OECD Warns Of 'Double-Tax Chaos' For Firms

By Ed Conway, Economics Editor

The OECD has raised the prospect of a global tax war, with companies caught having to pay double the levels of previous years, unless countries agree to a new international deal on corporate tax avoidance.

In a landmark report, the Organisation for Economic Co-operation and Development has warned that the international agreements set up in the 1920s to prevent companies paying double the tax on their profits in different countries could be abandoned, leaving "chaos" in their wake.

The warning came as it presented a 15-point action plan aimed at tackling tax avoidance by multinational companies such as Google and Starbucks.

It said that many companies - particularly those involved in the digital and internet sectors - were able to reduce their tax bills by shifting profits around the world to areas where rates are lowest, taking advantage of 90-year old rules aimed at preventing them being charged tax twice in different countries.

The perverse upshot of these League of Nation "double taxation" rules, it pointed out, was "double non-taxation".

However, it warned that unless Governments agreed an international scheme to police this, countries were likely to throw away the existing rules, resulting in "the replacement of the current consensus-based framework by unilateral measures, which could lead to global tax chaos marked by the massive re-emergence of double taxation".

The report added: "In fact, if the Action Plan fails to develop effective solutions in a timely manner, some countries may be persuaded to take unilateral action for protecting their tax base, resulting in avoidable uncertainty and unrelieved double taxation."

The report was delivered as finance ministers from the G20 group of nations met in Moscow for their annual meeting.

The OECD's hope is that the action plan is adopted either at this conference or at the heads-of-state meeting in St Petersburg next month.

However, some countries, including Russia and the United States, have expressed concern about the consequences of rewriting international corporate tax agreements that have been in place for almost a century.

The OECD plan suggests an investigation into measuring the creation of value in internet firms (in order to identify where taxes ought to be paid), as well as proposals to tackle complex structures which help companies avoid tax.

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Mothercare Mulls Sale Of Early Learning Centre

By Mark Kleinman, City Editor

Mothercare is considering the sale of its loss-making Early Learning Centre (ELC) chain as it bids to meet a target of restoring its UK operations to profitability by 2015.

Sky News has learnt that Mothercare has been holding talks with potential advisers about a sale in recent weeks, although the company has not yet made a formal decision to offload the specialist retailer of educational toys for young children.

Analysts believe that disposing of the business, which has perennially underperformed during the six years that it has been owned by Mothercare, may be difficult because of its poor track record.

It may, however, appeal to firms which are accustomed to investing in struggling high street chains, such as Hilco, which snapped up HMV for a token price earlier this year.

In a trading update published on Thursday, Mothercare said that it had continued to close stores in the UK amid difficult trading conditions.

"The UK market has been very competitive during the last quarter and we have continued to focus on delivering cash margin," it said.

"In line with our plan, we closed a further 13 loss-making stores (four Mothercare and nine Early Learning Centre) during the first quarter of the year.

"We now have 242 stores (192 Mothercare and 50 Early Learning Centre) in the UK. Space is down 7.7% year-on-year and is reflected in the 7.9% decline in total UK sales for the first quarter."

The talks with banks about a sale of ELC could result in an appointment imminently, with Lazard understood to be in the frame for the role.

Mothercare paid £85m for ELC but is unlikely to recoup anything like that sum if it manages to sell the chain.

The group wants to cash in on the imminent birth of the royal baby with the launch of a range of themed products, Simon Calver, the former Lovefilm executive who now runs Mothercare, said on Thursday.

Mothercare, which has a market value of around £400m, now has a much larger business outside the UK than in its home market. It's share price has rebounded strongly since Mr Calver's arrival.

A Mothercare spokeswoman declined to comment.

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Detroit's Downfall: City Files For Bankruptcy

Detroit, once the hub for America's car industry, has become the biggest city in US history to file for bankruptcy with debts of an estimated $18.5bn.

The federal bankruptcy court filing, which has been feared for months, puts the city on an uncertain course and sets the stage for a costly court battle with creditors.

The bankruptcy, if approved by a federal judge, would force Detroit's thousands of creditors into negotiations with the city's Emergency Manager Kevyn Orr to resolve the debt that has crippled Michigan's largest city.

The future of pensions and health benefits for thousands of city workers hangs in the balance.

Anticipating the filing, investors drove prices of Detroit bonds lower, sending their yields to record highs on Thursday.

