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Friday newspaper round-up: Barclays, Capital & Regional, Rank

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Date: Friday 02 May 2008

LONDON (ShareCast) - One of Barclays’ most senior executives is set to step down in a sign of the simmering tensions at the top of the UK’s third-biggest bank.

Paul Idzik, chief operating officer and one of the key lieutenants in efforts by John Varley, chief executive, to overhaul the bank’s culture and management, has decided to leave. His departure comes at a sensitive time for Barclays, which is facing scrutiny from investors over its exposure to losses from the credit market turmoil. It also faces questions about the strength of its balance sheet and whether it needs a rights issue, reports the FT.

Capital & Regional (C&R), one of Britain’s largest commercial property companies, suffered a brutal share sell-off yesterday amid concerns that its flagship fund had breached its banking covenants. After the market closed the company acknowledged the “market concern around the capital structure of the Mall Fund”. The firm has just over £600m of debt on its balance sheet. Including debt also held by the three funds C&R part owns and manages, the company is directly responsible for a total of £1.3bn of borrowings, reports the Times.

Sir Stuart Rose has been forced to make a further concession to pacify shareholders angered by his elevation to executive chairman of Marks & Spencer. In the latest attempt to diffuse the ongoing corporate governance row, Sir Stuart has agreed to sell a £100,000 stake in Lucky Voice, the karaoke business founded by M&S non-executive Martha Lane Fox, writes the Telegraph.

Britain’s bankruptcy rules have exacerbated the effect of the credit crunch across the country, the UK’s leading economics institute said. Bankruptcy reforms introduced in 2004 under the Enterprise Act allowed bankrupts to be discharged after one year instead of three to help to reduce the stigma of “honest failure”. However, the National Institute of Economic and Social Research said that this had fostered an environment in which people were happy to take on debt that they could not repay, inflating the losses of banks and other lenders, reports the Times.

Reliance Globalcom, the Indian telecoms group, is preparing to break London's IPO drought with a listing that will target a market valuation of as much as £6bn. The deal is at an early stage and the timing will depend on a stabilisation of market conditions, but Anil Ambani, the Indian billionaire who controls the parent Reliance Adag Group, said this week that he was keen to press on with a listing, writes the Times.

A growing number of hedge fund managers are trying to persuade investors to back new ventures by offering discounted fees to help make up for losses at funds that have failed. The latest are the $3bn London hedge fund Endeavour Capital and the $2.5bn flagship fund of New York’s Drake Management, both offering to waive performance fees on new funds until they have made back the disastrous losses that prompted their closure, says the FT.

Rio Tinto's chairman Paul Skinner said a break-up of his company is an option in order to extract the best possible return for shareholders. In an interview with the Sydney Morning Herald, Skinner said a break up would not be Rio's preferred course of action, but it would be considered in order to get the best outcome.

Police are investigating an alleged £70m attempted fraud by a London-based member of staff at HSBC, Britain's biggest bank. A man has been charged over the alleged scam, which was discovered last week at HSBC's securities services division, which settles trades for clients. A payment to a bank raised suspicions at the division in HSBC's head office building at Canary Wharf and the police were called, reports the Independent.

Shares in Rank, which owns the UK's second-largest bingo chain, jumped yesterday after hints that the government may be about to throw the industry a lifeline. Speaking at the annual general meeting of the UK Bingo Association, Gerry Sutcliffe, the sports minister, said that both he and the Prime Minister were sympathetic to bingo's problems, and that he expected to announce measures to help address these difficulties in the next few weeks, reports the Independent.

The government's plans to ease the UK's housing shortage by building some 2m new homes by 2016 were close to collapse last night, as official figures revealed that private and public housing starts slumped in the first quarter of this year. The Government wants to see 240,000 new properties built each year, but the Office for National Statistics said that private housing orders fell by 29% in the three months to March compared with the same period in 2007, reports the Independent.