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Blacklisted firms win contracts as corruption goes unchecked

Many contra­ctors have opened office­s in region­al countr­ies, quote higher prices­

Many contractors have opened offices in regional countries, quote higher prices. PHOTO: REUTERS

Many contractors have opened offices in regional countries, quote higher prices. PHOTO: REUTERS

ISLAMABAD: How much development work in Pakistan suffers from corruption and of what value? Is there any state agency to evaluate it, but unfortunately nobody is there to make the assessment.

The development work and supplies to government organisations mainly include infrastructure building, water, gas and electricity supplies, exploration activities and mineral extraction.

Every government prepares the Public Sector Development Programme (PSDP) in the annual budget to set the pace of country’s development and determine its cost, particularly the need for foreign exchange.

NAB totally committed to eradicating corruption: NAB chairman

Project contracts are awarded to bidders after assessing the prices they quote for making supplies and implementing the schemes. In this process, certain government departments are supposed to examine the offers and award contracts.

However, in Pakistan, many companies win contracts regularly, even after being blacklisted by major government organisations.

For instance, in a bidding held on January 11, 2016 by the Geological Survey of Pakistan (GSP), a number of deviations were noted. However, when the issue was brought to the notice of GSP Director General Nazrul Islam, he refused to divulge what happened in the bidding process.

He simply stated that everything was done according to applicable rules and that he could prove it through relevant documents.

A contract for the supply of two coring rigs for mineral exploration in various areas of Pakistan was won by a bidder that was allegedly the favourite of top GSP bosses.

Coring rigs are used to determine the nature of minerals, their quantities and the position of underground deposits.

The total supply cost was estimated at Rs250 million with a time period of six months. The bidder, who got the contract, quoted three prices through three of his companies, which is against the law that prevents ‘collusive bidding’.

When asked, the GSP DG said “I am not FIA. I am not supposed to catch this aspect.” He claimed that a monitoring committee in the Ministry of Petroleum and Natural Resources had approved the award of contract.

The GSP purchased two rigs – one mounted on an 8×8 truck and the other on 6×6 truck. However, the tender had specified that both rigs should be on 8×8 trucks. This gave the supplier an additional benefit as prices paid were higher than those payable in case of two different kinds of rigs.

One basic bidding precondition was that the cost of rigs would be paid after their delivery. However, the cost was paid in June 2016, three months before delivery. In his defence, the GSP DG pointed to the bank guarantee deposited by the bidder.

According to the tender documents, “full payment would be released after successful installation, commissioning, testing and operator training.”

Loopholes

There are many such cases of government contracts where even graver deviations have been found.

The officials issuing tenders for development work and supplies as well as business houses take advantage of loopholes in the law and rules while also applying tricks that are either hard to catch or are simply overlooked by monitoring agencies.

Lately, many contractors and suppliers have opened offices in regional countries, especially in the UAE, from where they operate as suppliers of machinery, parts and accessories.

These goods are either produced in European Union countries or the United States where laws and regulations prohibit kickbacks and commissions abroad, implying that no foreign company supplying to a foreign government can overstate prices for creating space for kickbacks.

Regional offices of many Pakistani companies operate as suppliers that quote prices far higher than the actual rates on which goods are available. No agency in Pakistan monitors these prices and no case is in domestic courts about overstatement of prices of imported machinery, accessories and parts.

Besides, there is no check on the cost-insurance-freight (CIF) values of the goods supplied to government organisations. The bidders that are victim of fraudulent practices have nowhere to go to make complaints.

Tender leak

In numerous cases, the contract-awarding government organisations leak tender specifications in advance to the bidders of their choice. In many cases, when specifications or conditions for goods supply do not suit the bidders of choice, the entire bidding is cancelled and tenders are floated again.

NAB’s anti-corruption campaign has been successful

The Public Accounts Committee only randomly takes notice of such practices and that too only partially. They cannot check credentials of the companies winning contracts regularly from government organisations even after complaints of collusion and kickbacks.

The writer has worked with major newspapers and specialises in the analysis of public finance and geo-economics of terrorism

Published in The Express Tribune, July 3rd, 2017.

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Modi claims registration of 1 lakh firms cancelled, calls it fight for ‘poor’

The decision was taken based on an extensive data analysis conducted by the government post demonetisation.

New Delhi: India has cancelled the registration of more than 100,000 companies which were “in violation of laws”, Prime Minister Narendra Modi said, in the latest effort by the government against “black money” and tax evasion.

The decision was taken based on an extensive data analysis conducted by the government after Modi in November announced a sudden ban on high-value currency banknotes.

More than 300,000 firms had come under scanner for irregular transactions following the banknote ban, while licences of more than 100,000 firms had been cancelled, Modi said, without naming any company.

“This is not an ordinary decision,” Modi said late on Saturday while addressing a gathering of accountants, hours after launching the country’s landmark sales tax reform. “Further stern measures will be taken in the coming days against companies which are violating the law.”

While the decision to outlaw 500- and 1,000-rupee bank notes last year was part of a broader crackdown on corruption, the sudden withdrawal of 86 percent of currency in circulation left businesses, farmers and households suffering.

Modi defended his decision, calling it a “fight” for the poor. The government’s “data mining” exercise initiated after the November decision was still ongoing, Modi said.

