for Xstrata.
The Royal broker’s top rainmak-
er is a Bermondsey grammar
schoolboy from a family of
Millwall fans.
Sands defies expectations of
bank bosses with his Swatch
watch and understated style.
But the former McKinsey high
flyer has insisted he will pay
what it takes to get the best
bankers in markets like India.
He has also raised the
prospect of his bank leaving
the UK if regulation gets too
burdensome.
& The Power Hundred 2011
up to scratch – something he
struggled with at Santander.
7 Richard Gnodde, Goldman Sachs
The co-chief executive of
Goldman Sachs International
joined the bank in 1987 and
helped build its European busi-
ness, becoming head of UK
investment banking.
After a long stint in Asia the 6’
4” South African returned to
London in 2005. He wasted no
time tapping into sources of
power and was the first invest-
ment banker the Labour gov-
ernment consulted about
Northern Rock.
Michael Sherwood is formally
Goldman’s top UK banker, but
Gnodde is regarded as the
smooth operator who does most
of the wooing of chief executives
and politicians. With his formi-
dable contacts book and the
power of the Goldman money
machine he ranks top of the list
of corporate advisers who have
entered our top 100 as the City
gets back to business.
10 Ana Patricia Botin, Santander
The daughter of
Santander’s chairman
Emilio Botin has been
thrown in at the deep end
after the shock defection
of Antonio Horta-Osorio to
Lloyds. As well as having
to prove herself as chief
executive in an unfamiliar
market, she takes over
with a UK IPO in the
pipeline for early 2011.
12 Stephen Hester, RBS
Hester was ranked a lowly 30
two years ago because he had
yet to prove himself as chief
executive at the stricken giant.
Hester’s dismantling of Sir
Fred Goodwin’s empire has
been unrelenting and the
country sports enthusiast has
proved adept at acknowledg-
ing the excesses of the banks
while hammering home the
5 Michel Barnier, European Commission
The European financial services
commissioner’s presence in our
top 10 underlines London’s vul-
nerability to new controls tak-
ing shape in Brussels after the
supposed failure of Anglo-
Saxon capitalism.
The City faces a wave of new
EU regulation, ranging from
crackdowns on hedge fund
transparency, derivatives and
short-selling to new supervisory
The 50-year-old golf
enthusiast has led
Santander’s Banesto retail
bank since 2002 and
weathered the Spanish
crisis through prudent
management of bad debts.
Botin takes over a power-
ful retail bank and, as the
City’s most senior woman,
will wield enormous clout
if she plays her cards right.
realities for government-con-
trolled RBS as it competes to
keep and hire top bankers.
Hester worked at Credit
Suisse, overhauled Abbey
National and led British Land
before taking over at RBS.
A combative classy operator
who will make a great deal of
money if his efforts get RBS’s
share price back on its feet.
21
bodies and tougher rules on
bank bonuses and computerised
high-frequency trading. The
Savoyard Frenchman has
stressed that he is not out to
punish the City but the flood of
new rules poses a greater
threat to the UK than to other
European countries because
Britain benefits from London’s
position as the region’s financial
powerhouse.
8 Simon Robey, Morgan Stanley
Morgan Stanley’s head of UK
investment banking is the ulti-
mate relationship banker.
When the firm’s biggest British
clients have strategic plans or
face crises, their chairmen call
Robey for advice.
Helping Cadbury in its defence
against the hostile takeover
offer from Kraft of the US kept
Robey occupied into the early
part of this year.
After starting his career with
Lazard, Robey joined Morgan
Stanley in 1987 and rose to
become co-head of global merg-
ers and acquisitions in addition
to his UK role.
The former choral scholar could
have been a professional singer
and has chaired the Royal Opera
House since 2008. The unusual-
ly self-deprecating banker’s
other interests include Arsenal
FC, where he has held a season
ticket for more than 20 years.
13 Douglas Flint, HSBC
HSBC’s finance director knows every inch of HSBC, is
emerged as chairman from hugely respected in the City
the rubble of the global bank’s and has the gravitas to glad-
leadership race. hand clients, politicians and
HSBC’s chairman used to rule officials around the world.
the bank but Flint’s more non- After fixing relations with
executive role will see him shareholders over the leader-
oversee new chief executive ship chaos, his big challenge
Stuart Gulliver. may be deciding whether
The dry but affable Scot HSBC will stay in the UK.
22 The Power Hundred 2011
14 Hector Sants, FSA
The Financial Services
Authority chief executive said
he would quit ahead of
George Osborne’s plan to
break up the regulator but
stayed on and will head regu-
lation of firms when it moves
to the Bank of England.
In the meantime, Sants is car-
rying out his threat that firms
should be “very frightened” of
the regulator.
16 Sir Philip Hampton, RBS
Hampton has straddled the
worlds of business and politics
since leading a review of regu-
lation in 2004. His skills are in
much demand as chairman of
nationalised RBS and he is a
new entry in our rankings.
After nine years at Lazard,
Hampton spent the 1990s in
finance director jobs before
joining Lloyds and quitting in a
19 Sir John Vickers, Banking Commission
As chairman of the govern-
ment’s independent banking
commission, Vickers will pro-
nounce on whether retail and
investment banks should be
separated and whether the
sector is anti-competitive.
The commission is not due to
report until September 2011
but the former Bank of
England top economist and
Office of Fair Trading chief
21 Robin Budenberg, UKFI
The former UBS investment
banker’s heavy involvement in
the 2008 bank bailout made
him an ideal choice to lead UK
Financial Investments, which
manages the state’s stakes in
RBS, Lloyds, Northern Rock
and Bradford & Bingley.
As well as working behind the
The former Credit Suisse
banker took the helm at the
FSA as the crisis started in
2007 and has shifted the
watchdog from friendly face
to enforcer. He drops out of
the top 10 but might yet rise
to the top at the Bank.
The FSA had a bad end to the
year when it was forced to
accept that details of its RBS
probe should be published.
row over the dividend.
As chairman of J Sainsbury he
thwarted an approach from
Qatar Investment Authority
and was the first chairman of
UK Financial Investments
before becoming RBS chair-
man and taking on Sir Fred
Goodwin over his pension.
Combines charm with steel
and decisiveness.
has already argued in a paper
written before his appoint-
ment that Lloyds’ controver-
sial takeover of HBOS was “a
mistake” that did little to sup-
port financial stability.
His consumer-friendly panel’s
proposals could trigger the
break-up of some of Britain’s
biggest banks. That is, if the
chancellor chooses to accept
their conclusions.
scenes to keep the banks in
line on pay, governance and
strategy, Budenberg’s big chal-
lenge is to decide when and
how to offload Lloyds and RBS
shares. A sale of Northern
Rock would go down well with
the chancellor, who could use
the spare cash for tax cuts.
& CITYA.M. 22 DECEMBER 2010
15 Marcus Agius, Barclays
Barclays’ chairman faced calls The imperturbable former
for his resignation in 2009 Lazard London head, who is
after the bank opted for an married to a member of the
expensive capital injection Rothschild family, was called
from Qatar instead of entering on to use his fabled diplomatic
the government bailout. skills to conjure a smooth han-
But his insistence that staying dover between chief executive
clear of state control was John Varley and bitter rival
worth the hefty price has been Bob Diamond.
vindicated as Barclays has Other roles include director of
emerged from the crisis with the BBC and trustee of Kew
its independence intact. Gardens.
17 Sir Win Bischoff, 18 David Mayhew, JPMorgan Cazenove
Lloyds Banking Group
The perennial City grandee’s
powers of persuasion were in
evidence this year as he lured
Antonio Horta-Osorio from
Santander to lead Lloyds and
managed a graceful exit for
Eric Daniels. The Anglo-German
banker joined Schroders in
1966 and rose to become chair-
man in 1995 before selling the
firm’s investment bank to Citi.
He stayed on at the US bank
and was drafted in as emer-
gency chief executive in 2007
before taking over as Lloyds
chairman after Sir Victor Blank Mayhew remains as chairman nected among Britain’s top
departed following the troubled of JPMorgan Cazenove after companies and Caz is stil cor-
HBOS acquisition. the merger between the porate broker to the most
Bischoff grew up in Germany Queen’s broker and its US joint FTSE 100 clients. After mak-
before moving to South Africa venture partner of five years. ing a success of the joint ven-
aged 13 and has dual British The deal reaped a £19m wind- ture, the flyfisherman and
and German citizenship. He fall for Mayhew as a reward pedigree cattle expert’s task is
reviewed London’s competitive- for 40 years at the firm, which to keep his clients and top
ness as a financial centre for the old Etonian joined from dealmakers on board now the
the last government. Panmure Gordon in 1969. US bank owns the venerable
Mayhew is hugely well con- broker outright.
20 Michael Sherwood, Goldman Sachs
Sherwood is the driving became one of its most
force within Goldman’s powerful traders.
Fleet Street money Sherwood now has an
machine and is one of the influential role in the
bank’s three global vice bank’s strategy and rela-
chairmen. tionships and is regarded
Starting out in bonds in as “the man who gets the
1986 after studying eco- deal done” at Goldman.
nomics at Manchester, The Watford supporter
the former Westminster grew up in North London
School pupil progressed and has a fortune esti-
through the ranks and mated at £150m.
22 Franck Petitgas, Morgan Stanley 23 Charles Harman, JPMorgan Cazenove
As global co-head of invest- JPMorgan Cazenove’s head
ment banking, Petitgas’s of UK investment banking
relationship-banker role joined from Credit Suisse in
spans Europe and Asia. His 2001 as leader of the bro-
hands-on deal activity con- ker’s technology, media and
centrates on equity capital telecoms group and brought
markets and M&A, reflect- several major client relation-
ing his background but also ships with him.
takes in debt transactions. Harman rose through the
He combines a low-key pub- ranks on the back of a string
lic profile with real financial of deals for 02, Vodafone
clout and is regarded as one and satellite group Inmarsat
of Morgan Stanley’s classi- and won overall responsibili-
est acts. The avid yachts- ty for the corporate finance
man joined Morgan Stanley business.
in 1993 after starting his His close corporate contacts
career with SG Warburg. earned him the credit for
Petitgas became chairman JPMorgan Cazenove’s oust-
of the Tate Foundation in ing of UBS and Goldman
2008 and is a council mem- Sachs as corporate brokers
ber of Artangel and the to Vodafone in 2009.
Serpentine Gallery. He and Harman has been advising
his wife Catherine are keen Rupert Murdoch’s News
collectors of Latin Corp on its attempt to buy
American contemporary out the rest of satellite
art. broadcaster BSkyB.
 CITYA.M. 22 DECEMBER 2010 & The Power Hundred 2011 23

24 Nigel Higgins, NM Rothschild 25 Jonathan Moulds, Bank of America Merrill Lynch

Higgins became Rothschild’s Moulds is president of the
first chief executive from out- bank’s operations in Europe. In
side the famous merchant bank- managing the fall-out from
ing family in 2010. Bank of America’s rescue of
David de Rothschild keeps some Merrill, he is seen as a potential
control over the family empire chief executive.
by remaining as executive chair- Away from banking, the accom-
man while making Higgins chief plished violin and viola player is
executive – the first time power best known for his collection of
at the firm has been divided rare stringed instruments,
along these lines. including three golden-period
Higgins is in charge of day-to- Stradivarius violins. After grad-
day running of the firm while De uating with a first in maths
Rothschild looks after broader from Cambridge he started off
strategy and some key clients. at Nomura before joining what
The jazz enthusiast has spent was then NationsBank to help
his entire career at the firm, build its derivatives arm. Moulds
which he joined in 1982 after is on the board of the London
studying at Oxford. Symphony Orchestra.

