Foreign investors could invest up to $10 billion in mutual funds: Finance minister

NEW DELHI: The government on Monday said that foreign investors, other than FIIs, would be allowed to invest up to $10 billion in domestic mutual funds, a move that will help in moderating volatility in the capital market.

This class of investors called Qualified Foreign Investors (QFIs), but not Foreign Institutional Investors (FIIs), can invest money into domestic mutual funds through Unit Confirmation Receipts (DPs) or Depository Participant route, Joint Secretary (capital markets) in the finance ministry, Thomas Mathew , said.

QFIs could be individuals and bodies, including pension funds, and cumulatively they can invest up to $10 billion (about Rs 45,000 crore).

At present, only FIIs, sub-accounts registered with the market regulator SEBI and NRIs are allowed to invest in mutual fund schemes in the country.

To begin with, $10 billion is the total ceiling on QFI investment in India but it is subject to review depending on response, he said.

"SEBI will be the regulator for all investments for both routes," he said, adding the SEBI will issue necessary notification and framework by August 1.

Only KYC (know-your-customer) compliant retail foreign investors would be allowed to invest and the DPs will ensure proper KYC of QFIs as per the norms prescribed by SEBI, he said.

Besides, mutual funds would also undertake KYC of QFIs, he added.

He further said that one QFI can open one account in one of the qualified DPs and only QFIs from jurisdictions which are FATF (Financial Action Task Force) compliant would be eligible to invest in the MFs under the scheme.

The move follows the announcement of finance minister Pranab Mukherjee on the issue in the last Budget.

"Currently, only FIIs and the sub-account registered with the SEBI and NRIs are allowed to invest in the mutual fund schemes. To liberalise the portfolio investment route it has been decided to permit SEBI registered mutual funds to accept subscriptions from foreign investors who meet the KYC requirements for equity schemes," Mukherjee had said in the Budget speech.

"This would enable Indian mutual funds to have direct access to foreign investors and widen the class of foreign investors in India equity market," the finance minister had said.

The average assets managed by the MF industry, consisting of 40 players, stood at Rs 7,00,538 crore as of March 31, 2011.

Since it is going to be retail investment, it would be more stable than the FII money, Mathew said.

Read From http://economictimes.indiatimes.com/

Religare Capital Markets Appoints Head of Institutional Equities, India

New Delhi: Religare Capital Markets Ltd (RCML), the investment banking and institutional securities arm of Religare Enterprises Ltd (REL), has announced the appointment of Gautam Trivedi as MD and head of institutional equities, India.Gautam joins RCML with over seventeen years of financial services experience, most recently at Goldman Sachs, where he worked for seven years, latterly as MD and head of sales in India.

He was also a member of the Board of Directors of Goldman Sachs India Pvt Ltd. Previously, he served as executive director, Asian equity sales in Hong Kong. Prior to Goldman Sachs, he was vice president, corporate finance, for Reliance Industries Ltd in Mumbai.Gautam began his career as a research analyst at DSP Merrill Lynch Ltd and went on to work in senior roles at CLSA and Jardine Fleming Hong Kong.


He has an MBA from the University of Southern California and a Bachelor of Law and Commerce from the University of Bombay.Gautam, who will be based in Mumbai, is the latest in a series of high profile hires at Religare Capital Markets Ltd who, along with the global management team, will lead the growth of the firm's institutional securities business.

RCML is now present across rising markets and has some 300 staff, counting over 40 analysts covering a broad range of industry sectors, speculation themes and macro-economics.Tarun Kataria, chief executive officer, Religare Capital Markets India, said, "We are delighted to welcome Gautam to the team as head of institutional equities for India. We are confident that he will provide the leadership required to drive our rapidly growing institutional equities business."

Anglo-Irish Bank Chief Executive Drumm Corrects Bankruptcy Errors

OLD Anglo-Irish Bank chief executive David Drumm said information about a new lawsuit filed against him by former shareholders of the bank and discounts totaling approximately € 1,000,000 described accounts or jointly with his wife in his accounts or language, according to a new bankruptcy archiving in Boston.

Mr. Drumm, who filed for bankruptcy in October, corrected several errors and omissions - many of which relate to transfers of money to his wife - in their financial situation in the filing with the Bankruptcy Court for the District Massachusetts yesterday. The errors were described as "accidental" on his part.
The new statement of affairs, which adds considerable detail to the document filed last October, says Mr Drumm, who resigned as chief executive of the bank in December 2008, faces a potential legal claim from former Anglo shareholders Jayne Mollard, Brian Doyle, Belinda Ennis, Michael J Curley and Anne Marie Kidney.

Shareholders saw their investment wiped out when Anglo was nationalised in January 2009.

Mr Drumm also states that he made 12 transfers of cash from his personal account or the account of his business, Harborlight (since renamed Delta Corporate Finance), to a bank account he shared with his wife, Lorraine. These transfers were made between November 6th, 2009 and September 27th, 2010.

A further 13 transfers were made from Mr Drumm's accounts at Anglo and AIB or from the proceeds of the sale of his assets to his wife between October 20th, 2008 and September 28th, 2009.
The largest transfer was €372,561, which was moved from a shared account at AIB in the names of Mr Drumm and his wife to another account belonging to his wife at the same bank on December 15th, 2008 - four days before Mr Drumm resigned from the bank.

He transferred €180,000 from their joint AIB account to his wife's account at the bank three days earlier. On the same day, the proceeds from a €250,000 mortgage on a property in Skerries, Co Dublin was transferred to her AIB account, according to the filing.

On March 11th, 2008 Mr Drumm transferred €80,000 and €50,000 in two transactions - the first from a joint account at AIB to his wife's AIB account and the second from Mr Drumm's Anglo account to an account at the bank belonging to his wife.

