Toshiba’s chief exec resigns over accounting scandal
Toshiba’s (6502.T) chief executive Hisao Tanaka resigned at close of trade today along with a string of other senior management figures, after the company suffered the country’s biggest accounting scandal in years.
Tanaka will be replaced by Toshiba’s chairman, Masashi Muromachi, until a new chief executive is found.
The 152 billion yen scandal involved Toshiba overstating its profits over several years, overseen by figures in top management positions. Tanaka denied falsifying the accounts, but accepted the need to take responsibility for the findings.
“I see this as the most damaging event for our brand in the company’s 140-year history,” Tanaka told a news conference.
“I don’t think these problems can be overcome overnight.”
The report found that Tanaka had put pressure on staff to make unattainable targets, and knew they were overstating profits and delaying the reporting of losses. The Japanese finance minister, Taro Aso, spoke out about the need to come down hard on companies who fiddle their books, in order to avoid losing the market’s trust. Japan has been trying to demonstrate improved corporate governance after it was found in 2011 that Olympus, another of the country’s biggest companies, had hidden $1.7bn of losses over 13 years.
Scottish-based crowdfunding site SquareKnot goes the extra mile
SquareKnot is the first Scottish crowdfunding equity platform, founded in September 2012. Like many other crowdfunding platforms, the founding team recognised a gap in the market after the financial crisis for a platform that brings together businesses that need cash, and individuals with cash who want to try and earn a sensible return.
However, unlike many other similar platforms SquareKnot assist with the provision of essential management support to businesses to help them grow and prosper, and offer the expertise of panel of independent specialists to businesses looking for investment on their site.
Not only do SquareKnot recognise the importance of a good idea, but also a good marketing campaign; without consumer awareness, a company is doomed to fail. SquareKnot helps pitching business with their PR – gaining attention for their campaigns and spreading the word about what they have on offer. They reguarly hold networking events, allowing pitching business to present their ideas to potential investors and also answer questions in small groups.
The guys behind the company make strong team, who cover all aspects of the business. Managing director Derek Bond is an is accountant with financial experience, and Brian Smilie is an experienced marketing professional, having previously owned his own agency. Ian Young covers the legal side, as a lawyer with specific experience with entrepreneurial corporate law. Tom Preston and Ian Webster both round up the management team with backgrounds in accountancy and corporate finance.
The site boasts a diverse portfolio of investments, from property to breweries. The Edinburgh-based Vikare Tuscan Property Fund offers prospective investors the opportunity to put money into a holiday apartment development in Florence, and MacGregor’s Bars offers 15% equity for a target investment of £150,000.
If investments in Scottish-based companies is what you’re looking for, SquareKnot will undoubtedly have something to offer. If you’re a business, consider listing with SquareKnot to benefit from the industry expertise and marketing support.
Meet Liberland, the world’s newest country
A brand new country with no official government, no tax, no public services and, as yet, no population. It sounds unbelievable – even a little ridiculous.
But it’s real. Liberland, or the Free Republic of Liberland to give it its full title, is a would-be sovereign state founded April 13 by Vit Jedlicka and two fellow libertarians. Liberland is a micronation – a nation not recognised by world organisations or governments, but with a formal claim of sovereignty to an area.
Liberland’s official website gives those interested a bit of background:
“Liberland came into existence due to a border dispute between Croatia and Serbia. This area along the west bank of the Danube river is not claimed by Croatia, Serbia or any other country. It was therefore terra nullius, a no man’s land, until Vít Jedlička seized the opportunity and on 13 April 2015 formed a new state in this territory – Liberland. The boundary was defined so as not to interfere with the territory of Croatia or Serbia. Its total area of approximately 7 km² is now the third smallest sovereign state, after the Vatican and Monaco.”
Jedlicka took over the area using the homestead principle, whereby unused and unclaimed land can be taken over by any group of people willing to develop it. Essentially, Jedlicka has taken advantage of a border dispute between Croatia and Serbria – and some experts believe that, in due course, it will be found to be owned by Serbia. Its total area of approximately seven square kilometers would make it the third smallest sovereign state in the world, after the Vatican and Monaco.
When developing his nation, Jedlicka and the other founders have no intention to follow any traditional political models. Jedlicka was elected as president – without formally running for the position – by his other founding father and his girlfriend. He wants to run the country on nationalistic principles, binding together those with a common focus: “We are a nation of people who are not happy with the recent status quo, with state interference and high taxation. And what really makes a nation if not a common feeling and approach to something?”
Speaking of taxation, Jedlicka plans to run the country without compulsory tax.
“Taxation will be optional and people will only finance specific development projects,” says Jedlicka. “We have to see how the foreign ministries react and we need to explain to them the kind of prosperity we can bring to the region. It will bring in money from all over the world: not only to Liberland, which would be a tax haven, but to the whole area.”
The nation’s public services will be private companies and – you guessed it – crowdfunding campaigns. On Liberland’s website, there is the option to donate money, either through bank transfer or bitcoin. Liberland’s government says it has already raised over $45,000 through crowdfunding, which has paid for government offices in Praque and Serbia and a personal assistant.
