A-Z of 2012 in the business world – Umesh Shanmugam

alphabet soupA is for arithmetic – a skill that deserted two of our listed companies, retailer SuperGroup and taxi manufacturer Manganese Bronze. Both companies had to restate accounts after their numbers failed to add up; both companies saw their share price punished for their failings. Things weren’t so bad for SuperGroup but the wheels really came off for Manganese when accounting problems were compounded by a parts failure – on its steering wheels.

B is for Bankers, not the investment variety, but the central ones. The year started with the Swiss losing theirs. Philipp Hildebrand stepped down over a controversial currency trade carried out by his wife. The UK gained a new one. In November, Canadian Mark Carney agreed to become the next Governor of the Bank of England. He immediately showed his prowess with numbers by bumping up the package the job attracts from Sir Merv’s £519,000 to £624,000, plus a £250,000 housing allowance.

C is for Cocktails, the unexpected mix of Irn Bru and Robinson’s Lemon Barley Water. The brew was created by the merger of manufacturers AG Barr and Britvic. The fact that the deal was presented as a merger spoke volumes for the power AG Barr chief exec Roger White had in the deal. As boss of the smaller company he may have been expected to take a back seat. Not a bit of it, White will have more power and more cash in his role at the head of the combined group. The Irn Bru-Robinsons mix may be tasty after all.

D is for Dick, as in Dick’s Sporting Goods, the US retailer that pumped £20m into JJB only to write it off four months later, shortly before the sports retailer went bust. No news yet as to whether Dick’s offered any support for Comet, Peacocks or Clinton Cards.

E is for emails, as sent between traders allegedly manipulating the London Interbank Offered Rate (Libor). “Done… for you, big boy,” wrote one Barclays banker to a trader contact, while a happy trader reciprocated to a Barclays counterpart: “Dude. I owe you big time! Come over one day after work and I’m opening a bottle of Bollinger.” Banks were fined billions.

F is for falling, flat and face. Put the three together and you get another F, Facebook. The social networking site made its debut on the public markets in February, with a valuation of just over $100bn, a record for a float of its kind.

By the end of the year the market had taken its own view, deciding its real value was closer to $60bn.

G is for George, as in “by George, Chancellor, haven’t you made a Horlicks of this Budget!” After his 50 minute speech the occupier of Number 11 was forced into more u-turns than a Liberal Democrat tackling student fees.

Taxes on pasties, caravans and conservatories were all reversed to the glee of the Labour Party and consternation of the electorate.

H is for hedge fund manager Crispin Odey’s hens, for which he is constructing a Palladian-style, stone chicken coop in the grounds of his Forest of Dean home, at a cost of more than £135,000. Cluckingham Palace, as the temple for 20 fowl in the grounds of Eastbach Court has became known, will be engraved with murals of chickens, eggs and Humpty Dumpty, since News Corp investor Odey is apparently a fan of “the wonderland aspect”. Or clucking mad.

I is for Indonesia. The Southeast Asia country may be over 7,000 miles from London but it was at the centre of stories that threaten to destabilise two listed companies. Coal miner Bumi reported it had uncovered suspected fraud at one of its Indonesian operations, while Rolls Royce revealed it was the subject of an SFO led corruption probe in the country.

J is for Jolly – of the corporate variety. The Big Four banks splashed the cash on their Christmas parties, with RBS offering employees £10 a head for their office party, HSBC £20, and Lloyds £35.

Barclays said festive party budgets are at the discretion of team managers. And we all know what that means…

K is for KFC – Colonel Sanders wasn’t just handing out chicken drum sticks, he also started serving out degrees. The fast food chain launched what is thought to be the first corporate degree course, from De Montfort University. Over 50 restaurant managers will be trained in the KFC business model – the fries, the finances and the food in a bucket.