After leaving the bank, including Mr. Drumm transferred proceeds of € 46k on the sale of its cars. Mr. Drumm has also transferred $ 100,000 from their joint account to account for his wife on 12 June 2009 AIB. “It occurred to me [me], she did not know where the money was, so she took a lot more money, Drumm said in evidence.

Melbourne Norton Rose loses head of M&A

THE head of Norton Rose's capital markets group has left the firm's Melbourne office for Beijing's escalating flow of M&A work.

Corporate finance partner Michael Wilton takes 25 years experience in mergers and acquisitions to Norton Rose's Beijing office where he will be a corporate finance partner.

He the region has seen "unprecedented growth, a thirst for resources".

He said there is "an appetite for gaining footholds in countries that have traditionally proven difficult to gain entry".

"Chinese corporations are increasingly looking to access overseas markets through mergers, acquisitions and joint ventures. This is coupled with an increasing trend toward securing additional equity financing in offshore exchanges including Hong Kong, London, New York, Toronto and Australia.”

Wilton specializes in equity and debt capital markets. His expertise includes cross-border transactions involving Chinese outbound investment.

Peter Burrows, head of the Norton Rose China practice, said the new recruit has the necessary skill, expertise and years of transactional experience.

He will "provide a valuable additional resource in Beijing for clients seeking to expand abroad and make an impact at a global level", Burrows said.

Norton Rose has an recognized presence in Beijing and Shanghai, and its China practice advises international clients across a broad range of industries, dealing with major M&A transactions, capital raising, infrastructure projects, foreign direct investment, and arbitration.

Corporate Finance Groups Warned of 'Patchy' UK Rebound

The UK economic recovery will remain "choppy" over the next two years, according to a new report from the CBI. 

Corporate finance groups have been advised that Britain's economic rebound is likely to remain sluggish over the next two years, after a new report cited concerns over government spending cuts.

According to the Confederation of British Industry (CBI), the UK's gross domestic product will climb by 1.7 per cent this year and 2.2 per cent in 2012 - both downgraded by 0.1 per cent on February's forecast.

"The recovery continues to be choppy ... Expansion in certain sectors is being offset by weaker performance in others," said CBI chief economic adviser Ian McCafferty. "What remains striking is how little we expect the pace of growth to accelerate."

Director general John Cridland added that although the process of "rebalancing" Britain's finances was always bound to take a considerable amount of time, there will be few signs of a genuine recovery until at least 2013.

Last week, the CBI welcomed the Bank of England's decision to keep interest rates on hold at 0.5 per cent, but predicted the Monetary Policy Committee would begin normalising its fiscal stance by the end of 2011.

Robert Kerr Passes the Baton to Corporate Finance Chief

Graeme Finnie is in line to take over as managing partner of French Duncan, when Robert Kerr steps up to the role of chairman on 1 May after 11 years in the post.

Finnie has been a partner at French Duncan for six years and currently leads its corporate finance advisory team, and says he plans to continue the strategy which has seen the firm more than double its turnover to £8.5 million over the past few years.

Finnie said: “Robert has turned French Duncan from a relatively modest-sized Glasgow-based operation into one of Scotland’s largest independent accountancy firms. He has done that by a shrewd combination of growth, both organically and by acquisition, and merger. As such, he has bequeathed me an excellent platform on which to build.”

Kerr added: “Graeme is the right man at the right time to take the firm forward. His experience both within and outside the accountancy profession, where he successfully ran two service sector companies for a period of time, gives him an additional understanding of the needs of entrepreneurs who form the greater part of our client base.

“In the short-term, I want French Duncan to break the £10 million annual turnover barrier and, within five years, £15 million and to be perceived as an attractive, indigenous alternative to larger national and international practices.”

New Corporate Finance Chief for MAG

Ken Duncan has resigned as finance director of Manchester Airports Group to set up his own business.

Mr Duncan held the post for nearly three years, following spells at companies including Rolls-Royce, General Motors Europe and Esso UK. He earned £384,000 in 2010. He has been replaced by Neil Thompson, previously MAG’s corporate finance director.

Mr Thompson, 40, is married with two children and lives in Hale. In his new role, he is responsible for all finance functions across MAG’s four airports – Manchester, East Midlands, Humberside and Bournemouth – and its property arm, MAG Developments.

United Bank Expects Rs 308 Cr Capital Infusion by March End

New Delhi, Mar 17: Public sector lender United Bank of India today said it expects the government to infuse a capital of Rs 308 crore by the end of this month.

“We hope Rs 308 crore capital infusion by the government by the end of March,” United Bank of India Chairman and Managing Director, Mr Bhaskar Sen said here, while launching the bank’s corporate finance branch here.

Asked about further capital raising plan, Mr Sen said, the bank is quite comfortable at the moment.

“There is a headroom and bank would take a call on follow-on public offer (FPO) by the end of next financial year (2011-12),” he said.

The Kolkata based bank came out with initial public offer (IPO) last year which was oversubscribed by 33 times.

Post-IPO, the government holding in the bank came down to about 84 per cent, against earlier level of 100 per cent.

Capital infusion into the bank will take place by way of preferential allotment of the equity. It is expected to raise the government’s holding in the bank.

The extraordinary general body meeting held on March 19 has already approved the proposal.

Besides Delhi, corporate finance branches were also opened in Mumbai and Kolkata.

Initially, Mr Sen said all corporate accounts enjoying a credit limit of Rs 50 crore and above in these centres will be transferred to corporate finance branches.

The purpose of opening of such branches is to give focused attention to the banking requirements of the corporate clients and to broad base the existing relationship with these corporates, he added.

United Bank Expects Rs 308 Cr Capital Infusion by March End

Government Must Continue to Help Economic Recovery

The British economy needs the government to support the economic recovery. The government must provide support to corporate banking if the UK's economic recovery is to keep its current pace.

