Jamie Ritblat, Delancey
Jamie Ritblat’s property firm, Delancey, is behind some of London’s biggest redevelopment projects including Earl’s Court, Elephant and Castle and the former Olympic village in Stratford (James Hurley writes).
It is another former Delancey project, the Rolls Building, however, that could soon be more closely associated with Ritblat. The site on Fetter Lane is a probable venue for High Court civil actions involving Delancey, its accountants EY and the tax authority.
HM Revenue & Customs says that Ritblat’s company owes tens of millions of pounds in tax from £141 million that it held in DV4, an offshore employee benefit trust, much of which went to him. Ritblat, an old Etonian who has donated £360,000 to the Conservative Party since 2011, argues that £400 paid as part of a settlement in 2015 prevents the authorities from collecting any further tax and that HMRC has breached the terms of the agreement.
The Revenue disagrees and a legal battle is under way. In an intriguing twist, the accounting and advisory firm EY is being sued by HMRC, a move described by tax experts as extraordinary. HMRC claims that EY, on behalf of Delancey’s employee benefit trust, made misrepresentations regarding the value of the trust when the £400 settlement was agreed. EY denies any wrongdoing.
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Others likely to be watching closely include 24 other people HMRC claims may seek to “rely upon the settlement so as to avoid taxation”. All but one of those named by the tax authority are current or former Delancey employees, the exception, as recently revealed by The Times, being a former property banker at NatWest Group. The bank and Delancey have been close business partners over the years. Both insist that the banker, the husband of a former executive at the property firm, had no involvement in their extensive dealings. The complex litigation could rumble on for years. The notoriously publicity-shy Ritblat may have to get used to seeing himself in the news.
Wael Sawan, Shell
Europe’s biggest oil and gas company began the new year with a new man in charge: Wael Sawan, who succeeded Ben van Beurden as Shell’s chief executive yesterday (Emily Gosden writes). Sawan, 48, has served on the group’s executive committee for more than three years, first heading its “upstream” oil and gas production business and then since late 2021 leading its “integrated gas” and renewables business, arguably Shell’s most strategically important division.
He was born in Beirut and raised in Dubai before studying chemical engineering in Montreal. He has dual Lebanese-Canadian citizenship and has just relocated to London from the Netherlands with his wife and three sons.
He takes over at a difficult time for the industry when governments in Britain and Europe are increasing taxes on windfall profits and making radical market interventions. His first big test will come on February 2, when Shell is scheduled to report full-year results that analysts forecast will show that its adjusted net earnings for 2022 doubled to a record $40 billion.
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Sawan must contend with political and fiscal unpredictability at the same time as trying to balance the long-standing tension between those shareholders who want Shell to move faster into green energy and those who would rather it double down on its traditional oil and gas business.
Shell has so far shied away from blockbuster acquisitions in the renewables space in favour of incremental deals for a few billion dollars apiece. It has also avoided setting firm targets for the scale of its emerging wind and solar power business, focusing instead on its “customer-facing” strategy.
Sawan has been presented very much as a continuity candidate, having been on the executive committee when the current strategy was devised. Still, Van Beurden began Shell’s mammoth takeover of BG Group within 18 months of taking the top job. If valuations in the renewables sector were to fall, some wonder if opportunity might soon present itself for Sawan to deploy Shell’s burgeoning cashflow into making a bigger, transformative deal in the green energy space.
Harriett Baldwin, Treasury Select Committee
As the newly appointed chairwoman of the powerful Commons Treasury select committee, Harriett Baldwin is the interrogator-in-chief responsible for holding the princes of finance, and their regulators, to account (Patrick Hosking writes).
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Baldwin, the Tory MP for Worcestershire West, got off to a robust start after being appointed in November when she told Andrew Bailey, the governor of the Bank of England, that he had miscalculated by keeping interest rates low in autumn 2021 and had helped to unleash “this terrible, terrible inflation”. She later urged his boss, David Roberts, chairman of the court at the Bank, to sell his shares in his old employers Barclays and Beazley, both firms supervised by the Bank, which could be seen as a conflict of interest. Best “to get all the barnacles off the boat”, she politely but firmly admonished him. The Bank has repeatedly declined to say whether Roberts followed her advice.
It was a more punchy approach than that of her predecessor Mel Stride, who once gave the Bank of England “nine out of ten” for its performance and has since become work and pensions secretary. Bailey, whose target is to keep inflation at 2 per cent, faces a much tougher line of questioning from the committee, especially if inflation does not fall quickly from its 10.7 per cent level in the coming months.
One big, looming question for the committee is if and how the authorities should start to regulate cryptocurrency. Baldwin comes across as a sceptic, lamenting the way regulators including the Financial Conduct Authority have inadvertently given it spurious credibility by using words like crypto “investors” and “assets”. She is understood to have sympathy with the argument that bringing crypto firms within the regulatory perimeter could be counterproductive.
Also under the committee’s eyes are the so-called Edinburgh reforms, a mix of 30 deregulatory plans announced by the chancellor in December. The committee is concerned about any watering down of safeguards put in place after the banking crisis and wants to look at proposed reforms to ring-fencing banks and the senior managers’ regime. Baldwin was a junior minister, including at the Treasury under David Cameron and Theresa May. She is a Remainer and was sacked by Boris Johnson. She supported Jeremy Hunt for the Tory leadership in 2019 and Penny Mordaunt in 2022.
