The City Diary

Just don't spend your specially reserved £9 all at once
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The Independent Online

Signs that the credit crunch is really crunching comes from the Halifax. One of our cash-strapped readers was delighted to receive a letter from the bank with the offer of a pre-reserved loan.

It would, promised the bank, help make mincemeat of credit cards, store cards and overdrafts. As the bank that is always giving extra, the Halifax offered to "make your bills easier to swallow" with a reserved loan of ... £9.

Just in case our reader found it too difficult to swallow that such a large amount had been reserved just for them, the letter from the Halifax happily repeated the fact that £9 had been set aside.

Of course, as you would expect from any responsible lender, the Halifax also made it clear that it was possible to "apply for less than we have reserved for you". That's a relief then.

Men in suits just don't get the music thing

EMI insiders tell us that the hordes of Guy Hands' Terra Firma money men brought in to rejuvenate the ailing music brand are causing much hilarity among members of staff.

Our mole tells us that one of the suits had severe trouble grasping the concept of paying artists advances when trying to work out how the business runs.

"So how do these advances work then," he is supposed to have asked. "Can we claim them back off the artists?"

Speaking at the recent Super Return private equity conference in Frankfurt, Hands ceded it was going to be "emotionally and physically" tougher to turn the label around than he expected. Judging by the ignorance of some of his foot soldiers, it looks like Hands is going to have his work cut out.

Iraq to UK: a Texan tale

Having rebuilt iraq, it seems Cliff Mumm (right), a senior vice-president at US giant Bechtel, is set on doing the same for the UK. The Texan, who led Bechtel's $2.3bn (£1.1bn) contract to repair Iraq's infrastructure, is back in the UK having received a CBE for rescuing the £4.5bn Jubilee Line extension on London's Underground. Mumm is leading Bechtel's bid, due next month, for the £20bn contract to decommission Sellafield and he is advising on the construction of the £16bn Crossrail scheme, which is expected to get Royal Assent in the summer.

Corporate governance the M&S way

The news that Sir Stuart Rose is to become "executive chairman", combining the functions of chairman and chief executive, is a breach of the Greenbury Code which recommends maintaining both roles separately as a guarantor of good corporate governance. Sir Richard Greenbury was, of course, once the chief of M&S. Cue husky ad voiceover: "This isn't just corporate governance – it's Marks & Spencer corporate governance."

Kazakh mining company in the dark over merger

Executives at Kazakhmys, the London-listed Kazakh mining company, nearly choked on their lunches on Wednesday. They were given "just a few minutes notice", says a source, that FTSE 100 peer and fellow Kazakh miner Eurasian Natural Resources Corporation was to announce that there had been "informal dialogue" between the companies over a tie-up. That was news to Kazakhmys executives. However, the Kazakh government wants a national mining champion, and Kazakhmys' two leading shareholders, Vladmir Kim and Oleg Novachuk, do see the sense in a merger. They'd just like to know about it first.

RBS bunkered by cabbie

Some banks may be belt tightening, but not all. While travelling to Murrayfield to watch England rugby's dismal capitulation against Scotland, a cabbie reiterated the well-worn tale that RBS is keen on buying his local golf course. "My Dad has been offered £20,000 – he's very temp-ted!" said the cabbie. An irked RBS spokeswoman tells us: "Taxi drivers always have a wealth of stories, some more true than others."

Marketing stripped bare

As any chief executive worth his salt will tell you: "It's all about knowing your market." So what exactly does the new marketing campaign by the spread-betting firm Spreadex tell us? A City-boy type who frequents a rather dodgy stripping establishment on the edge of the Square Mile tells us that the firm's ads were plastered all over the walls of the venue's toilets, urging punters to part with their cash.

Can a billionaire bear this?

Back in September last year, Joe Lewis (right), the 70- year-old privacy-loving British billionaire who lives in the Bahamas, spent around $860m (£430m) snapping up a 7 per cent stake in Bear Stearns at around $100 a share. On Friday the shares collapsed to around $33 a share. Lewis now sits on paper losses of more than $570m.

Contrarian investing is all well and good when it comes off, but when it goes wrong the impact can be catastrophic. According to Lewis's listing in 'Forbes' magazine's rich league last year, he is worth $2.5bn, so although the losses won't see him on the streets, they are still material.

A keen sports fan, Lewis owns a controlling stake in Tottenham Hotspur and counts golfer Tiger Woods among his friends. He once bid $1.4m to play a round of golf with Woods, who in an interview last year said: "Any time I have any kind of business venture that I might be leery of, I can run it by him." Tiger might be wise to find himself a new financial adviser.

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