The government will also take action against more than 37,000 identified “shell companies” which were found to be engaged in illegal transactions. “The ones who have looted the poor, will have to return to the poor,” Modi said.

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New rules for State to own mining firms

News

Mining secretary Dan Kazungu. FILE PHOTO | NMG

Mining secretary Dan Kazungu. FILE PHOTO | NMG 

Parliament has passed new operating rules the require all mining companies licensed in the past one year to cede a portion of their business to the government for free.

The rules, which do not apply to companies that were awarded mining licences earlier, give the government the right to a 10 per cent stake in all mining operations licensed after May 2016.

“The State right to a free equity participation shall not apply to any right that has been granted to a holder to mine or exploit a mineral before the coming into force of the Mining Act,” the Mining (State Participation) Regulations 2017 say.

The provision is different from the one that prescribes the formula for sharing mineral wealth between mining firms, national government, county governments and local communities.

The Mining Act, which came into force on May 27, 2016, entitles the government, through the yet to be formed National Mining Corporation, to acquire “a 10 per cent free equity participation or free carried interest in the mining operations to which the licence relates.”

The law also requires the Cabinet Secretary responsible for mining to make regulations that provide for State participation in mining or prospecting operations with the holder of a mineral right.

“Where a mining licence is granted in accordance with the Mining Act, the State shall not make or pay any financial contribution to the holder of a mining licence in respect of the interest acquired under sub regulation (1),” says the law, meaning the State is entitled to a 10 per cent shareholding for free.

In addition to the free carried interest or equity, the law gives the government the option of purchasing additional interest or share capital in the holder of the licence but only with the agreement of the licensee.

“Any additional interest that the State may acquire shall be agreed with the holder of the mining licence and the purchase shall be at a fair market value,” the rules state. The new regulations were tabled in the National Assembly on June 7, 2017, a week before the House went on an indefinite end-of-term recess.

Mining secretary Dan Kazungu is now expected to send a written notice to the holders of licences, asking them to award the State the 10 per cent interest in their business for no consideration.

“The Cabinet Secretary and the holder shall agree on the timeframe for the issuance of shares and in any case shall not be more than one year after the grant of the mining licence,” Mr Kazungu said in the gazette notice.

Mining companies are prohibited from diluting any free carried government interest unless the same is transferred, assigned or sold in part or entirely to the holder or any other party.

The regulations require qualified mining companies to issue the government the shares, enter the same in the appropriate register and issue a share certificate to the State in accordance with the laws of Kenya.

The government does not have a direct stake in mining deals under the current law.

Mining firms have in the past criticised the granting of licences on a first-come-first-served basis, arguing that it gives mining rights to well-connected speculators who then sell them to real investors.

“The purpose of these regulations is to provide for State participation in prospecting or mining operations carried out by the holder of a mineral right,” says the new set of laws.

Kenya’s Constitution requires all new oil and gas exploration rights that are negotiated with the Ministry of Energy to be ratified by Parliament.

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Britons booking holidays online to get protection if travel firms go bust

People using websites to book flights and hotels separately won’t run risk of losing money or being stranded abroad

Beach near Athens, Greece.



Millions more holidaymakers now opt to save money by booking online rather than visiting a high street travel agent.
Photograph: Simela Pantzartzi/EPA

Britons booking holidays online to get protection if travel firms go bust

People using websites to book flights and hotels separately won’t run risk of losing money or being stranded abroad

Britons who book their own holidays online are to be given the same protection if the firms they use go bust as consumers who buy package deals through a travel operator.

From 2018, new legislation will mean people using websites to book flights and hotels separately do not run the risk of being stranded abroad or losing their money.

Until now, the protection for holidaymakers offered by the government-backed Air Travel Organiser’s Licence (Atol) has failed to reflect the huge changes in the travel industry, as millions more people opt to save money by booking online rather than visiting a high street travel agent.

The Association of British Travel Agents holiday habits report 2016 found more than three-quarters of UK consumers now booked their vacation online.

“Atol was set up for good reason – we go on holiday to relax, not worry about ‘what ifs’,” said the transport minister John Hayes. “But people who buy their flights and hotels separately sometimes miss out on the protection, and peace of mind, that comes with this protection. This change will make the law fit for the modern age – and better able to adapt to any future advances in the technology that people use to book their getaway.”

Since 1973, Atol has protected people booking package holidays in the event that the firm goes bust, with more than 20 million holidaymakers covered annually. Almost all big travel companies operating in the UK are part of the scheme, which is funded by their contribution of £2.50 per passenger protected. In the event that a travel provider goes out of business, the scheme promises holidaymakers a refund or a flight home.

The new legislation will ensure Atol protection covers passengers who book flights, hotels or car hire that are not sold as part of package holidays. From next year, when holidaymakers book a flight and are then directed by the airline to a separate company to book accommodation, within 24 hours the holiday will be covered.

In recent years, a growing number of British holidaymakers have been unwittingly caught out by the lack of an Atol guarantee when things go wrong. The collapse last summer of LowCostHolidays left 110,000 holidaymakers out of pocket and highlighted how people were left vulnerable by booking through websites that appeared to be British but were in fact based overseas so not under the Atol umbrella.

