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Former Tesco Exec Scouler To Join TalkTalk

Written By Unknown on Kamis, 26 Februari 2015 | 00.12

By Mark Kleinman, City Editor

One of the executives who left Tesco in the wake of its £263m profits overstatement is to take on a senior role at TalkTalk, the home communications group.

Sky News has learnt that John Scouler, who left his role as food commercial director at Tesco in November following a period of suspension, will next month become TalkTalk's commercial director.

Mr Scouler's appointment, which was announced to TalkTalk's employees on Tuesday, makes him the first of the senior managers who left Tesco last autumn to re-emerge at another employer.

His arrival will come amid a Serious Fraud Office (SFO) investigation into the Tesco commercial scandal, although it is unclear whether Mr Scouler or his former colleagues will be required to give evidence as part of the inquiry.

In a statement issued in response to an enquiry from Sky News, TalkTalk said: "We are very pleased that John will be joining TalkTalk and to have someone with his consumer and retail expertise working for the business as we accelerate our quad-play growth."

Mr Scouler previously worked at United Biscuits and Kraft, both of which are major suppliers to Tesco.

Nine Tesco executives have been asked to step aside since last September, with at least four subsequently leaving the company, including Sean McCurley, a senior buyer in its convenience business.

In January, Tesco offloaded part of its Blinkbox on-demand content business to TalkTalk.

Last week, the supermarket giant named John Allan, the former chairman of Dixons Retail, as its next chairman despite competition for the role from Archie Norman, the chairman of ITV.

The SFO's criminal investigation is likely to take about a year to conclude, while the Groceries Code Adjudicator and the Financial Reporting Council are undertaking separate inquiries

Tesco suspended nine executives over the affair, four of whom have left the company, with most of the rest now reinstated.

The retailer's next chairman will have to grapple with the fallout from the supplier scandal as well as helping Dave Lewis, the new chief executive, navigate what analysts say is the toughest environment for big food retailers for many years.

Last month, Mr Lewis outlined proposals to relocate Tesco's head office, close dozens of stores and terminate its defined benefit pension scheme in an effort to save costs.

He also plans to sell a stake in Dunnhumby, its customer loyalty arm, and has announced a long-term price-cutting initiative across hundreds of core grocery items.

The debate over Tesco's decline was recently reignited when Sir Terry Leahy, the former chief executive, blamed his successor, Philip Clarke, for "a failure of leadership".

A series of profit warnings last year led to Mr Clarke being sacked, but analysts pointed out that some of Tesco's least successful initiatives in recent years, including its expansion into the US and China, had taken place during Sir Terry's tenure.

Earlier this month, Tesco said it would pay more than £2m in "liquidated damages" to Mr Clarke and Laurie McIlwee, its former finance director, after concluding that there was no legal basis for withholding the payments.


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Nearly 700,000 On Zero-Hours Contracts

Nearly 700,000 are people are now on zero-hours contracts, new figures show.

Figures for the last three months of 2014, showed 697,000 people said they were employed on the controversial contracts in their main job - an increase of 111,000 from the same period in the previous year.

The number of zero-hours contract has risen from 1.4m to 1.8m.

The report from the Office for National Statistics found that a third of people on zero-hours contracts, which the unions claim are worth £300 a week less than permanent contracts, want more hours.

Under the contracts, which are more likely to affect women, young and immigrant workers, employees are basically on call with the employer offering no set hours.

Their increasing use in the wake of the recession has become a significant political issue, with Labour saying it would scrap them if it comes to power in May's election.

Business Secretary Vince Cable said: "Zero-hours contracts are valued by many employers and individuals who want flexibility in the hours they work, such as students, people with caring responsibilities and those who want to partially retire.

"However, historically there has also been some abuse in these types of contracts. That is why I am taking legislation through Parliament at the moment to ban exclusivity clauses in zero-hours contracts which prevent people looking for additional work to boost their income. We want to make sure that people who are on zero-hours contracts get a fair deal."

He suggested the reason for the increase in figures was that more people were becoming aware of the concept of the zero-hours clause.

Shadow business secretary Chuka Umunna said: "Ministers have watered down every person's rights at work and zero-hours contracts have gone from being a niche concept to becoming the norm in parts of our economy."

Conor D'Arcy, policy analyst at the Resolution Foundation, said: "The continued growth of zero-hours contracts during the recovery suggests that they are more than just a recession-related phenomenon. While many employers may have started to use zero-hours contracts during the downturn, it looks like most are sticking with them."


