Editor: John Arnold. E-mail jarnold@creditman.co.uk
Pat Williams. E-mail pwilliams@creditman.co.uk
Site: Business Credit Management UK
URL: http://www.creditman.co.uk
Issue: Vol 5 Issue 48
Dated: 21 December 2001
Welcome to the Business Credit News UK.
In this weeks edition you will find the following topics.
UKNEW SURVEY HIGHLIGHTS SIGNIFICANT DIFFERENCES BETWEEN NATIONAL ACCOUNTING REQUIREMENTS AND INTERNATIONAL ACCOUNTING STANDARDS
An international accounting survey released by the world's seven largest accountancy firms, GAAP 2001, found mixed progress toward convergence of national requirements with International Accounting Standards. Approximately one-third of the 62 countries surveyed are responding to the challenge of convergence with an active agenda and proposed changes to national requirements. However, half of the countries surveyed reported significant differences between national and international standards, but have not implemented or proposed new standards to reduce the differences. As a result of major changes to international standards that are being considered, the differences between national and international standards will increase unless national standard setters redouble their efforts to keep pace with the changes.
"In an age of significantly increasing international investments and financial reporting on the internet, the need for a common worldwide financial language and framework for reporting is quickly making diverse national standards obsolete," said Brian Shearer, technical partner at Grant Thornton. "Governments, regulators, investors and the accounting profession all need to rededicate themselves to achieving convergence of accounting standards at the earliest feasible date."
The seven firms jointly advocate a single worldwide framework for financial accounting and reporting based on high-quality International Accounting Standards (IAS). Achieving such a framework would improve investor confidence by providing greater transparency and comparability of the financial information used in investment decisions, and thereby would contribute to financial market stability and economic growth around the globe.
The complete GAAP 2001 report is available at www.ifad.net. It includes summaries for each of the 62 countries surveyed of instances in which a country's requirements would not allow, or would not require, the IAS treatment. The survey also includes analyses of changes in these summaries since last year and of national requirements or proposals for national requirements, which will come into effect in the future and may further reduce differences from IAS.
In addition, GAAP 2001 demonstrates the necessity for users of any financial information to take great care to understand which accounting principles - national or international - have been applied in preparing the relevant financial statements.
"The rapid development of global financial markets has greatly reinforced the desirability of - indeed now demands - international consistency in accounting standards and auditing approaches," said Paul Volcker, Chairman of the Trustees of the IASC Foundation in June 2001. Strong support for high quality international standards has come from a number of other sources, including the European Commission's Commissioner on Internal Markets, Frits Bolkestein, who, in commenting on the EC's proposal for a Regulation on the application of IAS said, "The adoption of a common financial reporting language for listed companies throughout Europe will greatly benefit both companies and investors in bringing about more transparency and a higher degree of comparability." Isaac Hunt, a Commissioner of the United States Securities and Exchange Commission commented recently, "… I can think of no greater gift to the investing public than establishing a set of world wide accounting standards."
The potential for IAS to provide the basis for comparable national and cross-border financial reporting is increasingly clear. Evidence includes the May 2000 recommendation by the International Organization of Securities Commissions that regulators should allow multi-national issuers to use IAS for cross-border offerings and listings, subject to the provision of supplemental data. In addition, in February 2001, the European Commission proposed a Regulation that will require the Europe Union's listed companies to prepare their consolidated financial statements in accordance with IAS from 2005 onward.
Across the world from Asia to Latin America, many national governments, regulators and accountancy professionals are actively considering how their national accounting requirements differ from IAS and how to reduce those differences. This process will, in many countries, lead to a significant improvement in financial reporting transparency and comparability.
The quantity and significance of the differences reported in GAAP 2001 make it clear that, for many countries, convergence with IAS will be a major task and will require a joint effort in each country by the government, stock market regulators, financial statements preparers, users, standard setters. Although some efforts may be initiated internationally, it is clear that the most significant actions must be undertaken at the country level, where plans for convergence of high quality accounting standards need to be developed and implemented.
One response to the convergence issue is the European Commission's announcement of its proposed 2005 Regulation, which has provided several years of advance warning before IAS becomes compulsory for listed European Union companies. This approach will allow time for the management and finance functions of affected companies to develop a well-considered, orderly transition to IAS.