Corporate Finance

This is according to the Organisation of Economic Cooperation and Development's (OECD's) latest UK Economic Survey.

OECD secretary general Angel Gurria, during the corporate finance survey's release in London, praised the current policy of the Bank of England, adding: "To counter some of the negative impact, monetary policy should remain expansionary to support the recovery, even if headline inflation is currently above target."

It was also noted that the UK's tax system is inefficient compared to that in much of Europe, with only 60 per cent of the possible income from taxes collected.

Earlier this month, the Bank of England's Monetary Policy Committee revealed it is holding interest rates at the record low of 0.5 per cent, the level at which rates have been for more than two years, with the meeting's minutes set to be released next week.

Grant Thornton Beefs Up Corporate Finance Team

Accountancy firm and business adviser Grant Thornton has made three additions to its corporate finance team in the South West.

Corporate Finance News

Paul Short has been appointed as associate director after five years at Grant Thornton’s Reading office. Meanwhile assistant manager Paul Eke, transfers to Grant Thornton’s Bristol-based corporate finance team from a transaction advisory services role and Mark Pope joins the firm at executive level from Smith & Williamson.

Mark Naughton, corporate finance director at Grant Thornton in the South West, said: “Our team advised on several of the region’s most high-profile deals last year.

“We expect the recovery in the region’s transactions market to accelerate in 2011, so Paul, Paul and Mark are joining us at what is an extremely important and exciting time.”

Grant Thornton is a Corporate financial and business adviser. It has 28 offices in the UK.

Deloitte Finance To Launch Bahrain Operations

Deloitte Corporate Finance Limited (DCF), a DFSA licensed investment business firm in the UAE, has received a licence from Central Bank of Bahrain (CBB) to open its branch in the Kingdom.

An affiliate of the UK and Middle East member firms of Deloitte Touche Tohmatsu Limited, DCF said it aims to provide the full range of financial advisory services currently provided by DCF (Dubai) including Islamic financial advisory services.

Ahmed Al-Bassam, director of Licensing & Policy, CBB said, “We welcome Deloitte’s decision to set up a regional branch of DCF in Bahrain.”

'This branch is licensed to provide corporate finance solutions to clients based in Bahrain as well as in the region. In addition the provision of Islamic financial advisory services will contribute significantly to the development of Islamic finance industry,” he noted.

With a globally connected network of member firms in more than 150 countries, Deloitte is one of the ‘Big 4’ professional services firms providing audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries.

“Bahrain was selected for the location of the new branch in recognition of Bahrain’s status as a regional financial hub,” said Roger Nasr, managing partner, Deloitte Bahrain.

“The establishment of a branch of Deloitte Corporate Finance Limited in Bahrain represents yet another significant milestone in its strategic investment in the Middle East region,” said Dawood Ahmedji, general manager, DCF in Bahrain.

“DCF in Bahrain is an integral part of our strategy to have a dedicated team of specialists providing financial advisory services to clients throughout the region. We look forward to sharing our corporate finance expertise with clients based in Bahrain and those looking to invest in Kingdom,” Ahmedji noted.

In addition to the main Deloitte office and the new DCF branch, Deloitte also selected Bahrain for the location of its regional Islamic Corporate Finance Group, which was launched in 2010.

Corporate Finance Market Offers Growth

Firms are looking to invest and expand, according to a Norwich accountancy firm which has itself branched out and taken on new staff. M+A Partners, in a joint venture with business adviser Moore Stephens, launched M+A Corporate Finance last year.

It says it has worked on deals ranging in value from £250,000 to £50m and has now taken on a second member of staff. Director Christian Schosland said: “Whilst it has been a difficult period for corporate finance businesses generally, we have nevertheless managed to complete nine transactions, including the sale of Ipswich-based PetroTechnik to US buyer Franklin Fuelling Systems, and the acquisition of Norwich-based engineer Arthur Birchall Coatings.

“We have also helped two local businesses, Reeds of Downham Market and Norfolk Premier Golf, with bank fund raisings, which shows that banks in this region are lending again, providing you present a well-thought-out business case for doing so.”

He said there were also a number of financial institutions willing to help bridge the funding gap between bank debt and private equity for the likes of management buyouts, acquisitions or capital investment.
The firm, based in The Close, Norwich, has also recruited Chris Sheasby from private equity firm Key Capital Partners, where he spent three years investing in local small and medium-sized businesses.

Mr Schosland and Mr Sheasby previously worked together in the corporate finance department of Deloitte.
Mr Sheasby said: “The corporate finance market has been somewhat anaemic of late, but the future is brighter. “We are increasingly seeing companies with compelling investment cases.”

Corporate Finance Transactions Going Under Microscope

Liquidators of Strategic Finance say they are investigating transactions connecting company directors and third parties and are "progressing pursuit of possible avenues for recovery". The finance company, likely to repay just a fraction of the $360 million it owes investors, is also under investigation by the Securities Commission.

In their latest liquidators' report filed on February 17, John Cregten and Andrew McKay of Corporate Finance said they had "identified a number of transactions which require further investigation" but gave scant information about their progress or chance of getting money for creditors.

It was impossible to say when their job would be complete, they said, "as this will depend on any action the liquidators may take in respect of transactions entered into by the company prior to liquidation".
Mr Cregten told BusinessDay the biggest problem had been collating the volume of documents.

"It just takes time," he said. "In the next six months we should be able to say what progress we've made."
He said the transactions being investigated involved "both directors and third parties".
Strategic's directors are Kerry Finnigan, Jock Hobbs, Graham Jackson, Marc Lindale, Denis Thom and David Wolfenden.

No receipts or payments were made in the liquidation since their appointment last July.The main responsibility for recovering money so far is on receivers John Fisk and Colin McCloy of PricewaterhouseCoopers, who are trying to realise cash from Strategic's property development loans.

Since their appointment last March about $9m has been recovered and $7.4m was paid to investors in September.

