LONDON’S BUSINESS NEWSPAPER
DRY? TRY POURING JANUARY LIBBY BRODIE ON THE NEW RULES OF WINE DRINKING P16 WEDNESDAY 11 JANUARY 2023
IN THE NOTEBOOK JIMMY MCLOUGHLIN ON DATA, CODING... AND PODCASTS P11
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NICKEL FIASCO
LME should have done better: report NICHOLAS EARL THE LONDON Metal Exchange (LME) failed to police large positions on the nickel market and did not have sufficient volatility controls to deal with soaring prices, according to a long-awaited report on last year’s sudden suspension of nickel trading. Consultancy group Oliver Wyman – which was appointed by the LME to conduct a review into a decision to cancel $3.9bn-worth of trades amid a short-selling frenzy – urged the LME to bring in risk and control functions to prevent market distortions, upgrade volatility controls and spend more time monitoring risks in the market. The report did not look at LME’s decision-making process and governance – which remain under investigation by both the Financial Conduct Authority and Bank of England. Its conduct during the crisis is also the centre of mega lawsuits brought by Elliott Investment Management and Jane Street. The LME welcomed the report’s findings and said in a statement it would set out by the end of March how it will implement recommendations to prevent market distortions and improve risk monitoring.
INVESTOR TERRY SMITH WHIPS UP ANOTHER ATTACK ON UNILEVER – A YEAR AFTER INFAMOUS MAYONNAISE ROW ANDY SILVESTER RESPECTED City investor Terry Smith launched another excoriating assault on Unilever yesterday, a year after his infamous criticism of its focus on the purpose of its flagship brand Hellman’s. In his annual letter to shareholders, the Fundsmith chief yesterday listed a series of complaints about the consumer goods firm, saying it had failed to engage shareholders, had been opaque about transaction costs and allowed investors to “measure annual growth if you could only count to three”. Smith also says the firm has “asked [investors] to suspend disbelief” that the arrival of notorious activist Trian Partners’ investor Nelson Peltz on the board had nothing to do with the September departure of embattled CEO Alan Jope. “This explanation sounds like it was lifted from the script of Miracle on 34th Street,”
Smith writes. Smith, who was City A.M.s investor of the year in 2022, goes on to say that Unilever did not make contact with Fundsmith – “about the 12th largest investor” – for the first eight years of their holding. When they eventually did, his “points about what we saw with the performance of the business and the focus of the management” were “duly ignored”. Last year the investor made headlines when he attacked Unilever’s focus on so-called ESG metrics. “A company which feels it has to define the purpose of Hellmann’s mayonnaise has in our view clearly lost the plot. The Hellmann’s brand has existed since 1913 so we would guess that by now consumers have figured out its purpose (spoiler alert – salads and sandwiches),” he wrote in 2022. Unilever declined to comment last night. £ CONTINUED ON PAGE 3
‘Talking’s better than walking’: Khan calls for an end to Elizabeth Line strikes ILARIA GRASSO MACOLA SADIQ KHAN has urged rail unions to call off their planned strike on the Elizabeth line this week and encouraged them to get back to the negotiating table, saying that “talking is better than walking”. Rail platform workers on the line
from unions TSSA and Prospect are set to down tools tomorrow after rejecting an offer of a 8.4 per cent salary increase. No services will run in the central section of the line, between Abbey Wood and
Paddington, with shortnotice cancellations expected on the east and west ends of the line. “There’s no need for the strike to take place this Thursday,” the mayor told City A.M.
yesterday. “I’d encourage the unions to please, please, please talk to Transport for London (TfL).” “Talking is better than walking,” he said. Khan’s words were echoed by TfL’s interim commissioner Andy Lord, who took over on 25 October last year after Andy Byford stepped
down. He told City A.M. talks with TSSA and Prospect were still ongoing, but Prospect boss Mike Clancy said they still wanted “substantive movement” on pay. Both were talking at an event marking the 160th anniversary of the London Underground – complete with a new roundel.
INSIDE CRYPTO REGULATIONS ‘UNLIKELY’ IN 2023 P4 AMAZON CLOSURES PUT JOBS AT RISK P6 HIRING SLOWDOWN ON THE HORIZON P7 MARKETS P12 OPINION P14 SPORT P19