Shearer said:
"GAAP 2001 provides an overview of the movement toward global accounting standards throughout the world. Creating written standards that are comparable country-by-country is a critical first step, but written requirements will not actually lead to better accounting if standards are not properly applied and enforced. Overall improvements in financial reporting will require a joint effort in each country by the government, stock market regulators, the business community, users of financial statements, standard setters and the accountancy profession to develop the educational, professional and regulatory infrastructures."
The professional firms involved in this project are: Andersen, BDO, Deloitte Touche Tohmatsu, Ernst & Young, Grant Thornton, KPMG and PricewaterhouseCoopers. Many hundreds of partners and managers from around the world were involved in this project. The survey was edited by Christopher Nobes, Professor of Accounting at the University of Reading in the UK.
The 62 countries taking part in the survey were chosen for their economic importance and represent some 95% of the world's Gross National Product.
GAAP 2001 is a "status report" of a key aspect of financial reporting convergence as of December 2001. It surveyed some 80 key accounting measures (including a few areas of disclosure) and highlights instances in which a country's requirements at 31 December 2001 would not allow, or would not require, the International Accounting Standards (IAS) treatment. The focus was on consolidated financial statements for listed companies.
GAAP 2001 benchmarks national standards against a "moving target" as IAS are frequently changed and improved, and as some national requirements also are changing. The national requirements and IAS, which are compared in this survey, are those that are mandatory at 31 December 2001 (except for Japan and India, where a 31 March 2002 cut-off was applied).
Both the 2001 and 2000 surveys are available at www.ifad.net The web site also includes an analysis of new national requirements that affected the differences reported in the 2000 country summaries and a similar analysis of national requirements or proposals for national requirements, which will come into effect in the future and will further reduce differences from IAS.
UK HOTEL INDUSTRY COMES TO TERMS WITH THE NEW REALITY OF TRAVEL
As UK hoteliers near the end of a year that many of them would prefer to forget, PKF's preliminary performance figures for the UK hotel industry show signs that people are coming to terms with the new reality of travel post-11 September.
Whilst occupancy rates for London in November were 14.6% lower than in 2000, average room rate dropped by 14.8% and rooms yield fell by 27.3%, these figures are better than the nose-diving performance in October. In particular, they included a 4.1% increase in domestic visitors and, despite the considerable drop on 2000 figures, there were more European and American visitors in November than October.
In the regions, there were also glimmers of optimism despite drops in room occupancy of 1.2%, average room rate of 2.8% and rooms yield of 4.0%. As with the London hotels, however, the top end of the market outside the capital is suffering much more than mid-market and budget hotels which are continuing to hold their own.
Melvin Gold, Managing Director of Hotel Consultancy Services at PKF, said: "Although the November figures aren't a cause for seasonal rejoicing, it appears that the hotel industry and visitors are coming to terms with the new paradigm of travel. While the events of 11 September have changed our perceptions of travel, there is also a recognition that life must go on.
"Despite a truly challenging year, the UK hotel industry should take cheer from their own efforts to protect their occupancy figures. Hoteliers throughout the UK read the wind early in the year with many taking positive action to package up their offering to appeal to different market segments. Through a combination of tactics such as newspaper advertising, the use of the internet to promote late booking offers, and added value deals to encourage visitors, the hotel industry can take credit for the fact that average room rates have not dropped significantly between October and November."
MPC BIAS TOWARDS FURTHER RATE CUTS
Reacting to the minutes of December’s meeting of the Bank of England’s Monetary Policy Committee, which were released on Wednesday, Ian Fletcher, Chief Economist at the British Chambers of Commerce, said:
“We are reassured to see that the Bank of England remains aware of the downside risks to our economy and that the bias of the MPC at the moment is towards further rate cuts.
“The MPC is correct to pause and take stock of the impact of earlier rate cuts and the strength of consumer demand over Christmas. However, further rate cuts may be needed in the New Year if consumption at home stalls or the effects of the global downturn permeate the domestic economy further.”
I-many increases its presence on the European stage
I-many International, part of I-many Inc, the global contract and trade relationship management solutions provider has announced a new partnership with Cannock Chase. Leading credit management provider, Cannock Chase has a recognised presence within the Benelux region and the UK and the partnership with I-many International will provide valuable added value for both companies.