The estimated recovery is between 12c and 35c in the dollar, before costs.Last month, receivers said they had identified several transactions between December 2007 and August 2008, when Strategic collapsed, warranting further investigation.One was being investigated by SFL's liquidator and the rest by the receivers, they said.

Strategic Corporate Finance Liquidator Probes Transactions

The liquidator of disastrous property expansion financier Strategic Finance says although he's putting a few transactions under the spotlight, nothing originate so far is likely to be reported to the grave Fraud Office.

Andrew McKay, Corporate Finance director and Strategic liquidator, said the liquidators were investigating "a few" Strategic transactions dating from within 24 months before their meeting on July 26 last year.
These were the same transactions the receiver, which is helping with the Securities Commission's investigation into Strategic, has raised potential concerns about, McKay said.

His comments come as Corporate Finance releases its second liquidator's report.

McKay said the Strategic transactions being looked at date from within 24 months of the liquidator's appointment because they are the ones that are "potentially voidable" under the Companies Act.

"So they're the ones that we can investigate," McKay said, adding the liquidator would investigate "some" of the "few" transactions that it believes require investigation.

It would probably be "six months or so" before Corporate Finance decides whether to take any action or not.
The Securities Commission is investigating all the dozens of finance companies to have failed in the past four to five years.

And Serious Fraud Office CEO Adam Feeley said last month the SFO, which has opened investigations into several finance companies in recent months including Hanover Finance, Mutual Finance and Rockforte Finance, was in "ongoing discussions" with the Securities Commission.

"I think it'd be fair to say that in the next few weeks we will have a clearer view on whether that's a matter we take forward or not or whether it's something the Commission takes forward or not.

"But at the moment it's not an investigation and whether it becomes an investigation, at the moment we don't want to get drawn on that," Feeley said then.

Today McKay said the liquidators had not turned up anything "that we'd be rushing off to them (the SFO) at this point in time."

"We're working with the receiver, trying not to duplicate between us," McKay added. "Otherwise we're just wasting money and neither of us are in to that."

"We're in the collation and collection phase of documents and then we'll move to an analysis phase in conjunction with our legal team," McKay added.

According to its website, the Securities Commission's investigation into Strategic began in August 2008 and is continuing.

Strategic was tipped into receivership by its trustee Perpetual Trust last March.

Receivers John Fisk and Colin McCloy of PricewaterhouseCoopers say the about 10,000 secured debentureholders are likely to get back between 12 per cent and 35 per cent, or between NZ$44.1 million and NZ$128.7 million, of the NZ$367.8 million principal investment owed to them.

They've so far got back just 2 cents in the dollar.

Debentureholders, including the Bank of Scotland which is owed NZ$76.1 million, are Strategic's secured creditors.

Unsecured Strategic creditors, including unsecured depositors' owed NZ$1.45 million and subordinated noteholders owed NZ$21.7 million, are unlikely to get back any money at all.

Strategic, whose CEO was Kerry Finnigan and which counted former All Blacks captain and ex-New Zealand Rugby Union chairman Jock Hobbs among its directors, froze repayments to investors' in August 2008 blaming tough conditions in the property market.

Investors' then voted for a moratorium in December 2008 that aimed to repay them 100 per cent of their principal investments plus interest through asset realisations over five years.

Perpetual Trust subsequently called in the receivers after Strategic failed to generate sufficient loan recoveries for a repayment to investors' that had been due in January last year, and failed to sway the trustee with suggested alternatives to receivership.

Finnigan said last year that he didn't expect himself, or the rest of the company's leadership, to face any charges stemming from investigations into Strategic's demise.

"We don't think we've done anything wrong," Finnigan said then.

Canadian finance ministries closed off from web after cyberspy hack China

Corporate Finance News

Chinese hackers were accused of looting of sensitive documents from the Canadian government, which requires two departments of the Internet as a response. CSC reports that the attacks, the first time in January, goes back to the computer networks of China - noted the important proviso that commitment systems in China could have been used by others to cover their tracks.

Attacks on computer networks of destination and the Department of Finance and the Ministry of Finance of Canada's key government departments of economics. Internet access and the department was limited to the discovery of the attacks last month. Involved in the attacks targeted spear-phishing attacks designed to mislead government officials to hand over passwords and the use of malware.

The pattern of the attack matches that GhostNet assault that penetrated 100 other governments around the world back in March 2010.

Information Warfare Monitor, the Canadian group that detected those attacks, was reportedly asked to run an audit of government systems by the Canadian Security Establishment (CSE), a little-known armed forces division that serves as Canada's signals intelligence agency. The audit revealed that the two Canadian economics ministries had been comprehensively compromised, a problem not uncovered at the time of the original Ghostnet investigation some months before.

Sources involved in the investigation spoke to CBC News under the proviso that they would remain anonymous. Quizzed by CBC, federal government spokespeople would only say that an "attempt to access" federal networks had been detected.

In June 2009, warned the Canadian Security Intelligence Service that cyber-attacks against government systems and the private sector were up sharply. China, later blamed for cyber attacks against companies targeted the least energy data on discoveries of oil and gas field which have been blamed by some on the government spying charges that the Chinese government has always rejected. Furthermore, Google last year publicly criticized China Operation Aurora attacks against him and other hi-tech companies.

After Joining Corporate Finance Network Fenland Accountancy Firm to Develop a Centre of Excellence

A FENLAND accountancy firm has joined a national network that provides SME-specific expertise required for deals of up to £3million.

Whiting and Partners’ affiliation to the Corporate Finance Network is regarded as an important development for the firm, which has 130 staff in March and at seven other locations across Cambridgeshire, Suffolk and Norfolk.

The move reinforces the firm’s focus on small and medium enterprises (SMEs). It already has well-developed experience in the sector and provides clients with a realistic approach to business planning.

