Deutsche Bank and Jeffrey Epstein, M&A, John Lewis, Boots, Burger King, Air Asia, Boohoo, Shoosmiths: your commercial news round-up

Earlier this week Rishi Sunak gave a ‘summer statement’, in which he announced several schemes aimed to support the UK’s economic recovery, including training and apprenticeship schemes, stamp duty ‘holiday’, a VAT cut on food, accommodation and attractions, and environmental measures. Whether you are preparing to start university in the autumn, applying for training contracts or embarking on a virtual vacation scheme or training contract, it is crucial that you stay up to date with such changes and consider how they will affect the business and legal world going forward.

• Deutsche Bank has received a $150 million penalty from New York state financial regulators for its “significant compliance failures” in the bank’s dealings with investor and convicted sex offender and alleged trafficker Jeffrey Epstein – who died in August 2019, and two other client banks, Danske Bank Estonia and FBME Bank. In a prepared statement, State Financial Services Superintendent Linda Lacewell said: “In each of the cases that are being resolved today, Deutsche Bank failed to adequately monitor the activity of customers that the bank itself deemed to be high risk.”

Lacewell added: “In the case of Jeffrey Epstein in particular, despite knowing Mr Epstein’s terrible criminal history, the bank inexcusably failed to detect or prevent millions of dollars of suspicious transactions”.

• Mergers and acquisitions have taken a nosedive this year, as deal values across the world fell $1.9 trillion compared to 2019’s figure, plummeting to $901.6 billion in the first half of 2020, according to Mergermarket’s half-year roundup. The number of global deals fell by around a third, while Europe experienced its lowest deal value since the 2008 financial crisis. Despite Freshfields reporting a 31% reduction in deal value, the magic circle firm tops the league table in Europe, as ranked by Mergermarket. Latham & Watkins and Allen & Overy are ranked next, with Herbert Smith Freehills moving from 34th to fifth place after its deal values more than doubled in the first half of 2020.

• High street retailers John Lewis and Boots have announced job cuts. Health and beauty retailer and pharmacy chain Boots has revealed that it will cut 4,000 jobs and close 48 of its optician stores, while department store John Lewis plans to permanently close eight of its stores, putting 1,300 jobs at risk.

• Meanwhile, fast-food chain restaurant Burger King has revealed that 10% of its restaurants could permanently close as a result of the economic damage caused by the pandemic, with 1,600 jobs at risk.

• Concerns about the future of Air Asia – Asia’s biggest budget airline – have been raised by auditor Ernst & Young. Shares in the budget airline fell by more than 17% on Wednesday, after they were halted earlier in the day, according to the BBC. In a statement to the Kuala Lumpur stock exchange on Tuesday, Ernst & Young revealed that at the end of 2019 AirAsia liabilities exceeded its current assets by £340 million, with the budget airline’s finances hit further by global lockdowns and the subsequent grounding of its planes.

• Shares in online retailer Boohoo plummeted 30% over two days following reports about its poor factory working conditions. Despite the fast-fashion retailer’s announcement that it was looking into the allegations that workers at a site in Leicester were receiving payment as little as £3.50 an hour, more than £1 billion has been wiped off its market value. Next, ASOS, Zalando and Very.co.uk have removed Boohoo clothing from their websites, while they await an outcome from the investigations.

• As profit per equity partner continues to increase at national law firm Shoosmiths, it has reported an 11% growth in its net profit to £42.2 million, according to the Law Gazette. Meanwhile, the firm’s PEP, which is at £464,000, has increased 5% on 2019’s figure and – growing 12% each year – revenue is £154.2 million. Chief Executive Simon Boss said: “As Shoosmiths enters its next chapter, we are mindful of the challenges firms now face, given the advent of the unexpected public health crisis. The technologies we have invested in enabled us to adapt by rapidly to this – for example, moving our workforce to work from home over just a few days in mid-March – and we remain committed to implementing our strategy carefully as we look to the future.”

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