26 Philip Robert- 27 William Rucker, Lazard 28 Anshu Jain, Deutsche Bank

Tissot, Citi
Citi may still be struggling to hold
on to top dealmakers in the wake of
its near implosion in the crisis but
the US bank’s UK managing director
has continued to haul in the deals.
After advising Kraft on its success-
ful bid to buy Cadbury at the start
of the year, Robert-Tissot then
advised Chloride on the £997m
takeover by Emmerson agreed in
July. He has rounded off the year
heading the Citi team advising
Simon Property Group on its
£2.94bn proposed bid for Capital
Shopping Centres aimed at stopping
CSC from buying the Trafford
Centre. Past landmark deals include
acting as lead adviser to Ferrovial in
its 2006 acquisition of BAA.
Lazard’s UK chief executive was
kept busy early in the year
advising Kraft on its successful
takeover of Cadbury.
He joined Lazard in 1987 from
Arthur Andersen and rose to
become head of investment
banking and deputy head of the
London business in 2000.
Rucker works alongside some
formidable characters in
Lazard’s highly competitive
world, including Ken Costa and
former JPMorgan Cazenove
chief executive Naguib Kheraj.
But Rucker is said to be the
driving force and main deal
doer at the London arm of the
firm. He saw out 2010 by advis-
ing on Simon Property’s
£2.94bn proposed bid for
Capital Shopping Centres.
Jain was made the sole head of
Deutsche Bank’s investment
bank in July and many tip him
to be the German giant’s next
chief executive when Josef
Ackermann steps down.
Indian-born Jain joined
Deutsche in 1995 from Merrill
Lynch and was the force behind
building its capital markets
business. Jain, who earned
£6.6m for the final nine months
of 2009, has done equal stints
in the key markets of London
and New York and would also
give Deutsche clout in the
emerging giant India.
However, Jain does not speak
German and Deutsche may be
forced to choose between its
dual self-images as a global
bank and the embodiment of
Germany abroad.

29 James Leigh-Pemberton,
Credit Suisse
Credit Suisse’s UK
chief executive had a
great 2009 as the
main adviser to the
government on the
banking bailout and
its aftermath. But
what should have
been a plum assign-
ment this year turned sour
when Prudential, whose chief
adviser was Leigh-Pemberton,
was forced to abandon its
32 Tarun Jotwani, Nomura
Jotwani became the Japanese
bank’s chief executive of
Europe, Middle East and Africa
in April to fill the shoes of
Sadeq Sayeed, who left abrupt-
ly after masterminding its
takeover of Lehman Brothers in
Europe and Asia.
Jotwani joined Nomura in the
Lehman deal and has been head
of global fixed income since late
2008 – a job he will keep after
building up the business and
making it highly profitable. He
spent most of his Lehman
career in Asia.
Jotwani’s main challenge in the
short term will be to hold on to
Nomura’s top former Lehman
dealmakers amid intense com-
petition for bankers in Europe
and particularly in Asia.
30 Lord Levene, Lloyd’s of London
blockbuster takeover Levene is a true heavyweight
of AIA and scrap a with a world view that reaches
planned massive beyond financial services. After
rights issue. two decades in the defence
Advisers, including industry, he was recruited by
Leigh-Pemberton, who defence secretary Michael
is the son of former Heseltine to advise on cutting
Bank of England his department’s budget, estab-
Governor Sir Robin lishing Levene as a fiercely inde-
Leigh-Pemberton, came under pendent member of the great
fire for the fees they charged and the good. After steering
on the massively costly deal Lloyd’s of London from the
that never was. brink of collapse since 2002, he
will stand down as chairman in
2011 to concentrate on chairing
his bank acquisition vehicle
NBNK Investments. He has
hired Gary Hoffman from
Northern Rock as chief execu-
tive but has pledged not to bid
for the nationalised bank for at
least a year.
33 Carsten Kengeter, UBS
Former Goldman
Sachs banker
Kengeter joined
UBS two years ago
to turn round the
bank's loss-making
fixed income, cur-
rencies and com-
modities business and was soon
promoted to co-head of the
entire investment bank. He
helped rebuild the debt unit fol-
lowing more than £36.6bn of
31 Robert Swannell, Marks & Spencer
Swannell takes over as
chairman of the high
street icon on 4
January but some of
the sheen may be
taken off his arrival by
the troubles at HMV,
where he is also chair-
man. Swannell worked
in investment banking for more
than three decades, first with
Schroders and then with Citi.
After helping M&S fend off Sir
34 John Peace, Standard Chartered
writedowns and losses
that nearly crippled Peace is a low-key boardroom
UBS. In September he heavyweight. In 2009 he added
was put in sole charge the chairmanship of Standard
of the operation. Chartered to his existing chair-
After securing a lucra- man roles at Burberry and
tive signing-on deal, the Experian. All three businesses
43-year-old German have weathered the financial
was paid £8.2m in 2009, more and economic crisis better than
than any other board member most. Peace made his name at
of the bank and four times the Great Universal Stores (later
pay of group chief executive GUS) where he founded what
Oswald Grübel. would become Experian in
Philip Green’s bid in
2004, he knows the
company well but
will have to oversee a
period of change as
new chief executive
Marc Bolland makes
his mark. His heavy-
weight boardroom
experience includes senior inde-
pendent directorships at British
Land and 3i, both of which he
gave up for the M&S job.
1980. He became GUS chief
executive in 2000 and chair-
man of Burberry two years
later ahead of its demerger.
GUS split its existing businesses
in 2006 and Peace became
chairman of Experian, a job he
will leave when a replacement
is found. He is also a fellow of
the Royal Society of Arts and
chairman of the Work
Foundation.
24 The Power Hundred 2011
35 Michael Spencer, ICAP
Despite seeing the Conservatives returned to govern-
ment, it was a tough year for one of the City’s richest
men. The ICAP chief executive stood down as Tory
treasurer to concentrate on business after his inter-
dealer broker issued a profit warning in February
soon after he sold £45m of shares. There was then
further pressure when the FSA told ICAP to com-
mission an outside report into its business. But
ICAP’s performance revived and the year ended on a
high note as Prince William helped raise £12m at the
company’s annual charity day. To cap it all, a peerage
may not be far off for the self-made billionaire.
37 Peter Clarke, Man Group
Man’s chief executive put his
stamp on the giant fund of
hedge funds with the £1.03bn
acquisition of GLG Partners.
The deal brings in Emmanuel
Roman and his team’s active-
investment capabilities and
reduces Man’s reliance on its
underperforming computerised
AHL fund.
It also sees Clarke emerge
from the shadow of Stanley
Fink, who handed over control
just before the financial crisis.
Man suffered an eighth quarter
of client withdrawals in the
third quarter after AHL posted
a loss the previous year. Clarke
trained as a solicitor and
worked in investment banking
before joining Man in 1993.
& CITYA.M. 22 DECEMBER 2010
36 Roger Carr, Centrica
Carr earned his money as Cadbury chairman by
standing firm against the aggressive bid tactics of
Kraft’s Irene Rosenfeld to get a good price for share-
holders. Adding to his impressive portfolio of non-
executive roles, the Centrica chairman was recently
appointed as the new president of the CBI. He also
ruffled feathers by supporting the 50 per cent tax
rate for high earners. Carr is spearheading The 30
Per Cent Club campaign to increase female represen-
tation on UK boards by 2015 and has long argued
that women increase a board’s effectiveness by
adding balance when decisions are made.
38 Richard Ward, Lloyd’s of London 39 Robert Gillespie, Takeover Panel
The trained physicist took over The panel’s new director gener-
as chief executive of the al took over partway through a
world’s biggest insurance mar- consultation on new rules fol-
ket as an industry outsider in lowing Kraft’s controversial
2006. Ward had made his acquisition of Cadbury.
name by revamping the The Kraft bid reopened debate
International Petrol Exchange about foreign predators snap-
as ICE Futures where he ended ping up British companies and
open-outcry trading. the power of short-term
Ward has vowed to exert pres- investors to force through
sure to maintain market disci- deals. His proposals focused on
pline by underwriting increasing disclosure of bidder
syndicates amid increased intentions rather than requiring
competition and investment bigger shareholder majorities
returns depressed by low and other higher hurdles for a
interest rates. He also wants to successful bid.
make it easier to do business at Business secretary Vince Cable
Lloyd’s so the market can com- has called for stronger meas-
pete internationally. ures and Gillespie will be in the
This year will see the departure thick of the action if M&A
of Lord Levene, who has domi- activity takes off with many
nated Lloyd’s the past decade. companies sitting on cash piles.
CITYA.M. 22 DECEMBER 2010 & The Power Hundred 2011 25

40 David Harding, 41 Xavier Rolet,

Winton Capital London Stock Exchange
In a generally grim time for hedge funds, Britain’s The LSE’s beekeeping action man arrived nearly two
top absolute-return manager was paid a £54m divi- years ago after the exchange had spent four years
dend plus £4m in salary in 2009 after betting cor- defending itself against bids from just about every
rectly on swings in commodity prices. All things are other major bourse as well as ICAP and Macquarie.
relative and those earnings were well down on the As chief executive, Rolet has stuck to internal house-
previous year when the Cambridge science graduate keeping to cut costs while adding new services such
received £101m in dividends and £17m salary. as fixed income and has bought rival exchange
Harding is an ardent punk rock fan and the man of Turquoise. Rugged Rolet, who has driven in the Dakar
the moment when it comes to hedge fund reputa- Rally three times, may face further big strategic
tions. He was the H in the AHL trading programme issues if the Singapore Exchange’s acquisition of
sold to Man Group. He left in 1997 to launch Winton. Australia ASX sparks a bidding war from Asia.

