GSK Sacks Workers Over China Bribe Probe

British pharmaceutical giant GlaxoSmithKline has sacked staff in China amid an investigation into allegations of corruption.

A small number of staff has been affected, after an investigation was launched into expense payments.

The company employs around 7,000 people in China.

The staff involved failed to comply with expenses rules, according to sources.

A spokesman told Sky News: "GSK is committed to operating to the highest standards in every part of our business. As such we routinely monitor and check expenses claims to ensure they adhere to our policies.

"Since the start of the investigation by the authorities, we have increased this monitoring in China.

"Where we have found potential issues, we are thoroughly reviewing them and have withheld incentive payments where appropriate."

The dismissals come after accusations that GSK funnelled nearly £300m to Chinese doctors and officials to encourage them to use its medicines.

The Chinese announcement last year saw the company's sales in the country drop by around a third.

The close scrutiny of Britain's biggest drug firm was part of a tightening of regulation on foreign firms operating in China.

In 2012, GSK dismissed 312 staff for policy violations worldwide, according to its annual corporate responsibility report, of which 56 were in China.

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Lloyds Seeks Approval To Boost Pay Of Top 400

By Mark Kleinman, City Editor

Lloyds Banking Group is to seek approval to boost the pay packets of up to 400 of its most senior staff in a move which could stoke political tensions over bankers' remuneration.

Sky News has learnt that the taxpayer-backed lender will disclose in documents ahead of its annual general meeting (AGM) that it wants the flexibility to pay the higher-than-expected number employees up to 200% of their salaries in bonus awards.

The 400 executives, who are known as 'code staff' by regulators because of their designation as the holders of the most important jobs at the bank, can only be paid the equivalent of their base salaries without shareholder approval under new European Union rules.

The move by Lloyds to seek approval to double the level of variable pay will put the Treasury in a delicate position as it strives to avoid being seen to endorse bumper bonuses, particularly at banks in which it has a direct ownership interest.

One route allowing it to navigate this dilemma would involve UK Financial Investments, the agency which manages taxpayers' stake, abstaining on the remuneration-related votes at Lloyds' AGM, although final decisions are not thought to have been taken.

Approximately 75 of Lloyds' staff are being awarded allowances which, in line with similar deals at other banks, count towards their base pay and will enable higher bonuses to be paid from this year.

Antonio Horta-Osorio, the bank's chief executive, will receive a £900,000 allowance in deferred shares which will boost his guaranteed annual pay to £2.6m.

Lloyds, less than 25% of which is now owned by the taxpayers after a £4.2bn sale of Government shares last week, has identified the 400 eligible employees in accordance with definitions imposed by the European Banking Authority.

The new EU rules have prompted major banks operating in Europe - including Barclays, Goldman Sachs, HSBC and Morgan Stanley - to devise new monthly or quarterly payments, drawing criticism from politicians in Brussels.

George Osborne, the Chancellor, has mounted a legal challenge to the pay ratio cap, arguing that it will do little to curb risk-taking and may damage the City of London.

Lloyds' move to seek approval for the higher payments will be disclosed in the circular to shareholders ahead of next month's AGM, which Treasury sources said was expected to be distributed in the coming days.

The bank is also understood to be tabling a resolution that will ask investors to approve the ability to pay a scrip dividend for the first time since it was bailed out by taxpayers following the merger of Lloyds TSB and HBOS in 2008.

Lloyds has already said that it hopes to resume dividend payments in the second half of 2014 and anticipates becoming a distributor of chunky payouts to shareholders in the coming years.

Sources said that the Lloyds documentation would also include a resolution seeking approval for the bank to draw up a prospectus for a possible sale of shares to the general public.

Such a plan, which is unlikely to be launched by the Treasury until the autumn, could see billions of pounds of shares offered to retail investors.

Lloyds declined to comment on Thursday.

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High Streets Show 'Resilience' After Crash

Around 80% of high street stores left vacant after the collapse of successive retail chains have now been filled, new research suggests.