"We are delighted to have signed this agreement with I-many, as they are leading the way in debt recovery and collections management software," comments Eef van Riet, Director and co-founder of Cannock Chase. "Through the partnership we will become a recognised provider of I-many's Collections Management software solution, providing us with a competitive edge and ensuring that our clients get a value added service."
"This is an extremely positive move for I-many as we continue to put investment into strengthening our global presence," Kevin Still, General Manager, I-many International explains. "Through I-many CMS (Collections Management Solution), Cannock Chase will be able to provide its clients with the ideal solutions to their dispute management and debt recovery needs.
"Cannock Chase has a strong client base of blue chip companies, built-up through its years of experience in the credit management sector. Initially the joint services will be available in the Netherlands, with new offices in Leidschendam, further strengthening our position within Europe."
About I-many International
I-many International is a wholly owned subsidiary of I-many, Inc. I-many International was formed following the acquisition of BCL Vision, supplier of I-many CMS (formerly Sales2Cash), an e-commerce-based collections and dispute management software solution.
I-many CMS integrates with leading ERP, accounting and document management systems to; maximise cash collection, reduce days sales outstanding (DSO) and improve post-sale customer service. I-many CMS provides customers with access to their account using their Web browser to obtain copy documentation, help resolve open disputes and obtain timely information relating to their account, unpaid invoices and payments.
About I-many Inc
I-many (NASDAQ: IMNY) is the leader in providing software and Internet-based contract management solutions and related professional services which enable businesses to manage complex trade relationships and facilitate
business-to-business e-commerce. The company's software is used by 8 of the largest 10 healthcare manufacturers in the world and leading consumer goods companies. The company estimates that its solutions help manage more than $55 billion in contracted commerce per year. For more information, visit the company Web site at www.imany.com
About Cannock Chase
Cannock Chase is the leader in providing a one stop shopping formula in credit consultancy and credit management. The Cannock Chase Companies provide tailor made solutions through consultancy, secondment, outsourcing, training and software. Cannock Chase guarantees their clients that their activities will always yield more than they cost. For more information visit www.cannockchase.com
DRAFT DIRECTORS' REMUNERATION REPORT REGULATIONS
Following on from Patricia Hewitt's announcement on 19 October 2001 regarding a shareholder vote on directors' remuneration, the DTI is consulting on draft regulations on directors' pay with the aim of introducing legislation this parliamentary session under the Companies Act 1985. The consultation period ends on 15 March.
The draft regulations can be found on the DTI website at www.dti.gov.uk/cld/current.htm
The draft regulations aim to strengthen disclosure requirements particularly in relation to policy on directors' remuneration and to introduce a requirement for an annual shareholder vote on the directors' remuneration report.
Under the proposals, quoted companies will be required to produce a directors' remuneration report as part of the annual reporting cycle.
Key elements of the report would be:
Directors face a conflict of interest when they become involved in deciding their own pay and the requirements will improve transparency and help protect the integrity of both individual directors and companies.
It is also important that there is effective dialogue between directors and shareholders on directors' pay. Shareholders will be given the right to vote on the remuneration report at the AGM (ie: do they agree with the policy statement as it stands, are they happy with the incentives scheme). The new requirements will give shareholders more information and chance to voice their views. A negative vote is likely to be damaging to the company and individual directors.
The Government is expecting that quoted companies should be required to produce a directors' remuneration report and to put the report to a shareholder vote with respect to financial years ending on or after 31 December 2002. This will mean that companies with a financial year ending on 31 December 2002 would be required to produce a report and put it to a shareholder vote in 2003.
"THE EURO'S IN THE POST ……."
D&B warns of euro cashflow disruption
The single European currency is set to take a heavy toll on business' credit management capabilities and without careful preparation could significantly impact corporate cash flow, even in non-eurozone countries, according to leading business information group D&B.
" 'Our systems are not euro-ready yet' is set to become a new version of 'the cheque is in the post' ", comments Philip Mellor of D&B. "We anticipate a number of organisations will use the advent of the euro to pay incorrectly, delay payment - or even avoid it altogether. It is vital that companies ensure they are not disadvantaged by a lack of preparedness amongst their customers, and have contingency plans in place to manage any detrimental situations which may occur."