Chris Kelly, heads of the firm’s corporate finance team, said: “Joining The Corporate Finance Network is important because not all accountants have the knowledge and expertise required to handle deals up to £3million.

“It will give us an edge and help us to develop a centre of excellence in providing finance solutions and formalise our service standards.”

Whiting & Partners’ specialist group will be supported by members of the Corporate Finance Network’s executive team. Its expertise extends from owner-managed businesses aiming at commercial acquisition and includes due-diligence investigations, business planning, exit strategies and securing finance.

Kirsty McGregor, chairman of the Corporate Finance Network, said: “Our members are regarded as experts in their regions for obtaining the most appropriate finance for businesses and for buying as well as selling companies with a transaction value of less than £3million.

“The number of firms who can advise SME clients in this highly specialized arena is limited. We believe that Whiting & Partners is ideally placed to take advantage of the growth in the Eastern Region and can provide a high quality and dedicated alternative to national and other regional firms.”

Government 'Focused on World Exports to Rebuild Economy'

The UK recovery will be driven by a boost in world exports, it has been said.

The government is putting its focus on encouraging world exports as it believes this is the way to boost the country's economy, a corporate finance expert has said.

Georgia Raimes of foreign exchange broker World First voiced her opinion on the importance of exports in helping fiscal recovery for the UK.

She stated that as Britain is not a major exporting nation like Germany and China, it is "not as big a factor" as it would be for those countries.

However, she went on to say: "The government has been focused on rebuilding exports and allowed the pound to devalue in order to assist this."

Therefore, Ms Raimes stated that it is "key in the overall recovery" of the UK's economy, which corporate financing groups may wish to take note of.

Her comments follow a report from the Ernst & Young ITEM Club released last week, which predicted that there will be a period of growth for UK exports.

It said this will be driven by focusing exports towards Brazil, Russia, India and China, as well as an increase in competitiveness as a result of the weak sterling.

Corporate Finance Planning Begins to Reflect the Upturn

Strong indications of an increase in U.S. corporate innovation and productivity for 2011 emerge from a late-December survey of finance executives released today by CFOworld.

Among other findings indicative of the state of mind of CFOs, the survey showed that 44% expect technology and consulting budgets to rise this year, with 45% saying they see IT budgets remaining flat.Indeed, tech and consulting represent the highest level of expected increases seen by respondents. Increased spending on mergers and acquisitions is anticipated by 21%. For other expected cost rises, though, the cause of the increase is more reactive. Among 27% of executives, for example, higher insurance and risk management costs are anticipated this year. And 20% see higher banking and finance costs.

More than a third of respondents expect budget allocations for employee benefits to increase, although half are predicting that they will be able to hold the line.

Corporate Finance

IT's Cost and Complexity

While spending on tech may be rising, CFOs do voice concern about the cost increases for what they get (69%) and the increasing complexity of IT(58%.) The efficiencies and possible savings from cloud computing may provide relief for some of those concerns, however, with 64% saying they have interest in lessons and best practices that could be learned from early adopters and alternative IT models.

When it comes to other concerns facing corporate finance, 57% percent worry about high rates and fees for their banking and finance business, while the difficulty of securing financing troubles 35% of them, giving pause about whether they can close M&A deals. Further, 84% are concerned about the cost of insurance as they plan their insurance and risk management budgets for this year.

The CFO More as Partner, Less as Advisor

Evident from the survey responses, too, is the strong collaboration that has been developing between finance executives and CEOs. Indeed, 57% of the respondents overall say they are partners with the chief executive. Far fewer see themselves as advisors who provide strategic guidance when the CEO seeks it (28%), while only 14% considers that they are in the role of "the numbers person" at their company.

The survey was conducted by email from Dec. 14 and Dec. 23 among finance executives of the IDG Enterprise audience. IDG Enterprise, part of the International Data Group of publications, is publisher of the new CFOworld online site, as well as such titles as Computerworld, Network World and CIO. CFOworld based its results on 180 responses from executives of a range of companies including manufacturing (19%); services and retail (14% each); tech, telecom and utilities (a total of 12%); financial services (9%), and healthcare (7%.) Slightly more than half the responses were from companies with fewer than 500 employees. Companies represented by the survey had average revenues of $3.58 billion and more than 7,600 employees.
Finance executives also now claim that online resources are delivering fully 46% of their information about corporate finance matters, according to the survey's findings.

Andrew Walls Joins Leeds Corporate Finance Boutique

LEEDS-BASED corporate finance boutique Ethos has appointed accountant and former finance director Andrew Walls as a partner.

Walls joined Begbies Traynor in 2003, before moving to McInnes Corporate Finance providing advisory services on M&A transactions.

"His blend of corporate finance, turnaround and banking experience together with his role as finance director at a property business makes his approach perfect for the firm, and the deals we are driving for our clients," said Silverwood.

Corporate Finance - Insider Trading Trio Made £590,000 Profit

Corporate Finance

(Corporate Finance) : - A top banker made more than half a million pounds for himself, his wife and a friend through insider trading, a court heard today.

Christian Littlewood, 37, used his position as a corporate finance adviser to listen into conversations in city pubs and spy on colleagues' computer screens and documents.

Southwark Crown Court heard his wife used her Chinese name to invest hundreds of thousands of pounds in companies he found out were about to be bought.

He would tip off Angie Littlewood, 39, who is also known as Siew Yoon Lew, when he learned the sensitive information that a company's share price was set to increase.

Alongside the couple, self-employed juice bar owner Helmy Omar Sa'aid, 34, also stood in the dock.

The three have all admitted eight charges of insider trading between March 2000 and August 2008.

Between them they invested £2,150,000 and made a profit of £590,000.

Nicholas Dean, prosecuting, said it would have been "convenient" for Mr and Mrs Littlewood to use a name that was not immediately recognisable to casual investigation.