Before politics she was a banker with JP Morgan for 21 years, including spells as a portfolio manager and head of currency management. In her capacity as a backbencher she recently argued for regulators to recognise a new category of “personalised guidance”, a targeted but cheaper form of financial advice that could help the millions of people unable or unwilling to pay the price of full advice. An early task for January is a meeting of all committee members to decide new areas in finance deserving of scrutiny.
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Michael Murray, Frasers Group
Michael Murray will be looking to make his mark on the retail empire built by his father-in-law Mike Ashley this year as it forges ahead with its campaign to win over wealthier customers (Helen Cahill writes).
Murray joined the main operations of Frasers Group as “head of elevation” after starting out helping with property deals for the business in 2015. He was given the task of shifting the conglomerate away from the cut-price strategy championed by its main brand Sports Direct.
Ashley set out his plan to move upmarket when he pledged to make House of Fraser the “Harrods of the high street” after buying the department store out of administration in 2018. Ashley’s group was trading on the stock exchange as Sports Direct at the time and later rebranded as Frasers Group.
Ashley officially stepped back from the business to let Murray spearhead the new strategy in October, saying that he felt “very confident passing the baton” to his son-in-law.
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Murray, 33, was a club promoter before he met Ashley’s daughter Anna more than a decade ago. The couple tied the knot at Blenheim Palace shortly after Murray took over from Ashley as chief executive of Frasers Group in May.
His first challenge will be restoring the share price. The stock fell from a recent high of 895p to about 720p shortly after the interim results revealed that the level of unsold stock had risen by more than a fifth to almost £1.5 billion. Frasers said the stock levels had risen because of recent acquisitions.
Ashley has bet that Murray will succeed. He recently sold £1.8 million of put options that will give him a profit if the share price rises above 900p before the final quarter of 2023.
Melanie Dawes, chief executive, Ofcom
She is known for walking around the office barefoot and for her love of TikTok cat videos, but Melanie Dawes will show a more serious side this year when she starts overseeing the content and actions of some of the world’s richest and most powerful companies (Katie Prescott writes).
Come the middle of 2023 the media regulator will be responsible for implementing the new and extremely controversial Online Safety Bill. It will give her the powers to fine technology companies £18 million or 10 per cent of qualifying worldwide revenue if they do not comply with rules that include requiring them to remove illegal content.
Facebook, Twitter and other social media sites will have to take down material in breach of their own terms of service and provide adults with better filters so they can protect themselves from extreme content such as hate speech.
Keeping an eye on that is no easy task but Dawes, 56, a career civil servant who has held top positions at the Cabinet Office and the Treasury, has never shied away from a challenge. She has said that a David and Goliath battle between the regulator and Silicon Valley does not faze her.
She has been nabbing top executives from Google and Meta to gain a better understanding of what Ofcom is up against and of the inner workings of these companies.
Ofcom will not only be policing the internet: along with other key issues such as enforcing the broadcasting code, it is also dealing with changes to its remit. The forthcoming Media Bill is expected to hand responsibility to Ofcom for overseeing the UK’s most popular streaming service, Netflix, in the next few years.
Telecom companies are linking up ultrafast broadband to try to hit the government’s target of reaching 85 per cent of premises by 2025.
Meanwhile, landlines are due to be replaced by digital technology by the end of 2025, although the newer systems have been criticised for being unreliable in the event of a natural disaster, floods and storms.
Media plurality, the cost of broadband, hate directed at footballers on social media and even the role of Amazon’s Alexa as a cure for loneliness all crossed her desk last year; 2023 shows no sign of letting up.
Tufan Erginbilgic, chief executive, Rolls-Royce
Rolls-Royce is the UK’s engineering champion and leadership of the company brings with it the burden of keeping Britain at the forefront of industrial excellence and innovation (Robert Lea writes).
There is the weight of history, too: from its origins as one of the world’s great automotive marques (now assembled by BMW) to making the Merlin engine for the Spitfire fighter aircraft, to powering the Concorde supersonic passenger jet.
There was, though, also a series of financial crises: most notably its collapse and nationalisation in 1971 and more recently a £7 billion rescue during the depths of the pandemic.
The leadership has now passed to Tufan Erginbilgic, 63, a British and Turkish citizen, who takes over from Warren East, two years his junior. East is standing down after a turbulent tenure that began in 2015.
Erginbilgic has spent much of his career burning fossil fuels in executive roles at BP. His mission at Rolls-Royce is to take its commercial and military aircraft engines, propulsion systems for warships, maritime vessels and trains, and industrial power generation and put them on the road to zero-emission capability by 2050.
In addition to alternative technologies using synthetic fuel, hydrogen and battery power, Rolls-Royce needs to make good its commitment to solving the UK’s energy security crisis and deliver small modular nuclear reactors for domestic power generation.
All the while, though, he needs to keep the money coming in, most notably from the passenger jet engine business, which suffered reputational damage from the flawed Trent 1000 provided to Boeing for its 787 Dreamliner.
Erginbilgic inherits a much-changed business. More than a quarter of the workforce, or 13,000 jobs, went on East’s watch during which by his own testimony he had to unpeel layers of bureaucratic middle management. He also had to change the culture at a company that was fined £671 million in 2017, a record at the time, for three decades of bribery and corruption across five continents.
In the past seven years Rolls-Royce’s stock market valuation has halved to less than £8 billion. Long-suffering investors may see the reversal of that as a good place for Erginbilgic to start.
