Weekly Wrap Up: Please don’t increase my wage

The honeymoon appears to be over for the newly elected Conservative government. After basking in the glow of an unexpected majority win in the recent elections, the UK’s Tories have become caught up in a media firestorm - although it may not be one they could have avoided.

Before the election, David Cameron had described a 10% pay increase for MP’s – from £67 060 to £74 000 – as unacceptable. And on the surface, it does look bad for a government that is rumoured to be planning an additional £12 billion in welfare cuts to bump up their own pay. But the government has little choice when it comes to the pay rise – it’s decided by an independent body.

Nevertheless, in the UK media, taxpayer money is a hot button issue. Just ask the banks that received bailout money: banker’s salaries and bonuses have come under intense scrutiny and the media likes to suggest that taxpayer money is being used to pay for them. And there’s no class discrimination when it comes to receiving a taxpayer funded salary: welfare recipients who are deemed to be receiving too many benefits are also popular subjects in some major UK publications.

The lesson here is that when people are giving you their hard earned money they will want to know exactly what you are doing with it and why. This is as true for taxpayers as it is for shareholders. The unavoidable reality of increased scrutiny therefore requires increased transparency. Clearly communicating what is being done with the money and why will not only prevent the media from sensationalizing the story, it will also help win the trust of those who are providing the funds.

In the case of the MP pay rise, the government actually appears to be at least trying to do right by the taxpayer. Earlier this week a spokesperson explained that David Cameron could not do anything to prevent the pay rise. Ironically, the process of having an independent body decide on MP pay was put into place to prevent politicians from being paid excessive salaries on the taxpayer dime. Downing Street has followed this explanation with a letter to the authority that decides on MP pay to appeal the increase. At the very least, Downing Street has attempted to show that they are trying to protect taxpayer money.

So while most people living in UK would be thrilled to get a 10% wage increase, for politicians that extra money is likely not worth the public backlash – especially since after tax that £7000 won’t go very far for MP’s based in London.



This week, Abchaps attended the Watson Farley & Williams Commodities Summer Reception at The Salt Point Bar and the London Stock Exchange Summer Advisory Drinks at the Marchant Taylors’ Hall, where we caught up with lots of familiar faces. We also hosted a market lunch that discussed various topical subjects affecting the IPO market.



EY appointed Klaus Woeste, of KPMG, as a Partner and Head of the HR advisory team in its financial services human capital practice. Andrew Charnley joined Lloyds Bank’s Global Transaction banking business as Regional Head of the Trade and Working Capital Team from Barclays. Lloyds also appointed Paul Smith, who has worked at the bank for over 31 years, as Head of Trade Finance. Finally Gareth Lewis joined PwC’s real estate practice as Director, moving from a consultant role at EY and the Urban Land Institute.



“Hot button issue” – an issue that elicits a strong emotional reaction, such as MP’s who receive a 10% pay increase while the wages of those who pay that salary stagnate.



Enjoy Sunset Safari, where London Zoo opens its doors until 10pm, allowing guests to witness nature whilst the sun goes down.

Polo in the Park returns to the Hurlingham Club in Fulham. Nothing gives better excuse to Champagne before lunch than polo, so enjoy the atmosphere as the England team plays its first match there since 1939.

Over in east London, Field Day marks the start of festival season, being held in Victoria Park. With names like Caribou, Clarence Clarity, and Django Django, this promises to see the season kick off in style.

Follow us on Twitter @AbchurchComms

Weekly Wrap Up: Humility Before Profit

Could an incident that occurred a decade ago create more reputational damage now for the company involved than when the incident first occurred? This is arguably the case for Thomas Cook, who have been under immense pressure in recent weeks over their handling of the high-profile deaths of two children on holiday in Corfu in 2006.

The Independent’s view “a tragedy to a corporate disaster” has been widely voiced, with the public and media consensus being that Thomas Cook’s communications strategy is “too little too late”.

Timeline of events:

• April 2015 – Inquest begins into deaths of the Shepherd children.
• 13 May – Manny Fontenla-Novoa, CEO at the time of the tragedy, appears as a witness to the inquest but refuses to answer a series of questions. Peter Fankhauser, current CEO, tells inquest that Thomas Cook has done "nothing wrong". Inquest jury returns verdict of unlawful killing and says Thomas Cook "breached its duty of care".
• 17 May – Shepherd family reveals it received £350,000 in compensation from the hotel owners for their children’s deaths. It emerges later that day that the hotel paid Thomas Cook up to £3.5m in compensation.
• 18 May – Thomas Cook offers to pay compensation it received to Unicef and apologises to the family.
• 20 May – Fankhauser apologises to the family and says he is "deeply sorry".
• 21 May – Fankhauser meets with the parents face to face, giving a “sincere and heartfelt apology” and agrees to donate an undisclosed sum to six charities of the parents’ choice. In addition, the parents requested that the bungalow where the tragedy took place be demolished and replaced with a “lasting tribute” in the form of a playground.