To minimise cashflow disruption, says D&B, businesses will have to differentiate and develop policies for handling:
genuine delays caused by costly and slow manual processes used while corporate systems are made euro- compliant.
invoices sent in national currencies being paid in euros (or vice versa). Swift and accurate reconciliation of invoice amounts with monies received is essential according to D&B, especially as some companies could use "mistakes" in conversion rates to extend the payment process.
manipulation of the floating rates of "out" countries to the sole advantage of one party to the transaction. Equally, says D&B, use of the wrong rates will again simply be used to obtain a longer credit period.
With only days to go, many companies are still working on converting their systems to the euro - and it's clear that this work will extend beyond the January 1 deadline in a large number of cases, says D&B.
D&B research, conducted in the autumn, showed that 3 per cent of companies in the eurozone were still at the planning stage of euro transition. Sixteen per cent had experienced delays in implementation of their crossover plans - primarily due to the inflexibility of computer systems.
TOP MANAGEMENT CHANGES AT NCM
Amsterdam, 20 December - Gerard van der Stelt, 44, CEO of international credit insurer NCM - which in the UK insures annually more than EUR 65 billion of trade against the risk of non-payment - has decided to leave NCM on one February 2002 in order to pursue other interests. He will be succeeded by Steen Parsholt, currently a member of NCM Group Managing Board. Bas Sepers, currently Regional Director of NCM Benelux and Director of Medium Term Business (the Netherlands), will join the NCM Group Managing Board as of one January 2002.
Van der Stelt took his decision against the background of the combination of NCM with Gerling Credit International Group, which the European Commission regulatory authorities have now approved. The CEO of this Cologne-based combination, called Gerling NCM Credit and Finance AG, will be Bernd Meyer, 55, the current Chairman of the Gerling Credit International Credit Group.
Van der Stelt will, therefore, be seeking a new opportunity elsewhere, although he remains very supportive of the new company and will join the Supervisory Board of NCM Holding on one February 2002.
Van der Stelt has worked at NCM for the past six years, the last three as CEO. Before joining, he worked in various international positions for Reuters and for leading business information provider, VNU, in the United States. At NCM, he made a significant contribution towards reorganising and internationalising the Group, developing it from a credit insurer into an integrated international receivables company. At the same time, a more efficient shareholding structure was created. He partly initiated the Gerling NCM combination.
Steen Parsholt, 50, has been with NCM for 6 years. Prior to joining, he spent 20 years in banking and investment banking with, amongst others, Citibank and UBS in London and New York.
The NCM Group is a privately owned company headquartered in Amsterdam. In the 2000 financial year it insured against the risk of non-payment, business transactions worth approximately EUR 200 billion. Revenues totalled EUR 584 million. NCM services more than 20,000 customers worldwide, helps them trade safely in 250 countries, can provide access to information on 30 million companies worldwide and processes one million requests for buyer risk assessments yearly. It employs approximately 1,800 people.
The Gerling Credit International Group is the third largest credit insurer worldwide. In the financial year 2000 revenues totalled EUR 608 million. The Group now operates with 1,700 employees in 36 countries in all continents, having successfully integrated the Belgium-based Namur - Assurances du Credit in 1994 and having acquired, over the past five years, subsidiaries - Etoile (France), Gerling Nordic and Mexican market leader, Gerling Comesec.
Creditors want to play a more active role in insolvencies and accept they do not do enough to help insolvency practitioners chase their debt, according to a survey published by the Insolvency Practitioners Association and the Institute of Credit Management.
In a survey of 100 members of the Institute of Credit Management, six out of ten admitted that they do not take an active enough role in the insolvency process and 84% stated that they would be willing to sit on a creditors committee. Despite the low turn-out at many creditors' meetings, creditors appear to value them with 76% of those surveyed believing creditors' meeting usually or always perform a useful function.
Keith Goodman, president of the IPA said that the results were promising but need to be translated into action.
"This report is encouraging as the profession often feels creditors have little interest or appreciation of the efforts of practitioners. By law, the unsecured creditors are last in the pecking order and often feel it is not worth "throwing good money after bad" but, as they are able to influence the outcome, it is in their interest to get more involved.
"What we really need to see is this feeling translated into action and more creditors attending meetings. Practitioners' owe a duty of care to creditors and creditors should view insolvencies as working for them and participate more."