In a letter accompanying the filing, Michigan Governor Rick Snyder said he had approved a request from Mr Orr to file for Chapter 9 bankruptcy protection.

In the letter, he wrote: "Detroit simply cannot raise enough revenue to meet its current obligations, and that is a situation that is only projected to get worse absent a bankruptcy filing."

Speaking after the announcement, Mr Snyder, a Republican, said, "Let's stop the decline. Let's get to stability. Let's get things working in the right direction."

Mr Snyder named Mr Orr in March to tackle the city's spiralling long-term debt.

A White House spokeswoman said US President Barack Obama and his senior team were monitoring the situation in Detroit closely.

"While leaders on the ground in Michigan and the city's creditors understand that they must find a solution to Detroit's serious financial challenge, we remain committed to continuing our strong partnership with Detroit," White House spokeswoman Amy Brundage said.

Detroit was once a hugely prosperous car manufacturing centre that exemplified American progress. Its automotive giants switched production to planes, tanks and munitions during World War Two, earning the city the nickname of the "Arsenal of Democracy."

Now the city's name has become synonymous with decline, decay and crime.

Detroit has seen its population fall to 700,000 from a peak of 1.8 million people in 1950, and the city's government has been beset by corruption cases over the years.

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Petrol Prices At The Pumps Set To Soar

Petrol pump prices could soar 5p a litre - burning a hole in the pockets of holiday motorists, the AA has warned.

A surge in the wholesale cost of petrol across Europe has already led to a rise in UK petrol and diesel prices, with more misery possibly to come, the AA said.

On average, UK petrol prices have risen from 134.61p a litre in mid-June to 135.78p now, while diesel has gone up from 139.16p a month ago to 140.24p now.

The AA said: "A 100 dollars-a-tonne increase in the cost of petrol across north west Europe, combined with a weaker pound, heralds a potential 5p increase in pump petrol costs."

It added that should petrol go up 5p a litre then a family from Hounslow in west London, for example, heading off on holiday in a typical family car to Cornwall will pay £2.90 more for the return trip than it would have done in June.

The AA said a survey of last year's visitors to Cornwall found that 26% of visitors came from London and southeast England so that for every 100,000 trips to Cornwall from London and the South East, with 86% of visitors coming by car, the petrol price spike could siphon nearly £250,000 away from the tourism industry into the pockets of the fuel industry.

At present, London and the North West have the cheapest petrol, at 135.5p a litre on average.

Northern Ireland, although enjoying the smallest price rise over the past month, is still the most expensive region for petrol at 136.6p.

Scotland and East Anglia share the position of most expensive areas in the UK for diesel, both averaging 140.8p a litre, while the North West has the cheapest, at 139.7p.

AA president Edmund King said: "After the price of petrol stabilised at around 134.6p a litre through much of this June, and weeks were filled with beautiful weather and sporting excellence, it was perhaps inevitable that oil and fuel market speculators would cast a black cloud over what was promising to be a glorious summer."

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Jobless Figure Falls At Fastest Rate In Years

The number of people unemployed fell by 57,000 in the three months to the end of May, official figures have revealed.

The total jobless count sat at 2.51 million in the quarter, according to the Office for National Statistics (ONS).

Meanwhile, the number of people claiming Jobseeker's Allowance last month fell by 21,200 to 1.48 million.

It was the fastest rate of fall in three years. Total unemployment was at the lowest level since last autumn.

The ONS added that average earnings increased by 1.7% in the year to May, 0.2% up on the previous month.

However, long-term unemployment has increased to a 17-year high, despite the fall in the number of people claiming Jobseeker's Allowance.

Some 915,000 people have been out of work for more than a year, an increase of 32,000.

Vacancies were up by 24,000 to 529,000, the highest since the autumn of 2008.

Just over 460,000 people have been jobless for more than two years, the highest figure since 1997.

The number of people classed as economically inactive also increased in the latest quarter, up by 87,000 to 9.04 million.

The figure included a 44,000 increase in economically inactive students, a 26,000 rise among the long-term sick and 8,000 more people who retired early.

The ONS also reported that 29.7 million people were in employment in the three months to May, up 16,000 on the previous quarter, and an increase of 336,000 on a year ago.

Unemployment is 72,000 lower than a year ago, with a jobless rate of 7.8%.

Youth unemployment fell by 20,000 to 959,000, giving a jobless rate for 16 to 24-year-olds of 20.9%.