Many of those who bought expensive holidays from LowCost had been unaware that in 2013 the company, which ran glitzy TV ads, had moved its corporate base from the UK to Majorca, and with that ceased to be covered by Atol.

In 2013 the Civil Aviation Authority had warned that LowCost was no longer offering protection. But at that time Irish regulators had gone much further and demanded that the company supply a bond after it moved its business to Spain so Irish holidaymakers got full refunds. In the end LowCost’s administrators predicted that holidaymakers would each receive compensation of less than £10.

The Atol bill, which is getting its second reading in parliament on Monday is the first to be debated in the House of Commons since the Queen’s speech.

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Law firm billings to state over Flint water crisis hit $14 million and rising

“I don’t see how you could have this part-time Legislature, cut the pay and still have term limits,” Murray said.

The reality is, if Calley’s proposal makes the 2018 ballot and wins likely support from an angry electorate, the Michigan Legislature will soon be populated with more retirees, wealthy people and young attorneys trying to make partner at their firms.

“How many lawyers really want to spend three months of their lives away from their practice to make $31,000? Not the good ones,” Murray said. “We’re going to get the government we pay for.”

Murray thinks the current $71,685 annual salary for legislators is not enough given the year-round demands involved in a job that can only be held for six years in the House and eight years in the Senate because of voter-imposed term limits.

“I just want to make the job attractive to people,” Murray said. “I don’t think it’s attractive when we tear it down and talk about slashing people’s pay.”

While it’s easy to castigate the Legislature, this is a serious job with serious issues that affect Michigan’s 10 million residents. Reducing the role of the Legislature to part-time status while the other two branches of state government are always on duty will likely diminish the legislative branch.

And limiting the work and compensation of legislators to three months a year ignores the reality that being a representative or senator can be a seven-days-a-week job filled with community meetings, phone calls and constituent issues.

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RVHA Cautions Firms Against Discrimination Of Rivers Indigenes

Rivers State House of Assembly, has warned against discriminating of indigenes of the state by multinational oil companies.
Speaker of the House, Hon Ikuiny-Owaji Ibani issued the warning when management of Halliburton Energy appeared before the House.
The company was invited in the course of investigation over alleged mass sack of Rivers indigenes by the company.
He said law makers would fight against the attitude of the multinationals which were denying indigenes of the state employment opportunities among other forms of discrimation.
He emphasised that the House would use Halliburton Energy as a test case and urged other companies to give indigenes of the state their due and fair share in their operations.
Other members of the House also expressed dismay and wondered why the companies chose to place indigenes of the state on redundancy when other workers from other parts of the country were highly favoured.
The House stressed the need for competent indigenes of the state must to be fairly treated by the companies, stressing that the House would not watch to see companies operating in the state deny indigenes their fair positions.

Chris Oluoh

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BCI hails govt for deferring VAT law enforcement

Published : 02 Jul 2017, 21:57:11
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FE Report

The Bangladesh Chamber of Industries (BCI) welcomed on Sunday the government’s decision to defer the implementation of new VAT (Value Added Tax) and Supplementary Duty Act, 2012 for two years.

The chamber also thanked the government for reducing the proposed excise duty on bank deposits in the national budget for fiscal year (FY) 2017-2018.

In a statement, BCI president Mostafa Azad Chowdhury delivered the post-budget reaction.

He said the suspension of new VAT law would allow local businesses, especially small and medium firms, to prepare for VAT payment under the latest procedure.

“The decision will further strengthen the mutual trust between the government and local businesses,” he added.

However, he called for the completion of the VAT Online project shortly as it would become a benchmark towards developing the VAT system and reducing the harassment of traders.

Moreover, the BCI hailed the government for exempting VAT and providing tariff benefits from local motorcycle manufacturers and reducing supplementary duty on imported parts of refrigerators by local manufacturers and assemblers.

The BCI president expressed the concern that unchanged rate of corporate tax might have negative effect on local and international investment in the country and diversifying products in many sectors.

    ahb_mcj2009@yahoo.com

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New partners and directors at some of Wales top legal and financial services firms

Four professional services firms in south Wales have made major changes to their teams by promoting some of their best staff to the level of partners or directors.

The four firms include two law practices, one corporate finance business and one business advisory firm.

These latest promotions reflect the continuing search for quality among some of Wales’ top performing professional services businesses.

Deloitte

L-R: Karen Griffin, Sam Hart, Shaun Curtis, Wayne Harvey, David Rozier, Laurence Hedditch, Delyth Jones

Business advisory firm Deloitte has strengthened its senior leadership team in Cardiff by promoting two of its people to director.

Shaun Curtis in tax and David Rozier in audit and assurance are the newly promoted directors.

Mr Curtis is a senior member of the Cardiff tax practice and focuses on advising privately owned businesses across the region, supporting entrepreneurs on a range of tax matters and helping them to recognise the unique opportunities in Wales. He was promoted to senior manager in 2014.

As a director, and alongside senior partner for Wales alongside Wayne Harvey, he will lead the Deloitte private tax team in Cardiff which consists of 25 tax professionals.

He joined Deloitte’s tax practice in 2007 after graduating from Cardiff University with a degree in accounting.

He grew up in Pembrokeshire where his family runs a fishing business, but always knew he wanted to work in the world of finance and help businesses grow.