The problems are not all the fault of creditors though and 78% of respondents said they should be more encouraged to participate. As a regulator the IPA is keen to ensure their license-holders do all they can to improve communications between practitioners and creditors. Goodman continued,
"Thirty four per cent of respondents said they feel ill-informed of progress in procedures and a good way to improve communication is to use the committees. It should be the role of the committee to keep their fellow creditors informed of progress but the profession itself needs to be more active in getting the ball rolling. I think this is an area where the IPA and ICM should work together for the benefit of all their members".
On a separate matter, the survey report highlighted that creditors want the regulation of the insolvency profession simplified by reducing the number of insolvency regulatory bodies. 64% of those surveyed said that regulation would be more effective with a single regulator, a suggestion with which 43% strongly agreed. Goodman said,
"It is unusual for a profession with just 1,500 members to be regulated by eight recognised professional bodies. Given the small number of practitioners and the complexities of insolvency law, even if the government does not want to introduce a single regulator it would make more sense to have fewer, more specialised regulatory bodies."
To request a copy of the report, please call 020 7251 1500 or email requests@ipa.uk.com
The IPA was established in 1961 and became a Recognised Professional Body (RPB) under the Insolvency Act 1986 for the purposes of licensing and regulating insolvency practitioners. It works closely with another RPB, the Institute of Chartered Accountants in England & Wales (ICAEW) and together they represent 61% of all licensed practitioners.
The IPA/ICM survey
The IPA/ICM survey - What do you think about insolvency - investigates credit managers' opinions of insolvency and insolvency practitioners. It was conducted in June and July 2001 and among Institute of Credit Management members who responded to a series of questions about the insolvency marketplace.
A self-completion questionnaire was distributed to all ICM members through Credit Management, the credit related publication produced and distributed monthly by the Institute. Completed questionnaires were returned and analysed by an independent research company.
A total of 100 questionnaires were returned. The respondents hold positions in an array of credit related roles, the majority of which were credit management positions. Respondents were spread across range of 27 industries, representing opinions from a wide variety of sectors. The size of the respondents' companies varied in turnover from less than £500,000 to over £100 million, including some up to £1 billion
More on the Insolvency Practitioners Association - background information
IPA Objectives
Background
IPA
The IPA was formed in 1961 as a discussion group of accountants specialising in insolvency.
It is the only RPB whose membership comprises solely of insolvency practitioners and in the main, act as trustees in bankruptcy, nominees and supervisors of voluntary arrangements, liquidators, administrators and administrative receivers of companies.
Keith Goodman: IPA president and partner at Leonard Curtis
Keith is senior partner at Leonard Curtis, trading name for the insolvency section of Fisher Curtis after a 1998 merger of Leonard Curtis and H W Fisher & Co. He is IPA representative on the DTI Best Practice Committee and is a member of the Insolvency Practitioners' Tribunal.
How to Qualify for an IPA Insolvency Licence
To qualify for an IPA insolvency licence one must:
Hold a practising certificate which is gained by passing the examination set by the Joint Insolvency Examination Board or equivalent for non - UK applicants; and
satisfy the committee that they are a fit and proper person to act as an insolvency practitioner.
All insolvency practitioners holding an insolvency licence are required to complete defined amounts of continued professional education (CPE). This ensures that practitioners are kept informed of the best practice within the profession and is monitored annually by the IPA.
Making a Complaint
This is the main area where the public would interact with the IPA. It is very important that, the public report any malpractice, if from an IPA member, to ensure protection for business people & consumers.
For the complete procedure of how to make a complaint to the IPA you can visit the IPA website;
www.ipa.uk.com
Related Organisations
There are nine bodies specialising in the regulation of insolvency practitioners.
Joint Insolvency Examination Board (JIEB)
JIEB was established by a group of RPBs, in 1988, to conduct examinations in insolvency subjects. A pass in an examination set by the JIEB is necessary to become a member of the IPA.
Joint Insolvency Monitoring Unit (JIMU)
This body is established to monitor the insolvency profession by examining individuals and firms who are engaged in insolvency work. It works closely with the IPA which follows up any information on member malpractice.