Thomas Cook’s mistakes and subsequent quick fixes have caused immeasurable damage to the firm’s reputation and future value as they enter a crucial trading period. The Group would expect to be selling holidays to families gearing up for the summer break. Meanwhile, it has been reported that around £75m has been wiped off the company’s share price this week as investor’s dumped stock. Only time will tell whether the share price will recover. This will largely depend on any subsequent actions the Company take to stop the rot.

Fankauser has now done what his predecessor should have done back in 2006; given the parents a sincere apology.

Holly Ward, co-founder of The Forge commented: “As a nation we respond well to humility; even if Peter Fankhauser didn’t want to imply his company was to blame by offering an apology to the parents of Bobby and Christi Shepherd, a little humility would have gone a long way in showing his company actually cared. The Unicef donation smacked of a quick fix that missed its mark.”

The incident can serve as a lesson not only for Thomas Cook, but the majority of companies. Thomas Cook went far too much down the legal route, allowing its lawyers and bean counters to dictate how it dealt with a grieving family, instead of actioning a robust crisis communications plan, or having the inclination to do the right thing.

Julian Pike, Head of Reputation Management at Farrer & Co stated: “From the outset, Thomas Cook should have made the family its priority, irrespective of the legal advice or insurers' requirements. Its own financial wellbeing should also have come a long way second.”



This week, Abchaps hosted an Asia themed market lunch where economic opportunities in the region were explored and the potential impact on the London IPO market was discussed.



Andrew Penny joined EY from JP Morgan as Senior Advisor to its real estate corporate finance team; Judith Mackenzie, Partner at Acuity Capital and Senior Investment Manager at Aberdeen Asset Management Growth Capital, joined the board of Quoted Companies Alliance, whilst Kelly Tubman Hardy joined Hogan Lovells’ corporate practice in Baltimore from DLA Piper.



“Stop the rot”: to take action against something bad, before it spreads and becomes worse



If craft beer is your thing, head along to the Old Royal Naval College, and try over 80 different types of draft beer at Brewfest; Greenwich.

This weekend sees a particularly British pastime, with the Gloucestershire cheese rolling taking place, where you can throw yourself down a hill after Cheddar!

Finally, Kew Gardens is holding a Full of Spice festival, starting this weekend. With everything from a Strictly Spice dance-off to a pop up bar, this festival has everything.

Follow us on Twitter @AbchurchComms

Weekly Wrap Up: The Biggest Loser this Election

Before the polls even opened on Thursday, there was already a clear loser in the UK general election: banks. Regardless of which party takes power, it seems that UK bank earnings are set to be hit by a wave of new legislation that could result in a rising bank levy, ring-fencing of operations, and even capping of retail banking market shares.

To be clear, banks and individual bankers whose recklessness and criminal behaviour precipitated the financial crisis deserved to be punished. And yes, the government should play a strong role in ensuring economic stability and therefore has to keep an eye on the financial industry.

Some proposed policies aimed at banks suggest politicians have become irrational. How, for example, would a Labour Party proposal to increase the bank levy to support free childcare have prevented the next financial crisis? Tory plans to use the money from fines to create apprenticeships also suggest politicians are simply using this money for political gain. It’s no wonder then that the Institute for Fiscal Studies recently felt compelled to warn politicians against treating banks like a “cash cow”.

But still, banks have been remarkably silent when it comes to defending themselves against political attacks in the post credit crunch era. This is particularly surprising because many politicians were themselves complicit in creating the conditions that led to the financial crisis.

So perhaps it’s time for banks to change their PR strategy and speak up. Already there are rumblings: The Chief Executive of the British Bankers’ Association was recently quoted in the Financial Times reminding politicians that “Banking is by far Britain’s leading export industry, and one of its biggest taxpayers, but…it is very internationally mobile.”

But instead of running away, as HSBC and Standard Chartered have threatened, it would be refreshing to hear more about the value that the financial industry brings to the UK and how banks are working to prevent further bad behaviour. After all, the staggering fines paid by banks since the financial crisis are not just the result of overzealous politicians on a witch hunt – banking culture was clearly dysfunctional pre crunch.