Neither colleagues nor the Financial Services Authority (FSA) would be alerted to the scam if his family name did not appear alongside transactions.

The barrister said: "For almost all of the period, Christian Littlewood was employed by Dresdner Kleinwort Wasserstein (DKW), an investment bank."

He told the court Littlewood's area of expertise was in mergers and acquisitions, and by the time he left DKW at the end of 2007 he held a position of "some seniority".

His gross salaries, including huge bonuses, ranged from £200,000 to more than £400,000 over the period he abused the information he had access to.

Mr Dean explained that Littlewood would have become aware that "small companies, and not so small companies, were being taken over by bigger companies".

He said the trader looked at information he was allowed to see, but also at data he was not.

The prosecutor said he had "necessary and legitimate access to price sensitive information, and had access to information that was not relevant to him".

He told the court Littlewood worked in an environment where he could quite easily eavesdrop on conversations in a pub near his office, or while he was making a cup of tea, or peer at his colleagues' screens and paperwork.

Although Angie Littlewood acted on her husband's tip-offs, the prosecutor said her role was not inactive.

"She, we say, was no mere cipher," Mr Dean told the court.

He said the Singaporean woman of Chinese origin was qualified as a lawyer and in finance, with two Masters degrees.

Like her husband, she had experience in mergers and acquisitions, the barrister said.

The couple married in 2000 and have three children.

She gave up her job at investment bank UBS in 2001, where she earned £55,000 a year as a corporate financier.

Sa'aid was a friend of Angie Littlewood, but Mr Dean said the businessman did not get on with Christian Littlewood.

However Mr Dean said Christian Littlewood was able to keep tabs on Sa'aid's trading, as he wrote an email to his wife which read "Hel has not sold".

Of the eight charges faced by the three, some relate to deals Littlewood had legitimate access to through his job, and some relate to those he did not.

They will be sentenced later this week.

Corporate Finance - Hogan Lovells and SH star in LoveFilm acquisition

Corporate Finance

(Corporate Finance) :- Hogan Lovells and Stephenson Harwood took the key mandates on the £200m sale of the remaining shares in LoveFilm to Amazon.

Stephenson Harwood ­corporate partner Liz Field led the team acting for ­longstanding client LoveFilm on the deal. Tax partner Maryanna ­Sharrock, employee incentives partner Jeremy Glover and head of competition Julianne O’Leary also advised.

At Hogan Lovells corporate finance partner Richard Lewis led the team of ­advisers for Amazon.

LoveFilm has turned to Stephenson Harwood for legal advice since 2004, when it was acquired by Arts Alliance Media.

More recently the firm acted on the acquisition of Amazon Europe’s UK and German DVD rental ­business in 2008 - a deal that saw the online retailer take a significant minority take in the UK film ­subscription business.

Prior to the latest transaction, which is expected to reach completion in the first quarter of the year, Amazon owned 42 per cent of LoveFilm.

In the UK Amazon has used a range of firms for corporate advice. These have included CMS Cameron McKenna, Olswang and Osborne Clarke. Herbert Smith has also acted for the retailer on competition issues.

Amazon will now wholly own the business after ­buying the remaining shares from existing shareholders, which include four venture capital firms alongside LoveFilm staff.

Amazon now plans to grow the business alongside other movie-related assets, including the film database website IMDb

Obama Backs Cut in U.S. Corporate Tax Rate

Corporate Finance

President Barack Obama called on Congress to cut the top U.S. corporate tax rate for the first time in 25 years “without adding to our deficit,” a sign that businesses will have to give up tax breaks in exchange for lower rates.

The president, in his State of the Union address to Congress last night, also pressed for simplifying the tax system for individuals, which would restructure how more than $1 trillion in revenue is collected annually.
“The best thing we could do on taxes for all Americans is to simplify the individual tax code,” he said, to applause from the audience. “This will be a tough job, but members of both parties have expressed interest in doing this, and I am prepared to join them.”

Some analysts said Obama’s willingness to consider a corporate tax overhaul along with tax simplification may lead to changes in the code.

“Tax reform has been like the weather, everyone talks about it but no one does anything about it,” said Pat Heck, a partner at the Washington law firm KL Gates and a former top aide to the Senate Finance Committee. “Tonight’s speech could be a game changer. While it would be naïve to think tax reform legislation will be drafted overnight, a long journey always begins with a first step.”

‘Disappointed’

Representative David Camp, a Michigan Republican who chairs the tax-writing House Ways and Means Committee, said he was “disappointed” by the lack of details in Obama’s call for a tax overhaul.
“I think it could have used a little bit more on his proposals on individual tax reform,” Camp said in an interview after the speech. “Frankly, we really need more of a path forward even on the corporate side. I think we need some more concrete plans.”

Obama’s proposal for a corporate tax-rate decrease, accompanied by removal of tax breaks, is at odds with that espoused by corporate chiefs. Robert McDonald, CEO of Procter & Gamble Co., and groups such as the Washington-based Business Roundtable have urged the administration and lawmakers to set aside deficit concerns for now to focus on rate reduction.

Each percentage-point reduction in the 35 percent corporate tax rate could cost $8 billion or more a year in foregone revenue to the Treasury, according to the congressional Joint Committee on Taxation.
Financing a rate cut could mean that corporate tax breaks such as a deduction for domestic manufacturing and production income and accelerated depreciation of capital expenses may have to be sacrificed.

Winners and Losers

“If it’s revenue neutral for businesses, there’s probably some winners and some losers,” said Daniel Shaviro, a professor of taxation at the New York University School of Law. “And when you take away a lot of special benefits, you tend to get losers complaining more than the winners celebrating.”
The top marginal corporate tax rate, or the rate paid on the last dollar of income earned, has stood at 35 percent since 1993.