Over the last 10 years, Mr Curtis has worked with a large number of different private businesses and high net wealth individuals, helping them address the challenges they face, especially ones related to enterprise taxes and trusts.

As a tax associate in 2008 he gained a distinction from the Association of Tax Technicians in his exams, an award given to candidates that achieve an exceptional level of performance.

In 2016 he was named one of eprivateclient’s top 35 under 35 private client practitioners. Its yearly list recognises the rising stars of private client professions across the UK.

Opening of Deloitte’s office at Park Street, Cardiff

David Rozier is a senior member of the financial services team in Cardiff with 11 years’ experience in this sector, specialising in retail banking. He has been auditing some of the largest financial services companies in south Wales, seeing them grow, deal with the credit crisis and respond to different business challenges over the years.

In his new role, Mr Rozier forms part of the leadership group that heads up Deloitte’s south region financial services practice, a team of 70 people based in the southern half of the UK including Wales.

He is originally from south Llantrisant and joined Deloitte’s audit practice in Cardiff in 2006 after gaining a degree in maths from Nottingham University.

He moved back to south Wales after graduating and now lives in Dinas Powys outside Cardiff. He was promoted to senior manager in 2013.

During his career at Deloitte Mr Rozier has been on secondment to many banks and building societies in a range of roles, the shortest for a period of three months and the longest lasting two years.

The opportunities to work inside different financial institutions, as well as being an auditor in this sector, have given him a strong insight into the financial services industry and its people and has underpinned his career trajectory.

In 2011 he was a finalist in the British Accountancy Awards in their ‘new accountant of the year’ category. In 2015 he was named in Wales Online’s 35 under 35 highest flying young businessmen in Wales, and also made it onto their list of the 25 most stylish men and women in the Welsh business world.

Senior partner in Wales for Deloitte Wayne Harvey

Deloitte employs more than 700 people in Cardiff at its offices in Callaghan Square, Park Street and Fusion Point, including 11 directors and seven partners.

Wayne Harvey, senior partner for Deloitte in Wales, said: “I’m delighted to be announcing these promotions as they are a clear example of how we are investing in Wales. As directors, they are now part of the leadership of our firm in Wales.

“It is testament to the quality of the people we have in our business and of the valuable work they are doing with our clients. They have both built up extensive knowledge in their specialist areas and I’m sure they’ll continue to be successful in serving our clients and leading their teams.

“There are few things more important to the success of our business than attracting, developing and retaining high quality people.”

Harding Evans

Ben Jenkins and Siobhan Downes, new partners at HardingEvans

Newport-based law firm HardingEvans has announced the promotion of two of its solicitors to partner positions.

Siobhan Downes, 32, has been promoted to partner in the care team, and 33-year-old Ben Jenkins has been promoted to partner in the dispute resolution team.

Ms Downes, from Newport, joined HardingEvans 10 years ago after studying for her LLB at the University of Wales in Swansea.

She specialises in complex children and family matters involving disputes both between private individuals and also where there is involvement of local authority social services. She has extensive experience in domestic violence and harassment matters and also applications for injunctions.

She said: “I was focused on becoming a solicitor from a young age, and since joining Harding Evans I have specialised in family law with a particular focus on children matters.

“My specialist knowledge has allowed me to gain accreditations such as becoming a member of the Law Society Children’s Panel.

“Thanks to HardingEvans Pathway to Partnership programme I have in more recent times been given the opportunity to develop my management knowledge and skills, which has results in my promotion to partner. I am very much looking forward to contributing to the wider business in the future.”

Born in Singapore to British parents, Ben Jenkins attended schools around Hampshire and boarding school in Wiltshire before studying for his LPC at Cardiff University in 2005.

Specialising in civil and commercial litigation, commercial contracts, advocacy at court and mediation, he has acted for a wide variety of clients including a plc, foreign companies, professional sports clubs and professional athletes.

He said: “Since joining Harding Evans 10 years ago, I have extensively developed my skills as a solicitor and had the opportunity to deal with a vast range of legal clients across my department.

“I am very excited about the new opportunities that being partner at Harding Evans will bring, including playing a key role in the future growth and development of the firm.”

Joy Phillips, practice director at HardingEvans, added: “Developing and retaining staff is one of our top priorities and this is reflected in our desire to promote from within, ensuring that the investment we make in our staff reaps dividends in the future.

“Siobhan and Ben have both shown commitment and dedication to the firm and our clients, they have both progressed through our Pathway to Partnership programme which is key to supporting our retention and development of young talent.

“They have both played an important part in our past success and I believe they will be vital to our future growth plans”.

J A Hughes

Lucas Edwards, new partner at Quality Solicitor J A Hughes

Specialist criminal lawyer Lucas Edwards has become a partner in law firm Quality Solicitors J A Hughes which has offices in Barry, Penarth and Cardiff and was originally established in 1888.

He joined the firm in January 2016 as an assistant solicitor where he specialised in all areas of criminal law. He recently represented a defendant in a high profile local murder case.

Mr Edwards started his career in 2012, working in two of the largest high street law firms in Wales after graduating with a law degree from Swansea University.

While there he gained a passion for criminal law and criminal defence. He started his training contract with Lloyd & Rowe Solicitors, qualifying as a solicitor in April 2015, and has rapidly developed an extensive client base and a reputation for his high quality criminal defence work.