Jedlicka has already had thousands of applications to live within the country. On the website, Liberland advertises for a population much like an employer might advertise a job:
“Liberland currently needs people who:
- have respect for other people and respect the opinions of others, regardless of their race, ethnicity, orientation, or religion
- have respect for private ownership which is untouchable
- do not have communist, nazi or other extremist past
- were not punished for past criminal offences”
Valirx PLC up 20%
Valirx PLC are up 19.7% this morning after releasing an update on an ongoing clinical trial for a cancer fighting drug.
The compound, VAL201, is in its Phase l/ll dose escalation clinical trial, which is approved to include patients with locally advanced or metastatic prostate cancer and other advanced solid tumours. VAL201 is designed to selectively prevent tumour growth.
The company report that the drug has continued to demonstrate safety and tolerability, with no significant adverse effects recorded. The compound continues to show positive results in terms of delaying disease progression in the patients currently on trial. In light of this, the next dose escalation has been approved and the clinical trial is reported to be on track.
Dr Satu Vainikka, CEO of ValiRx, commented: “Again it is good to be reporting that the VAL201 trial continues to proceed well and as planned. I am pleased to say that, at this stage, a good safety profile has been seen and potential efficacy continues to be noticed.
“We are now nearing dose levels that we originally projected would be therapeutically significant and as such, I enthusiastically look forward to VAL201’s continued clinical trial progress and to updating investors accordingly.”
ValiRx Plc is a bio pharmaceutical company developing new technologies and products in oncology therapeutics and diagnostics.
Blur Group up 20%
Blur Group plc is up 20.41% this morning after a trading update for the second quarter. The Group has seen a 30% increase in Buyers and Service Providers, and the number of projects listed on their platform increased by 20% in 2015 compared to 2014.
Growth in enterprise buyers using the platform, service providers joining the marketplace, expansion of premium services to grow gross margin. To this end, the company reports that over 700 new Enterprise Service Providers joined blur’s Platform in Q2 – 10% of all new Service Providers. The leading marketing agency Ogilvy, the USA’s largest employment related law firm Littler Mendelson, a USA cloud contact centre named Five9, and engineering consultancy Mott MacDonald, were amongst those who joined blur’s marketplace. In the third quarter, the company will launch blur Data, a unique stand alone subscription based intelligence product developed by blur Group that enables organisations to gain invaluable insight into global business services trends and market pricing information.
Philip Letts, blur Group CEO commented:
“The Platform is attracting more Enterprise level Buyers and Service Providers than before. Whilst our transition to the Enterprise became more evident in 2014, we have seen increasing momentum in H1 2015 in both the USA and Europe. Added to this, with the introduction of our Premium Services in early 2015, the new Buyer and Service Provider subscriptions in Q2, and soon, blur Data in Q3, we are driving up our gross margin. Our Platform is, more than ever, ready to service the business needs of the larger Enterprise organisation. We are focused on our goal of having hundreds of large Enterprise customers broadly adopting the platform serviced by an increasing number of Enterprise suppliers.”
Blue Group operates the the world’s leading Enterprise Services Platform and Marketplace.
Government borrowing falls – but not far enough
British government borrowing in June fell to its lowest point in seven years, but failed to beat analysts’ upbeat predictions.
According to the Office of National Statistics Britain’s headline public borrowing fell to 9.4 billion pounds in June, compared to 10.2 billion pounds a year earlier. However these results came as a disappointment to economists, who predicted a fall to £8.5 billion. This data weighed on investors, with the FTSE 100 failing to break out of the red, trading five points down at 6,784.
‘With June’s improvement being less than expected, the chancellor is now slightly off track to meet the reduced fiscal targets for 2015/16 contained in July’s summer budget,’ Howard Archer, chief European and UK economist at IHS Global Insight, told Citywire.
‘However, this is nothing for George Osborne to worry about at this stage given that he is still very close to target – and public finances can be volatile from month to month and subject to appreciable revisions.’
The report continued, revealing public sector net debt excluding state-controlled banks totalling 1.513 trillion pounds in June – equivalent to 81.5 percent of GDP. George Osborne took the opportunity to push back the date that Britain is scheduled to wipe out the deficit altogether until 2019/20.
Earnings season beats expectations
Earnings season is well underway, with many companies performing above analysts’ expectations. This morning, European shares headed for a flat to slightly higher open, with investors focusing on company results as the second-quarter earnings season gathers pace.
So far, 70% of reporting companies in the S&P have exceeded predicted figures – although the predictions were relatively low. In general, earnings reports begin to come out one or two weeks after the last month of each quarter. Earnings expectations for this round are modest, but the two major US banks, JP Morgan and Wells Fargo, both beat projections. Bank of America reported its biggest quarterly profit in nearly four years and Citigroup, eBay, and Netflix all followed with strong quarterly results.
In the UK yesterday, British Land Co reported a first quarter dividend of 7.9 pence. Chief Exec Chris Grigg said: “We’ve taken advantage of favourable market conditions to raise £350 million of convertible bonds at a zero coupon, continuing our strong track record in accessing funding on competitive terms from a range of sources.”