Average earnings increased by 1.7% in the year to May, up by 0.2% on the previous month, giving an average weekly wage of £476.

Full-time employment increased by 28,000 to 21.6 million, but the number of part-time workers fell by 12,000 to 8.04 million.

The number of self-employed people fell by 28,000 to 4.1 million.

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GSK Boss Witty To Quit His Whitehall Role

By Mark Kleinman, City Editor

Sir Andrew Witty, the chief executive of GlaxoSmithKline (GSK), is to step down later this year from a key Whitehall post that has seen him become one of the coalition's most influential business advisors.

Sky News has learnt that Sir Andrew, who is embroiled in the biggest crisis of his leadership at the drugs giant amid allegations of a massive bribery scandal in China, will quit his role in December as the lead independent director on the board of the Department for Business, Innovation and Skills (BIS).

GSK said on Wednesday that his exit was unrelated to the China kickbacks probe or any other external issue, and that it was solely because his term would be expiring.

GSK boss Sir Andrew Witty after receiving a knighthood from Prince Charles

"Andrew has very much enjoyed his time as the lead non-executive at BIS. He is looking forward to publishing his review into universities and growth later this year. His three-year term at BIS is due to finish at the end of the year so, as planned, he will be stepping down," a GSK spokesman said.

Sir Andrew was among dozens of business leaders appointed to the boards of Whitehall departments in December 2010 as part of an initiative aimed at bringing broader commercial expertise into Government.

At the time, the duration of the appointments was not made clear by the Cabinet Office, which co-ordinated the initiative, and it is thought that many of the directors will remain in their non-executive roles in order to provide continuity.

The departure of Sir Andrew at the end of his term avoids a potential embarrassment given his proximity to the department of government responsible for business policy.

He is understood not to have been put under pressure to step down by Vince Cable, the Business Secretary.

Sir Andrew has become one of David Cameron's closest allies in the business community, outlining plans to return part of GSK's research and development budget to the UK in the wake of new measures relating to the taxation of intellectual property.

He also serves as a member of the Prime Minister's Business Advisory Group.

The former BP boss Lord Browne

The GSK chief is fighting fires on several fronts, with allegations made by Chinese authorities in recent days that the company used travel agencies as a front to bribe doctors and other health officials to buy more of its drugs at higher prices.

GSK has said it will co-operate with the inquiry and has "zero tolerance" of such conduct.

Media reports suggested that Steve Nechelput, the finance director of GSK's Chinese operations, had been banned from leaving the country.

GSK also faces a headache closer to home after being accused by the Office of Fair Trading in April of abusing its "dominant position" in the market for supplies of one of the UK's leading antidepressant medicines.

The drive to bring more businesspeople into Whitehall has had mixed results, although Sky News understands that Lord Browne, the former boss of BP, has been persuaded to stay on as the overall lead non-executive despite indicating that he was likely to step down.

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Swinton Insurance Fined £7m Over Mis-Selling

High street insurance group Swinton has been fined more than £7m over mis-selling products to consumers.

The Financial Conduct Authority (FCA) said Swinton's aggressive sales strategy meant that it failed to treat customers fairly in its telephone sales of monthly add-on insurance policies.

It said that between April 2010 and April 2012, Swinton sold personal accident, home emergency and motor breakdown policies, which during the relevant period generated an income for accounting purposes of £92.9m.

The FCA found that Swinton did not provide enough information to customers about the key terms of the policies and also failed to properly monitor its sales calls.

Swinton set aside £11.2 million to repay those customers who were mis-sold, of which £1.9 million has already been paid out.

According to the FCA, the insurance firm has contacted over 650,000 customers it thinks may have been affected.

Swinton has over 500 branches across the UK, employs more than 3,000 people and has been operating for six decades.

Incorporated in 1963, it processes more than 2.5 million policies each year.

The City watchdog said any policyholders who believe they bought monthly cover as a result of mis-selling should contact Swinton directly.

Tracey McDermott, the FCA's director of enforcement and financial crime, said: "Swinton failed its customers. When selling monthly add-on policies, Swinton did not place the consumer at the heart of its business. Instead it prioritised profit.

"At the FCA we have been clear in our expectation that firms must behave in the interests of consumers.

"Today's outcome shows our approach in action and will act as a deterrent for other firms tempted to put profit figures above the fair treatment of customers."

The FCA found Swinton did not explain the cover clearly enough or tell customers the monthly policies were optional and separate from other core insurance products.