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Morrisons Appoints New Boss To Lead Fightback

Supermarket chain Morrisons has announced the appointment of an ex-Tesco staff member as its new chief executive.

In a statement to the London Stock Exchange, Britain's fourth biggest grocer said David Potts would be the new CEO.

He replaces Dalton Philips, who struggled to reassure shareholders amid Britain's bitter supermarket price war.

Mr Potts, 57, is expected to start on March 16 on the same £850,000 salary of his predecessor.

Morrisons is Britain's fourth biggest grocer, behind market leader Tesco, Sainsbury's and Asda.

Mr Philips was at the helm during last Christmas' disappointing sales results and was sacked on 13 January.

He had also overseen Morrisons' late dash to create convenience stores and online delivery services.

Both areas had suffered as the supermarket focused on its core portfolio of stores as rivals expanded into smaller outlets and home service.

Mr Potts is a former Tesco colleague of Morrisons chairman Andrew Higginson.

He held a 40-year career with Tesco before quitting in 2011 to act as a retail expert and private equity consultant.

He started his supermarket career stacking shelves in a local store before rising to head the Tesco's supply chain, its UK business and then its Asian operations.

"David is the best retailer I have worked with in 25 years in the industry," Mr Higginson said.

"Having worked alongside him for 15 years, I know he will bring to Morrisons a focus on the customer, a track record of delivery, flair, talent, and immense energy to his new role."

A third Tesco-trained executive has a key role at Morrisons - chief financial officer Trevor Strain - who was previously Tesco UK's property finance director.

After the announcement was made, former boss Ken Morrison described the choice of Mr Potts as "a good appointment".


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Google Bans Porn From Its Blogging Website

Reddit has promised to remove nude photos taken without the subject's consent - while Google is banning porn on its blogging network.

The tough stance by the two companies comes in the wake of the iCloud hack which led to the release of celebrities' nude images.

Reddit - a site which lets users post images, videos and links - will remove content if the person in the image has not given permission for it to be posted.

Until now, Reddit has taken a hands-off approach to privacy, with only child abuse images and spam explicitly prohibited. It allows its 160 million users to police individual forums.

From 10 March the site's rules will change, in an effort to grow the platform "for the next 10 years and beyond".

Interim chief executive Ellen Pao announced the new policy, saying that anyone who wants an image of themselves removed from the site can email contact@reddit.com.

Google is going to ban most nude photos and videos from publicly accessible sites on its Blogger service.

It is giving its users until 23 March to delete explicit content.

If they do not, their sites will be switched to a private restricted access mode.

The only exceptions will be for special circumstances, such as nudity depicted in "artistic, educational, documentary, or scientific contexts," according to an explanation on Blogger's site.

Facebook already prohibits images containing nudity. Twitter allows most content but says users should mark it as sensitive.


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TSB Lures Customers From High Street Rivals

The newly spun-off TSB bank has seen its pre-tax profit rise by 2.3%, as it lures customers from established high street rivals.

As a result, the company said it would consider making acquisitions in the future to help accelerate expansion plans.

TSB became Britain's 7th biggest lender after it was hived-off from the taxpayer-backed Lloyds Banking Group last June.

It says it now has 8.4% of all new personal current accounts opened in 2014, with the total almost reaching 500,000.

The bank said pre-tax profit rose to £133.7m for the year ending in December, up from £130.7m in the previous year.

Since its spin-off TSB has sought to position itself as one of the new breed of smaller "challenger banks", amid public discontent with the sector.

The bank said it hopes to lift its share of the total personal current account market to 6%, up from the target figure of 4.2% during the initial public offering (IPO) on the London Stock Exchange.

Chief executive Paul Pester said: "2014 was a pivotal year for our business as we started to establish TSB as Britain's challenger bank.

"We've exceeded the expectations we set out at the time of our IPO in June last year."

Banking regulators have been supporting the new breed of bank on the high street as a way of offering greater competition to the overwhelming dominance of the four large lenders.

Meanwhile, new figures released by the British Bankers' Association show personal credit usage continuing to rise.

It said in January annual growth in personal loans and overdrafts was up 3.9% - the highest rate since late 2008.

But that was tempered by mortgage approvals, which were little changed in January compared with December, and still down a fifth on the figure from a year ago.


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AO World Shares Plunge 46% On Profit Warning

Online white goods retailer AO World has seen its share price drop by almost 50% in early trades, wiping £500m from its market value.