He said: “I’m very happy to have been promoted to be partner in this forward looking, yet long established firm. I enjoy working within criminal law as every day is different and you never know what issues, whether big or small, will arise.

“One minute I can be in the office preparing a submission which will enable someone to keep their driving licence and the next I get a call to go to the police station to represent someone arrested for a serious assault or even murder, though happily those cases are rare.

“I look forward to the opportunities ahead and to being able to continue to provide a high quality service to our clients.”

Tim Hackett, head of the criminal and care departments at QS J A Hughes, said: “We’re delighted that Lucas has accepted our offer to become a partner.

“He is a very talented and passionate individual and we know he is able to deliver an excellent service to the people of Cardiff and the Vale of Glamorgan. His enthusiasm and expertise will be put to good use in his new position.”

Grant Thornton

Grant Thornton has boosted its corporate finance offering with the appointment of Trefor Griffith as partner for the South West and Wales.

Mr Griffith will lead Grant Thornton’s corporate finance advisory team for the region. He leads the consumer industry group for the firm nationally, having been based in Grant Thornton’s London office since 2009 with a focus on the food and beverage sector, where he has led deals across the UK.

Mr Griffith has led a number of notable deals in the south west region over the last few years, including the investment in BVG Airflo by BGF, the acquisition of Thompson and Morgan by BVG, the sale of AerFin to Carval and the recent sale of Westbridge Food Group to CP Foods.

Tim Lincoln, practice leader at Grant Thornton South West, said: “Trefor brings with him strong experience from both a national perspective and regionally that will prove invaluable to us and our clients. He will be a real asset to our team and I’m confident that he will help to further bolster our presence in the regions.”

Mr Griffith added: “I am delighted to be able to join a young dynamic team covering the south west and Wales, working with them to continue to grow our business in the region.

“Our focus on advising dynamic organisations is a perfect fit with a significant number of businesses in the region and I am looking forward to working with more of them in the coming months and years.”

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Brussels regulator urges rival firms to sue Google 

  • Google was fined €2.42billion for abusing its dominance as a US search engine 
  • Fine dished out by European Commission competition chief Margrethe Vestager
  • She said if anyone has been affected, they should use ruling to help their cases 
  • Could open the floodgates to a raft of legal claims from price comparison rivals  

Gareth Davies For Mailonline

A Brussels regulator has urged Google’s rivals to sue the internet giant if its abuse of power has cost them.

Google was slapped with a record €2.42billion fine for skewing search results in favour of its own shopping services in a fresh blow to the US company earlier this week. 

The European Commission’s decision to levy the record penalty for breaking anti-trust laws could lead to a string of legal cases from rivals claiming their business has been harmed by its actions.  

And Margrethe Vestager, the woman who dished out the punishment, has said any business claiming to have been affected should use her ruling to prop up its case.  

EC competition chief Margrethe Vestager said Google had 'abused its market dominance' as the world's most popular search engine

EC competition chief Margrethe Vestager said Google had 'abused its market dominance' as the world's most popular search engine

EC competition chief Margrethe Vestager said Google had ‘abused its market dominance’ as the world’s most popular search engine

Google was slapped with a record €2.42billion fine for skewing search results in favour of its own shopping services in a fresh blow to the US web giant

Google was slapped with a record €2.42billion fine for skewing search results in favour of its own shopping services in a fresh blow to the US web giant

Google was slapped with a record €2.42billion fine for skewing search results in favour of its own shopping services in a fresh blow to the US web giant

Vestager, the European Commission’s competition chief, told the Sunday Times: ‘It is for everyone who feels they have been hurt by the illegal Google behaviour to take this report and use in court as part of their evidence will have an influence.’  

When she made her judgement, she said Google had ‘abused its market dominance’ as the world’s most popular search engine.

‘Google has come up with many innovative products and services that have made a difference to our lives,’ she said. 

‘That’s a good thing. But Google’s strategy for its comparison shopping service wasn’t just about attracting customers by making its product better than those of its rivals.

‘Instead, Google abused its market dominance as a search engine by promoting its own comparison shopping service in its search results, and demoting those of competitors.

‘What Google has done is illegal under EU antitrust rules. It denied other companies the chance to compete on the merits and to innovate.

‘And most importantly, it denied European consumers a genuine choice of services and the full benefits of innovation.’

The European Commission's decision to levy the record penalty for breaking anti-trust laws is likely to anger US President Donald Trump 

The European Commission's decision to levy the record penalty for breaking anti-trust laws is likely to anger US President Donald Trump 

The European Commission’s decision to levy the record penalty for breaking anti-trust laws is likely to anger US President Donald Trump 

The watchdog launched an investigation into Google Shopping seven years ago amid complaints it gave the service a prominent position on the internet search engine, while rival services were demoted.

The EC gave the Mountain View, California, company 90 days to stop or face fines of up to 5 percent of the average daily worldwide turnover of parent company Alphabet.

Google could face claims by consumers, says expert

Oliver Fairhurst, Associate and competition law specialist at law firm Lewis Silkin told MailOnline: ‘The decision is a real kicking for Google. The fine is around double the amount of the previous largest fine issued by the Commission, showing how seriously the behaviour is viewed.