According to the FT, most bank bosses recognize that the industry is not doing enough to convince sceptics it has changed. Increased transparency would be a step in the right direction since it would prevent people from coming to their own conclusions, which has been mostly that banks are still up to no good.

So it’s time for the banks to take back control of the narrative. Until now, it may have been easier for banks to remain silent and for the public to hate them, but in reality if the financial industry continues to be a political target the biggest loser in this election will ultimately be the UK economy.



This week, Abchaps have been networking across the continent with our global partners at IPREX’s Annual Meeting in Berlin. We also met CMS Advisory over breakfast, discussing the ever increasing importance of social media in the City. Our Market Lunch series continued unabated; with this generalist lunch as the last held before the election, understandably, politics was at the forefront of the agenda.



Richard Hughes joined Norton Rose Fulbright as a Partner in its banking and finance practice, having previously worked with Simmons & Simmons. Alistair Mackenzie joined Associate Sales Director at UBS Global Asset Management, from Curzon Capital. Finally Cavendish Corporate Finance appointed Kate Gibbon, David Harris, Victoria Clarke, and Nathan Harroch into its Corporate Finance team.



The Saatchi Gallery the annual Contemporary Craft Fair ‘2015 edition’, presenting 35 international galleries showcasing the most exciting examples of applied arts craftsmanship.

To all you wannabe Sir Bradley Wiggins’ out there, SPIN London – The Urban Cycling Show celebrates the urban cycling scene with international brands and smaller independent makers in fixed gear, single speed, custom and BMX bikes in attendance as well as emerging cycle fashion brands, cyclic artwork, talks, demonstrations and workshops.

If you happen to be having a stroll with your dog on Hampstead Heath this Sunday, then why not enter The Great Hampstead Bark Off 2015? With a dog-themed-cake bake off, a dog show, and prizes awarded in categories like ‘cutest pup’ and ‘best rescue’. The event, in association with charity All Dogs Matter, will also give you the chance to meet some lovely mutts in need of a new home.

Follow us on Twitter @AbchurchComms

Weekly Wrap Up: Flash Crash brings Fast Cash?

The City has been in the PR mire for some time. Since the financial crash, institutions and individuals have been scrambling to save face, only to be undermined by a stream of negative press.

This week, that negative press has been provided with the flash crash case of Navinder Singh Sarao. A self-employed day trader, he faces extradition charges to the US, where he is accused of playing a significant role in, momentarily, taking up to $1 trillion off Wall Street. In a 45 minute period, almost 1000 points were knocked from the Dow Jones Industrial Average, the US’s premier exchange. The premise was simple, Sarao added sell orders which could be seen around the world, and caused others to add sell orders, panicking about a potential fall in their market. Following the cancellation of his orders, Sarao would then track the market down, and buy for supposed huge personal profits. This crime carries the potential for 380 years in prison, not something to be sniffed at.

In addition, Deutsche Bank, one of the largest financial institutions in the world, accepted a record libor fine of £1.6 billion for its role in fixing international interest rates during 2005-2010. These two crimes accurately portray the various flaws in City institutions. Firstly, the ability to undermine and subvert the system, and secondly the damage that can be done to its image.

Having been caught on the back foot when the markets fell, the financial regulators have now taken the fight to the institutions, inflicting more stringent fines. However, more needs to be done. Whilst America can be seen setting a hardline with its sentencing, 150 years for Bernie Madoff springs to mind, the UK needs to work harder at finding those who have abused the system criminally guilty.

The banks themselves, seemingly reticent to move on from their glory years, need to be seen doing more in the public eye to clear up their act. Possibly fearful of their pariah status, heads of UK banks have been notable in their absence from British screens in the last seven years. It will take strong character, but to move past the current public perception, banks need to work as never before to root out those who are abusing the system, and prove to the country and the world that this vital part of our economy is worth sustaining.



This week, Abchaps hosted multiple events including two Market Lunches, one focused on Mining and the other focused on the Environment, whilst also entertaining Northland Capital, after successfully working on TechFinancials IPO together. We also met with Richard Dunnett of Director Magazine, in order to learn more about how the magazine operates; and attended the Entrepreneurs Breakfast, a joint initiative between Smith & Williamson and freshbusinessthinking.com, which brought together multiple entrepreneurs at breakfast with keynote speaker Christopher Baker-Brian.