Yesterday in the US, Morgan Stanley became the last major bank to report its quarterly earnings, also beating expectations. Revenue rose to $9.6 billion from $8.52 billion a year ago.
Reporting in Europe today, German business software maker SAP’s revenues topped expectations due to a surge in internet-based cloud software. Sweden’s Handelsbanken reported quarterly operating profit slightly above market expectations as influx of business and lower costs helped offset the impact of negative interest rates imposed by the central bank.
On the other hand, in the UK, Royal Mail fared less well; it announced that its revenue for the first quarter remained the same from the previous year. The group’s core UK parcel, international and letters business division reported a 2% drop in revenue. This division accounts for 80% of revenue and 60% of operating profits. Royal Mail were hit hard in June by the announcement that the government would be selling off more of its stake in the company, when their shares dropped more than 4%.
The UK-based IG Group also reported today, with shares falling 6 percent after a blow to full-year earnings from the Swiss franc’s fluctuations in January. However, online domestic appliances retailer AO World jumped 9.7 percent after reporting a strong start to second-quarter trading.
In the US, Apple, Harley Davidson, Verixon Communications are also set to release results later today. According to a report by Factset.com, Apple is expected to be propping up the Information Technology sector for Q2 2015. The blended earnings growth rate – which combines actual results for companies that have reported and estimated results for companies yet to report – for the Information Technology sector is 0.2%; however, excluding Apple, the sector would be reporting a year-over-year decline in earnings of 6.0%.
Paypal jumps as eBay falls
PayPal Holdings Inc (PYPL.O) shares jumped as much as 11 percent, after returning to the Nasdaq this morning.
Today marks the day that Paypal splits from eBay, who bought the payments company 12 years ago in order to provide a reliable payment service for the young online marketplace. Paypal began began trading separately again this morning, with shares soaring to $42.55 in early trading. eBay’s stock fell 4.7 percent, valuing the company at about $32 billion.
eBay CEO John Donahoe said the decision was best for both businesses, as well as their shareholders. He added that the two companies will continue to work closely together.
Paypal CEO Dan Shulman opes to use Paypal to enable more people to transfer and manage money more easily. He told Reuters: “It’s clear that the potential for mobile technology to transform money extends beyond commerce. The vast majority of the world’s 7 billion people lack access to even basic financial services.”
Summer impacts on UK alcohol sales
Sales of UK-made sparkling wine have risen, according to new data from the Office of National Statistics.
There are almost 500 vineyards operating in England and Wales, yet English wine accounts for just a small percentage of total wine sales in the UK. However, it seems the summer sun has impacted on consumer behaviour, with sales of UK-produced sparkling wine more than doubling from £2.9 million in 2010 to £6 million in 2014.
In the same report, it was found that consumers’ drinking habits in the hot weather had also shifted towards craft beers and fruit ciders, many of which are also brewed in the UK. Sales of UK-made cider, perry and mead grew by 59% from 2010 to 2014.
Crowdfunding is good news for women in business
A new study offers some good news for female entrepreneurs; women outperform men on crowdfunding sites like Kickstarter. In 2014, two PhDs discovered that women who launch technology-related crowdfunding projects are more successful than every other demographic and category, even fashion and publishing.
An astonishing 65% of all women-led tech startups reached their funding goal on Kickstarter, compared to just 30 percent of men-led tech startups. Interestingly, though, it’s not just tech that female entrepreneurs are succeeding in; in all industries reviewed by the study, women-founded ventures prevailed.
According to Julia Elliott-Brown, CEO of Upper Street, crowdfunding could be just the thing that democratises investment for women. In her article for the Telegraph, she details how easy it is for women to be intimidated by traditional financing routes: “It feels significantly less intimidating to create and run your pitch online than having to present at a testosterone fuelled pitching event, or walk into the fancy offices of a venture capital firm for an in-person grilling from the guys in suits.”
Her own company crowdfunded for a small investment earlier this year. She said she was encouraged to see that 36 per cent of our new investors were women, who actually put in on average almost four-times as much money as the men. In a male dominated industry, online crowdfunding offers women an easy in-road into the world of business financing; and on top of that, it offers an audience of investors who are actively looking to support ventures started by women like them.
Online crowdfunding seems to have led to the creation of a group of female “activist” investors, who seek out investment opportunities offered by women in order to offer their financial support. In the US, crowdfunding platform PlumAlley launched last year, a site designed to showcase investments by women for other women to back. Started by Deborah Jackson, it is a site ‘designed to help women succeed.’
She says: “Women-led projects are more successful on the whole than men’s projects, across all sites. Research shows women to support women. You can see that as a bias, but we choose to see that as actually a really empowering thing. There’s so much about when taking one another other down or the competition between women in the workplace, and it’s really good to see that when it comes something as tangible and economic as crowdfunding, women really do want to support other women.”
There have been plenty of suggestions that crowdfunding has democratised business as a whole; it’s not just about knowing some wealthy backers anymore – anyone can find funding, with a good business plan and access to the internet. However, it’s interesting to see these statistics in the light of women entering the business world, especially that of technology. It is increasingly clear that women are under-represented in business, and the technology sector in particular – perhaps crowdfunding will pave the way for this to change.