‘Google will now have to work out how it is going to comply. It will probably change the way in which its “Shopping” results are shown, so consumers may find that they have to choose who provides the comparison at the top of a Google search. The end result might be similar to the default search engine option provided in Internet Explorer.

‘It may also mean that Google faces legal claims arising out of competitors (and even consumers) who say that they lost out because of the behaviour.

‘One major caveat to all this though is that Google is very likely to appeal, and any such appeal process may take us well into the 2020s’. 

Anti-trust cases against US companies have stoked anger in Washington and the EU could now face the wrath of Mr Trump, who won office on a pledge to adopt a more protectionist stance towards US companies.  

The case comes a year after Vestage angered the Obama administration with an order that Apple repay 13 billion (£11.5m) euros in back taxes in Ireland.

The case is one of three against Google and of several against blockbuster US companies including Starbucks, Apple, Amazon and McDonalds. 

The EC said Google was the most dominant search engine across the 31 countries in the European Economic Area (EEA).

It found that Google had handed its comparison shopping service an illegal advantage in 13 EEA countries, including in the United Kingdom and Germany where it was launched in 2008.

The abuse caused traffic to Google’s shopping service to jump 45-fold in the United Kingdom, 35-fold in Germany and 19-fold in France.

However, the demotions to rival websites triggered sharp reduction in traffic, with some UK sites seeing visitor numbers plunge 85%.

While an EU record, the fine is well below the maximum possible of about 8 billion euros (£7m) or 10 per cent of Google’s total revenue last year.

It follows the internet search giant’s controversial £130 million deal with HM Revenue & Customs in January 2016 to settle a 10-year tax inquiry into its UK business. 

Battle of the big beasts: How the EU and Google have fought over the Internet

As the European Union fines Google for abusing its dominance in online searches, here is a look back at the key dates in the bloc’s legal tussle with the technology company.

November 2010 – The EU opens formal inquiry into whether Google manipulates search results in a way that favours its own business. The probe includes whether the search results favour Google’s services, such as its price comparison business, how it displays the contents of rivals, and how it manages ads.

April 2013 – Google offers change to its practice in the hope of ending the investigation.

The EU has been a constant thorn in Google's side over the years. Pictured: Flags fly at the European Commission headquarters in Brussels

The EU has been a constant thorn in Google's side over the years. Pictured: Flags fly at the European Commission headquarters in Brussels

The EU has been a constant thorn in Google’s side over the years. Pictured: Flags fly at the European Commission headquarters in Brussels

July-December 2013 – After feedback from complainants, the EU twice rejects Google’s offer to change its search results as not good enough.

Feb 2014 – The EU and Google reach a tentative agreement on how to fix the search results. This keeps Google from paying a fine.

May 2014 – In a separate case, the European Court of Justice rules that Google must consider EU citizens’ requests to remove irrelevant or embarrassing personal information that pops up on a search of their names.

Sept 2014 – After receiving complaints from Google’s competitors, the EU appears to make a U-turn on its settlement with Google on search results, declaring it insufficient.

April 2015 – After five years of investigations and talks, EU formally charges Google with abusing its dominant position in search results, a step up in the legal battle. It also opens a preliminary investigation into whether Google uses its Android mobile operating system to rig the market for apps.

April 2016 – The EU charges Google with using Android to gain market advantage in mobile apps.

June 2017 – The EU fines Google a record 2.42 billion euros ($2.72 billion) for breaching antitrust rules with its online shopping service. It says Google abused its market dominance as a search engine by giving an illegal advantage to another Google product, its comparison shopping service.  

But the penalty is likely to leave a bigger dent in Google’s pride and reputation than its finances.

Alphabet has more than $92 billion (82 billion euros) in cash, including nearly $56 billion (50 billion euros) in accounts outside of Europe.    

Vestager said Google had 'abused its market dominance' as the world's most popular search engine

Vestager said Google had 'abused its market dominance' as the world's most popular search engine

Vestager said Google had ‘abused its market dominance’ as the world’s most popular search engine

In the other Google cases, the EU is examining Google’s AdSense advertising service and its Android mobile phone software.

The Commission, which polices EU competition policy, launched an initial investigation into Google in 2010 following complaints from rivals such as Microsoft and Trip Advisor that it favoured its own shopping services when customers ran searches.

Vestager’s predecessor, Joaquin Almunia, made three attempts to resolve the dispute but in each case intense pressure by national governments, rivals and privacy advocates scuppered the effort.

In a statement, Google said: ‘When you shop online, you want to find the products you’re looking for quickly and easily.

‘And advertisers want to promote those same products. That’s why Google shows shopping ads, connecting our users with thousands of advertisers, large and small, in ways that are useful for both.

‘We respectfully disagree with the conclusions announced today. We will review the commission’s decision in detail as we consider an appeal, and we look forward to continuing to make our case.’ 

In the firing line:  Other American companies probed by the EU

APPLE

Brussels came down hard last year on the world’s most valuable and iconic company, Apple, ordering it to repay Ireland a record 13 billion euros ($14.3 billion) in back taxes.

The August 2016 ruling found that Apple had benefited from a series of Irish sweetheart tax deals that were illegal.

The US Treasury Department roundly rejected the reasoning of the commission’s decision, and Apple and the government of Ireland both filed appeals.