It also failed to give enough information about the terms of the policy, including the conditions and limitations, and cancellation process.

The nature of the failings, particularly poor sales scripts, meant that every sale could have been a mis-sale, the FCA said.

In response to the ruling Swinton chief executive Christophe Bardet apologised for the company's procedural policies.

Mr Bardet said: "We apologise for these shortcomings. They were not compatible with the proud history of Swinton, which since 1957 has been providing peace of mind to people through insurance cover.

"Our focus is now to deliver on our promise of insurance with a personal touch. Swinton is embarking on a £60m investment in growth which puts the customer at the heart of everything we do."

On its website Swinton said its customer service team aims to resolve general complaints within 20 days.

The £7.38m fine reflects the number and seriousness of the issues raised during the investigation, according to the FCA.

The sum was reduced from £10.54m, with a 30% discount applied as Swinton settled at an early stage in the FCA's investigation.

In 2009, Swinton was ordered to offer refunds to 350,000 customers over mis-selling of payment protection insurance.

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Co-Op Bank Toughs Out Customer Withdrawals

By Mark Kleinman, City Editor

Depositors with the Co-Operative's struggling banking arm have withdrawn hundreds of millions of pounds since the scale of its problems began to emerge in the spring, Sky News understands.

Corporate and retail customers of the Co-Op Bank have contributed to net withdrawals totalling more than £500m - out of an overall deposit base of almost £37bn at the end of 2012 - in recent months.

In a statement issued on Tuesday, a spokesman for the Co-Op's banking arm said: "Customer deposit retention levels remain within expected parameters and we continue to recruit new retail depositors, reflecting the underlying loyalty to our brand.

"The bank remains focused on delivering its capital plan."

News of the withdrawals - which amount to roughly 2% of the lender's deposit base, a smaller number than had been anticipated by banking experts - come as the Co-Op Group prepares a restructuring that will result in bondholders being forced to swallow significant losses on their investments.

Sources close to the Co-Op Bank and the Prudential Regulation Authority (PRA), the arm of the Bank of England which monitors risks in the financial system, said they were "comfortable" with the deposits profile of the business.

Co-Op depositors' savings are protected - as they are at all UK-regulated banks - up to an £85,000 limit by a Government guarantee.

A substantial proportion of the withdrawals at the Co-Op Bank are understood to have been made by so-called matrix funds, which are obliged under their terms of operation to pull their deposits from lenders which have their credit ratings downgraded to junk status.

Some local authorities are also understood to be among the depositors which have diverted their money elsewhere.

The Co-Op Bank's rating was downgraded five notches in May following its withdrawal from a deal to acquire 632 branches from Lloyds Banking Group.

A heavyweight new management team, led by former HSBC executive Niall Booker, was parachuted into the Co-Op's banking arm, and was tasked with devising a restructuring plan aimed at filling a £1.5bn capital hole identified by the PRA.

That plan involves the Co-Op Group injecting £1bn of new capital, while bondholders will swap their existing debt for new debt and a chunk of shares in a new company that will be listed on the London Stock Exchange.

Bondholders angered by the proposed terms have vowed to fight for a better deal, but would be likely to see their investments wiped out if they voted to block it in the autumn. Under that scenario, the PRA would probably take control of the Co-Op Bank under a new resolution programme.

The Times reported on Tuesday that hundreds of jobs were likely to be axed at the Co-Op Bank as part of the restructuring, with Mr Booker expected to focus on retail lending under a revised strategy.

The plans will be outlined in the prospectus for the bank's stock market listing later this year.

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GSK Admits China Corruption Claims 'Shameful'

By Mark Stone, Asia Correspondent

Chinese police have released further details of what they claim is a massive programme of bribery by GlaxoSmithKline (GSK) in China.

According to a police official in Beijing, the British drugs manufacturer has transferred as much as £323m to over 700 travel consultants since 2007.

Separately, TV interviews have emerged with some of the GSK staff alleged to have been involved in the bribery.

The Chinese authorities allege that GSK officials used the travel agents as vehicles through which to bribe doctors, hospital bosses and government officials. According to Chinese police, the travel agents were paid to offer services to officials in return for the purchase of GSK branded products.

Gao Feng, the head of the Economic Crime Investigation Unit of China's ministry of public security, claimed that some travel agents offered "sexual bribery" to GSK employees to secure favours. He did not elaborate on those allegations.