Companies often pay a lower effective tax rate, after taking advantage of tax credits and deductions and keeping overseas earnings reinvested indefinitely. The U.S. is among a handful of countries that tax profits earned in other countries, though only when the money is brought home, or repatriated.

Obama’s call to cut the top rate “will be highly welcomed by the business community,” though it ought to be paired with changing the way overseas profits are taxed, said Drew Lyon, a principal in the Washington national tax services office of PricewaterhouseCoopers LLP. He said Obama should endorse switching from a worldwide system of taxation to a “territorial” system, where companies’ overseas branches and subsidiaries pay tax only to their host governments.

Deficit Concerns

A report by the Washington advocacy group Citizens for Tax Justice released before the speech said the goal should be to reduce the budget deficit, which was $1.3 trillion for the fiscal year ending Sept. 30. The report said Obama should follow President Ronald Reagan’s example in ending more corporate tax breaks than necessary to finance a rate cut.

The president in his speech also called for ending Bush-era income tax cuts for individuals earning more than $200,000 and married couples earning more than $250,000.

The tax cuts enacted under President George W. Bush for all income levels were extended through 2012 as part of a deal Obama worked out with congressional Republican leaders in December.

Obama also asked Congress to make permanent a stimulus tax credit for higher education expenses, up to $10,000 for four years of college. That Corporate Finance proposal was estimated by the JCT last year to cost $58.1 billion over 10 years.

Corporate Finance News - Zilli Wants a Partner to Share Baby

Corporate Finance

Baby Zilli, the organic baby food company founded by celebrity chef Aldo Zilli, is preparing to sell a 20pc stake in the business.

The company has appointed advisers from Cavendish Corporate Finance to raise up to £2m in a deal that is likely to value the start-up Baby Zilli at £10m.

The new funds will be used to finance Baby Zilli's expansion plans. These include growing the company's sales and operational support team, and developing further the organic baby food range, such as creating "finger snacks".

Dean Dunham, a well-known media lawyer and serial entrepreneur, teamed up with Mr Zilli to establish the business in 2008. Since then, Baby Zilli has been funded by its founders.

According to sources, the company forecasts that it can achieve significant growth over the next four years, generating sales of around £73m in year four and earnings before interest, tax, depreciation and amortisation of around £15m in the UK alone.

Mr Zilli, an Italian, owns a number of restaurants, such as Zilli Fish in Soho, London.

The move to sell a stake in the business follows significant interest in organic baby food brands. In 2008, Organix, founded in 1992 by Lizzie Vann, was bought by Hero Group. Swiss-based Hero Group is owned by the German Oetker family, whose wealth is estimated to be £4bn.

Blue Sky Corporate Finance advises on Shropshire buyout

Birmingham advisers at Blue Sky Corporate Finance have worked with the organization team in the overthrow of a Shropshire-based software firm for an secret amount.

Occam Systems, which supplies technology used by colleges and universities to manage student lodging, was sold in a business was monetarily backed by a high net-worth individual (Business Angel).
Blue Sky managing director Paul Heaven said it was a complicated deal.
 
He said: “A transaction of this type is made slightly more complicated by the fact that different parties have differing interests in the various legal documents that emerge during the process.
“The financial backer and the management team sit on the same side of the table during the negotiations of the contract to acquire the company but they have a different perspective when it comes to the negotiation of the shareholder agreement.

“In these circumstances it is important that the buy-in management team are properly advised.”
David Wilkes, now managing director of Occam and head of the management buy-in team, said: “A management buy-out is not a transaction that most entrepreneurs encounter every day.

“It’s easy to think that because you know the business you don’t need advice.

“In reality you’re dealing with professional advisers acting for the investor as well as those acting for the seller – your personal needs and those of the business can get pulled in both directions. Having Paul on hand to guide me, provide independent advice, and to review the mass of documents you have to sign was an immense help.

“Particularly in the couple of weeks leading up to completion it meant I could still find time to sell, critical to any business.”

Legal advice to the company during the deal was provided by Harrison Clark Solicitors in Worcester and advice to the vendors was provided by George Green Solicitors of Cradley Heath.

PEM Corporate Finance Advises On Sale Of Leading UK Payday Lending Business

CorporateFinancenews.blogspot.com

Kieran Moulden and Stuart Carter, Directors of leading UK payday lending business, Fortress Group UK, are pleased to publicize the sale of the company to Texas based Think Finance Inc.

Bury St Edmunds based Fortress, founded in 2007, has developed quickly to become one of the UK’s foremost payday lending businesses. Fortress is an entirely online lender, and was recognized with best of breed IT systems and observance procedures to allow it to be scalable. It has grown rapidly since formation and a recent report found it to be one of the top five players in the market.

Fortress, which trades under the brand names “1 Month Loan” and “Mayday Payday”, provides short term unsecured loans to private individuals known as payday loans as they are intended to be repaid “on payday”. Such loans have high interest rates but their cost compares favourably to unauthorized overdraft facilities and they are much easier to access than bank finance. For the customers they are convenient and confidential.

Payday lending is a mature market in the United States – indeed there are more payday lending outlets than there are branches of McDonalds. The UK market is less developed but growing rapidly and is attractive to US acquirers as demonstrated by the recent agreement by NASDAQ listed Dollar Financial Corp to acquire Purpose UK Holding the largest UK payday lender for £124M

Think Finance is one of the US’s fastest growing private companies with three year revenue growth of over 70% . Think Finance provides innovative financial products which provide under-banked consumers with better solutions for their financial needs combining, convenience, affordability, and transparency. Established in 2001, Think Finance has served over 1 million customers. The company is privately held and backed by some of Silicon Valley’s most respected venture capital firms, including Sequoia Capital and Technology Crossover Partners.

Think Finance will provide capital to support Fortress’s expansion. All of the Fortress Directors will remain with the business to lead its development.