In the wake of the LuxLeaks tax scandal the EU launched further inquiries into the practice of countries offering extremely low corporation tax rates in an effort to attract multinationals.

STARBUCKS

In October 2015 the EU ordered US coffee maker Starbucks to repay the Netherlands 30 million euros in back taxes.

MCDONALD’S

The EU launched a formal investigation in December 2015 into tax deals between US fast food giant McDonald’s and Luxembourg, saying its preliminary assessment was that the arrangements breached state aid rules.

The case against McDonald’s stemmed from a complaint by trade unions and the charity War on Want that accused McDonald’s of avoiding around one billion euros ($1.1 billion) in taxes between 2009 and 2013, by shifting profits from one corporate division to another, and paying no local tax in Luxembourg.

AMAZON

Brussels has launched an investigation into Amazon’s tax arrangements over its tax deals in Luxembourg.

In June 2015 it also opened a formal investigation into the Seattle-based online retail giant’s e-book distribution.

MICROSOFT

In a historic case in March 2013, the European Commission fined US giant Microsoft 561 million euros ($638 million) for failing to provide clients with a choice of internet browsers for Windows 7, as it had promised to do.

It also fined the company 899 million euros in 2008, subsequently reduced to 860 million euros, for failing to comply with an order to share product information with rivals so that their software could work with Windows.

That came on top of a then-record fine of 497 million euros in 2004 for violating EU competition rules.

FACEBOOK

The EU in May fined US social media giant Facebook 110 million euros ($120 million) for providing incorrect and misleading information on its takeover of WhatsApp, imposing its biggest penalty for such a breach.

The admonishment came after EU regulators cleared the then $19 billion Facebook acquisition of WhatsApp in late 2014, a decision that faced criticism in Europe.

INTEL

INTEL, the world’s biggest chipmaker, was in May 2009 fined a record 1.06 billion euros. The EU says it abused its stranglehold on the semiconductor market to crush its main rival, AMD. 

 

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New partners at some of Wales top legal and financial services firms

Four professional services firms in south Wales have made major changes to their teams by promoting some of their best staff to the level of partners or directors.

The four firms include two law practices, one corporate finance business and one business advisory firm.

These latest promotions reflect the continuing search for quality among some of Wales’ top performing professional services businesses.

Deloitte

L-R: Karen Griffin, Sam Hart, Shaun Curtis, Wayne Harvey, David Rozier, Laurence Hedditch, Delyth Jones

Business advisory firm Deloitte has strengthened its senior leadership team in Cardiff by promoting two of its people to director.

Shaun Curtis in tax and David Rozier in audit and assurance are the newly promoted directors.

Mr Curtis is a senior member of the Cardiff tax practice and focuses on advising privately owned businesses across the region, supporting entrepreneurs on a range of tax matters and helping them to recognise the unique opportunities in Wales. He was promoted to senior manager in 2014.

As a director, and alongside senior partner for Wales alongside Wayne Harvey, he will lead the Deloitte private tax team in Cardiff which consists of 25 tax professionals.

He joined Deloitte’s tax practice in 2007 after graduating from Cardiff University with a degree in accounting.

He grew up in Pembrokeshire where his family runs a fishing business, but always knew he wanted to work in the world of finance and help businesses grow.

Over the last 10 years, Mr Curtis has worked with a large number of different private businesses and high net wealth individuals, helping them address the challenges they face, especially ones related to enterprise taxes and trusts.

As a tax associate in 2008 he gained a distinction from the Association of Tax Technicians in his exams, an award given to candidates that achieve an exceptional level of performance.

In 2016 he was named one of eprivateclient’s top 35 under 35 private client practitioners. Its yearly list recognises the rising stars of private client professions across the UK.

Opening of Deloitte’s office at Park Street, Cardiff

David Rozier is a senior member of the financial services team in Cardiff with 11 years’ experience in this sector, specialising in retail banking. He has been auditing some of the largest financial services companies in south Wales, seeing them grow, deal with the credit crisis and respond to different business challenges over the years.

In his new role, Mr Rozier forms part of the leadership group that heads up Deloitte’s south region financial services practice, a team of 70 people based in the southern half of the UK including Wales.

He is originally from south Llantrisant and joined Deloitte’s audit practice in Cardiff in 2006 after gaining a degree in maths from Nottingham University.

He moved back to south Wales after graduating and now lives in Dinas Powys outside Cardiff. He was promoted to senior manager in 2013.

During his career at Deloitte Mr Rozier has been on secondment to many banks and building societies in a range of roles, the shortest for a period of three months and the longest lasting two years.

The opportunities to work inside different financial institutions, as well as being an auditor in this sector, have given him a strong insight into the financial services industry and its people and has underpinned his career trajectory.

In 2011 he was a finalist in the British Accountancy Awards in their ‘new accountant of the year’ category. In 2015 he was named in Wales Online’s 35 under 35 highest flying young businessmen in Wales, and also made it onto their list of the 25 most stylish men and women in the Welsh business world.

Senior partner in Wales for Deloitte Wayne Harvey

Deloitte employs more than 700 people in Cardiff at its offices in Callaghan Square, Park Street and Fusion Point, including 11 directors and seven partners.