The Royal Institution of Chartered Surveyors
The RICS is a professional association with a membership principally comprising of chartered surveyors and technical surveyors. IPA and RICS have worked together to create a voluntary regulation system for LPA receivership cases.
R3, the Association of Business Recovery Professionals
R3 (the Association of Business Recovery Professionals) acts as a trade body for insolvency practitioners/turnaround professionals of which the majority of insolvency practitioners/turnaround professionals are members/fellows. R3 speaks on behalf of the profession to the government and other influencers expressing the profession's views on legislative developments and professional issues. R3 also offer courses, conferences, technical bulletins and other related services to insolvency practitioners.
RAILTRACK PLC - IN ADMINISTRATION
Strategic Rail Authority Assumes Sponsorship of CLG Bid for Railtrack plc- McAllister Puts His Team in Place
The Strategic Rail Authority (SRA) has taken responsibility for the formation and sponsorship of the Company Limited by Guarantee (CLG) which is preparing a bid to take over Railtrack plc's railway assets and its role as network operator.
The Authority's role includes agreeing the appointment of directors and legal and financial advisors to support Chairman Ian McAllister, and approval of the business plan and associated financing arrangements for the bid.
A senior appointment to the bid team was immediately confirmed by the SRA, in the form of Adrian Montague of Societe Generale as Deputy Chairman. UBS Warburg is confirmed as financial adviser. Other banking institutions will be invited to participate in the debt raising. Linklaters & Alliance will provide legal advice.
Welcoming the developments, SRA Chairman, Richard Bowker said:
"Bringing Railtrack out of railway administration as soon as practicable has to be a top priority.
"To this end, the SRA is sponsoring the team putting together the CLG bid.Once tendered,it will be the job of the Administrator to make his evaluation of this proposal against those submitted by the other parties.
Adrian Montague CBE (CLG Deputy Chairman) is a Senior Advisor to SG, the investment banking business of Societe Generale. He was Chief Executive of the Treasury Taskforce, the focal point for Private Finance Initiative deals across government, from its formation in 1997 until it was incorporated in Partnerships UK in June 2000. He has been Deputy Chairman of Partnerships UK since then, but will be bringing forward his resignation from its Board, planned for the end of this month, when he takes up his new position in the CLG. He was also an advisor on private finance to the Department of the Environment, Transport and the Regions until July 2001. He will spend the greater part of his time on the start-up of the CLG until completion of the acquisition of Railtrack's business from the Administrator, and has been made available by SG on secondment for that purpose.
The announcement of Ian McAllister as Chairman of the Company Limited by Guarantee (CLG) was made by DTLR on 23 October 2001. Ian McAllister was appointed to give strategic direction to the CLG team. He will continue to be employed by Ford Motor Company Limited, who have agreed that he will be available for this part-time role. In essence, a CLG would be a private sector company run on commercial lines but without shareholders. Any operating surplus would be reinvested in the rail network.
The bid team will be supported by financial, legal and technical advisers.UBS Warburg has been appointed as financial adviser. Other banking institutions will be invited to assist in raising the CLG's debt finance in due course. Linklaters & Alliance has been appointed as legal adviser.Technical advisers are in the process of being appointed.
It is for the Administrator (Ernst and Young) to assess and make recommendations on proposals for how Railtrack plc's railway assets are transferred out of administration as a going concern.
The CLG bid team will put forward a proposal to the Administrator, who will evaluate all the bids he receives before putting a proposed transfer scheme to the Secretary of State for approval under Schedule 7 of the Railways Act 1993.
Further announcements regarding the CLG team will be made in due course.
*** FORTHCOMING CREDITORS MEETINGS ***
For detailed information on the British Isles insolvency's (liquidation's, receiverships, administrations, dividends, creditors) please visit http://www.insolvency.com/cgi-bin/gazette/liq/nots.pl
The OFT proposes to make a decision that BSkyB has behaved anti-competitively, infringing UK competition law.
BSkyB now has the opportunity, for the first time, to make written and oral representations on the OFT's proposed decision which will be taken into account before any final decision is made. The OFT does not anticipate being in a position to make a final decision before Summer next year.
The OFT has written to BSkyB setting out why it proposes to make a decision that the company has a dominant position on the wholesale market for the provision of pay premium sports and film channels. The OFT also proposes to make a decision that BSkyB has abused its dominant position both in that market and in the market for the distribution of pay TV channels.
