PRESS DIGEST - Financial Times - Jan 14

FRAUD SET TO RISE AS ECON0MY WEAKENS

The predicted slowdown in the economy this year is likely to lead to more corporate fraud being uncovered, business advisers warn. Simon Bevan, head of fraud services at accountancy firm BDO Stoy Hayward, said: "With an economic downturn now already affecting the property and financial services sectors, I expect to see many more frauds being discovered in 2008." Because processes come under heightened scrutiny during periods of belt-tightening, more frauds are detected. Alex Plavsic, head of fraud investigations at KPMG, said: "If the current credit crunch does lead to a slowdown through 2008, we may, therefore, see the detection of some high-value frauds in its wake."

TAX TENSIONS THREATEN TO DRIVE FOREIGN BANKS AWAY

Foreign banks have warned that London's pre-eminence as an international financial centre could be damaged by new tax initiatives that run the risk of making the capital less business-friendly. A Revenue & Customs crackdown on offshore accounts, stricter rules on the number of visits someone can make to the UK before being deemed a resident for tax purposes, and proposed increases to taxes of foreigners living in the UK have all increased friction between banks and the government. John Treadwell, managing director of the Association of Foreign Banks, said: "The foreign banks contribute greatly towards the success of London . and the government should not forget that these banks always have a choice of location."

WATCHDOG ATTACKS NUCLEAR GO-AHEAD

The government's watchdog for sustainable development has attacked ministers for giving the green light last week on construction of a new generation of nuclear power stations. The Sustainable Development Commission, which is funded by government but independent of it, launched one of its strongest critiques of policy to date, calling ministers to account for failing to respond adequately "to the legitimate concerns expressed by the general public over new nuclear power". Tim Jackson, the commission's economics expert, said: "They have carried out a consultation and then ridden roughshod over the results of that consultation."

AUSTRALIAN INVESTOR BUYS FORTH PORTS STAKE

Babcock & Brown, one of the world's most active port investors, is thought to have taken a stake of about 15 percent in the UK's last independent port operator, Forth Ports (FPT.L). The move by the Sydney-based investment bank, which could threaten Forth's existence as an independent company, is believed to be on behalf of a fund the bank manages. It is not at present clear whether the stake-building was for Babcock & Brown Infrastructure, which took over the UK's PD Ports in 2005 and has stated its aim of becoming the world's first large-scale international operator of bulk ports. B&B is expected to clarify its intentions in an announcement on Monday.

SCI FACES CALLS FOR CAVANAGH'S RESIGNATION

Shareholders at SCi Entertainment SEG.L are demanding that chief executive Jane Cavanagh quits following last week's profit warning and 50 percent fall in share price. Some are also calling for Tim Ryan, SCi's chairman, and Bill Ennis, Cavanagh's husband and commercial director of the company, to hand in their resignations. Shareholders contacted Ryan and Citigroup, the company's brokers, last Friday insisting that Cavanagh should go. Over the weekend, talks with shareholders were held but no decisions have yet been taken on management changes.

THEO FENNELL LOSES NONE OF ITS LUSTRE