Vote Leave's CBI stunt spoils fair criticism on nuance-free EU stance
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Version 0 of 1. How to spoil a half-decent point with a silly stunt. The Vote Leave students who heckled David Cameron’s speech to the CBI conference came across as wanting to squash debate on Europe. If, as suggested, similar protests are planned at the annual meetings of companies with pro-EU bosses, the tactic will become tiresome and probably self-defeating. Yet, on the narrow issue of the CBI’s utterances on Europe, there is a fair criticism to make. The problem is not that the CBI gets 0.6% of its funding from the European commission for use of its economic surveys – the percentage is so small it is not worth making a fuss about. Rather, the difficulty is twofold. First, CBI wonks, while championing the virtues of the UK staying in a “reformed” EU, always refuse to say which of its desired reforms, if undelivered, would be a deal-breaker, if any. The position looks a cop-out. The second factor is the breezy confidence with which CBI leaders talk about what business “thinks” about Europe. It is people, not organisations, who do the thinking and any single company is likely to contain a range of views. The CBI is probably right that most directors are favourably inclined towards the EU, but its tone is often too dogmatic. “Business must be crystal-clear that membership is in our national interest,” said recently retired president Sir Mike Rake in May. No room for nuance there. Paul Drechsler, Rake’s successor, did at least nod to some of the criticisms on Sunday by acknowledging that there is no uniform business view of EU membership. But then he spoiled the effect by arguing that “business leaders should let their employees, communities, customers and suppliers know what the referendum means for growth and jobs”. Let them know? This is not Downton Abbey, and employees are not waiting breathlessly to be told what to think by their bosses. Lonmin share offer an unlikely investment gem Cash calls don’t come much more desperate than this. Investors in Lonmin, the world’s third-biggest platinum miner, are being offered the chance to buy 46 shares for every one they own at a 94% discount to last week’s share price – 1p versus 17p. With terms like that, you might expect the underwriting banks (HSBC, JP Morgan and Standard Bank) to cut their fees for the job. Don’t be ridiculous. Lonmin is a pauper and is being taken to the cleaners. Of the $407m (£270m) being raised, the company will see just $369m – the gap of $38m is enormous, even if it also covers arrangement fees on a new $370m borrowing facility. Still, the option of not underwriting the issue was probably a non-starter given that Lonmin had warned it could run out of cash without a fresh injection of funds. This is the company’s third cash call in six years and the fear that shareholders would be reluctant to throw good money after bad was real. In practical terms, the arrival of $369m will ensure that chief executive Ben Magara gets one last chance to ensure Lonmin’s survival within South Africa’s oversupplied, dangerous and strike-prone platinum industry. There are two possible reasons for optimism. First, Magara seems to enjoy better relations with the main trade unions than recent Lonmin bosses: he has managed to complete half the planned 6,000 job losses among a 36,000 workforce without a strike. Second, Lonmin – belatedly – has done itself a favour by concentrating on lower cost mines and giving up on chasing higher volumes of production across its portfolio, which had been 2012’s strategy. Unfortunately, there are also reasons to worry that a smaller workforce and lower levels of capital expenditure may not be enough. The platinum price has fallen by a third in the past 15 months and the often predicted upturn seems constantly to slip away over the horizon. And, while industrial relations may have improved since the appalling Marikana massacre in 2012, nobody is pretending that sweet harmony has arrived, or is even possible. Last year, the main platinum producers in South Africa, including Lonmin, suffered a five-month strike. Shareholders will take up their rights because they don’t have much real choice – but they will do so more in the hope of salvation rather than expectation. |