42 Willie Walsh, British Airways
British Airways’ Irish chief
executive has had quite a year.
He has managed a merger
with Iberian Airlines and
fought off attacks from Sir
Richard Branson to forge his
transatlantic alliance with
American Airlines. The former
pilot has also stood firm
against the strike campaign by
members of his cabin crew.
The strikes cost £150m but
BA still returned to profit this
year. Walsh has shown strate-
gic vision while asserting the
right to run his company in the
interests of shareholders and
employees.
43 Paul Tucker, Bank of England 44 Angela Ahrendts, Burberry
Tucker is deputy governor for
financial stability at the Bank of
England and is Mervyn King’s
eyes and ears in the City.
The Cambridge-educated econo-
mist is highly regarded in the
Square Mile and has long been
tipped as a market-savvy suc-
cessor to King in 2013, though
he may now face competition
from Hector Sants.
Like King, he hails from the
Midlands and is concerned
about a shortage of credit for
small and medium businesses. The luxury goods company’s when at school in New
He is at the forefront of prepar- American chief executive Palestine, Indiana. But
ing the Bank for its enhanced racked up record profits in the Arendts’s vision goes beyond
role in preventing future finan- first half as her plan to turn an affinity with her products.
cial crises and in seeking inter- the raincoat maker into a She has driven a push into
national agreements to stop global brand paid off. The emerging markets that has
banks jurisdiction-hopping to daughter of a model, she has made her brand a must-have
avoid tougher regulation. been steeped in fashion since for burgeoning middle classes
carrying Vogue in her bag in Asia and Latin America.
 26 The Power Hundred 2011
45 John Studzinski, Blackstone
Studzinski built his
formidable contacts
book at Morgan
Stanley and had an ill-
fated spell at HSBC
before becoming
Blackstone’s M&A
boss. Deals this year
include advising GDF
Suez on its merger with
International Power.
With business, philanthropic
and cultural interests that over-
48 Robert Chote, OBR
The former director of the
Institute for Fiscal Studies is
both an ideal choice to head
the new Budget-checking
agency and also a potential
thorn in the side of George
Osborne.
The chancellor set up the
Office of Budget Responsibility
after the Brown years cast
doubt on the objectivity of
Treasury figures. Chote, who is
a former journalist and
International Monetary Fund
adviser, has vowed to remain
an independent voice at the
OBR.
The chancellor deserves credit
for Chote’s appointment after
the Institute for Fiscal Studies
dismissed Osborne’s claim that
his emergency Budget was pro-
gressive.
51 Alan Howard, Brevan Howard
Howard spotted the severity of
the crisis early and put most of
his funds’ assets into cash and
his judgement has been good
since. Savvy bets on global
trends generated a return of 21
per cent at his main fund in
2008 in a painful year for many
rivals. Howard, who moved to
54 Michael Platt,
BlueCrest Capital Management
Platt quit JPMorgan
to co-found
BlueCrest in 2000
and sold a 25 per
cent stake to Man
Group three years
later. The £9.96bn
fund is now Europe’s
third largest and its
fast-trading strategy
has not produced a down year
since it was founded.
55 Greg Coffey, Moore Capital
Hedge-fund heart-
throb Coffey
stunned the City in
2007 when he quit
GLG, announcing he
would start his own
fund and forgoing a
£160m golden
handcuffs deal. A
few months later the emerging
markets trader unveiled anoth-
er surprise when he opted to
join Louis Bacon’s Moore
46 Clive Cowdery, Resolution
lap and attract royal-
ty, politicians and pop
stars, he is a force to
be reckoned with and
the closest thing to a
Renaissance man the
specialised world of
the City now has.
Studzinski ruffled
feathers this year by saying pri-
vate contributions would not be
able to make up for the with-
drawal of state arts funding.
Not content with making
£150m in four years from the
unglamorous business of com-
bining closed life funds,
Cowdery reemerged in 2008
vowing to buy underperforming
life insurers and asset man-
agers. The acquisitions of
Friends Provident and Axa’s UK
49 Nigel Boardman, Slaughter and May
This year was a
lean time for the
UK M&A that is the
doyen of corporate
lawyers’ bread and
butter and last
year’s bonanza of
government work
on the bank bailout
was not repeated,
but Boardman stayed busy. The
first half included UK work on
BHP Billiton’s bid for Potash
52 Crispin Odey, Odey Asset Management
Geneva in 2010, is so low key
that wealth watchers did not
spot him for many years,
though his fortune is now esti-
mated at £875m. In his only
on-the-record interview, with
Bloomberg, he explained: “We
prefer to have a low profile.
That’s just the way we are.”
Odey paid himself £28m in
2008 after betting against
Britain’s banks at the peak of
BlueCrest dealt a blow
to the market for
the crisis and then did well
from backing Barclays on the
onshore hedge funds in way back up. The current year
2010 by liquidating its has been less successful as his
Ucits fund and moved flagship European fund has lost
its headquarters to money and worries about equi-
Guernsey.
Platt spends his money
on modern art including
a life-size wax gorilla
nailed to a wooden cross by a
young artist he sponsored.
56 Paul Ruddock, Lansdowne Partners
Ruddock co-founded Lansdowne
with Stephen Heinz in 1998 after
a career at Schroders and
Goldman Sachs.
The firm was an aggressive short-
seller of British financial stocks
Capital instead. during the financial crisis and
Moore’s emerging mar- made about £50m betting
kets fund, run by against HBOS alone.
Coffey, is up 3.29 per Ruddock’s flagship UK equities
cent in 2010 to the end fund performed well in 2009,
of November and his returning just over 25 per cent.
recently launched The art lover has been chairman
emerging markets equi- of the Victoria and Albert
ty long/short fund is up Museum since 2007. He has
nearly 30 per cent. donated at least £385,000 to the
Last month he was reported to Conservative Party and is paying
have bought a 12,000-acre Tony Blair a six-figure sum for a
estate on the Isle of Jura. series of speeches.
& CITYA.M. 22 DECEMBER 2010
life business have got Cowdery
almost halfway to his £10bn
target and no one in the City
doubts his determination or the
power of his contacts book in
the insurance world. But falls in
Resolution’s share price suggest
enthusiasm for Cowdery’s proj-
ect may be waning.
and in the second
half he helped face
down Tom Hicks and
George Gillett in the
transfer of Liverpool
FC from the US pair
to its new owner
John W Henry.
Boardman boasts
the most FTSE 100
clients of any UK lawyer and
will be in demand when the
M&A market revs up.
ties have prompted redemp-
tions. Odey argues these things
can happen in the short term
when you are predicting the
future. The old Harrovian is
launching a low-fee asset man-
agement arm. Odey is married
to Nichola Pease, deputy chair-
man at JO Hambro Capital.
47 Michael Hintze, CQS
The “old school” trader
is closing his £643m
multi-strategy hedge
fund to new money in
a sign that investors
are returning to the
industry – or at least
to the best managers.
Aussie Hintze is
undoubtedly one of those and
CQS has added about £1.29bn
of assets under management
since 2009 when panicked
50 Louis Bacon, Moore Capital
The Moore Capital founder’s for-
tune almost doubled last year to
£1.1bn according to the Sunday
Times Rich List, making him
Britain’s richest fund manager.
American-born Bacon is based in
London but splits his time
between Mayfair and the US,
where he owns a 435-acre island
off New York and a 171,400-acre
ranch in Colorado.
Moore Capital’s trading strategy
is based on bets on macro-eco-
nomic trends. Moore was caught
out in May by the Eurozone crisis
and after a rocky 2010, its flag-
ship fund was up 2.5 per cent in
2010 at the end of November.
Moore came eighth in a recent
ranking of the top 10 hedge
funds that have earned a third of
the industry’s total returns for
investors.
53 Mark Coombs, Ashmore
Emerging markets
are the hot ticket in
town and Ashmore’s
chief executive is
reaping the benefits
from his knowledge
of those economies.
Ashmore’s assets
under management
jumped more than 40 per cent
to £22.7bn last year as client
demand increased and asset
57 George Robinson, Sloane Robinson
Sloane Robinson had
a tough time in
2008-2009 when it
made only £61m,
down from a peak of
£341m the year
before. The firm
blamed poor per-
formance because of volatile
stock markets and some of its
58 Ian Wace, Marshall Wace
Marshall Wace’s chief
executive set up
Marshall Wace with
Paul Marshall in 1997
and their fund is one of
the most prominent in
Europe.
With Marshall devot-
ing more time to
support of the Liberal
Democrats, Wace is now the
main man at the £3.86bn
investors pulled
money out of funds
regardless of individ-
ual performance.
The CQS Directional
Fund is said to have
returned about 27
per cent this year
compared with just 7
per cent for the average hedge
fund and Hintze has decided to
shut it to make sure it stays
nimble for its existing investors.
prices recovered.
Coombs led a buyout
of Ashmore from
ANZ in 1999 when
assets were £270m.
The Cambridge law
graduate sold £192m
of shares when
Ashmore floated in
2006 and his fortune is esti-
mated at £950m – up by more
than £400m in a year.
main funds have been
in negative territory
this year. Founded in
1993 by Robinson and
Hugh Sloane, it focus-
es on India and other
Asian markets. Both
men keep low profiles
but have donated more than
£500,000 to the Tory Party.
long/short equity
fund.
Marshall Wace
invests using its own
trade optimised port-
folio system (TOPS),
which trades based
on analysts’ recom-
mendations.
Wace’s fortune is
estimated to have increased by
£100m to £400m last year.
CITYA.M. 22 DECEMBER 2010 & The Power Hundred 2011 27

59 Nat Rothschild, Bumi Plc 60 Arpad Busson, EIM 61 Michael Smith, CVC Capital Partners
“Arki” Busson tends to divide CVC was one of the vibrant American
The heir to the title Rothschild the opinion like few others in finance. most active buyout economy compared
Baron Rothschild biggest exporter of Educated in France but based in firms in the market with the stagnant
cemented the deal coal to China. London, he founded fund of this year with 13 UK environment of
for his big venture In doing so, he is car- hedge funds EIM in 1992. deals totalling the early 1980s.
in November, put- rying on the family The socialite has had a high pub- £8.73bn – its Smith lives in
ting his £707m tradition of spotting lic profile since, but as much for biggest ever. Smith, Luxembourg but
Vallar cash shell flows of money and his personal life as for the per- the firm’s British spends most of his
into Bumi Plc to trade and acting formance of his business, which – chairman, led a time on the road.
buy stakes in two boldly. He is along with many funds of hedge management buy- CVC became known
Indonesian coal supremely well con- funds – was caught out by out from Citibank in 1993. in the boom for buying big
producers. The deal buys into nected with friends such as Bernard Madoff’s Ponzi scheme While in the US, he was struck names such as Debenhams and
the hot emerging market of Peter Mandelson and Russian when it imploded in 2008. by venture capital’s role in the the Automobile Association.
Indonesia and makes tycoon Oleg Deripaska. Busson has two children by the
Australia model Elle Macpherson
and was engaged to Pulp Fiction
actress Uma Thurman.