Accountancy giant Deloitte said Britain's high streets were recovering at a greater pace than rival locations such as shopping centres and retail parks.

Britain's retail environment suffered a major change in the wake of the financial crisis more than five years ago, with a number of household names disappearing.

Chains including Woolworths, HMV, Blockbuster, Comet and Jessops vanished from the retail landscape but Deloitte said "great resilience" was being shown in re-occupancy.

It examined almost 30 major administrations since 2009 and used research from the Local Data Company to track the status of around 5,900 shop premises.

Around two-thirds of the shopfronts were left vacant at some point, but many have since been filled, it said.

The research showed that charity shops, pawnbrokers and bookmakers had limited interest in acquiring the empty shops, instead conventional retailers filled the void.

According to the data, just 3% of shops post-administration have been occupied by charity shops and less than 0.01% have been turned into pawnbrokers or bookmakers.

Like property price variations, however, regional shop vacancy rates are evident.

Deloitte said the North West vacancy level stands at 32% whereas in London the figure is 18%.

Out-of-town shopping zones have apparently been hit hardest, in the downturn.

While the average high street vacancy rate across the country is 20%, it is 29% at shopping centres and 37% for retail parks.

The better high street re-occupancy rate is aided by lower refurbishment costs in comparison to large out-of-town locations.

Deloitte found that the average vacancy rate for the High Street is 20%, but it rises to 29% for shopping centres and 37% for retail parks.

"The results of this research are surprising and seem to challenge a number of myths around the state of the high Street," Deloitte director and report author, Hugo Clarke, said.

"They would suggest that far from being dead, the high street appears to be showing great resilience and a capacity for re-invention.

"It seems that a structural shift is taking place with the high street emerging as an unexpected winner."

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New Car Sales Accelerate By 18% In March

New car registrations were up almost 18% in March compared to the same period last year.

A total of 464,824 cars were registered in the month, the highest level for a decade - nearly 15,000 a day.

Last month's figure and the previous high, recorded in March 2004, were the two best registration periods since 1999 when the motor industry ditched the August new number plate for a twice-yearly system.

The sales speed-up in March has taken year-so-far sales to 688,122, a rise of 13.7% on the total for the first three months of 2013.

Trade body SMMT said the surge reflects a return to confidence to Britain, especially as more than half of the total went to private buyers.

"New car registrations surged 17.7% in March to 464,824 units, a surprisingly strong level of growth and a reflection of intensifying consumer confidence and the availability of great new products," SMMT chief executive Mike Hawes said.

"Given the past six years of subdued economic performance across the UK, there is still a substantial margin of pent-up demand that is contributing to a strong new and used car market."

The month of March is the traditional registration high point, however the industry expects growth to continue.

"There has never been a better time to buy a new car thanks to attractive finance deals and advanced technologies that often make new cars cheaper to run," Mr Hawes said.

"We expect the market to continue to perform positively for the rest of the year, albeit at a more modest rate."

The best-selling car remains the Ford Fiesta, with 25,753 registered in the month.

That was 58% above the next best-seller, the stablemate Focus (16,860), and the Vauxhall Corsa (16,231).

VW Golf, Vauxhall Astra and Nissan Qashqai were the next best models, along with the VW Polo, Fiat 500, BMW 3 Series and Toyota Yaris.

Alternative fuel vehicles (AFVs) saw a rise of 35% year-on-year, however the "green vehicle" total was still below 2% of all cars put on the road.

There is now expected to be a surge in AFVs sales, amid an increased awareness of air pollution.

Diesel-powered cars, whose exhaust emission particulates are known to be harmful, made up 47.8% of sales in March.

Many heavily-populated areas of Britain have been blanketed in thick smog this week, due to atmospheric conditions and vehicle pollutants.

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Google Fined £825k Over Street View Cars

Google has paid a €1m (£825,000) fine over the use of its Street View camera cars in Italy.