The plunge occurred after it released a statement lowering its financial forecast for the full-year ending March 31.

The company's profit warning said Black Friday resulted in "adverse effects".

Shares eased to around 30% down as noon approached.

The company said: "AO has found achieving expected sales growth to date in Q4 FY15 difficult and this has negatively affected adjusted (pre-tax earnings).

"It is now apparent that some of the revenue growth in the second half of FY14 and going into FY15 was due to the extra publicity surrounding the company at that time."

It now expects gross revenue to be around £472.5m and pre-tax profit to reach £16.5m.

The Bolton-based retailer said that November's Black Friday damaged longer-term sales growth.

It said the online frenzy "did not produce incremental sales but condensed sales into a shorter time period".

The company reassured investors its business plan was sound as it pursued expansion in Germany and other potential markets.

Chief executive John Roberts said: "We remain committed to our market-leading, customer-focused business model.

"Having delivered on all our strategic objectives through this financial year, we are confident of our ability to continue to deliver for our customers and to further drive the success of AO in the interest of all stakeholders."


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Apple Fined $500m For iTunes Patent Infringement

Apple has been told pay $533m (£343m) after a jury in Texas found that iTunes infringes three patents.

A jury deliberated for eight hours and found that the world's most-valuable company willfully used Smartflash's patents without permission.

Smartflash had been asking for damages of $852m (£549m) - Apple says it will appeal the decision.

A spokesman for Apple said: "We refused to pay off this company for the ideas our employees spent years innovating and unfortunately we have been left with no choice but to take this fight up through the court system."

The case began in May 2013 when Smartflash sued, alleging that iTunes software infringed on patents related to accessing and storing downloaded songs, videos and games.

Apple tried to have the case thrown out, but a judge ruled that Smartflash's technology was not too basic to deserve the patents.

It then asked the jury to find Smartflash's patents invalid because previously patented inventions covered the same technology.

Brad Caldwell, a lawyer for Smartflash, said: "Smartflash is very happy with the jury's verdict, which recognises Apple's longstanding willful infringement."

The city of Tyler in Texas has become the focus for patent litigation.

It was also in Tyler federal court that a jury ordered Apple to pay $368m (£237m) to VirnetX Inc for patent infringement in 2012.

Smartflash has also filed patent infringement lawsuits against Samsung Electronics Co Ltd, HTC Corp and Google Inc.


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Huge Fines To Tackle 'Menace' Of Cold Callers

Companies to blame for nuisance calls and texts can be fined up to £500,000 under tough new regulations that come into force soon.

Changes to the current law, which has been described as "a licence for spammers and scammers", will make it easier to impose hefty sanctions.

From 6 April the Information Commissioner's Office (ICO) will no longer have to prove that unwanted messages are causing a "substantial damage or substantial distress" before taking action against those responsible.

The Government is also hoping to introduce measures to hold board-level executives responsible for nuisance calls and texts.

"For far too long companies have bombarded people with unwanted marketing calls and texts, and escaped punishment because they did not cause enough harm," said digital economy minister Ed Vaizey.

"This change will make it easier for the Information Commissioner's Office to take action against offenders and send a clear message to others that harassing consumers with nuisance calls or texts is just not on."

Which? led a taskforce last December calling for a review of the rules in order to act as a stronger deterrent to rogue companies.

Its executive director, Richard Lloyd, said: "These calls are an everyday menace blighting the lives of millions so we want the regulator to send a clear message by using their new powers to full effect without delay.

"It's also good news that the Government has listened to our call and is looking into how senior executives can be held to account if their company makes nuisance calls."


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Lloyds To Adjust Terms Of Chief Exec's Bonus

By Mark Kleinman, City Editor

Lloyds Banking Group is preparing to tweak the terms of its chief executive's bonus which could make it dependent on the Government offloading its entire stake in the UK's biggest high street lender.

Sky News has learnt that Lloyds directors are in advanced talks with UK Financial Investments (UKFI), which manages the taxpayer's stake in the bank, about the annual incentive award for Antonio Horta-Osorio.

Insiders said the discussions were focused on tying the annual award either to a greater number of consecutive days on which Lloyds' shares trade above the taxpayer's break-even price, or to the disposal of the Government's remaining 24% stake.

The latter scenario appeared to be more likely on Wednesday although a final decision has not yet been taken, they said.