62 Robert Easton, Carlyle He is also well known as a

Carlyle was the world’s busiest
private equity firm this year.
In the UK it has snapped up real
estate assets such as its con-
trolling stake in residential
property developer Fairfield.
Easton is one of the leading fig-
ures in European private equity
and is the top partner in Britain
for the US firm. At the height of
the boom he was one of the
65 Johannes Huth, KKR
KKR’s European arm has been
active on the deal front this year,
nabbing Pets at Home, Nordic
healthcare group Ambea and a
stake in Spanish helicopter opera-
tor Grupo Inaer in the first few
months alone.
The deals are smaller than the
mega-buyouts KKR did before the
crisis, such as the fraught £11bn
buyout of Alliance Boots, and
often involve working with anoth-
er firm or taking a stake.
Huth, the low-profile former
Salomon Brothers banker, is seen
as a potential leader of KKR – the
original Barbarian at the Gate –
which went public this year.
buyout bosses who went before
the Treasury Select Committee.
He sits on the industry’s
Guideline Monitoring Group
which was set up after the
Walker Review of the private
equity sector.
The chemistry PhD joined
Carlyle in 2000 after spending
much of the 1990s overhauling
BTR (now Invensys).
founder of Absolute Return for
Kids (ARK), which raises millions
to finance and run children’s proj-
ects in Eastern Europe, South
Africa and the UK.
63 David Blitzer, Blackstone
Blackstone’s
European managing
partner made a plea
for good behaviour
by his industry earli-
er this year by call-
ing for realistic
pricing of private
equity IPOs. His firm
pulled its attempted
share sale of Travelport at the
last minute in February and qui-
etly shelved plans to float
66 Michael Queen, 3i
Queen replaced the ousted
Philip Yea in January 2009 and
moved quickly to raise £732m
in a rights issue to cut the pri-
vate equity group’s debt. His
shake-up, announced in
September, saw the departure
of dealmaker Jonathan Russell
and raised questions about 3i’s
Merlin as what was
expected to be the
year of the IPO fell
flat. It was a quiet
2010 on the acquisi-
tions front for
Blitzer who spent
much of the year on
the attempted sale
of Jaffa Cake pro-
ducer United Biscuits but
Blackstone has been among the
deals and is still a major force.
ability to spot future buyouts.
Queen joined 3i in 1987 and
was head of the infrastructure
business before taking the
helm. 3i has suffered the same
pressures as the rest of the
industry but, as a public compa-
ny, has faced greater pressures
than privately held firms.
64 Martin Halusa, Apax Partners
Private equity is showing signs
of revival despite continuing
problems in debt markets.
Apax Partners is in talks for
the biggest leveraged buyout
since the crisis with its pro-
posed £5.4bn purchase of
Danish cleaning business ISS –
albeit from other private equity
67 Andrew Tyrie, Treasury Committee
The new chairman of the
Treasury Select Committee
may be a Tory but he is no
establishment figure. After his
surprise victory, Tyrie has given
the chancellor a rough ride and
has extracted a veto for his
committee on the appointment
of the head of the Office for
firms. Halusa shook up his
team in June and Apax’s head
of its media portfolio left the
firm. The Austrian took over
running Apax from the British
firm’s founder Sir Ronald
Cohen six years ago after co-
founding the German opera-
tions in 1990.
Budgetary Responsibility. This
political outsider combines
forensic questioning with
damning judgements, making
the committee a scarier place
than under the generally affable
John McFall. City bosses should
prepare for the worst if called
to give evidence.

68 Tim Breedon, Legal & General 69 Andy Haste, RSA

Legal & General’s results have
been good this year with cash
generation boding well for the
dividend. L&G’s focus on the UK
has raised doubts about its
growth prospects for many
years but Breedon has imposed
discipline while branching out
into emerging markets through
70 Andrew Moss, Aviva
bancassurance deals. As chief
executive of the biggest
investor in the FTSE 100, the
Italy lover can wield enormous
clout when he chooses.
Breedon’s former governance
chief Mark Burgess has quit for
Threadneedle, which may be a
blow.
The RSA chief executive did not feature in
our previous list and has kept a deter-
minedly low profile while reviving the
insurer from the mess he inherited in 2003.
It was therefore a surprise when Haste
approached Aviva in 2010 with a £5bn
approach for the bulk of his rival’s UK, Irish
and Canadian non-life business.
Aviva rejected Haste’s overture and an
entertaining slanging match ensued before
the RSA boss retreated.
Look out for more from the hands-on oper-
ator, who is linked with just about every
European insurance job that comes up.

It has been a rough year or so for

Aviva’s chief executive.
After embarrassing personal reve-
lations near the end of 2009,
Moss struggled to convince
investors that his “One Aviva,
twice the value” revamp was pay-
71 Tidjane Thiam, Prudential 72 Terry Smith, Tullett Prebon
ing off. By June, the company’s
shares had roughly halved in the
three years since Moss took over The Prudential boss should real- after shareholders declared the True to his maverick image, fee-heavy fund-management
and RSA made an unwelcome ly be higher up in our rankings. deal too pricey and risky. The Smith has spent the last couple industry with his low-cost
approach for a big chunk of After all, he heads an insurer Pru’s decisions and communica- of years calling for the big Fundsmith venture, in which he
Aviva’s non-life business. Some performing strongly in Asia’s tions were woeful throughout. banks to be broken up even is said to be investing a third of
investors questioned Moss’s sharp booming savings markets. The The former McKinsey star from though this is not obviously in his £60m fortune. To make
rebuff and he will need to main- big negative is of course Cote d’Ivoire has hung on to his the interests of Tullett Prebon, time for Fundsmith and Tullett
tain the momentum shown in Thiam’s disastrous and job so far and must keep the the inter-broker dealer he he recently stepped down as
encouraging first half numbers to extremely costly £22.96bn bid business motoring to restore his heads. Never afraid of a scrap, deputy chairman at Collins
keep shareholders happy. for AIA, which was scrapped reputation with shareholders. the keen boxer is taking on the Stewart after 18 years.
28 The Power Hundred 2011 & CITYA.M. 22 DECEMBER 2010

73 Michael Dobson, Schroders 74 Martin Gilbert, 75 Ian Powell, PricewaterhouseCoopers

Schroders’ chief executive has
headed the fund manager since
2001 when it was in turmoil
and has provided a steady hand
since. Schroders’ shares hit an
all-time high last month after it
reported record funds under
management of £181.5bn with
strong non-UK inflows.
The firm has also been active as
an owner, notably in criticising
Prudential’s failed bid for AIA
and calling for management
heads to roll.
Aberdeen Asset Management
Five years ago, Aberdeen’s
reputation was in tatters
amid regulatory probes into
sales of split capital invest-
ment trusts.
The firm’s recovery is down
to chief executive Gilbert,
who has expanded
Aberdeen through a series
of bold deals to boast
£178.7bn of assets under
management at the end of
September.
The keen golfer and angler
is still based in Aberdeen,
where he co-founded the
firm with £100m of assets
27 years ago, but it now
employs 1,800 people in 24
countries.
He has argued that
Scotland should become a
PwC’s chairman joined the firm as a gradu-
ate trainee in 1977 and rose to make senior
partner in 2008. Before management, he
worked on high-profile administrations
including MG Rover, Marconi and Drax.
Powell has argued against heavy financial
regulation and anti-competitive taxation in
Britain but the big four accountants will
have to tread carefully as they face ques-
tions about their dominance and failure to
spot problems at banks. PwC, once the clear market leader, is neck
and neck with Deloitte to be the world’s biggest accounting firm.
78 Mark Otty, Ernst & Young
low-tax jurisdiction to
attract financial services
business.

76 David Sproul, Deloitte

The new Deloitte chief
executive and senior
partner has a hard act
to follow in John
Connolly, the dealmak-
er who dominated the
UK arm of the global
firm as he expanded
aggressively.
Sproul joined Deloitte in
Connolly’s transformational
takeover of stricken Arthur
Andersen’s UK busi-
77 John Griffith-Jones, KPMG
ness in 2001 and has
headed the UK and The chairman and senior partner of KPMG The South African marathon when he was elected in 2006.
Europe tax practice UK and joint chairman of KPMG Europe also and triathlon competitor heads He advocates further integra-
since 2006. He has heads Europe, Middle East, Africa and India the fourth-biggest accountancy tion of E&Y’s network to follow
until June to get set- – the biggest of KPMG’s three regions. firm’s Europe, Middle East, the Eastward shift of economic
tled in before The Eton-educated former Royal Green India and Africa business, power. The evangelical
Connolly finally hands Jacket joined the firm in 1975 and was a which was forged in 2008 to Christian sees encouraging
over the reins and will founder of the corporate finance team when increase cross-border coopera- staff to have good values as a
need to work on building his it was launched in 1986. tion between its 86 practices. key part of his job and gets up
profile outside the firm to main- Outside interests include membership of the Otty was the UK firm’s at 5am to run before work on
tain Deloitte’s growth story. advisory boards of the Judge Business youngest ever chairman at 41 most mornings.
School and School of Oriental and African Studies. He is also chair-
man of the Every Child a Chance Trust, which helps children with
learning difficulties.

