Economy · August 3, 2022

FirstFT: Bain penalized for “serious misconduct” in South Africa

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Good morning. Bain & Co, the Boston-based global management consultant, was struck yesterday with a three-year ban from the British government’s bidding process due to its “serious professional misconduct” in a corruption scandal in South Africa.

Cabinet minister Jacob Rees-Mogg told Bain that the affair had made the company’s integrity “questionable” and that he wasn’t convinced he had taken his role in the scandal “seriously enough.”

In a letter seen by the Financial Times, Rees-Mogg told James Hadley, managing partner of Bain in the UK, that the ban will apply retrospectively from 4 January 2022. “I am confident that after three years Bain & Co will have restored the his reputation, hey wrote.

Cabinet office officials initially warned that no action was needed against the company, but Rees-Mogg sought further advice, including from an external QC.

Britain is the first Western country to impose such sanctions on Bain for his role in the South African “capture of the state” scandal. There is pressure on the United States to follow suit.

Do you support Rees Mogg’s speech? Share your thoughts on firstft@ft.com. Thanks for reading FirstFT Europe / Africa – Jennifer

1. Nancy Pelosi in Taiwan The chairman of the US House of Representatives landed in Taiwan yesterday, the highest-level visit by an American official in decades, as China announced live-fire military exercises.

  • Temperature increase: Beijing has blocked imports from hundreds of Taiwanese food producers in what appears to be an attempt to punish Taipei.

  • Go deeper: Tom Mitchell writes that President Xi Jinping’s reaction gave Pelosi’s trip more importance than it deserved.

2. Lloyd’s are looking for billions of new capital Lloyd’s of London hopes a new investment structure agreed with UK financial regulators will attract billions of dollars in alternative capital and increase its competitiveness with hubs like Bermuda in the growing insurance market.

3. Liz Truss takes a U-turn on the public sector pay cut The UK Foreign Minister’s Tory leadership offer suffered a setback yesterday when she was forced to abandon her plan to cut pay for public sector workers in Britain’s poorest areas just 12 hours after being cast in the face of fierce criticism. Who do you think will win the leadership race? Vote in our poll.

  • Go deeper: Truss’s politics struggled with a fundamental problem: You can’t cut salaries in the places you’ve struggled to recruit, writes Stephen Bush in Inside Politics. Sign up for his newsletter here.

  • Opinion: Tax cut votes are a distraction from the UK’s painful productivity, writes Diane Coyle, professor of public policy at Cambridge University.

4. The UK risks deepening the recession The UK economy is sliding into recession, relentlessly in a cost-of-living crisis that will exhaust the savings of more than 5 million households by 2024, according to forecasts by the National Institute of Economic and Social Research which showed that GDP would be decreased through the first quarter of 2023.

5. Robinhood fires 23% of the staff Troubled online brokerage will lay off nearly a quarter of its staff as it struggles with waning retail fervor due to coronavirus pandemic highs. The cuts are part of a “broader reorganization,” he announced in a blog post yesterday.

The day ahead

OPEC + meeting The oil producers group is meeting today in the wake of US President Joe Biden’s visit to Riyadh and Saudi Crown Prince Mohammed bin Salman’s move to Europe last week. Any move to increase production could put new downward pressure on crude oil prices, which have rebounded by around $ 100 a barrel.

Controls on grain shipments to Ukraine The Sierra Leone-flagged Razoni cargo ship, which carries 26,000 tons of Ukrainian maize as part of a deal to alleviate soaring food prices, is expected to be screened by officials from Russia, Ukraine, Turkey and the United Nations in a joint control center in Lebanon.

economic data S&P Global publishes service purchasing manager indices for France, Germany, Italy, the United Kingdom and the United States. Italy and the EU publish retail sales data for June and July respectively, while the United States has monthly employment data.

corporate earnings Axa, Bank of Ireland, Commerzbank, eBay, Hugo Boss, Infineon Technologies, Just Eat, Moderna, Taylor Wimpey, Telecom Italia and Veolia report. Maersk publishes full quarterly results after increasing its earnings guide for the third time this year. Find out more in our The Week Ahead newsletter – e sign up here to receive it by e-mail every Sunday.

What else are we reading

The voluntary climate blindness of the Tories is staggering Both candidates for leadership of the UK ruling party appear to be content with ignoring the environmental and geopolitical reality, writes Pilita Clark. If we are on the verge of converting climate promises into concrete action, you wouldn’t know by looking at Rishi Sunak and Liz Truss.

China at the center of elections in Kenya Candidates for the campaign to become Kenya’s next president agree on one thing: China is at the center of next week’s elections. While the vice president has threatened to expel Chinese citizens, many of whom are struggling to make a living, his veteran rival is stressing the need to renegotiate Beijing’s loans.

How listening to uninterrupted noise has helped millions of people focus Lofi Girl, a live music stream, ran continuously for 20,843 hours, more than two years, until YouTube abruptly suspended it last month. These continuous streams are designed for people who seek not silence but peace, writes Dave Lee.

Nike marks success with women’s football For the sportswear retailer, who dressed the Lionesses as they made their way to victory at the European Championships, an appearance in nearly every British newspaper was the culmination of nearly a decade of investment in English, and especially women’s football. .

Time to invest in a gap year? The concept of taking an extended hiatus has long been common in academia, but as the war for talent rages on, it is increasingly being adopted in professional workplaces. More and more employers are willing to give staff a permit, but there are important financial questions to ask first, explains Claer Barrett.

Architecture

Last week, the first renders of the new Saudi city of Neom were released. It is intended to house 9 million residents over a length of 170 km in a canal that cuts through the Tabuk desert. The similarities to a 1969 plan for a city that continually cuts through the Arizona desert are compelling, writes architecture critic Edwin Heathcote.

An artist's interpretation of the new Saudi city of Neom

Neom is a city defined as a wall, pushed through an uninhabitable desert, hermetically sealed and solely dependent on technology to make it livable © EOM / AFP / Getty Images

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