Mr Horta-Osorio's 2013 bonus of £1.7m was designed to vest if Lloyds' share price remained above 73.6p on average on 126 consecutive trading days in the five years following its award, or if the Government sold at least half of its shareholding in the three years to 2017.

While the first of those conditions has been met, vesting will not occur until 2017 and the Lloyds chief will be required to hold the shares until 2019.

Sky News revealed earlier this week that Mr Horta-Osorio, who has presided over a trebling of Lloyds' share price since taking over in 2011, was in line for a bonus award of roughly £1m for 2014.

The bank, which reports its full-year results on Friday, is keen to avoid a row over a separate payout to Mr Horta-Osorio under a long-term share award made in 2012 tied to its performance over three years.

He stands to collect more than £7m from the scheme, although the Treasury is understood to have provided private assurances that it will not publicly criticise the payment.

Mr Horta-Osorio's bonus award for last year would have been higher based on Lloyds' performance but was cut to reflect the bank's £220m fine for its role in the Libor rate-rigging scandal, a source said.

Crucially, Lloyds will announce on Friday that it has gained regulatory permission to pay a dividend to shareholders for the first time since it was bailed out with more than £20bn of taxpayers' money.

A source said the Prudential Regulation Authority had communicated its approval earlier this week, with Lloyds directors due to agree the size of the proposed shareholder payout at a board meeting on Thursday.

If Lloyds pays a dividend of 0.5p-a-share, that would equate to a total outlay of approximately £356m, just under a quarter of which would be handed to UKFI.

George Osborne, the Chancellor, is expected to point to those receipts and the sale of a further 1% of the bank's shares confirmed earlier this week.

"The trading plan I launched in December has raised a further £500m for the taxpayer so far," he said on Monday.

"This is further progress in returning Lloyds Banking Group to private ownership, reducing our national debt and getting taxpayers' money back."

Lloyds is also expected to add roughly £600m to its mounting bill for payment protection insurance compensation, taking its liability so far to more than £11.5bn.

Lloyds declined to comment.


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HSBC Boss 'Sorry' For Swiss Tax Scandal

The boss of HSBC has apologised in person to MPs over the past behaviour of his bank and thousands of secret Swiss bank accounts it held for clients.

Stuart Gulliver told MPs on the Treasury Select Committee that revelations about thousands of secret accounts held in Switzerland has caused "damage to trust and confidence".

He said: "I am apologising as CEO. I am responsible for cleaning it up."

Committee chair Andrew Tyrie MP asked Mr Gulliver why he found it necessary to shield his income through a shelf company located in Panama, while he was actually domiciled in Hong Kong.

Mr Gulliver stressed it was not for "tax purposes", instead saying it was because he did not trust other members of staff at the bank.

"It was purely about privacy. Privacy from colleagues in Hong Kong and privacy from colleagues in Switzerland," Mr Gulliver, whose has worked for the bank for 35 years, said.

"That was because my pay was not a matter for public record."

He said the HSBC computer system at the time allowed staff to snoop on each other to find out how much they were paid.

Mr Gulliver admitted he was one of the best remunerated members of staff in Hong Kong.

He said: "The computer system showed everyone's pay and I was amongst the highest paid and I wished to preserve my privacy."

Protesters outside the House of Commons chanted anti-HSBC slogans, as public anger continues to rise over the secret accounts promoted by the bank's private arm in Geneva.

Swiss investigators raided the offices of the bank last week after reports said it turned a blind eye to handling funds for arms dealers and traders in conflict diamonds.

That announcement came just over a week after HSBC Switzerland found itself at the centre of a global scandal following the publication of secret documents.

The cache of files, made public in a French newspaper, claimed HSBC's Swiss private banking arm helped clients in more than 200 countries evade taxes on accounts containing £77bn ($119bn).

The files, which include the details of 30,000 accounts and the names of celebrities, were originally stolen by former HSBC IT worker Herve Falciani in 2007.

A number of regulators have launched investigations into the HSBC tax scandal.

In 2012 the bank agreed to pay fines and settlements of £1.2bn over an unconnected matter.

That followed a US investigation of Europe's largest bank which focused on the transfer of funds on behalf of nations such as Iran and the movement of $7bn (£4.5bn) in cash into the US financial system, suspected to have belonged to Mexican drug cartels.

At the time Mr Gulliver apologised for the actions of his bank, which dated back to 2007 and 2008.

He said: "We have said we are profoundly sorry for them, and we do so again.

"The HSBC of today is a fundamentally different organisation from the one that made those mistakes."


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