79 Edward Bonham Carter, Jupiter 81 Neil Woodford, Invesco

Jupiter’s chief execu-
tive braved a frosty
market for share
offerings in June
when Jupiter pushed
on with its IPO but
succeeded in raising
£220m. The great
grandson of former prime min-
ister Herbert Asquith and
brother of actress Helena com-
bines patrician roots with the
popular touch when it
comes to communicat-
80 Tim Howkins, IG Group Woodford runs two
of the UK’s biggest
stocks early as the cri-
sis loomed.
ing with his legion of funds and oversees His most recent high-
retail investors. more money for pri- profile call was to sell
Bonham Carter led a vate investors than almost all his 7.94 per
£740m management any other manager. cent stake in United
buyout of Jupiter from His consistent per- Utilities to back up his
Commerzbank in formance is driven by warnings that
2007. He gave up day-to-day what he calls “subjective” long- investors will abandon water
fund management and stood term equity investments. He companies if Ofwat keeps
down as chief investment offi- avoided the dotcom boom and behaving like “Robin Hood” in
cer ahead of the IPO. bust and got out of financial regulating customer charges.

82 Keith Skeoch, Standard Life Investments 85 Malcolm Sweeting,

Skeoch has stepped
up his shareholder
activism in the wake
of the financial crisis.
RBS climbed down
over its bonus formu-
la for senior execu-
tives in 2010 after
Skeoch criticised it
and he also ques-
tioned Lloyds boss Eric
Daniels’s pay plan. SLI also took
83 Philip Gibbs, Jupiter
Gibbs was already
one of the country’s
star fund managers
before he put half his
Financial
Opportunities Fund
into cash just before
the credit crunch
started in 2007.
After generating a
return of 766 per cent since
launching the fund in 1997,
Gibbs has handed it over to
IG had a shock in 2009 when
its spread-betting punters
the unusual step of racked up bad debts during the
speaking out at stock market crisis.
HSBC’s general meet- That threat receded and chief
ing to attack the bank executive Howkins got on with
over pay. Skeoch was expanding overseas.
paid £2m last year – Growth in Australia and other
more than his chief
executive. He also
heads the Institutional
Shareholders
Commitee, which has called for
reform of rights issue fees.
84 Edward Braham, Freshfields
The head of Freshfields’ world-
wide corporate practice was
our lawyer of the year after
nabbing BP as a client from
rivals Linklaters.
Braham has led the corporate
recent hire Guy de practice since 2009 after build-
Blonay to concentrate ing up the magic circle law
on the fast-growing firm’s infrastructure and trans-
absolute return and port practice.
international financials Freshfields’ was the only lead-
funds he launched at ing corporate practice to
the end of 2009. increase revenues in 2010
The Cambridge history despite a dire market for merg-
graduate worked as ers and acquisitions with a
an equities analyst broad European spread capital-
specialising in financial stocks ising on relatively strong
before moving into fund man- Continental activity compared
agement at Jupiter in 1997. with the UK market.
international markets helped
drive record annual results
announced in July and UK busi-
ness was not bad at all as mar-
ket volatility drove demand.
The astronomy enthusiast
audited IG’s books and joined in
1999 as finance director.
Clifford Chance
The world’s biggest law firm elected Sweeting
last month as senior partner to replace Stuart
Popham, who is retiring. Popham will be a
hard act to follow after establishing himself as
a leading voice in UK policy debates and gain-
ing the ear of Gordon Brown.
Sweeting has said he wants to combine
improved profits with leaving a legacy akin to
the trailblazing deals of the 1980s and 1990s that turned Clifford
Chance into a global giant.
86 David Morley, Allen & Overy
Allen & Overy’s tial mortgage-
senior partner lays backed securities
claim to be the issue in September
best banking 2009. Morley
lawyer in the coun- recently spent a
try and remains a month based in
source of advice Germany to help
for Britain’s bank the firm’s expan-
bosses. During the sion there and relo-
crisis, the firm cated to New York
advised HBOS on for three months
its emergency after the Lehman
merger with collapse. He sits on
Lloyds TSB and advised Lloyds London Mayor Boris Johnson’s
on its landmark £2.8bn residen- business advisory council.
CITYA.M. 22 DECEMBER 2010 & The Power Hundred 2011 29

87 Jeremy Parr, Linklaters 88 Alison Carnwath, Land Securities 89 Nilufer von Bismarck,
Slaughter and May
Linklaters’ busy corporate rain- The former invest- talking Carnwath told
maker kicked off this year ment banker is chair- her chief executive Married into the family of the
working on Lloyds Banking man of Land Francis Salway that former German chancellor,
Group’s record £13.5bn rights Securities and this she was giving him six von Bismarck is also the sis-
issue after a hectic period year added a direc- months to turn the ter of Naguib Kheraj, the for-
advising Lloyds on its HBOS torship at Barclays to business round. mer JPMorgan Cazenove
acquisition and the drawn-out her collection of non- Carnwath was the chief executive.
decision on whether or not to executive posts, first female director of But companies from pharma-
enter the government’s asset which also include Schroders investment ceuticals to banking come to
protection scheme. Man Group. bank, where she worked for 10 the Slaughter and May part-
Parr then stepped up to become Soon after becoming chairman years before amassing a blue- ner for her unflappable
Linklaters’ head of corporate at Land Securities, the straight chip “portfolio” of directorships. advice, not her family connec-
but will carry on with client tions.
work for the likes of Bank of Work for major client
America Merrill Lynch, United Standard Chartered this year
Technologies, Novartis and included advising on the UK
Dubai World.
Educated at Cambridge, Parr
91 Vince Cable, Business Secretary bank’s £3.3bn rights issue and
its £321.34m investment in
cut his teeth advising NatWest the IPO of Agricultural Bank
on its defence against the dual of China. for its failed AIA bid.
hostile bids from Bank of Less successfully, von She is a member of the steer-
Scotland and Royal Bank of Bismarck advised on ing group reviewing the Higgs
Scotland in 1999-2000. Prudential’s scrapped rights corporate governance code.

90 Gerald Ronson, Heron International 92 Francis Salway, Land Securities

With Ronson’s 755-
feet Heron Tower
nearing completion
at Bishopsgate, the
veteran property
tycoon is placing a
big bet on demand
for office space in the
City of London.
Ronson raised eye-
brows when he went ahead
with the long-planned sky-
scraper in the reces- What a difference a year makes.
sion. The tower will be An embarrassing run in with earnt him the title of anti-busi- Land Securities’ chief executive was living on
London’s third-tallest some undercover journalists left ness secretary in this newspa- borrowed time in 2009 after investors
building when it opens Vince Cable’s presence in this per. Despite his newly reduced fumed at a £4.8bn loss and demanded a
in the new year. list hanging by a thread yester- role, the Strictly Come Dancing rapid overhaul of the business.
Ronson’s career spans day. A trenchant critic of the contestant and former Shell After surviving that test, things are looking
decades and includes a financial sector in opposition, in economist is still reviewing rosier as the London commercial property
spell in prison for his government Cable’s critique has matters such as the takeover market continues to pick up. Land Securities’
part in the Guinness often been much harsher than rules and the stewardship code punt on the City’s shopping habit looks to
scandal, in which some of his coalition colleagues and so remains an influence on have paid off after the upmarket One New
Ronson says he acted in good would have liked, and once the City – for now. Change mall’s recent busy opening and now the long-hoped-for
faith and was a scapegoat. Walkie Talkie is under way, promising a skyscraper to rival Heron
Tower and the Shard in transforming the Square Mile’s skyline.

93 Dominic Barton, McKinsey & Co 94 Robin Geffen,

McKinsey’s global
managing director
lives in London as
much as he lives any-
where in running the
global consultancy
firm with tentacles
all over the business
world. The Canadian
took over in early
2009 and soon found himself
dealing with a case of insider
Neptune Investment Management 95 Sheikh Hamad bin Jassim
trading by a McKinsey
partner based in
The Neptune
founder has had a
and called for chief
executive Tidjane bin Jabr Al Thani, QIA
California. Steeped in high-profile year or Thiam to take
the firm since joining so, doubling funds responsibility for
straight from an under management the costs.
Oxford economics and leading a share- He also demanded
master’s in 1986, holder revolt that Kraft should
Barton weathered the against Prudential’s increase its offer
storm. The marathon attempted takeover for Cadbury after
runner chaired of AIA. Geffen kept up the investing 3.6 per cent of his
McKinsey’s Asian business pressure on Pru management fund in the confectioner and
before moving to London. after the deal was scrapped waiting for a bid.

