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Tuesday newspaper round-up: Corporation tax, HSBC, Carphone Warehouse

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Date: Tuesday 13 May 2008

LONDON (ShareCast) - The Treasury has succumbed to sustained pressure from big business and agreed to water down controversial proposals to change the UK corporate tax regime, reports the Times.

Several big multinational British companies had said that they were prepared to move their headquarters from the UK amid concerns that the Treasury was preparing to tax the profits they derived overseas. A Treasury spokesman confirmed yesterday that the department had drawn up a new set of tax plans after extensive consulation with UK companies. The move will be seen as another embarrassing government climbdown.

Knight Vinke, the activist investor, launched a fresh attack on HSBC yesterday, accusing Europe's biggest bank of flattering its US sub-prime losses by failing to write down $30bn worth of mortgage assets. The broadside came as HSBC revealed a $3.2bn first-quarter write-down on loans by its US business to poor Americans, reports the Times.

The legal battle between Tesco and the Guardian newspaper has intensified - with the retailer demanding a front-page apology. The supermarket chain's latest demands follow a string of articles that ran alongside a "correction and clarification" published by the Guardian 10 days ago, reports the Telegraph.

A group of key EU finance ministers will today launch an assault on the rewards earned by bankers and top managers in a move that poses a potential threat to the City of London. A confidential document prepared for the gathering in Brussels finds the "short-term" pay structure of modern capitalism has become deformed, causing firms to take on "excessive risk" without regard to the interests of stakeholders or society. While there is no concrete legislation on the table, ministers are eyeing curbs on stock options, bonuses and golden parachutes, reports the Telegraph.

Carphone Warehouse is understood to have failed to make it on to a shortlist of second round bidders for Tiscali, the Italian broadband operator. Vodafone and BSkyB are thought to be among about six companies who will be given access to Tiscali’s books. After a board meeting last night, Tiscali, which has a market value of €1.43bn, said that it had received an “unspecified number” of bids, says the Times.

Hewlett-Packard on Monday was close to a deal worth up to $13bn (£6.6bn) to buy Electronic Data Systems, one of the world’s biggest IT services companies. The deal would mark an attempt by Mark Hurd, HP’s chief executive, to challenge IBM’s dominance in IT services, of one of the technology industry’s most lucrative markets. HP and EDS confirmed that they were in “advanced discussions”, but cautioned a deal might still not be consummated, reports the FT.

Jewson, the UK's second biggest building materials supplier, has called in police amid allegations its sales director was embroiled in a suspected £1m fraud. Tony Newman, director of sales at Jewson, which is owned by Paris-listed Saint Gobain, was arrested three weeks ago after an internal audit team uncovered alleged irregularities relating to the procurement of marketing services, writes the Telegraph.

A record number of surveyors reported a drop in house prices and property transactions last month, new figures show. The balance of surveyors reporting that house prices had fallen rather than risen increased to 95.1% last month, up from 79.4% in March, figures from the Royal Institution of Chartered Surveyors (RICS) show. This is the biggest margin since the figures were first compiled in , reports the Times.

Britain's biggest pension funds are to sue the Government for refunds of hundreds of millions of pounds worth of value added tax (VAT) they claim to have been illegally charged on investment management fees. The National Association of Pension Funds (NAPF) and Wheels Common Investment Fund, an £8bn car industry scheme, unveiled the legal challenge yesterday, reports the Independent.

The mining industry could top last year's record number of mergers and acquisitions with more than $250bn worth of takeovers this year as demand from an industrialising Asia inspires an unprecedented land-grab in the sector. Michael Lynch-Bell, head of the metals and mining team at Ernst & Young, the accountancy firm, predicted that there could be at least three $50bn-plus transactions done this year, reports the Independent.

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