In a statement to Sky News, GSK said: "We are deeply concerned and disappointed by these serious allegations of fraudulent behaviour and ethical misconduct by certain individuals at the company and third-party agencies. Such behaviour would be a clear breach of GSK's systems, governance procedures, values and standards. GSK has zero tolerance for any behaviour of this nature. 

"In the meantime, we are taking a number of immediate actions. We are reviewing all third party agency relationships. We have put an immediate stop on the use of travel agencies that have been identified so far in this investigation and we are conducting a thorough review of all historic transactions related to travel agency use.

"GSK fully respects the laws and regulations in China and expects all staff to abide by them. GSK shares the desire of the Chinese authorities to root out corruption. These allegations are shameful and we regret this has occurred. We will cooperate fully with the Chinese authorities in the investigation of these new allegations.

The GSK global headquarters in Brentford, west London

"We will take all necessary action required by the outcome of this investigation," the statement concluded.

According to police, four senior Chinese executives from the firm are being held and questioned.

China's Xinhua State News Agency named them as: Vice President and Operations Manager Liang Hong, Vice President and Human Resources Director Zhang Guowei, Legal Affairs Director Zhao Hongyan, and Business Development Manager Huang Hong.

In TV interviews aired by China's state-run CCTV (China Central Television), the suspects are heard apparently confessing to the bribery.

Speaking in Chinese, one of the employees, Liang Hong said: "We began to cooperate with Shanghai Linjiang International Travel Service Co Ltd since 2010.

"Within the following three years, about 10 meetings had been held, with participants ranging from over 100 in small meetings to 2,000 in large-scale meetings."

A reporter then asks him how much money would be involved in one of the large scale meetings.

"The expenses for the largest-scale one exceeded ten million yuan (£1.07m)." Liang says.

In another interview, an employee from one of the travel firms reportedly used by GSK staff, explains the alleged process.

"He (Liang Hong) said he need to visit a professional or a leader and bring some gifts with him," Weng Jianyong, Boss of Shanghai Linjiang International Travel Agency said.

"But according to the company (GSK) discipline, the gift can only value 100 or 200 yuan, (£10-£20) so it doesn't work at all. Then he said to me to give him some cash.

"The money sometimes reaches 500,000 yuan (£50,000) for an activity," Weng Jianyong alleged.

Last week, Sky sources confirmed that a British national was detained and questioned by Chinese authorities in Shanghai last week. He or she has since been released.

Sources revealed that dozens of Chinese police entered the GSK Shanghai offices on June 27, went into the offices of senior British staff and seized paperwork.

After the raid GSK circulated an internal memo, seen by Sky News, which said: "At this stage, it is unclear about the precise nature/purpose of their visit and investigation.

"We will of course cooperate with their inquiries, but are unable to comment further at this stage."

GSK operates a zero-tolerance policy toward bribery and issues staff with a 16-page booklet outlining its guidelines.

The Brentford-based company said in June that it had already investigated an accusation that its sales people in China bribed doctors and found no evidence of wrongdoing.

The drug-giant has a growing business in China. It currently employs more than 5,000 people at eight sites across the country and has investments totalling £300m.

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New London Airport Shortlist Revealed

By Enda Brady, Sky News Correspondent

Boris Johnson has unveiled a shortlist of three locations on which a new London airport will be built.

He put forward his outer Thames Estuary, artificial island plan - dubbed "Boris Island" - for a new four-runway hub airport in a report published on Monday.

He also said that a new, four-runway airport on the Isle of Grain on the Hoo Peninsula in Kent - a plan already outlined by architect Lord Foster - should be considered and was his first choice.

And Mr Johnson's third proposal for a four-runway hub would be at Stansted in Essex, where the existing airport would be expanded.

Mr Johnson's plans, which rule out expansion at Heathrow airport in west London, will be submitted later this week to the Government-appointed Airport Commission headed by Sir Howard Davies.

A list of 20 options were whittled down to the final three.

Mr Johnson said that a new hub airport would be able to support more than 375,000 new jobs by 2050 and add £742bn to the value of goods and services produced in the UK.

He said a new hub airport could be delivered by 2029, with a hybrid bill being passed by parliament to secure approval for the airport, the surface access and the acquisition of Heathrow.

He also wants to shut Heathrow at a cost of £15bn and create a new London borough for 250,000 residents, with housing and a university.