The OFT's proposed decision is that certain conduct of BSkyB infringes Chapter II of the Competition Act 1998, in particular:
In 1996 the OFT conducted a review, under the Fair Trading Act 1973 of the wholesale pay TV market in the UK. Following this review BSkyB gave non-statutory undertakings.
The non-statutory undertakings were reviewed in 2000 as part of the Director General of Fair Trading's general duty to review commercial activities under section 2 of the 1973 Act. He indicated that the review might lead to further investigation or action under Chapter II of the Competition Act 1998 and that he would consider whether any agreements that came to light during the review might infringe Chapter I of that Act.
The response to the 2000 Review gave the Director reasonable grounds under section 25 of the Competition Act 1998 to suspect that BSkyB had infringed the Chapter I and Chapter II prohibitions. Accordingly the Director launched an investigation under that Act on 5 December 2000.
EUROPEAN COMMISSION ASKED TO CONSIDER UK ASPECTS OF PROMATECH'S BID FOR TEXTILE DIVISION OF SULZER GROUP
Melanie Johnson, Parliamentary Under Secretary of State, on the 18 December announced that the UK has asked the European Commission to consider the UK aspects of the bid by Italian company Promatech for the weaving machine manufacturing business of Swiss industrial group Sulzer. The request has been made in accordance with Article 22 of the EC Merger Regulation.
Melanie Johnson said:
"This case qualifies for consideration under the UK Fair Trading Act rather than the EC Merger Regulation. However, the Director General of Fair Trading has advised that it may raise competition issues on markets that extend beyond the UK and also may affect competition in other Member States. I have therefore concluded, in accordance with the advice of the Director General, that it would be appropriate to ask the European competition authorities to consider it.
"We have co-ordinated our request with similar ones from Germany, Spain and Italy, whose national competition authorities have also been considering the case. We hope that the European Commission will as a result be able to carry out a single, co-ordinated consideration of its impact on competition in all the Member States concerned.
"This is the first time a merger has been referred to the European Commission on a joint basis in this way. I am pleased that the close liaison between national competition authorities has made possible this co-operative approach to the consideration of the case."
Promatech S.p.A, (Promatech) is a weaving machine manufacturer and distributor based in Italy. It forms part of the Itema Group, which in turn is part of the Radici Group who are active in the chemical industry, plastics, engineering, packaging, weaving industry, synthetic fibres and textile industry. Sulzer Textile, (Sulzer) is the weaving machine production and distribution division of Sulzer Ltd. The parent company is based in Switzerland and is active in surfacing technology, turbo machinery, pumps and chemical process technology. None of the parties' activities in the production of weaving machines are located in the UK, but both are significant suppliers of the products to the UK market.
Concentrations meeting the turnover thresholds set out in Article 1 of the EC Merger Regulation (ECMR - Council Regulation 4064/89 as amended) fall directly to the consideration of the European Commission rather than national competition authorities. However, Article 22(3) of the ECMR enables a Member State acting alone or a number of Member States acting together to request that the Commission examine a concentration that does not meet the turnover thresholds. Following such a request, the Article provides that the Commission may consider such a case as it would a concentration meeting the ECMR thresholds insofar as it affects trade between Member States.
Article 22(3) has in the past been used by Member States acting alone to refer cases to the Commission, although never by the UK. This is, however, the first occasion on which a number of Member States have acted together to ask that a Commission consider a case. It has been possible on this occasion primarily because of recent improvements to liaison between the national competition authorities of the Member States involved which has enabled the necessary co-ordination to take place within the tight deadlines set down in the ECMR for making requests under Article 22.
PROPOSED ACQUISITION BY CARGILL INCORPORATED OF CERESTAR
Melanie Johnson, Minister for Competition and Consumer Affairs, has decided, in accordance with the advice of the Director General of Fair Trading, to request the European Commission to refer to the UK authorities under Article 9 of the EC Merger Regulation an element of the proposed acquisition of Cerestar by Gargill Incorporated. This is currently being considered under the EC Merger Regulation.
Melanie Johnson said:
"The Director General of Fair Trading has advised that the proposed merger appears to raise competition concerns in the UK in relation to glucose syrups which warrant further investigation. I agree and am therefore requesting the European Commission to refer this aspect of the case to the UK.