96 Jon Moulton, Better Capital 97 Chris Grigg, British Land

Moulton was a trail- company Gardner As head of Qatar Investment position as the largest investor
blazer in European from Carlyle. Moulton Grigg has had a Grigg has rebalanced Authority, the oil state’s sover- in J Sainsbury makes it a con-
private equity but sprang to prominence tough baptism British Land to rely eign wealth fund, Hamad bin stant source of bid speculation
things looked bleak a in 2000 with a failed since he was less on the City with Jassim has placed some heavy after scrapping an attempted
year ago when he bid for Rover that named as British more properties in bets on the City as a wealth takeover in 2007.
quit Alchemy focused attention on Land’s chief execu- the West End. He generator. Add in stakes in the landmark
Partners after rowing the methods of ven- tive two years ago. faced criticism early QIA made £600m by selling Shard of Glass building at
with management at ture capitalists. He has Soon after joining, in 2010 as Land some of its stake in Barclays London Bridge and Canary
the firm he founded. since been a source of the former Securities and and is still a major shareholder Wharf’s owner Songbird and
Now Moulton is back disarming frankness Barclays banker Hammerson got in the bank. It bought luxury you have an astute backer of
doing deals with Better Capital. on private equity’s use of tax launched a £740m rights issue ahead with new building. But store Harrods in 2010 and its Britain’s financial future.
He has already acquired breaks, accountants’ loss of to reduce debt and sold a stake with UBS’s new headquarters
Reader’s Digest UK and integrity and the need for Sir in trophy City asset Broadgate and the £340m Leadenhall
launched the buyout of defence Fred Goodwin to resign. to the chagrin of former British Building in the pipeline, he is
Land boss Sir John Ritblat. back in the market.
100 David Thomlinson, Accenture
98 Iain Evans, LEK 99 Anthony Ward, Armajaro Thomlinson is the
senior managing
biggest market.
Thomlinson took
director of the con- over four years ago
Evans is global chairman of the UK consul- sultancy’s global after Accenture was
tancy firm. He co-founded LEK in 1983 with Commodities have been a hot to make 5.3bn chocolate bars. strategy and opera- dumped by J
two former colleagues from Bain & Co and it story in 2010 and Ward’s Unusually, he has taken physical tions on top of his Sainsbury and with-
is now one of the world’s biggest manage- Armajaro group is at the centre delivery of the beans. job as managing drew from its £2bn
ment consultants with offices in 20 cities in of the action by making big The former dispatch rider director of NHS contract.
Europe, Asia and the US. Evans still spends bets on future food production earned the nickname Accenture’s UK and After a lean time in
more than half his time on client work, much and demand. “Chocolate Finger” in 2002 Ireland operations. the recession, he is
of which involves M&A and corporate turn- Ward stunned the market in after buying more than Britain and Ireland targeting advice on
arounds. LEK lurks in the background of hundreds of acquisitions July by snapping up 7.3 per cent 200,000 tons of cocoa beans, generates £2.1bn of revenues, government cost-saving
and is the only global strategy firm to have grown from a UK base. of the world’s cocoa – enough making £40m in two months. making it Accenture’s second- measures to boost revenues.
 City Focus
Breaking up is hard to do: partnership
gets tricky when you’re asked to leave
A recent Employment Tribunal
case clarifies the status of fixed
share partners in law firms
TINA WILLIAMS AND
DANIEL SUTHERLAND
W
HEN is a partner not a partner?
That was the question posed to
the Employment Appeal
Tribunal (EAT) in the recent
case of Tiffin v Lester Aldridge. It has long
been accepted that employees can be
given the title of partner without this
affecting their status as salaried employ-
ees. Less clear is whether a partner who
lacks some of the typical characteristics
of a full equity partner may claim the
reverse: that is to say, that he is in reality
an employee.
The question of the employment status
of a partner is important because an
employee has statutory rights enabling
him to bring a claim for unfair dismissal
whereas a partner does not. The partner-
ship claims equivalent to unfair dismissal
are, if available at all, so difficult and
costly to bring that such cases are rare.
The result is that junior partners – who
generally lack some of the rights enjoyed
by full equity partners – are often required
to leave in circumstances which would
constitute unfair dismissal if they were
employees, but without any realistic
prospect for legal redress.
In the case of Tiffin, the aggrieved part-
ner was a “fixed share partner”. Unlike
full equity partners, who normally receive
a percentage of the firm’s profits, he was
entitled to a fixed amount of the firm’s
profits each year, much like a salary, with
only a small percentage share on top. As is
Stockholm Syndrome and Dementors rule the law
MATTHEW RHODES
A
HARD year for the City’s legal mar-
ket is drawing to a close, and
lawyers at those firms that haven’t
cancelled their Christmas parties
are looking forward to a booze-filled lead
up to the New Year. And giving their two
cents in RollOnFriday’s annual Firm of the
Year survey. There seems to be little festive
cheer in the sector.
It’s not entirely doom and gloom.
Workflow is slowly improving, bonuses
and salary rises are starting to creep back
and at least the younger end of the profes-
sion is having a laugh – “training was good
THE NISSAN CUBE’S
NOT FOR SQUARES
| Law SEE OUR REVIEW IN
MOTORS, P32
In or out?
Picture: GETTY
typical of junior partners, Mr Tiffin had a mere 5 per cent of the votes of a full
very limited say in the management of the equity partner).
firm. On being required to leave, Mr Tiffin The EAT’s decision was that, on balance,
sought a ruling that he should be classed Mr Tiffin was a partner. He possessed
as an employee, with the employment enough of the characteristics of a partner
rights that accompany that status. and those characteristics need not be sat-
Against the factors indicating that Mr isfied as to any minimum threshold.
Tiffin’s true status was that of an employ- Many partnerships and LLPs will consid-
ee, there were a raft of factors which sug- er this judgment with relief. They would
gested that he was a partner. These have been concerned to find that fixed
included the fact that he freely agreed to share partners with similar
become a partner and never asserted he characteristics to Mr Tiffin are in fact
was an employee prior to bringing pro- employees for employment rights purpos-
ceedings, that he contributed some es. What might such a judgment have
capital to the business, was entitled to a done to their self-employed tax status as
small variable profit share, would have partners, which is hugely beneficial to
received some of the surplus proceeds on the firm?
a winding up of the firm and was entitled By contrast, the EAT’s decision provides
to vote at partners’ meetings (albeit with a no comfort for junior partners. As the law
– lots of kicks and frolics. But once it was the last couple of years been handled
over, a totally different face emerged. That entirely successfully. One lawyer reports
of a greasy old bum.” that his firm “has had to make substantial
Why the change? Four years ago, part- payouts to more than one person when
ners’ only worry about the forthcoming they have been pushed out and it has not
year was whether to upgrade their been dealt with properly or in line with
Porsche. Now they wonder whether their employment law.”
new office will have no windows and a They’ve also left some departments per-
seat that flushes. The resultant paranoia ilously short staffed, and those firms
has meant that at some outfits the profes- which are profiting from the very gentle
sional, courteous working environment of upturn are seeing the inevitable results.
the pre-crunch firm has evaporated. It’s possibly no surprise that the top griev-
Typical comments include: “They treat ance is a general lack of any work/life bal-
lower staff like something you step in.” ance.
“Perhaps the most odious and dysfunc- “Crippling would be one word to
tional private equity team in the City describe the hours. Murderous would be
makes working here deeply unpleasant.” another.” “At 4pm last Sunday there were
“This job is like syphilis. Getting it was fun, around 30 of my 60-strong intake in the
but it turns out to be very bad in the long building.” And “working here is like being
run.” “Lower tier management have the kidnapped. You are beaten down so much
people skills of the Dementors from Harry you get Stockholm Syndrome. I’ve worked
Potter.” “There is a culture of bullying and through the night and all the next day and
treating those who survived redundancy still not even been thanked.”
as no more than numbers on a sheet to be Still, at least they’re lucky enough to
moved around and abused at will.” have jobs, and they’re handsomely paid for
Nor have the swingeing redundancies of the hours they put in. Or not. “Salaries, if
31
stands, partners can do little when they
are required to retire, unless they are “for-
tunate” enough to be so required by rea-
son of a characteristic protected under
discrimination law. That there is no gen-
eral right of protection against removal
without cause for partners reflects the
origins of partnerships as a relationship
between equals, but can seem anomalous
in a world where junior partners are, in
reality, not in an equal bargaining posi-
tion with the full equity partners. In
many firms they are treated much as
employees would be and, had it not been
for the favourable tax treatment that
comes with partner status, would proba-
bly have remained as employees.
Tina Williams and Daniel Sutherland are part-
nership law experts at Fox Williams LLP
converted to an hourly rate, work out to be
less than you’d earn at McDonalds.” Hmm.
And you can, at least, get a decent cup of
coffee at McDonalds, as opposed to one
law firm where “coffee from the machine
tastes like a beaver’s ass” and “our new bis-
cuits look like they’ve been made from the
dried grime you find around your sink
hole in the bathroom. The taste isn’t far off
that either.”
Are things really that bad? One lawyer
rejoices in his firm’s location being “near a
bridge I can throw myself off”. Another
comes up with the rather more prosaic “I
hate my life”. But lawyers are paid to be
cynical, and most will grudgingly admit
that things aren’t entirely awful. “The part-
ners are excellent: understandable and
approachable”. “Fantastic staff canteen,
great support services.” “Debauched quiz
nights.”And “collegiate atmosphere and
half-price cake in the café on a Friday”. So
lawyers can indeed have their cake, but
possibly not eat it too.
Matthew Rhodes is director of legal community
website RollOnFriday.com
 Lifestyle
32 CITYA.M. 22 DECEMBER 2010

| Motors WORDS BY
RYAN BORROFF

This funny box is not just for kids

Hipsters and motor
enthusiasts alike are This retro, boxy
look isn’t for every-
going mad for the one. But hipsters
love it.
Nissan Cube

A
RE YOU a children’s entertain-
er?,” asks some clown as I’m
unloading from the Nissan
Cube’s boot. And there’s no
doubt that as a chariot of choice for a
children’s entertainer, the Nissan Cube
must be on the list of hot possibles just
due to its unusual cartoon looks. And
therein lies the Nissan Cube’s weakness
and its strength. The car divides opinion,
emphatically. I have driven supercars
that attract less attention than this.
But I liked it immediately. I genuinely
found excuses to drive it. This is extreme-
ly unusual for any car at this price.
Around town I found the Cube to be a
very pleasant companion. Visibility – out
the front rather than the rear – is fantas-
tic. It is one of the brightest and most
airy cars I’ve driven. It feels wide and spa-
cious despite being small and inside is
roomy indeed, even in the back. Unusual
features – like the hair band-like orange
elastic straps on the door pulls to cap-
ture pens, tickets, letters to post etc – are
quirky, and they’re clever little touches
that soon become indispensable. design classic appreciated by the same
But quirky doesn’t even cut it. Even in people who are obsessed with the styling
Japan I suspect the Cube is something of of anything by Apple Inc. The Cube is hot
an oddball and cars can get fantastically amongst the fixed-wheeled, tweed plus-
odd there as it is. Inside, there’s an S- four-wearing bicycle-polo players of
shape dash that wraps into the doors, Hoxton. As I say, its divisive. It’s cool in
atop of which sits a circle of shag carpet the same way that wearing a Yo Gabba
that my wife described as a discarded Gabba T-Shirt is cool on a 42-year-old
toupée. It sits there to house stuff like man. If you don’t like it then you just
mobile phones and iPods in a super con- don’t get it. It’s worth remembering that
venient and carpet-grippy fashion. I the Cube spearheaded a trend for boxy,
wanted to build a small miniature dis- characterful cars and took 10 years to get park.
play of tiny ninja figures covertly crawl- here from Japan. And people were eager, THE FACTS: I walk away from it and almost expect
ing through the carpet grass. The thing really eager, for it to get here. NISSAN CUBE to see a warm, happy orange glow
is I probably didn’t need to drive any- In the City the Cube – thanks to its 1.6 KIAZEN around it. Or maybe it’s around me. The
where in the Cube. I just wanted to play 110bhp, 1.6 litre engine – seems sprightly Nissan Cube is an imperfect and often
in it. enough. It does have a tendency to roll at impractical car, but it’s fun and enter-
But then there is something childlike speed but only in a way a puppy does taining and not just for the children.
about the Cube. It may be bought by the when it gets a little ahead of itself. PRICE: £15,100
kind of people that name their cars like Somehow it seems like no big deal and
0-62MPH: 11.3secs
they name their pets or who personalise
them with colourful cushions and cud-
appears part of its loveable charm. On
the motorway it’s going to be a bit more TOP SPEED: 109mph
THE VERDICT
dly toys on the rear parcel shelf. Or the challenging, being so upright, and isn’t DESIGN hhhhi
kind of people that talk in high-pitched going to make for super speedy progress. CO2 G/KM: 151g/km PERFORMANCE hhhii
cartoon voices to one another to convey But none of this really matters because
MPG Combined: 42.8 PRACTICALITY hhhii
affection. Perhaps, but I doubt it. the sun roof has a roller blind, the boot VALUE FOR MONEY hhhhi
Really the Cube is something of a opens like a fifties fridge and it’s easy to

