Companies in the news ... and how they were assessed
Airbus: corruption probe
Rolls-royce is trying hard to draw a line under long-running corruption probes, said John Collingridge in The Sunday Times. Now another aerospace giant is in the mire. The French plane-maker Airbus is being investigated by the Serious Fraud Office over allegations of fraud, bribery and corruption when selling passenger jets overseas. The probe centres on “irregularities” in the use of “third-party intermediaries” on export deals underwritten by the UK, French and German governments, through so-called “export credits”. Airbus hasn’t yet revealed the extent of the problem, which it discovered in an audit and reported to the SFO in April, said Nicola Clark in The New York Times. And it’s not clear which countries or customers are involved. But questions about whether Airbus “properly vetted” its agents have led to a suspension of statebacked credit financing – at a time when the “recent boom in global aircraft sales” shows signs of slowing. Investors don’t seem too worried, noted Lex in the FT. Shares fell only slightly; export financing contributed to just 6% of revenues last year, and Airbus has a whopping s978bn order backlog. Still, arch-rival Boeing may benefit if the probe deepens. Lengthy corruption investigations can be debilitating. Just ask Rolls-royce.
UK banks: mobile banking revolution?
“Following a two-year probe into rip-off bank accounts”, the Competition and Markets Authority has produced a set of remedies to shake up Britain’s high-street banks, said Katie Morley in The Daily Telegraph. The most eye-catching measure is a compulsory “mobile banking revolution”. Banks have until 2018 to sign up for “open banking”, enabling customers to see all of their financial products – mortgages, savings, current accounts – in one app. The CMA reckons that this is the best way of encouraging meaningful competition. It’s certainly needed, said the Daily Mail. “At present, just 3% of personal and 4% of business customers each year ditch their old bank and switch to a new one.” If they can “manage accounts held by different providers” from one app, it will be easier to compare products and shift their money around. There are caveats, though. The insistence that banks share customers’ financial details with other “approved firms” is likely to raise security fears. And there’s bound to be “pushback” from the big banks about meeting the deadline, said Morley. The foot-dragging is understandable, said Conrad Ford of fintech firm Funding Options. This scheme could blow open financial services to new start-ups, or to major tech players such as Amazon.
Deliveroo: big appetite
“Another day, another jaw-dropping fundraising for a technology start-up,” said Simon Duke in The Sunday Times. The latest recipient of investors’ largesse is Deliveroo, the London-based restaurant delivery service. Last week, it secured another $275m dollop of funding, thereby entering “the thin ranks of European tech unicorns” – tech start-ups with valuations of $1bn-plus. Co-founded three years ago by former Morgan Stanley investment banker Will Shu, Deliveroo “does not stoop to anything so vulgar as making a profit – or even disclosing performance”. Perhaps that’s understandable, given it is fighting against “a growing band of deep-pocketed rivals”, including Uber. It probably won’t be long before Deliveroo “has to pass the cap around again”.