N+1 Singer appointed Nic Hellyer as Director in its Corporate Finance team from HSBC, whilst Nicole Martin was hired as Audit Partner in BDO’s Technology and Media practice. Meanwhile, Standard Chartered appointed Sir Iain Lobban to the bank’s board Financial Crime Risk Committee.



“Flash Crash” – A word which has entered the lexicon as quickly as the crime was purported to take. Having taken five years to work out a potential culprit, one feels that we will be reminded of the flash crash for some time to come.



If you’re an athlete you might be heading to the London Marathon this weekend. But for the less active among us, you will probably want to avoid Central London.

For those not running, there’s still a chance to celebrate England’s Patron Saint this weekend: The Mayor of London's throwing a party in his honour at Trafalgar Square on both Saturday and Sunday, where Robbie Boyd is headlining from 4pm-5pm on Saturday.

Follow us on Twitter @AbchurchComms

Weekly Wrap Up: An Affair to Forget

True to the core values of its business, the company that owns adultery website Ashley Madison has decided to stray from its home market when it goes public. The Toronto-based Avid Life Media made headlines this week when it announced its plans for a London listing this year. But it wasn’t the announcement itself that generated extensive press coverage. It was the Company’s reason for deciding to list in Europe that has received the attention.

The Company’s Head of International Relations, Christoph Kraemer, told Bloomberg that “Europe is the only region where we have a real chance of doing an IPO”. Why is that? Even though half of the adultery site’s users are based in the United States, Kraemer claims they have to list in London because Europe is more tolerant of adultery.

Except that’s not exactly true, according to the Pew Research Centre. In a poll asking respondents if “married people having an affair is morally unacceptable”, 84% of Americans did agree that cheating is bad. And in France, less than half of the respondents condemned affairs, with only 47% agreeing.

Avid Life Media is not, however, planning to list in France. And the UK has much less of a laissez-faire attitude towards infidelity: 76% of those who were asked considered it wrong. That is the same percentage as Canada, and not too far behind the Americans. Simply put, listing in London doesn’t make sense based on society’s attitude towards adultery.

Avid Life Media and Ashley Madison are obviously not concerned with this inconvenient fact. It’s also hardly believable that Ashley Madison is worried about investor morality in the US. Anyone who has seen the Wolf of Wall Street knows that stateside investors wrote the book on immorality. But claiming otherwise gave the story of the Company’s potential listing an angle that was picked up in much of the mainstream media in the US and the UK. It’s simply a tasteless PR strategy – and based on what the Company represents, no one should be surprised by this tactic.

Here’s what’s really happening: Avid Life Media is desperately trying to drum up interest after a failed attempt to raise money in Canada. But even an amateur investor could see that their growth strategy of expanding into new markets is limited – and potentially dangerous. Women will inevitably suffer far greater consequences if caught committing adultery; in many parts of the world it still results in ostracisation and violence. Investors would have to be prepared to accept this uncomfortable truth.

In the UK, Ashley Madison is currently banned from advertising on television because it is not deemed morally justifiable. And given that the UK’s attitude towards this type of business is on par with Canadians, it is likely that Ashley Madison’s attempt to raise money in London will soon be an affair the UK can altogether forget.



This week, Abchaps attended an interesting CIPR Speaker lunch with Ashley Armstrong, M&A Correspondent at The Telegraph. She touched on multiple topics, predicting 2015 to be a good year for M&A and purchasing influence of the Asian market to increase. As well as hosting a successful Malaysia focused Market Lunch, we attended the Election Debate Seminar, chaired by Vincent Wood, business Tax Partner at Moore Stephens. Discussions at the seminar included the truths behind the different parties’ pre-election pledges and asked the question whether the parties can realistically implement them.



Steve Frizell has been appointed Partner in PwC’s UK financial services risk assurance internal audit services team. Meanwhile, Standard Chartered has been promoted to Chief Economist and hired Ding Shuang as Head of Greater China Economic Research from Citigroup. Ian Sadler has become Partner and National Global Compliance and Outsourcing Leader at Baker Tilly.



“Morality” – usually considered the differentiation of intentions, decisions and actions between those that good and those that are bad. Although derived from Latin, this word apparently has a completely different meaning in French.



The Tweed Run is happening on Saturday, which sees cyclists take to the streets in their well-pressed best, cycling past London’s most iconic landmarks kitted out in the far more flattering tweed and brogues, compared to the de rigueur Lycra.

The Southbank Centre have an interesting take on election season, with their Changing Britain series this weekend taking in the period from 1945-1979, a seminal junction in British political life, with the welfare state as we know it today being born.

Follow us on Twitter @AbchurchComms