Wayne Harvey, senior partner for Deloitte in Wales, said: “I’m delighted to be announcing these promotions as they are a clear example of how we are investing in Wales. As directors, they are now part of the leadership of our firm in Wales.

“It is testament to the quality of the people we have in our business and of the valuable work they are doing with our clients. They have both built up extensive knowledge in their specialist areas and I’m sure they’ll continue to be successful in serving our clients and leading their teams.

“There are few things more important to the success of our business than attracting, developing and retaining high quality people.”

Harding Evans

Ben Jenkins and Siobhan Downes, new partners at HardingEvans

Newport-based law firm HardingEvans has announced the promotion of two of its solicitors to partner positions.

Siobhan Downes, 32, has been promoted to partner in the care team, and 33-year-old Ben Jenkins has been promoted to partner in the dispute resolution team.

Ms Downes, from Newport, joined HardingEvans 10 years ago after studying for her LLB at the University of Wales in Swansea.

She specialises in complex children and family matters involving disputes both between private individuals and also where there is involvement of local authority social services. She has extensive experience in domestic violence and harassment matters and also applications for injunctions.

She said: “I was focused on becoming a solicitor from a young age, and since joining Harding Evans I have specialised in family law with a particular focus on children matters.

“My specialist knowledge has allowed me to gain accreditations such as becoming a member of the Law Society Children’s Panel.

“Thanks to HardingEvans Pathway to Partnership programme I have in more recent times been given the opportunity to develop my management knowledge and skills, which has results in my promotion to partner. I am very much looking forward to contributing to the wider business in the future.”

Born in Singapore to British parents, Ben Jenkins attended schools around Hampshire and boarding school in Wiltshire before studying for his LPC at Cardiff University in 2005.

Specialising in civil and commercial litigation, commercial contracts, advocacy at court and mediation, he has acted for a wide variety of clients including a plc, foreign companies, professional sports clubs and professional athletes.

He said: “Since joining Harding Evans 10 years ago, I have extensively developed my skills as a solicitor and had the opportunity to deal with a vast range of legal clients across my department.

“I am very excited about the new opportunities that being partner at Harding Evans will bring, including playing a key role in the future growth and development of the firm.”

Joy Phillips, practice director at HardingEvans, added: “Developing and retaining staff is one of our top priorities and this is reflected in our desire to promote from within, ensuring that the investment we make in our staff reaps dividends in the future.

“Siobhan and Ben have both shown commitment and dedication to the firm and our clients, they have both progressed through our Pathway to Partnership programme which is key to supporting our retention and development of young talent.

“They have both played an important part in our past success and I believe they will be vital to our future growth plans”.

J A Hughes

Lucas Edwards, new partner at Quality Solicitor J A Hughes

Specialist criminal lawyer Lucas Edwards has become a partner in law firm Quality Solicitors J A Hughes which has offices in Barry, Penarth and Cardiff and was originally established in 1888.

He joined the firm in January 2016 as an assistant solicitor where he specialised in all areas of criminal law. He recently represented a defendant in a high profile local murder case.

Mr Edwards started his career in 2012, working in two of the largest high street law firms in Wales after graduating with a law degree from Swansea University.

While there he gained a passion for criminal law and criminal defence. He started his training contract with Lloyd & Rowe Solicitors, qualifying as a solicitor in April 2015, and has rapidly developed an extensive client base and a reputation for his high quality criminal defence work.

He said: “I’m very happy to have been promoted to be partner in this forward looking, yet long established firm. I enjoy working within criminal law as every day is different and you never know what issues, whether big or small, will arise.

“One minute I can be in the office preparing a submission which will enable someone to keep their driving licence and the next I get a call to go to the police station to represent someone arrested for a serious assault or even murder, though happily those cases are rare.

“I look forward to the opportunities ahead and to being able to continue to provide a high quality service to our clients.”

Tim Hackett, head of the criminal and care departments at QS J A Hughes, said: “We’re delighted that Lucas has accepted our offer to become a partner.

“He is a very talented and passionate individual and we know he is able to deliver an excellent service to the people of Cardiff and the Vale of Glamorgan. His enthusiasm and expertise will be put to good use in his new position.”

Grant Thornton

Grant Thornton has boosted its corporate finance offering with the appointment of Trefor Griffith as partner for the South West and Wales.

Mr Griffith will lead Grant Thornton’s corporate finance advisory team for the region. He leads the consumer industry group for the firm nationally, having been based in Grant Thornton’s London office since 2009 with a focus on the food and beverage sector, where he has led deals across the UK.

Mr Griffith has led a number of notable deals in the south west region over the last few years, including the investment in BVG Airflo by BGF, the acquisition of Thompson and Morgan by BVG, the sale of AerFin to Carval and the recent sale of Westbridge Food Group to CP Foods.

Tim Lincoln, practice leader at Grant Thornton South West, said: “Trefor brings with him strong experience from both a national perspective and regionally that will prove invaluable to us and our clients. He will be a real asset to our team and I’m confident that he will help to further bolster our presence in the regions.”

Mr Griffith added: “I am delighted to be able to join a young dynamic team covering the south west and Wales, working with them to continue to grow our business in the region.

“Our focus on advising dynamic organisations is a perfect fit with a significant number of businesses in the region and I am looking forward to working with more of them in the coming months and years.”

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