United Kingdom

ALEX BRUMMER: FCA must act faster on Greensill than it did on Woodford

The City regulator, the Financial Conduct Authority, acts in mysterious ways. For months now all our questions about holding an investigation into Greensill Capital (UK) and Greensill Capital Securities have been batted away.

We were told that the 'Appointed Representative' (AR), Mirabella Advisers, was the supervisor of Greensill Capital Securities and that was the end of it.

Now, with the Treasury Select Committee belatedly breathing down the FCA's neck, it has revealed that it formally is investigating both Greensill entities and is looking at Mirabella as well. In addition it says it is co-operating with overseas regulators.

Probe: The FCA has revealed that it formally is investigating both Greensill entities and is looking at Mirabella as well. In addition it says it is co-operating with overseas regulators

It cautions the Commons panel that some of the allegations regarding Greensill are 'potentially criminal in nature'.

One would hope that the FCA's intervention reflects the determination of its newish chief executive, Nikhil Rathi – a refugee from the London Stock Exchange – to be more assertive than his predecessors. 

Rathi also suggests in his submission that the AR regime has ballooned out of control.

There are now as many as 3,600 firms, supporting the activities of 40,000 ARs, with a potential for harm. 

The FCA was aware of difficulties at funds run by the Swiss GAM group, invested in Greensill supply chain assets, as far back as mid-2018.

It seems astonishing that alarms were not going off at the highest level of the FCA or at the Bank of England over the dangers to the UK financial system, given that Greensill's main operating arm is in London.

Someone might have alerted the former prime minister David Cameron to obvious fissures. There are huge policy questions for the select committee to get to grips with.

As for the FCA, all that one can demand is that it is speedier in conducting the Greensill probes than it has been with the implosion inside Neil Woodford's fund empire.

Protest vote

The suspicion must be that even if Pascal Soriot had been at Astrazeneca headquarters in Cambridge, rather than in Sydney, he would have found it hard to turn the tide of opinion over his £15.4million pay package for 2020 and even more generous arrangements for 2021.

The near-40 per cent repudiation of executive pay was as much as slap across the wrist for the remuneration committee, currently headed by Michel Demare, as Soriot himself. Changing the bonus targets two years in a row was not a good look.

It would have been more grown up for the corporate do-gooders to have looked at Astra in the round.

The executives and scientists, working flat out during the pandemic, have made more of a contribution to the health of Britain and the world than governance mavens will make with their posturing.

As the board noted in its response, the total shareholder return under Soriot's leadership has been 300 per cent over eight years and 77 per cent over the last three years.

Amid the kerfuffle over pay, shareholders have backed Soriot's judgment in approving the £28billion takeover of the US-based Alexion Pharmaceuticals.

The realpolitik of Astra is that, after his flirtation with other jobs, it was vital to keep Soriot in place. 

But it would have been better had Soriot been closer to home amid the turbulence whipped up by Brussels.

Bully boy

Just as well that Emma Walmsley and the Glaxosmithkline board are doubling up defences for when Elliott Advisers sharpens the assault on the pharmaceutical giant.

Senior City figures who have dealt with London-based Gordon Singer and his sidekick Mark Levine have only disdain for the intimidating approach.

The assault on Glaxo is at an early stage. Questions have been raised about a lagging share price, the speed of the break-up initiated by Walmsley and her qualifications to run the drugs arm. 

That, in spite of the fact that, in Hal Barron as chief scientific officer, Glaxo has put in place one of the most respected names in pharma and biotech.

Elliott's muffled criticism is usually followed by a graceless letter laying out demands pungently. If lucky, as with Whitbread when Coca-Cola emerged to buy Costa, the day can be saved. 

At property firm Hammerson a fire sale of assets was generated which didn't benefit anyone.

The normal life cycle from drug discovery to market at big pharma is generally long and complex. The brutal short-termism of Elliott is unwanted.

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