The Italian Data Protection Authority (DPA) hit the California-based company with the penalty after complaints were made about its vehicles.

The fine relates back to Google's activities on Italian streets in 2010.

The regulator said: "Cars belonging to the giant of Mountain View roamed Italy's streets without being entirely recognisable as such.

"Therefore not allowing the people present in those places to decide whether to be photographed or not."

The fine does not relate to a separate probe into it allegedly capturing communications data during the mapping process.

A Google spokesperson told Sky News: "The fine from the DPA relates to an old case that dates back to 2010.

"We complied with everything the DPA required of us at the time."

The internet behemoth has faced numerous privacy complaints in the United States and Europe over Street View.

UK Google cars previously had only small identification badges

In 2009, residents of the Buckinghamshire village of Broughton surrounded a Google car to prevent it taking photos of their houses without implicit permission.

The following year, Google admitted collecting personal wi-fi data as Street View cars roamed roads.

Germany authorities fined it €145,000 (£120,000) for inadvertently intercepting emails, passwords and user names on open networks.

In 2013, the Information Commissioner's Office (ICO) told the company it faced prosecution unless it deleted similar payload data gathered in the UK.

Google is appealing a French DPA judgement made last year, while the ICO is still investigating the company over the merging of privacy policies for a variety of its services.

A US federal appeals court rejected Google's bid last September to dismiss legal action accusing it of violating federal wiretap law when it accidentally collected personal data gathered from Street View.

The Italian fine was calculated on the company's revenue and also that it had promptly adopted the measures it requested.

These included clearly marking the camera cars, along with public information about areas it would be mapping.

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City Questions Future Of UKLA Chief Teasdale

By Mark Kleinman, City Editor

Fund managers have begun questioning the future of the executive in charge of London's market disclosure regime following the insurance sector debacle which wiped billions of pounds off share prices last week.

Senior City sources at asset management groups and insurance companies affected by the botched briefing announcement said they had lost confidence in Marc Teasdale, who has headed the UK Listing Authority (UKLA) for the last nine years.

The UKLA, which is part of the Financial Conduct Authority's (FCA's) markets division, is responsible for maintaining confidence in securities markets by prompting full and timely information disclosures by companies.

Last Friday, the FCA triggered the biggest crisis in its year-long history when it briefed a national newspaper about a probe it was planning to launch into certain aspects of the closed-life insurance industry.

The City regulator then failed to issue a statement to clarify the newspaper story until almost six hours after the London stock market had opened, during which time the share prices of companies such as Aviva, Legal & General and Resolution were hit hard by investors' interpretation of the potential impact on their businesses.

One leading fund manager said on Friday that Mr Teasdale had made a "catastrophic mistake" by not forcing the FCA to clarify its position at 7am, before the market opened but several hours after The Daily Telegraph's story had been published.

"The UKLA is a busted flush if the same management remains in place," a board member of one major UK insurer said.

"How can their raison d'etre to force proper disclosure by issuers [companies] have any credibility unless heads roll over this?"

The partial recovery in insurers' share prices last Friday came after the FCA corrected some details of the newspaper report, by which time hedge funds, other investors and individuals had made significant sums from trading in what was effectively a false market.

Sky News revealed earlier this week that Clive Cowdery, the founder of Resolution, had made a paper profit of approximately £200,000 by acquiring 1.2 million shares in the company close to their low.

Last Friday evening, the watchdog issued a further statement to say that its board would be appointing a law firm to conduct an inquiry into the fiasco.

A Treasury source said that the FCA had selected a law firm to carry out the review although it was unclear whether it had been approved externally.

Andrew Tyrie, the Conservative MP who chairs the Treasury Select Committee, has called the FCA's actions "an extraordinary blunder", while George Osborne, the Chancellor, has labelled them an "egregious error".

