Pound shop PM bargains on rescue

A pound shop prime minister? That might seem a harshly premature verdict on Andy Burnham, but framed in the context of Britain’s latest high street crisis, it may just be appropriate.

It’s far from irrational that Burnham has intervened in the crisis at Poundland, and not only because his Makerfield constituency is home to the discount chain’s largest distribution centre.

“This is a deeply worrying time for Poundland staff and their families,” the PM said a couple of weeks ago. “We want to see jobs protected. If there was a potential owner to avoid this that hasn’t been accepted, then the business secretary and I want to know why that is the case.”

Events since those words, however, imply an alarming degree of government impotence. Until this week, Gordon Brothers, Poundland’s majority-owner, had shown complete contempt for its management, employees – and by extension Burnham’s administration – by freezing access to the chain’s finances.

A claim to be focused solely on an outcome which preserved jobs has rung hollow as Gordon Brothers failed to progress solvent bids with little more than disdain. One, from Martin Property Group, the Londonderry-based business which owns the rump of National Car Parks, could have been concluded weeks ago. That it was not appears to have been dictated by its disinclination to line Gordon Brothers’ pockets.

Importantly, Pepco Group, Poundland’s Warsaw-listed former owner, still retains both a minority equity stake in the chain and a 25 per cent interest in a £30m loan, the bulk of which is owed to Gordon Brothers. Pepco has offered to defer its right to repayment on condition of a solvent deal, suggesting that it at least understands the gravity of the situation.

Belatedly, Gordon Brothers released limited funds to Poundland this week to provide a stay of execution – but this looked cynically timed to coincide with yesterday’s business and trade select committee grilling.

This has all the hallmarks of the most pointless major retail collapse for decades and the most politically contentious since BHS in 2016. Vulture capitalism is an overused label, but the evidence here leads to the conclusion that it’s a wholly appropriate one.

Ditching annual say on pay would be a mistake

Should the say on pay have had its day? The government’s latest consultation on overhauling Britain’s corporate governance regime is a microcosm of its schizophrenic approach to regulating British business: pile needless red tape on companies while removing some of the guardrails which actually serve a useful purpose.

Shareholders’ right to an annual advisory vote on executive pay – derided by some as no more useful than the proverbial chocolate teapot – is under threat, part of a potential corporate governance bonfire being assembled by ministers to demonstrate their commitment to supporting economic growth.

They’ve chosen the wrong target, though. Companies including AstraZeneca, Glencore and, as I revealed this week on Sky News, LSEG, owner of the London Stock Exchange, are all consulting major shareholders on significant increases to executive pay packages amid growing anxiety in the City that more blue-chip companies will flee to the US.

A spokesperson for the Investment Association told me: “The advisory vote on remuneration is an important mechanism for shareholder accountability and helps maintain alignment between pay, company performance and shareholder interests. While we support efforts to modernise corporate reporting, its removal could have unintended consequences, including greater opposition to directors’ re-election and a more stringent approach to remuneration policy votes, ultimately reducing flexibility for companies. We will make the case for retaining this vote.”

They are right to do so. The annual say on pay provides a useful guardrail for boards, making them accountable to their shareholders. Stop the votes, and it’ll make it harder for companies to argue that trying to keep pace with overseas competitors is a valid endeavour – and that would be to the long-term detriment of corporate Britain.

Interpath and FTI defections highlight restructuring market shake-up

Just what is going on in Britain’s restructuring market? After the frenzy of corporate activity which gripped the sector five years ago, when KPMG sold its insolvency and restructuring business to HIG Europe under the name Interpath, and Deloitte did the same by selling its operations to Teneo, a sense of renewed continuity had again taken hold.

Until now. In recent months, Interpath has again changed hands, with Bridgepoint taking control after buying control of the business from HIG. This week, Interpath confirmed the departures of UK chief executive Will Wright, along with fellow partners Ryan Grant and Chris Pole, to Grant Thornton following persistent speculation of unrest in the firm’s senior ranks.

The trio are likely to be prevented from joining their new employer for some time, but there’s no doubt that their defection is a blow.

And elsewhere in the sector, is a new player about to gatecrash the market? I hear that two of the partners who launched FTI Consulting’s European restructuring practice in 2007 – David Morris and Paul Inglis – are jumping ship for an unexpected new berth: Berkeley Research Group, the TowerBrook Capital Partners-owned consulting firm.

Sources say Inglis and Morris will be tasked with replicating what they did two decades ago at FTI Consulting, when the big four accounting firms were the dominant players in UK restructuring. How times change.