Gulf Keystone was on a collision course with some of its biggest institutional investors last night after agreeing to pay executives and employees a £26m bonus if the Kurdistan-focused oil explorer is taken over. Manifesto, the corporate governance specialist, criticised the highly unusual move, which it said gave management an incentive to sell the company at any price. Gulf Keystone will pay executives and employees a cash bonus equivalent to 10 million shares in the event of a takeover. They were worth 261p each at yesterday’s closing price, according to The Times.
The controversial sale of Lloyds bank branches to the Co-operative Group looked to be in trouble, increasing the likelihood the business may now be spun off in a stock market flotation. The state-backed lender, which has been expected to finalise the terms of the sale by the end of the month, but today admitted it would not now be able to provide an “update” until the second quarter of the year. In a statement on Thursday, the bank said its “preference” was to sell some of the 630 branches to the Co-op, but that it was “continuing to prepare a divestment through an initial public offering”. The deal is expected to value the branch business at £1.5bn, The Telegraph reports.
More than a million people on modest incomes will be dragged into the higher-rate tax threshold, an influential think-tank has warned, as fresh doubts were cast over the effectiveness of George Osborne’s tax raid on the super-rich. The Institute for Fiscal Studies (IFS) estimates that the number of taxpayers paying 40p in the pound will hit 5m by 2014, up from 3.7m today, in part because of the Chancellor’s decision to reduce the threshold at which the higher rate is payable. Describing Wednesday’s Budget as a “hotch-potch” of reforms, Paul Johnson, the IFS director, said that it smacked as much of “political expediency” as economic strategy, The Times says.
The Government has been accused of taking a huge risk with the Scottish environment after giving BP approval to drill its first deepwater exploration well in British waters since the Gulf of Mexico disaster. The approval comes a day after the Chancellor handed the oil industry a £3bn tax break to develop deepwater fields to the west of Shetland. The largely unexplored area, thought to contain four billion barrels of oil, is regarded as the last frontier of the North Sea for the oil industry. Both the Department of Energy and Climate Change and BP said that the timing of the announcement was not connected with the Budget statement, The Times reports.
Government to set minimum alcohol price at 40p per unit and ban the sale of multi-buy discount deals in supermarkets. David Cameron will risk the wrath of the drinks industry and free marketeers today by announcing his government is to introduce legislation setting a minimum alcohol price of 40p a unit in England – enough to add £135 to the annual bill of a heavy drinker. In what is regarded as the biggest public health intervention since the Labour government’s smoking ban, Cameron will also ban the sale of multi-buy discount deals in supermarkets. He is aware the policy may prove deeply unpopular, but thinks it will chime with those demanding greater social order, The Guardian says.
Vedanta, the FTSE 100 natural resources group controlled by Anil Agarwal, the London-based billionaire, has offered $3.4bn (£2.1bn) to purchase the Indian Government’s remaining stake in two of the country’s leading metal producers. The group has offered to pay 150bn rupees for a 29.5% stake in Hindustan Zinc and 20bn rupees for a share in Bharat Aluminium, according to Vishwapati Trivedi, secretary at the Indian Ministry of Mines, writes The Times.
The Prime Minister of India is accused of allowing the “mother of all scams” after an official audit found that companies were handed new coalfields worth £132bn without a competitive auction. Manmohan Singh allegedly helped to delay the introduction of competitive tendering for more than seven years, during which time 155 fields were simply allocated instead of being sold to the highest bidder. Companies that benefited include those run by some of the most powerful business families in India, including the Tatas. Although the draft auditors’ report, seen by The Times, makes no allegations of corruption it is scathing about what it believes was the botched allocation of valuable resources.