ALEX BRUMMER: Interim FCA boss Chris Woolard would boost his long-term job prospects by unveiling some post-Woodford reforms
The Financial Conduct Authority’s interim chief executive, Chris Woolard, is in overdrive.
He has taken command of the troubling issue of insurers seeking to slough off responsibility for business interruption policies.
He has brought in his own QCs along with exclusive City law firm Herbert Smith to help the regulator navigate the legal complexities as a test case speeds to the courts. Hopefully, the imperilled enterprises won’t have imploded by then.
Interim FCA boss Chris Woolard has taken command of the troubling issue of insurers seeking to slough off responsibility for business interruption policies
Woolard also has launched an inquiry into the way in which sub-prime lender Amigo, the subject of a boardroom tug-of-war, assesses whether clients are credit-worthy.
It is terrific he has been galvanised to action. But investors in Neil Woodford’s investment empire, which imploded a year ago, may wonder why the lumbering FCA has done so little to address malpractice in the industry. The shortcomings have yet to be addressed.
Top of the list is the ‘cash machine’ set-up which allows instant withdrawals from funds which are often illiquid.
The structure was responsible for triggering the crisis at Woodford’s Equity Income fund when Kent County Council demanded its £238million back last June.
Another shortcoming is the flaccid supervision and lack of independence of the authorised corporate director (ACD). The responsibility of Link, the Woodford ACD, for the cascade of errors is still to be determined.
The other huge issue to be addressed is the cosy relationship between funds such as Woodford and the Hargreaves Lansdown (HL) investment platform. It is no accident that an obscene one-third of HL clients were exposed either directly or indirectly to Woodford funds.
HL’s research on Woodford was valueless and its list of favoured funds distorted towards those which offered discounts.
Reform at HL is on the way but is not much comfort to savers who are greatly out of pocket. Woolard was not in charge when the scandal occurred.
The FCA was under the stewardship of his former boss Andrew Bailey, who moved onto to greater things as governor of the Bank of England in March this year.
Chancellor Rishi Sunak is busy saving the economy at present and may not yet have focused on Bailey’s replacement.
The shortlist is understood to be down to two: current interim incumbent Woolard, and Nikhil Rathi, the chief executive of the London Stock Exchange’s markets offshoot.
As an outsider, Rathi is the favoured candidate of the City cognoscenti. Woolard could do his chances some good if he rapidly unveiled some post-Woodford reforms.
Don’t hold your breath.
Rishi Sunak went walkabout on Monday as street markets re-opened.
It was also ground zero for Rachel Osborne, the cheery new chief executive charged with reviving iconoclastic fashion brand Ted Baker.
The decks have been cleared by writing off the final £34million of stock which vanished into the ether.
Osborne is onto the next stage in Ted Baker’s recovery through a £105million fund-raising of which founder Ray Kelvin will be part.
The 75p price tag per share is a little different to £31.00 at which stock changed hands two years ago.
Osborne is confident that Ted Baker can emerge from lockdown and its self-inflicted crisis in good shape. Unlike Primark and Marks & Spencer, it doesn’t appear to have a stock backlog.
And like M&S, it seems to have learned that it is easier to run the company with the shorter lines of control in lockdown than when there was a bloated headquarters.
The new CEO wants to keep the 153 retail outlets open and focus on building up online sales (up 75 per cent in the last year) and licencing deals in Asia and the Middle East.
She also wants to add a bit of sizzle with more upmarket fashion lines, better to compete with Hugo Boss, Paul Smith and the like.
She believes the company’s British heritage will carry it forward and reputational damage, caused by Kelvin’s touchy-feely approach, has passed. It will be a long journey back.
The governance disaster at gaming tech outfit Playtech obviously hasn’t registered across the Atlantic.
In the UK, the company’s reputation has taken a hit from is handling of the suicide of gambling addict Chris Bruney, 25, and the pay gluttony of CEO Mor Weizer.
In New Jersey it has just won approval to launch its core casino product with sports gaming and live casino to follow. Let the chips fall…