Fund manager Ashmore acquires Aviva’s stake in Chinese joint venture

British fund manager Ashmore Investment Management Ltd will acquire its competitor Aviva Investors’ 49% stake in a proposed Chinese joint venture with China Central Securities.

The UK fund manager has been seeking to grow its presence in China for some time and through this JV will get the chance to build a local fund management business, a spokesperson for Ashmore told AsianInvestor today.

He noted that the new entity will be based in Shanghai and operate under the name Ashmore-CCSC Fund Management Company, but did not provide any financial details regarding the transaction. The spokesman stressed that Chinese regulations forbid the creation of a wholly-owned foreign assets management firm. Ashmore has had an office in Beijing since 2010.

A spokesman for Aviva Investors in Singapore did not confirm the move to AsianInvestor.

Shanghai-based consultancy Z-Ben Advisors said it considers Ashmore’s planned partnership with China Central Securities to be risky due to insufficient funding. According to it, the parties will have a combined investment of CNY200m (USD31.6m/EUR24.5m), which is CNY100m less than what the advisor recommends as a minimum.

Z-Ben noted that since Ashmore targets the maximum foreign shareholding limit of 49% it would like to be actively involved in the venture.

Cameron and Clegg just don’t get it

by Dave Chaplin, CEO, ContractorCalculator.co.uk

Under the new off-payroll rules the Government has decided to implement processes within its own departments that 12 years ago HMRC said “would be inappropriate and burdensome” – a move which will damage public sector service delivery.

The new off-payroll rules being introduced this month apply to contractors working for a government client and earning over £219 per day on assignments lasting longer than 6 months. These contractors must demonstrate that they are genuinely self-employed and outside the IR35 legislation, or else go on the payroll.  This latest unworkable legislation demonstrates that the one element of common sense from the original IR35 legislation has just been thoughtlessly dumped by a coalition government that does not get it.

In November 1999 when IR35 was first mooted HMRC stated that “it would be inappropriate and burdensome to require a client to check” when speculating on how it might tackle the thorny problem of disguised employment.  It added that “what is required is a system to allow clients, or potential clients, to check (quickly, easily and at minimum cost) whether or not they can make payments gross.”  HMRC even proposed that workers caught by the legislation would find that “the client will account for PAYE/NICs on relevant payments made to the intermediary or to the worker – broadly following existing PAYE/NICs rules.”

Prior to the legislation going live in April 2000, lobbyists worked to have these proposals removed and contractors were expected to self-certify.  HMRC then tried imposing the rules without much success for 12 years and recently created three new specialist teams to help.

So imagine our surprise and shock when we learned that the Government is imposing a new set of rules on its own departments that its own tax-gathering team decided 12 years ago would be “inappropriate and burdensome”!

The reality is that there will be as many implementation strategies as there are government departments – some managers in the public sector will accept contract reviews by external agencies, retain genuine contractors and keep their departments running smoothly.  Others may take a more cautious approach and refer all their contractors to HMRC.

The result will see many contractors being deemed as inside IR35 and wrongly so, many contractors leaving public sector roles, voluntarily and involuntarily if their public sector client or HMRC deems them as such. This could then lead to contractors taking legal action of breach of contract if they subsequently prove in court that HMRC was wrong about their IR35 status.

So the brain drain continues as an important resource to the public sector dwindles.  Those departments accepting non-HMRC yet perfectly legitimate contract and working practices will attract the best and those operating more anachronistic policies will be left with the rest, or be charged a 20%+ premium to make up for the loss of net income for those highly competent contractors prepared to work on the payroll.

The result of this extra unnecessary red tape – higher costs, less qualified workers and poorer public service delivery.   Cameron and Clegg just don’t get it!

 

About the author:

Dave Chaplin is the founder and CEO of ContractorCalculator.co.uk, www.contractorcalculator.co.uk, an online resource for freelancers and contractors that has become the expert guide to contracting.  Dave has recently published the second edition of The Contractors’ Handbook which provides all the advice freelancers and contractors need whether they are new to contracting or experienced old-hands.

How to Get Out Of Debt

Being in debt is one of life’s biggest pressures, and it can be difficult for anyone to deal with. Fortunately, there are solutions and companies out there that want to help if the problem has become very serious, and you’re struggling to pay back the money you owe. It’s much better to get help; ignoring the problem won’t make it go away.

Harassment from your creditors and even debt collection agencies can be one of the most stressful aspects of being in debt. It can be letters, emails, phone calls or even home visits. One of the main aims of helpful debt management companies is to end this constant stream, to the point that creditors will only contact you when absolutely necessary. This is one of the first things that will happen when you decide to consolidate your debt, and it gives you some essential breathing space to begin resolving the problem.

Using a debt management company is actually quite simple, and it’s easy to get started. You supply them with all the information that they need, and they’ll work with you to decide how much you can afford to pay to whoever you owe. They then inform your creditors that they’ll be working for you, and will give them offers as to the amount you can pay back. In many cases, debt management companies can reduce the interest on your outstanding debt. You then pay the debt management company a set amount every month in order to settle the debt, and they deal with creditors. A fee for the service will be included in this payment, and there may be initial charges too.

