PRESS DIGEST - Financial Times - July 17

Financial Times

BANKERS HIT BACK AT WALKER REVIEW

Recommendations published on Thursday in Sir David Walker's review of financial sector corporate governance met strong criticism from leading London bankers, many of whom claimed the government-backed recommendations to rein in executive power and publicise the details of executive salaries, were overly bureaucratic and populist. Sir David also recommended financial groups set up board-level risk committees, separate from audit committees, and suggested remuneration committees take on more work, scrutinising the pay of anyone earning above the average board-level executive.

CLARKE WARNS CAMERON TO START CHALLENGING 'PRO-BUSINESS' STANCE

Shadow Business Secretary, Kenneth Clarke, has warned Conservative leader David Cameron not to translate his "standing up to big businesses" rhetoric into policies in government, and said he is eager to serve Mr Cameron as long as he does not start challenging the party's pro business stance. Mr Clarke said a Conservative government would fully privatise Royal Mail and dismantle the business and innovation department.

TREASURY REVEALS 20 BILLION POUND UNDERSPEND

The Treasury revealed government departments have amassed more than 20 billion pounds in underspends: money from a department's annual budget that is allowed to be carried forward for up to three years. The news came on the day the International Monetary Fund's annual assessment of the economy confirmed an initial recommendation to increase efforts to cut the 175 billion pound deficit in public finances.

SPORTS DIRECT TUMBLES ON WRITE-OFFS

Sports Direct(SPD.L) has reported a drop in pre-tax profits from 118.9 million pounds to 10.7 million pounds in the year to April 26, after the sportswear retailer was forced to write-off shares caught up in the Icelandic banking collapse. The 90 per cent fall is another blow for founder and owner Mike Ashley after Newcastle United, the football club he owns, was relegated from the Premier League in May. Apart from investment losses, the group was also hit by 30.5 million pound impairment charges, mainly on property.

LEWIS GAINS BOARD VOICE AT MITCHELLS & BUTLERS

Joe Lewis, the Bahamas based investor, has been granted boardroom representation at Mitchells & Butlers(MAB.L), the company in which he is the biggest shareholder with a 23 per cent stake. Mr Lewis bought into M&B in October through a vehicle called Piedmont. M&B said it had appointed Richard McGuire, president of Mr Lewis's Tavistock Europe vehicle, as a non-executive director. In a trading statement M&B said like-for-like sales rose 1.7 percent in the 8 weeks to July 11.

ENTERPRISE COUNTS COST OF BREAKS FOR STRUGGLING PUBLICANS

Enterprise Inns(ETI.L) has reported the cost of rent concessions and beer discounts that it is offering to struggling publicans has increased by a fifth, to 1.7 million pounds a month, when compared to the 1.4 million pounds disclosed in May. The figures emerge amid tough trading conditions and continued debate about the fairness to licensees of the tied pub model. Enterprise is also spending 700,000 pounds a month running more than 200 pubs that would otherwise have closed. They hope it will make them attractive to new lessees.

HENDERSON WARNS ON PROFIT AS FUND OUTFLOWS CONTINUE

In an update on performance Henderson Group(HGGH.L) has warned profits for the first six months of the year would be half of those earned during the same period in 2008. Andrew Formica, chief executive, said that pre-tax profits would be between 25 million pounds and 28 million pounds against 50.8 million pounds in the first half of 2008. The company's fund have seen net outflows of 2.9 billion pounds since the beginning of the year, in addition to 700 million pound outflows from the New Star funds it acquired, which do not appear contained.

BLACKSTONE ADVISING ON EMI DEAL

Terra Firma is receiving advice from rival private equity group Blackstone on a plan to issue high-yield bonds to raise revenue to repay 2.6 billion pounds investment bank Citigroup lent to EMI - the music company owned by Terra Firma. According to people familiar with the matter, JP Morgan and Morgan Stanley are in talks with Terra Firma about underwriting the bond issue and one plan being considered is to use money from the issue to repay all or part of the debt at a discount of 20-40 per cent to face value.

DMGT SOUNDS THE DEATH KNELL FOR TELETEXT

Daily Mail & General Trust(DMGOa.L) has announced it is to switch off its Teletext service two years earlier than planned, due to falling audiences and lower than expected advertising revenue. According to DMGT, Teletext lost three million pounds in the six months to March 29. Mike Stewart, Teletext's group managing director, said; "the continued fragmentation of television audiences, and the boom in online use for news, information and commercial services, have contributed to a significant reduction in Teletext's viewing figures over recent years".

GATES TRUST LIFTS HOLDING IN JJB

Microsoft founder Bill Gates has purchased 800,000 shares in JJB, increasing his philanthropic organisation's holding to 3.14 per cent of the sportswear retailer. JJB narrowly avoided administration earlier this year and said last week the company was considering launching a rights issue to pay off debts. JJB said: "The company has seen a major turn-round. Presumably that's been recognised by the trust". Shares in JJB increased by 14 per cent following news of Mr Gates' interest in the retailer, closing up 12 per cent at 28 pence on Thursday.

Prepared for Reuters by Durrants