CAR TALK BY RYAN BORROFF

JAGUAR’S C-X75 ON SHOW
Jaguar’s stunning C-X75 concept is on display at the Jaguar Boutique
at the Berkeley Hotel, London, the first time the car has been on shown
to the British public. The supercar has batteries which are charged by
two mini jet turbines mounted in the rear which means that the car
would have carbon dioxide emissions of just 29g/km CO2 yet still be
capable of 200mph+. The car is on show until New Year’s Eve.
VW’S TAXI CONCEPT
Volkswagen has created a series of inspired taxi concepts for cities
worldwide. The electric UP! has been reconceived as a taxi for Berlin,
Milan and now London. The London one has just two seats, and the Union
Jack flag on the roof. Powered by an electric motor with a maximum out-
put of 115 PS, a top speed of 74 mph and a range of 155 miles, there’s no
word yet on whether London cabbies would go for it.
PARIS GETS NEW AUTOLIB SCHEME
Paris is set to combat congestion with the automotive answer to its
hugely successful Velib bike hire system. The Autolib service will offer
3,000 electric four-seater Bluecars designed by Italian designers
Pininfarina and manufactured by Bolloré. They’ll cost €5 for the first half
hour, €4 for the next and €6 thereafter and will be located at 1,000
ranks across the city. Could Boris introduce a similar scheme in London?
CITYA.M. 22 DECEMBER 2010 Lifestyle | TV& Games 33

BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5 TV PICK

TERRESTRIAL
6pm BBC News
6.30pm BBC London News
7pm The Nativity
7.30pm Dig 1940: BBC News
8pm Jimmy’s Food Factory
8.30pm Nigel Slater’s Simple
Suppers 9pm Supermarkets: What
Price Cheap Food? Panorama 10pm
BBC News 10.25pm Regional News
10.35pm The National Lottery
Wednesday Night Draws 10.45pm
Catherine Tate: Nan’s Christmas
Carol; National Lottery Update
11.35pm FILM Holiday in Handcuffs
2007; Weatherview 1.10am Sign
Zone: Country Tracks 2.05am The
Story of Science – Power, Proof and
Passion 3.05am The Hairy Bikers:
Mums Know Best at Christmas
4.05am-6am BBC News
5.20pm Escape to the Country
6.05pm Celebrity Eggheads
6.35pm Yellowstone
7.35pm CHOICE Nigella
Kitchen
8.05pm Victoria Wood with All
the Trimmings: All-star special.
9pm FILM The Other Boleyn
Girl: Premiere. Historical drama,
starring Natalie Portman and
Scarlett Johansson. 2008.
10.50pm Ruth Jones’
Christmas Cracker
11.30pm The Goodies
12am The Funny Side of
Christmas
1am Medium: Starring Patricia
Arquette. 1.40am Medium 2.20am
BBC News 4.05am-6am Close
6pm London Tonight
6.30pm ITV News
7pm Countrywise Winter
Special
7.30pm Emmerdale: David puts
himself in danger trying to
rescue Jacob.
8pm CHOICE It’s Paul Burling:
The Britain’s Got Talent star
takes a comical look at 2010.
9pm The Comedy Annual 2010
10pm ITV News at Ten
10.30pm London News
10.35pm FILM Batman
Begins: Comic-book adventure,
starring Christian Bale. 2005.
1am The Zone; ITV News
Headlines 3.05am Surface
3.50am-5.30am ITV Nightscreen
6pm The Simpsons 6pm Monkey Life
6.30pm Hollyoaks 6.25pm Live from Studio Five
7pm Channel 4 News 7pm Five News at 7
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8pm Christmas with Gordon diver suffering from ‘the bends’
9pm Come Dine with Me: receives urgent attention; Five
Celebrity Christmas Special: News Update
With Goldie, Susie Amy, Janet 8pm Emergency Bikers; Five
Ellis and Tony Christie. News at 9
10pm Chris Moyles’ Christmas 9pm NCIS
Quiz Night 10pm CHOICE Law & Order: IT’S PAUL BURLING
ITV1, 8PM
10.50pm The Family Criminal Intent
12.20am The Event: President 10.55pm Law & Order The Britain’s Got Talent finalist is joined
Martinez is blackmailed. 11.55pm Poker by fellow impressionists Jess Robinson,
1.20am The Real Housewives of 12.50am SuperCasino Eve Webster and Anthony Spargo to
New Jersey 2.05am FILM Candy: 3.55am Poker 4.45am House present a comical look at 2010.
Drama, starring Heath Ledger. 2006. Doctor 5.10am Michaela’s Wild
3.55am Brothers & Sisters 4.40am Challenge 5.35am-6am Michaela’s
ER 5.25am-6.15am Hill Street Blues Wild Challenge

SKY SPORTS 1 BRITISH EUROSPORT Four Weddings 9pm Simon Make It or Break It 2.25am DISCOVERY HOME &
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Cowell’s Crazy 2010 10pm Alan Carr: Chatty Man 3.20am

7pm Live Darts 12am Spanish
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Pin Bowling 11pm Cage Fighter
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Selection 8.20pm Equestrian
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7pm Press Pass 2010 7.30pm
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7pm Total Wipeout 8pm FILM
Armageddon 1998. 10.20pm
Russell Howard’s Good News
10.50pm Family Guy 11.35pm
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Pints of Lager and a Packet of
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Good News 2.50am Mongrels
3.20am Lee Nelson’s Well Good
Show 3.50am Total Wipeout
4.55am-5.20am Two Pints of
Lager and a Packet of Crisps
E4
7pm Hollyoaks 8pm Friends
9pm Ugly Betty 11pm Alan
Carr: Chatty Man 12.05am
Friends 12.35am Scrubs 1.35am
What About Brian 4am Being HEALTH
7pm A Baby Story 8pm 10
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Years Younger 9pm Emergency:
HISTORY Life in the ER 10pm Hospital
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Nigella Lawson prepares food and drink
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Cross 3am Mega Movers 5am- sausages, and a seasonal cocktail.
6am Dinosaur Secrets SKY1
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The Complete History 3.50am Their Own 2am Road Wars CHANNEL5, 10PM
Stephen Hawking’s Universe 2.50am Oops TV 3.15am The Bobby is haunted by the past when he
4.40am Days That Shook the Dresden Files 4.10am Sell Me the finds a picture at his mother’s grave.
World 5.30am-6am How Does Answer 5.05am-6am Are You Vincent D’Onofrio, Kathryn Erbe and
That Work? Smarter Than a 10 Year Old? Tony Goldwyn star. Last in the series.

COFFEE BREAK
Copyright Puzzle Press Ltd, www.puzzlepress.co.uk

QUICK CROSSWORD
    

SUDOKU KAKURO
35 11 10 37 17 5
24 18
9 7 
16 13
Place the numbers from 1 to 9 in each empty cell so that each 30 
row, each column and each 3x3 block contains all the numbers Fill the grid so that each block 8 12
38 6 10
from 1 to 9 to solve this tricky Sudoku puzzle. adds up to the total in the box 23 13
   
above or to the left of it. 7
7 33    
You can only use the digits 1-9
    and you must not use the
10
20  
same digit twice in a block.
  The same digit may occur 18
4 16
13
34

8
  more than once in a row or
column, but it must be in a
16
11
22
11


    separate block.
15 14
28
7
8

19 15
  14 12
 

    ACROSS DOWN
1 Acute (5) 1 Sculptures representing
 
  WORDWHEEL A C
4 Pale (5)
7 In a little while (7)
humans or animals (7)
2 Painkiller developed in
Germany in the 1890s (7)
Using only the letters in the Wordwheel, you have 8 Part of the leg
    ten minutes to find as many words as possible,
O L between the hip
3 Civil or military
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters D and the knee (5)
9 Alongside each
authority in Turkey (5)
5 Sharp piercing cry (6)
LAST ISSUE’S or more, all must contain the central letter and
letters can only be used once in every word. There
R E other (7) 6 Draft (6)
SOLUTIONS KAKURO is at least one nine-letter word in the wheel.
K D 13 Make changes
in text (4)
10 Evergreen tree with
small berries and glossy
QUICK CROSSWORD 16 Toy flown in
aromatic leaves (3)
SUDOKU
3 5 1 2 6 9 8 4

7 $ 6 7 ( / ( 6 6
1 8 5 9 4 6 7 2          the wind (4) 11 Device on an aircraft that
8 9 8 3 9 5 1          controls lateral motion (7)
3 % 2 2 & ,
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3 6 * , * % 7 3 8 1 5 9 6 4
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5
%
:
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(
% % 2
6
7
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& 2 5 * , 7 5 < 2 1 9 5 2 1 7 1 2 The nine-letter word was par in golf (5)
a small child (6)
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TRANSIENT          18 Fen (5)
5 $ 3 7 8 5 2 8 6 8 4 6 7 8 7 5 9 22 For this reason (5)
 Sport
34 CITYA.M. 22 DECEMBER 2010

Results
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▲

(%,'(:_X`eF]:fddXe[N?lkZ_`ejfe (($)) CRICKET

8cnXpjfek_\dfm\C8jg\cc ,'$(*M\ik`^\;fi\KA BY JAMES GOLDMAN of it – slid by unnoticed until his dou-
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(($+*=flekX`ej=cpgXjkIXZ_X\c>i\\e (-$( ical upper-hand following their crush- Mohammad Amir and Mohammad
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game, so you guys talk
about momentum, you
all say they’ve got it,”
he said.
tough or we’ve been desper-
ately trying to save a
draw, Colly’s the guy
you want out there.
Aussies call up

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“But we all
know when we
start in
When his back’s
against the wall
he delivers.”
cover for Ricky
NXjgj%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%+ * ' ( * ((+ .' (, Melbourne, it’s The build up to AUSTRALIA have placed Usman
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slate. I think it’s Test has been fourth Ashes Test as captain
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D<DFI@8C=<IE8E;FM@;8CJ8CM8JG8E@J?FG<E# to these condi- reports of the sur- from a fractured finger.
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9`XeZ_\kk`@kX (($-(($+()$('% tions we get in face that will greet The uncapped Khawaja, 24, has
Melbourne and plays England at the MCG. been this season’s Sheffield Shield
the best cricket will But whatever the leading the runscorer with 598 at
KF;8PËJ;@8IP win, it’s nothing to do curator prepares, Cook an average of 74.75.
;8IKJ with momentum.” admits Australia are well Ponting is expected to be fit for
G;:1CX[Yifb\j%ZfdNfic[;Xikj:_j_`gCfe[fe % One man who will certainly be within their rights to produce a track the Boxing Day showdown but his
@:<?F:B<P adopting the clean slate approach at that plays to their strenghts. potential replacement is certainly
<c`k\C^\1:Xi[`]];\m`cjm?lccJk`e^iXpj:Xi[`]]8i\eX % the MCG – should he retain his place He said: “That is what home advan- not short of confidence.
– is under-fire Paul Collingwood. tage is, and you’d expect everyone to He said: “I think I was ready to
England’s record-breaking feats do it. There is no reason I would play for Australia when I was six.”
email sport@cityam.com with the bat in the first two Tests expect Australia not to do it.”