"I should emphasise that the Commission may decide it is able to deal with the concerns addressed in our request itself and that a reference to the UK is therefore unnecessary. I wish, however, to provide them with the possibility of referring the case to the UK if they conclude that this would be appropriate."
If the Commission refers this aspect of the merger to the UK authorities, it will be considered under the merger provisions of the Fair Trading Act.
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ALEXANDER MEETS THE SAINT
New Industry alliance to promote security of the Internet and tackle computer hackers and viruses
Douglas Alexander speaking at the launch of SAINT on the 17 December, welcomed the proposed new alliance for the IT industry which aims to promote the security of the Internet and other new technologies with measures to tackle computer viruses and protect against hackers.
SAINT or the Security Alliance for Internet and New Technologies will be a not for profit organisation funded by the IT industry to create a secure environment for the industry by:
Speaking at the launch of SAINT, Mr Alexander made the case for an increased need for the IT industry to look more closely at how they can create a secure environment. He said:
"SAINT is a proposed new alliance for the IT industry to promote security of the Internet. The SAINT alliance will enable the IT industry to work together, to share information and jointly act to tackle threats to Internet security."
"Improving Internet security and effective tackling of viruses is key to ensuring that the UK can keep at the forefront of E-Commerce. It is important that the industry can work together to collectively tackle these important issues enabling the knowledge economy in the UK to continue to grow and prosper."
Proposals for SAINT have been produced by the Alliance for Electronic Business, grouping of the Computing Services & Software Association (CSSA), Confederation of British Industry (CBI), Direct Marketing Association (DMA), e-centre and the Federation of the Electronics Industry (FEI)
Monday 14th to Thursday 17th January 2002 ICM Examinations Thursday 24 January 2002 Sussex & Surrey Branch of the ICM Annual General Meeting Followed by Dinner. Speaker: To be advised Venue - The Imperial Hotel, Hove Time: 7.00 for 7.30 p.m. 27 - 29 January 2002 FCIB - A Global Association of Executives in Finance, Credit & International Business 108th International Conference & Workshop In Europe Amsterdam Marriott Hotel The Netherlands For further information Telephone: + 44 (0) 1865 481 630 Fax: + 44 (0) 1865 481 482 Email: timlane@fcib-europe.org Website: www.fcibglobal.com Friday 22 February 2002 Debt Sale & Purchase Credit Today, Savoy Hotel, London The second annual debt sale and purchase conference chaired by Rob Levick. For details e-mail carleen@credittoday.co.uk Wednesday 13 March 2002 ICM National Conference and Exhibition Heritage Motor Centre, Gaydon near Warwick For full details tel 01780-722907 or e-mail training@icm.org.uk 7 - 13 April The Credit Academy, 7 day Residential Course FT Knowledge Financial Learning London, 80 Strand, WC2R 0RL Contact Jane Lees - E-mail jane.lees@nyif.com +44 (0)20 7010 2568 17 and 18 April Credit 2002 - The Definitive Event for the Commercial and Consumer Credit Industry Brompton Hall, Earls Court, London For more information contact vtolson@advanstar.com 22 - 28 April The Credit Academy, 7 day Residential Course FT Knowledge Financial Learning Venue - Hong Kong, location tbc Time: 08.30 Contact Jane Lees - E-mail jane.lees@nyif.com Tel +44 (0)20 7010 2568 10 - 16 June The Credit Academy, 7 day Residential Course FT Knowledge Financial Learning Venue - New York, location tbc Contact Jane Lees - E-mail jane.lees@nyif.com Tel +44 (0)20 7010 2568 21 June The ICM Fellows Luncheon Churchill Room, The House of Commons Westminster, London Guest Speaker Norman Lamb MP Cost 49.50 GBP inc of vat and all drinks Contact ICM Training Department on 01780-722907 E-mail sheila@icm.org.uk If you have an event coming up which is credit management related and you would like us to make an entry in the Diary section please e-mail the details to jarnold@creditman.co.uk
Alternatively you may use the email interface. email creditman-request@mailing-list.cyberstrider.net with the word Help in the subject line for details.
Business Credit Management UK: John Arnold jarnold@creditman.co.uk
Business Credit News UK: Pat Williams pwilliams@creditman.co.uk