L is for Lynch, Dr Mike Lynch, whose enormous pay-day on selling his software business Autonomy to Hewlett-Packard for $11bn (£6.7bn) turned from dream to nightmare after HP chief Meg Whitman accused him of irregular accounting prior to the acquisition. Whitman announced an $8.8bn writedown of the assets; Lynch continues to vigorously contest the claims. This one will run and run.

M is for muppets. Of the Goldman variety, after ex-employee Greg Smith spilled the beans on life at the Vampire Squid by claiming senior bankers called clients Muppets as they ripped them off. Smith’s subsequent book promised to be incendiary – but Wall Street closed ranks after revelations were few and far between, deciding Smith was the Muppet for being passed over by the bank for a $1m bonus.

N is for nein, danker. German chancellor Angela Merkel’s thoughts on the torpedoed £28bn merger of BAE Systems and Franco-German aviation giant EADS.

O is for “over my dead body” – the line Pearson’s ex-chief executive Marjorie Scardino trotted out when asked if the Financial Times would ever be sold. No sooner was the ink dry on Ms Scardino’s resignation letter from the FTSE 100 business than FT-for-sale-rumours started swirling.

P is for profit – the subject of Elisabeth Murdoch’s MacTaggart Lecture. The scion of the Murdoch family took on her brother James and father Rupert in her talk. Responding to James’s line that the only reliable guarantor of independence is profit she added, “yes, but profit without purpose is a recipe for disaster.”

The line was well received by the audience. Not so popular within the family. Her father didn’t speak to her for nine weeks.

Q is for Question Time, as committees of all hues grilled big business on their misdemeanours. Paul Tucker answered Libor charges from the Treasury Select Committee; multinationals faced tax-related grillings by Margaret Hodge on the Public Accounts Committee; and Stephen Hester squared up to Archbishop-elect Justin Welby on the Commission for Banking Standards.

R is for rail franchising policy, the cause of the West Coast rail fiasco. The Department for Transport gave it to FirstGroup… and then handed it back to incumbent Virgin Rail, after admitting to “significant flaws” in the bid process. Let’s call it signal failures.

S is for saved, after shareholders decided that Nick Buckles was the best man to run G4S despite the company’s failure to provide the promised 10,400 security staff at the Olympics. Lieutenants Ian Horseman-Sewell and David Taylor-Smith fell on their swords instead.

T is for terrorists, among the alleged customers of HSBC, which was forced to pay a $1.9bn fine to settle US regulators’ allegations that the bank had allowed billions of dollars to be laundered for drug barons, rogue states and potential terrorists.

U is for umbrella – the accessory that is supposed to protect you from a rainy day. UBS trader Kweku Adoboli named his illicit trading account “umbrella” when he had profits to squirrel away from his unauthorised trading. It did nothing to protect him when his £1.4bn of losses came to light. He was sentenced to seven years.

V is for vigorous, the approach the Serious Fraud Office said it was adopting to its long running investigation into Kaupthing Bank and its largest customer Robert Tchenguiz. That was in August. By October the crime fighter had dropped its investigation entirely.

W is for whale, harpooned in JP Morgan’s London headquarters. Bruno Iksil, the JP Morgan trader nicknamed the London Whale for the huge trades he took on. He was later found to have run up $6bn in losses.

X is for the mining company Xstrata, now known as Glenstrata after its multi-billion pound merger with commodities giant Glencore got the green light after almost ten months of wrangling and controversy.

Y is for yacht. While the super rich were building bigger and bigger ones, former BP boss Tony Hayward gave his, Bob, to charity.

Z is for zzzzz, the gentle sound of the euro crisis falling asleep. Is it too early to predict the end of the affair? Maybe not, but after all the dire warnings, the threats of global economic meltdown, and the unrest in Southern Europe, Greece is still in the eurozone, Andalucía hasn’t separated from Spain and Italy hasn’t needed a bail out. Let’s wish the eurocrisis goodnight – at least in hope, if not in expectation. fraud at one of its Indonesian operations, while Rolls Royce revealed it was the subject of an SFO led corruption probe in the country.