Mike Lynch’s extradition issue is sovereignty issue for UK business

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United States in ‘another pivotal moment’ as Delta variant leads to increase in Covid cases


The Mike Lynch case is not yet over. Home Secretary Priti Patel must decide whether the extradition of the former Autonomous boss to face 17 charges, including wire fraud and stock market fraud, can take place. Assuming she gives the green light, Lynch can apply for a right of recourse. If granted, the case could go to the Supreme Court.

This is perhaps the best place for it. Some of the questions raised are fundamental. The first is whether Lynch can expect a fair trial in the United States. David Davis, a former Conservative cabinet minister and former shadow home secretary, spoke of a process of “ferocious bullying” that relies on plea negotiations and produces a 97% “conviction” rate.

He is not the only one to voice these concerns. Three other former Conservative ministers and Sir Vince Cable for the Liberal Democrats explained that Lynch’s extradition could set a precedent that “any British businessman or woman who finds himself in conflict with a powerful American company could suffer the same. fate ”.

In the midst of all of this is the related fact that Autonomy was a UK company whose 2011 US $ 11bn (£ 7.8bn) takeover by Hewlett-Packard was carried out according to the rules. British authorities in terms of acquisition. Lynch’s ‘forum bar’ defense, which allows a UK court to block an extradition if it finds the majority of the alleged offenses to have taken place in the UK, was dismissed by Michael Snow, a district judge in the United Kingdom. Westminster Court. It would be useful to have the opinion of a higher court.

You might not like Lynch, who was never a popular figure even at the height of her autonomy. And the Financial Reporting Council’s record £ 15million fine last year for Deloitte for audit failures at Autonomy only heightened the feeling of unanswered questions surrounding the takeover. But it remains very difficult to imagine that the UK could summon a prominent American businessman to face criminal charges if the circumstances were reversed. This question of sovereignty is important, not only for Lynch, but for UK business.

It’s time to step up the sale of NatWest Treasury shares

There is no point in bemoaning the loss to the public purse that will be crystallized by the sale by the Treasury of more shares of NatWest. Almost from the day of nationalization in 2008, losses were inevitable. The jagged bank, then called Royal Bank of Scotland, was backed to save Britain’s banking system from collapse, not to take a speculative kick. The closest buy price for 502p shares in recent years was 350p in early 2015.

The question of elimination, then, is really a question of timing. Seems a good time to speed up the process thanks to the drip trading plan announced by the Treasury on Thursday. At 193.5p, stocks are still below their immediate pre-pandemic level of 220p but have recovered, in line with the industry, from Covid lows of 100p.

Meanwhile, there is no impending big corporate event at RBS that could drastically improve the valuation. The large disposals have been completed and NatWest, on a price / book basis, is now rated better than some of its competitors. A cash-strapped Treasury has better uses for £ 12bn of capital than letting it sit in NatWest stocks. Given that a full divestiture of the 54.7% stake could take until 2026 on the current schedule, it is better to step up the pace.

Councilors board the £ 275million Morrisons redemption sauce train

To anyone’s surprise, the battle for Morrisons will be the usual boost for city councilors. Add up the totals for the Fortress-led bid and you get a figure of around £ 275million.

We can ignore the bigger issue, which is the £ 169million in arrangement fee from the bidder to fund the proposed £ 6.3bn deal, as the Fortress consortium will at least have something to do with it. show – a big bank loan. The most notable counts are those of “financial and business brokerage advice”: £ 36.2million on the fortress side and £ 43.1million for Morrisons.

What do these figures correspond to? On the Morrisons side, the City team includes advisor Rothschild as well as brokers Shore Capital and Jefferies. How many people does it take to hold hands with directors? The opinions of only a small number of people count in the “fair and responsible” assessment of recovery approaches; the rest of the work is standard city footwork. The gravy train is rolling, but is no easier to explain.

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