Lloyds Bank avoids corporation tax in UK
Business Ethics and Corporate Culture, Financial Integrity
The Telegraph reports that Lloyds Banking Group has admitted that it will not pay corporation tax until it makes a profit of £15 billion. Reportedly, the bank, which is 41% state owned, is able to circumvent the tax as it can write off billions of pounds of deferred losses against tax liabilities. The bank faces further public anger following controversial comments by outgoing chief executive Eric Daniels saying that he would make a decision on whether or not to accept a £1.45m bonus “once the money was in his ‘hot little hands’”, according to the Telegraph.
The Telegraph: Lloyds will not pay corporation tax until profits hit £15bn (26 February 2011)
(Source: The Telegraph)
UK warns businesses to simplify consumer contract language
The UK Office of Fair Trading (OFT) has warned businesses that consumer contracts must be clear and has urged them to must review small print to avoid enforcement action. A market study (February 2011) by the OFT “identified the practices and contract terms which have the potential to cause people the greatest harm”, finding that one in five people had trouble understanding contracts properly. The OFT is urging businesses to review their contracts for the following:
- “unexpected restrictions to contract scope”;
- “terms that impose unexpected risks on consumers”;
- “complex, deferred or contingent charges that exceed costs”; and
- “obstructions to consumer switching”.
OFT’s media release (24 February 2011)
Vodafone Qatar Goes “Green” with Eco-friendly Bags
Corporate Responsibility and Sustainability
Gulf Times reports that Vodafone Qatar has introduced eco-friendly bags throughout its stores in a bid to reduce the long-term impact of plastic bags. Reportedly, the bags are made from “biodegradable D2W” which “break down naturally at the end of their useful life”. The initiative is reportedly part of Vodafone’s corporate social responsibility programme called “A Better World”.
Gulf Times: Vodafone introduces eco-friendly bags (27 February 2011)
(Source: Gulf Times)
Google Accused of Antitrust Practices by European Competitor
Google has again been accused of blocking smaller European search services after French company 1plusV filed a supplemental complaint with the European Commission on February 22nd. 1plusV is one of three companies that have filed charges against Google over the past year. The European Commission began investigating whether or not Google was capable of shutting out competition and prohibiting companies from advertising on other search engines nearly three months ago. In its latest filing, 1plusV claims that Google restricted its use of Google’s advertising service, AdSense, a practice which they claim “impedes the development of efficient vertical search engines.” In its initial complaint filed a year ago, the company claimed that one of its webpages, Ejustice.fr, had most of its pages dropped from Google’s online index and, as a result, visits to the website dropped off significantly. Google claims that the actions it took against the website stemmed from Ejustice.fr’s attempts to artificially raise their search rankings, a violation of Google’s search engine guidelines.
New York Times: Google Faces Another Antitrust Complaint in Europe (22 February 2011)
(Source: New York Times)
UK Company First to Be Fined for Corporate Manslaughter
Health, Safety and Environment
The Telegraph reports that Cotswold Geotechnical (Cotswold) has been convicted for corporate manslaughter over the death of geologist Alexander Wright in 2008 and been fined £385,000. According to clickdocs.co.uk, the minimum fine under the Corporate Manslaughter and Corporate Homicide Act 2007 is £500,000 without a maximum limit, however Cotswold’s fine was lowered “due to the dire state of the company finances”. Reportedly, the court held that Cotswold had committed a gross breach of its duty of care to Mr Wright and the judge stated that Cotswold director Peter Eaton failed to take an adequately safe approach to trial pitting.
The Telegraph: Cotswold Geotechnical fined £385,000 in first corporate manslaughter conviction (17 February 2011)
clickdocs.co.uk: Corporate Manslaughter and Corporate Homicide Act 2007 (23 February 2011)
Related news item:
The Telegraph: First corporate manslaughter conviction: industry reaction (18 February 2011)
(Source: The Telegraph; clickdocs.co.uk; legislation.gov.uk)