Some insurers suggested last weekend that Martin Wheatley, the FCA chief executive, might have to resign over the fiasco, although Mr Osborne is unlikely to be keen on such an outcome given the tentative state of much of the regulatory work that he is overseeing.

The FCA declined to comment.

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Japanese Giant Rakuten In £120m McLaren Talks

By Mark Kleinman, City Editor

The Japanese owner of Play.com is in talks to take over the title sponsorship of the McLaren Formula One (F1) team, one of the most prestigious naming rights deals in global sport.

Sky News has learnt that Rakuten, Japan's biggest internet retailer, is in advanced discussions with the British motor racing outfit about paying roughly £40m annually over the next three years as it builds global awareness of its growing business empire.

The talks have been going on for some time, and Rakuten is understood to have seen off competition from an unidentified drinks brand to move into pole position to secure an agreement.

However, a person familiar with the talks said there was no certainty that they would be concluded successfully.

It is also unclear how Rakuten and McLaren would choose to brand the team for the remainder of the 2014 season, which continues with the Bahrain Grand Prix this weekend.

Rakuten's name is little-known in the UK but an international acquisition spree in recent years has brought some of the most prominent brands in global e-commerce under its ownership.

Three years ago, the company acquired Play.com in the UK for about £25m.

In January last year, Rakuten shut the retail operations of the online business following the closure in 2011 of a VAT loophole by the Government which had allowed it to avoid charging VAT on entertainment products such as CDs and DVDs.

In February, the Japanese group bought Viber, the messaging app, for $900m (£540m), providing Rakuten with its first foothold in the rapidly growing mobile messaging market.

Viber has more than 300m registered users and operates in nearly 200 countries.

Hiroshi Mikitani, Rakuten's chairman and chief executive, said when the deal was struck:

"Viber understands how people actually want to engage and have built the only service that truly delivers on all fronts. This makes Viber the ideal total consumer engagement platform for Rakuten."

The Japanese group's other interests include Buy.com, France's Priceminister, Kobo, a Canadian rival to Amazon's Kindle e–reader, and Wuaki.tv, a Spanish film streaming service recently launched in the UK and backed by an endorsement from the former high jumper Dick Fosbury.

Rakuten, which also sponsors the annual Japan Open ATP tennis event,  announced this week that it would cease sales of whale meat amid continuing international condemnation of trade in the product.

Its Japanese provenance will suit McLaren given that the team's engines will be supplied by Honda from next year.

McLaren has historically commanded one of the biggest price-tags in the F1 paddock for its title sponsorship, but the value of the latest deal, if completed, is likely to surprise some in the sport given that last year saw its worst on-track performance for decades.

Vodafone was the team's principal commercial partner for several years but ended their alliance at the end of 2013.

Ron Dennis, the group chief executive of McLaren who has resumed his role as the F1 team principal, said recently that he was holding out for a richly-priced title sponsorship deal.

"Inevitably when you have a run of poor results people try to push the rate card down and I won't accept that.

"I know what this company is and I know what this Grand Prix team can achieve, and that requires the correct recognition when it comes to a commercial relationship with a principal sponsor.

"We are negotiating with several companies at the moment and I'm optimistic it will happen sooner rather than later.

"But part of being the size that we are, money is an issue. The racing team — which doesn't have to worry about income — has the biggest budget that it has had in the history of the company."

The £40m annual cost of the deal also indicates that the value of F1's sponsorship rights is not being hurt by the continuing debate about aspects of the sport, including the noise levels emitted by the racing cars' engines this year.

A McLaren spokesman declined to comment while Rakuten could not be reached for comment.

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Business Round-Up And Week Ahead

Sky's Naomi Kerbel offers a round-up of what's coming up in the week's business news.

: Monday April 7

Results from the Co-Operative Bank are expected no later than Tuesday. In late March, the bank said it expected to report a full-year pre-tax loss of £1.25bn.

In 2013, the bank was hit with an estimated £400m in legacy payment protection insurance (PPI), interest rate swaps and other consumer credit mis-selling claims, in addition to its previous £1.5bn funding gap.