Kieran Moulden, CEO of Fortress, said “This is a fantastic deal for Fortress, which gives us an entrepreneurial corporate partner to help fund our growth as the UK market develops. I would like to thank PEM Corporate Finance for their tenacity and insight over the past year during which they have helped us to prepare the company for sale and to market the company internationally.”

Lake Falconer of PEM Corporate Finance added “Kieran and Stuart have achieved a huge amount in building Fortress to such a strong position in a short period of time. Think is an ideal buyer which should help them continue on their growth trajectory. We were pleased that our marketing of the company delivered such strong competitive interest, particularly from North America.”

Legal advice to the Directors of Fortress was provided by Vanessa Walton and Tom Pickthorn at Mills & Reeve in Cambridge.

Mobile Number Portability Launch Today In India

Today is the day for all those who frustrated with their mobile phone networks have been waiting for. You can dump their operator at only Rs 19. And yes, it is so post-paid and prepaid customers.

As Mobile Number Portability takes across the country today, everything you need to switch providers if you have now is not meeting your needs and standards. Of course, you can do in its current coverage area. So not really help people who move into town. You can not keep the number was in Mumbai, where the transition from the bottom of Delhi. But in addition, this service is certainly a little weary calm nerves and help prevent a lot of unnecessary services cries.

Although studies show that MNP will make a negligible difference to the operator's subscriber base and thus overall service, it would be interesting to follow the customer enthusiasm and response to the highly hyped service, which is finally launched, three years late.

Park District Hires Corporate Finance Director

The Naperville Park District has hired a new CFO. Form Stanish, CPA, who took over last Monday had served as chief financial officer of the Village of Willowbrook for 12 years. She also worked as accounting manager for the city of Naperville from 1993 to 1998.

“Not only does Sue Stanish bring excellent qualifications and experience to the district’s finance department, but she also brings personal knowledge of Naperville,” said Park District Executive Director Ray McGury.

Stanish said she is looking forward to working as part of a team that will be building and maintaining parks and facilities for the community. She will be working with the park board and staff to maintain the district’s excellent bond rating and general financial health.

“My goal will be to keep the same level of professionalism in my department that has been here previously,” she said.

Corporate Finance Advisors Invited To Bid For Northern Rock

City analysts revealed yesterday that the most likely outcome for Northern Rock is a sale, as Edinburgh-based Virgin Money – owned by Sir Richard Branson – makes a prime bid for the group.

UK Financial Investments (UKFI), the organisation that oversees the taxpayers’ holdings in banks, said that corporate finance advisors would be given a fortnight to tender for work. The state-owned Northern Rank was nationalized three years ago at the height of the credit crunch. Since that time, the government has begun to take the first steps to privatize the institution.

Chief executive for the fledgling Virgin Money, Jayne-Anne Gadhia said that she expects to tell MPs she believes that the high street bank faces significant barriers still. Virgin Money announced it would hope to open 70 branches during the next five years, which could be done in one move if it acquires the 75-branch strong Northern Rock.

Other potential buyers for the financial group include NBNK Investments, which hired former Northern Rock boss Gary Hoffman last November. However, with the hire of Mr Hoffman, NBNK cannot bid on Northern Rock until November 2011. Other names include Tesco Bank and private equity company JC Flowers.

UKFI said that it is inviting expressions of interest from all corporate finance advisors that work with Northern Rock and UKFI. Northern Rock was infamously nationalised in February 2008 as customers lined around the block at branches to withdraw their money.

Last year, the Corporate financial institution was split in two as ‘good’ assets were saved under Northern Rock Plc and “bad assets” were moved in Northern Rock (Asset Management).
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Corporate Finance - Arden Boosted By Late Corporate Deals

LONDON (SHARE CAST) - AIM-listed broker Arden Partners has reported a loss for the year to October 2010, but still make an underlying profit in Corporate Finance.

A couple of important fundraising at the end of the period helped increase the income of corporate finance, but secondary income from equity trading fell 29%.

Generally revenues were flat at £13m but there was a sway from a profit of £1.52m to a loss of £512,000. Stripping out share based payments of £1.08m, up from £702,000 the previous year, Arden was profitable. There were also restructuring costs of around £700,000 in the period following the departure of the chief executive Jeremy Grime. The underlying profit was £1.3m, down from £2.2m.

Arden intends to focus its activities on its core areas of the United Kingdom and India. CEO Jonathan Keeling, focusing on the possibility of India. Last month, Arden has raised £ 6,800,000 for Hardy Oil & Gas.
Net cash fell to 9 million pounds in late October 2010, but its financial position remains comfortable. At year end, Arden spent £ 947 000 to buy back shares.

Geithner To Meet With Corporate Finance Chiefs On Tax Reform

The Treasury Department has released the list of companies expected to be represented when Timothy Geithner, the Treasury secretary, discusses tax reform Friday with corporate chief financial officers.

The companies are: Honeywell, Cisco, Johnson & Johnson, Coca-Cola, Emerson, United Technologies Corporation, Wal-Mart, Exxon, PepsiCo, Microsoft, Procter & Gamble, Bank of America, Caterpillar, Disney, Eli Lilly, General Electric, Dow Chemical and MetLife.

The meeting comes as tax reform is getting increased attention around Washington, even as members of both parties acknowledge that overhauling the nation’s tax code would be a difficult undertaking.

Treasury representatives have cautioned that Friday’s event is one in a series of meetings dealing with tax reform and have advised not to read too much into it.

For his part, President Obama has said he wants a “conversation” on the issue this year. And Valerie Jarrett, a senior White House adviser, recently called Friday’s Treasury meeting an opening step in what would most likely be a drawn-out push to overhaul the tax code.

Republicans have also been supportive of considering tax reform. Rep. Dave Camp (R-Mich.), the new chairman of the House Ways and Means Committee, announced Thursday the panel would have the first in a string of hearings on the issue next week.