Henson enjoys capital gains Under-fire Grant set to begin January SPORT | IN BRIEF
spending with deal for Villa’s Sidwell Dein to land senior FA position
FOOTBALL: David Dein is the front-run-
He said: “I moved from Wales for ner to be chosen as the new Football
▲

RUGBY UNION
BY JAMES GOLDMAN personal reasons. It was tough for me Association chairman when board
▲

after splitting with my wife. I was
SARACENS recent signing Gavin pretty cut up at the time and didn’t
Henson is yet to make his debut for think the Welsh media had been par-
the club, but the Wales international ticularly kind to me.
is already thinking of extending his “Saracens are a great team with
stay in the capital beyond the end of great facilties and it’s a great environ-
the current season. ment so hopefully it will be good for
The 28-year-old (right) is set to me.
make his eagerly awaited first “If it does work in London then
Sarries appearance at Wembley in I’ve got no reason to go back.”
the Boxing Day clash against After nearly two years out of the
Wasps, 21 months on from his rugby spotlight, Henson could
last competitive outing. be forgiven for wanting to
With his passion for the make his comeback in
sport reignited, Henson more low-key surround-
signed a deal with ings, but the player
Saracens until the end of thinks differently.
the current campaign “This is the best
and is enjoying London place to make a
life so much, he sees comeback. It’ll be
no reason to seek an great. There’ll be 50,000 all
imminent return to here to come and see my come-
Wales. back. It’s what it’s all about.”
FOOTBALL
BY FRANK DALLERES
WEST HAM are poised to bolster their
squad for another relegation scrap by
completing the signing of tough-tack-
ling Aston Villa midfielder Steven
Sidwell.
The former Chelsea, Reading and
Arsenal player, 28, is out of contract
at the end of the season and eager for
first-team action, having made just
six appearances this term.
Under-fire Hammers manager
Avram Grant has seen Mark Noble
and summer signing Thomas
Hitzlsperger succumb to injury as his
side have struggled to climb off the
bottom of the Premier League.
Grant has targeted two or three
signings in the January transfer win-
dow, with striking reinforcements
also a priority. Ambitious moves for
Sidwell’s contract
is in its last year
Picture: GETTY
Emmanuel Adebayor and Robbie
Keane appear to have failed, while
Monaco’s Dieumerci Mbokani is said
to be another target.
members gather today. Dein, the former
Arsenal vice-chairman, is the favourite
after acting chairman Roger Burden
withdrew his application following
England’s 2018 World Cup bid defeat.
Haye hopes for Klitschko deal
BOXING: David Haye is offering
Wladimir Klitschko a 50-50 split of the
earnings in order to secure a heavy-
weight fight next year. “David and I are
happy to split the entire pot 50-50 and
grant Wladimir the deal he has wanted
since day one,” said Haye’s manager and
trainer Adam Booth.
D’Ambrosio gets Virgin drive
FORMULA ONE: Belgian Jerome
D’Ambrosio, 25, will partner Germany’s
Timo Glock in Virgin Racing’s Formula
One driving team next season. The
Former GP2 driver replaces Brazilian
Lucas di Grassi.
CITYA.M. 22 DECEMBER 2010
THE ALL-ROUNDER |
CONDITIONS, STATS AND BANTER
STAT OF THE DAY
Those championing Ian Bell’s pro-
motion to No5 in England’s batting
order should take a look at this lit-
tle nugget. Bell has played and
missed at 5.6 per cent of all deliver-
ies in this Ashes, the highest per-
centage of any top seven batsman
from either side. It should also be
noted that Bell’s average at No6
for England (56) is only bettered by
Robin Smith.
BROAD’S THE NEW CLOUGH
How does one lonely cricketer
occupy themselves on the flight
back to England after suffering a
tour ending injury? Well, if you’re
Stuart Broad the only answer is a
good old Football Manager binge.
He tweeted: “A 12 hour wait in
Singapore airport. This is why
Football Manager was created! I’ll
have Forest in the Champions
League before I leave.” Billy Davies
watch out.
SHANE ON YOU, JIMMY
It seems the whole of Australia is
lining up to take a pop at England’s
sledger in chief Jimmy Anderson,
and Shane Watson has joined an
ever growing army of detractors.
Paul Collingwood lost his wicket to
the final ball of day three in Perth
when night nightwatchman turned
down a single that would have got
the Durham man off strike. Watson
said: “To see Jimmy not help out his
mate was great. As a nightwatch-
man, I thought their job was to pro-
tect the main batsman that was in.
He’s been quite talkative on the field
so it was nice to turn the tables.”
Ponting is expected
to be fit for the
Melbourne Test
Picture: GETTY
Usmanov hints at £700m Arsenal offer
▲
FOOTBALL
BY FRANK DALLERES
ARSENAL’S second largest sharehold-
er Alisher Usmanov has reignited the
battle for ownership at Emirates
Stadium by declaring his intention to
move to the brink of launching a for-
mal £700m takeover offer.
Russian billionaire Usmanov
already owns almost 27 per cent of
the Premier League outfit, but wants
to increase that to 29.9 per cent – the
maximum he can own before being
obliged to bid for all shares.
The move would intensify the
stand-off between Usmanov, who has
been slowly growing his stake, and
Stan Kroenke, the American sports
tycoon who already owns 29.9 per
cent and has been welcomed onto
the Arsenal board.
“The goal is to increase the holding
up to a blocking stake, 29.9 per cent,”
Usmanov said. “Afterwards, we’ll see
what to do further. If all the share-
holders are united by then like they
are now, we’ll keep it as that level.”
Usmanov’s reference to a blocking
stake is, in fact, misleading as he has
technically enjoyed the power to veto
major board decisions since passing
25 per cent. However, moving to 29.9
per cent would increase his voting
City star Balotelli: I’ve never heard of Jack Wilshere
▲
FOOTBALL
BY FRANK DALLERES
HE MAY be rated one of the best
young players in the world, but
Arsenal’s Jack Wilshere has escaped
Mario Balotelli’s radar.
The £24m Manchester City striker
revealed his ignorance of the 18-year-
old England midfielder after beating
him to the Golden Boy trophy, an
award for the best player aged under
20 handed out by a Turin newspaper.
“What’s his name? Wil…? No, I
don’t know him, but the next time I
play against Arsenal I will keep a
close eye on him,” said Balotelli of
Wilshere, who has made 19 starts
Usmanov has been
slowly growing his
Gunners stake
Picture: GETTY
rights and make him better posi-
tioned to make a takeover offer.
The metals mogul has been pre-
vented from mounting a formal bid
by the so-called lockdown agreement
among Arsenal’s hierarchy, which
means any shares sold by directors
must be offered first to fellow board
members. Kroenke, by contrast, took
advantage of his preferential status by
already this season. “Perhaps I can
show him the Golden Boy trophy and
remind him that I won it.”
Balotelli also managed to slight
Manchester United’s Wayne
Rooney, Arsenal captain Cesc
Fabregas and Tottenham’s
Rafael van der Vaart – all
former winners of the
award – by saying only
one previous Golden
Boy was better than
him: “There’s only one
that is a little stronger
than me: [Lionel]
Messi. All the others
are behind me. The 20-
year-old has shown
snapping up eight per cent from
Danny Fiszman in March 2009.
“I chose to invest significant money
in Arsenal because I consider it to be
one the world’s most well-structured
football clubs, with one of the best
stadiums and led by a genius coach,
Arsene Wenger,” Usmanov added. “I
don’t regret this investment. It’s not
dropping in value, it’s rising only.”
only glimpses of talent since a £22m
summer move from Inter Milan,
but did not attempt false mod-
esty on collecting his gong.
“I am delighted to receive the
award, but who should have
won it but me?” he said.
“Two years ago I finished
sixth, and then fourth in
2009. It was finally my
turn.
“My aim is that this
prize will transform
itself into the Ballon
d’Or. To have won
this award is a
good omen to
achieve that.”
35
ANALYSIS l Arsenal’s ownership
11.2%
29.9%
15.9%
16.1%
26.9%
29.9% 26.9% 16.1%
Stan Kroenke Alisher Usmanov Danny Fiszman
Securities LTD
15.9% 11.2%
Lady Nina Others
Bracewell-Smith
A 15.9 per cent shareholding
remains on the market after former
director Lady Nina Bracewell-Smith
put her stake up for sale in April.
Despite a five-year trophy drought,
the Gunners posted record pre-tax
profits of £56m in September.
The latest shares traded changed
hands last week for £11,200, making
the club worth £692m.
SUPER-MOUTH MARIO |
BALOTELLI’S BON MOTS
l “Because I am rich” – Balotelli’s
response to police who asked why
he was carrying £5,000 in cash
l “I am not a bad boy. I am just a
normal guy” – playing down his
chequered past on signing for City
l “I'd prefer to see them debate
the problem of racism more than
they debate my girlfriends” – in
satirical mood on the Italian media
failing to criticise right-wing fans