:: Tuesday April 8

Kantar Worldpanel publishes its latest grocery market share figures on Tuesday. This reveals who is top in the supermarket wards and what customers are spending their grocery pennies on. 

:: Wednesday April 9

Have you made a complaint against your bank? On Wednesday, we'll see how many did when the city regulator, the FCA publishes details of the complaints received by banks, insurers, lenders and other firms.

Barclays was the worst performing bank in the first half of 2013 and the most complained about product was payment protection insurance.

:: Thursday April 10

All eyes on Marks & Spencer on Thursday. The company recently announced that it will look overseas to boost profits amid struggles in its UK home market. It will open 250 stores outside the UK, including 100 outlets in India and dozens of food stores in France.

:: Friday April  11

Samsung's Galaxy S5 smartphone is expected to go on sale today.

The device is the follow-up to last year's successful S4 and features a fingerprint scanner, a 16-megapixel camera, and a personal fitness tracker which includes a heart rate monitor and pedometer.

There are rumours that it could also come with eye-scanning technology.

Missing something? Tweet your business stories to @SkyNKTweets

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House Of Fraser Bought By Chinese Tycoon

A Chinese tycoon has bought British high street chain the House of Fraser, according to sources.

Reuters said a 89% stake was bought by Sanpower, a Nanjing-based conglomerate controlled by Yafei Yuan.

Sources have told Sky News an announcement is expected imminently.

House of Fraser will now seek strategic growth in mainland China as part of a wider, global expansion.

The deal values the department stores at more than £450m.

The two sides are thought to have been in secret discussions for several months.

This follows a protracted search for investors led by House of Fraser's chairman, Don McCarthy.

Just months ago the company was tipped for a public flotation.

But Sky News City Editor Mark Kleinman reported in February that Mr McCarthy apparently had no desire to chair a publicly-listed company.

Sports Direct and Newcastle United owner Mike Ashley was also tipped as a making a possible move for the company.

The British group enjoyed strong Christmas trading, with like-for-like sales at its 61 stores up more than 7% during the three weeks to December 28 and more than 4% in the nine weeks to the same date.

Established during the 1850s, House of Fraser was taken private in 2006 for £351m by a consortium led by Baugur alongside Mr McCarthy and entrepreneur and philanthropist Sir Tom Hunter.

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Microsoft XP And Office 2003 Security Warning

Britain's data protection watchdog has warned owners of Microsoft's Windows XP and Office 2003 products of future potential security flaws.

The warning from the Information Commissioner's Office (ICO) comes as the software giant is set to end official support of the products on April 8.

Despite Windows XP being considered an aged operating system, it still powers nearly a third of all PCs worldwide, according to NetMarketShare.

UK software firm AppSense believes three-quarters of UK firms have XP within their networks, while Gartner says many businesses have up to 20% running on XP.

The ICO said once official support ends, no update release to overcome flaws will be issued, risking data breaches of machines used by businesses and private users.

The watchdog said the problem will get worse over time as more vulnerabilities are gradually discovered.

It said that will increase opportunities for attackers to exploit and potentially gain unauthorised access to systems.

ICO technology group manager Dr Simon Rice also warned that the issue is not limited to these two products.

He said: "Organisations regularly end support for their older products.

"And those with supported systems still need to be vigilant, as vulnerabilities will be discovered over time."

Dr Rice urged businesses to be prepared for the ending of support.

He said: "As a responsible data controller, it is your organisation's responsibility to make sure you have the measures in place to keep people's details safe."

He added: "Where you cannot apply a (software) update, you may need to put additional measures in place to mitigate the risk."

Approached by Sky News, a Microsoft spokesperson said warning about the end of support was announced some time ago.

It said the user notifications raised the issue of potential virus and security risks.

:: Microsoft has given advice for users of both Office 2003 and Windows XP on its website.

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