There are some important considerations to make when you decide to use the services of a debt management company. The first is that defaulting upon any of your original credit agreements can have a negative effect on your credit rating. This will often happen when using a debt management. Fortunately, you will be working on getting out of debt, not buying credit products, so you aren’t likely to have a credit report in the near future. It’s also far better for your future credit profile than getting an IVA or declaring bankruptcy.

The second important point is that debt management is generally an informal agreement, which is to say there is no set contract between you and the management company. Creditors are by no means guaranteed to accept any offers from debt management companies, nor are they required to stop contacting you. In most cases however, the company helping you will be successful in reducing overall payments.

Fresh Start UK Debt Management Limited (http://www.freshstartltd.co.uk) is a dedicated debt management company which places excellent service at the top of their agenda. Not only this, but they offer some extra services which many other companies do not; if you’re self-employed or have crown debts, then they might be the ideal company for you to use.

Remember, you don’t have to suffer in silence; get help and get out of debt.

Where to Start with Corporate Financial Planning

It’s never wise to underestimate the importance of financial planning, and in these risky times it’s crucial to get it right. Owners of large businesses and corporations usually have sound accounting knowledge and it can be tempting to believe that by not using a financial planning service a large, expensive corner is being cut. However a year, or even six months, down the line the tangle of complex laws and tax regulations can prove to be fatal to the business. So where to begin with corporate financial planning?

A Good Business Plan

A high-quality business plan is vital to clarify the objectives and strategies of a business. So what should a good business plan include? Well to start with the reader should have a clear grasp of what the business does, and why it has the competitive edge within the first few lines; the purpose shouldn’t be eclipsed by jargon and buzz words. A good plan should also cover information on the competition, market information and profiles of the business’s founders and partners. As the business founder that information shouldn’t be a problem to compile, it’s the next bit that’s tricky, unfortunately it’s also imperative it’s right.

  • A description of all revenue streams and the company’s cost structure.
  • A three year forward looking profit and loss balance sheet and cash-flow statements.
  • A breakdown of how much revenue is needed to cover initial investments.

These three financial planning points seem simple but they are easy to misunderstand or not thoroughly and accurately cover. And a simple mistake in the financial section of a business plan has the potential to make the business look either purposely deceptive or misinformed; neither bodes well.

Pension Planning and Employee Benefits

Business owners often get bogged down in pension planning and employee benefits, this can feel like a constant burden on time and money. However with the right corporate financial planning these pensions can be an integral and useful part of the business, enabling the owner to keep corporation tax liabilities low, keep profits safe from future creditors and even be used to purchase premises.

Employee benefits are a difficult thing to balance, it’s vital that all legal requirements are met but also important that employees feel protected and appreciated by their company.  A corporate financial planning specialist can help create a professional, streamline benefit package to help recruit and retain staff.

Contingency Plan and Exit Strategy

Many businesses avoid planning their exit strategy, feeling it shows pessimism or a willingness to ‘jump ship’. However there are multiple reasons that it is vital that both an exit strategy and contingency plan are in place right from the very beginning.

Firstly a contingency plan; many situations may arise that leave a company under threat, whether it’s political and financial instability, rises in interest rates or transport strikes.  The only way for a business to weather such storms is to have a cash reserve allowing it to trade effectively during the hard times.

An exit strategy doesn’t need to be a doomsday scenario; it should regard how the exit is made not why. The choices include a trade sale, a flotation, a family succession or simply allowing the business to close. The choices need to be thoroughly considered in the early days of the business and a good understanding is invaluable

Whatever their level of financial knowledge, it is risky for a business owner to take on such complex decisions alone. A corporate financial specialist will guide owners through the mine field of tax laws and legislations, decisions that need to be made, and information that needs to be made available to the FSA and HMRC Revenue & Customs.  Learn more about corporate financial planning services at www.ebc-trust.com today.

Food giant Kraft takes full control of Moroccan cookie maker Bimo

US food group Kraft Foods Inc (NASDAQ:KFT) said it was buying the 50% not yet owned in Moroccan cookie maker Bimo from investor National Investment Co (SNI) for MAD1.31bn (USD152m/EUR118m), as part of its plans to expand in growing markets.

For its part, SNI said that under the full ownership of Kraft, Bimo will be able to enhance its top position in the sector and to pursue further development. The investment holding, controlled by Morocco’s royal family, will use the cash from the exit to pay down debt and to finance investment of its affiliates, it explained.

SNI is looking to focus its future growth on other sectors including tourism, telecoms and renewable energies. The company has various partnerships with French firms.
Bimo, with a share of nearly 13% of Morocco’s cookie market by sales, has two production plants employing 1,400 staff, SNI said. The company, active since 1981, generated sales of MAD831m last year.

Kraft said the transaction needs to secure regulatory approvals, without giving a timetable for completion. Reuters cited an informed source as saying it would take six months to wrap up the deal.
The US group is splitting its business into two separate listed companies, separating its North American grocery business from the global snacks operations, in a move which it sees to allow each of the businesses to freely pursue their growth.

The break-up will be completed in October 2012, after Kraft’s board cleared it in August.