"This is a global race and we can still win it," Mr Johnson told reporters as he unveiled the plans at City Hall.

"Ambitious cities all over the world are stealing a march on us and putting themselves in a position to eat London's breakfast, lunch and dinner by constructing major airports that plug them directly into the global supply chains that we need to be part of.

"Those cities have moved heaven and earth to locate their airports away from major centres of population in areas where they have been able to build airports with four runways or more."

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Warm Weather Gives High Street A Boost

Glorious Sun: Heatwave Here To Stay

Updated: 11:13pm UK, Sunday 14 July 2013

Parts of the UK remain on heatwave alert, as the hot weather shows no sign of letting up.

Following the hottest day of the year on Saturday, Sunday was another scorcher with temperatures into the high 20s in many regions.

The hot weather is forecast to continue until at least next weekend, with the rest of the week hovering between the mid to high 20s.

Wednesday could be particularly hot, according to forecasters, when temperatures could reach 32C (89.6F).

On Sunday, the Met Office issued a level three heatwave alert for southwest England. The alert "requires social and healthcare services to target specific actions at high-risk groups".

Saturday saw the warmest day of the year so far, with the mercury hitting 31.9C (89.4F) in Southampton.

It topped the previous high of 29.9C recorded at Edenfel in County Tyrone last Monday.

The soaring temperatures have seen shoppers spend thousands of pounds on the high street and online, buying barbecues, food, sunscreen and garden furniture.

Paddling pool sales are up 816%, said online retailer Amazon, while Tesco said it was predicting a sausage surge of nine million bangers this weekend.

With many people taking to the water to cool off, emergency services have warned against swimming in lakes and quarries after three people died in the West Midlands in the last week.

"Please think twice about going into open water," said Commander George Marshall, of Hereford and Worcester Fire and Rescue Service.

"If you must take a dip please do it in the safety of a public swimming pool where there are lifeguards on duty."

Monday will see lengthy spells of sunshine for most parts, although northwest Scotland will be overcast and there could be patchy light rain.

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Investors Threaten Vote Against Oil Chairman

By Mark Kleinman, City Editor

Disgruntled shareholders in a London-listed oil company are threatening to kick out its new chairman less than two weeks after his appointment.

Sky News has learnt that a group of investors are considering voting against Simon Murray's election as chairman of Gulf Keystone Petroleum at its annual meeting later this month.

The unhappy institutions are led by M&G Investments, the fund management arm of Prudential, which met Mr Murray to discuss its concerns about corporate governance at Gulf Keystone on Friday.

Although Mr Murray will not receive share options as part of his pay package, Gulf Keystone is understood to have refused to disclose the size of the new chairman's annual salary during the meeting, angering the investors.

M&G and others are said to be reluctant to vote in favour of Mr Murray, who is slated to become the new chairman of Gulf Keystone's remuneration committee, until they have seen the full details of his pay.

A large-scale vote against Mr Murray, the former chairman of commodities trader Glencore, would be unusual given that he was only appointed to the role at Gulf Keystone on July 4.

The row is developing into one of the bitterest governance battles seen in the City for years, with M&G backed by heavyweight investors such as Capital Research Global Investors.

M&G has proposed four new directors to join the board, all of whom were rejected by Gulf Keystone this weekend.

"M&G is not seeking representation on the board of GKP, nor has any wish to interfere with its operations. But we do want the election of truly independent non-executive directors who will represent the interests of all shareholders.

"We are not asking for any special relationship with the four candidates: our aim is purely to strengthen corporate governance at GKP," the fund manager said in a statement.

The rebel shareholders are believed to be supported by a group of Malaysian investors and are confident that they will have sufficient backing to secure the election of their nominees.

Insiders said the shareholders were furious at a suggestion by Gulf Keystone that one of their nominees, Jeremy Asher, had been snubbed by the Kurdistan Regional Government.

Investors have long been unhappy with governance and pay at Gulf Keystone, which specialises in exploring for oil in Kurdistan but which has seen its share price fall sharply during the last year.

Todd Kozel, who agreed to relinquish the chairmanship but remains as chief executive, has been a divisive figure at the helm of the company.

People familiar with the situation said that his ex-wife, Ashley, was likely to use her roughly 17m shares to vote against the company at the AGM.

Gulf Keystone is one of the most controversially-governed companies on London's junior AIM market and scrutiny by shareholders has been intensified by the apparent intention to move its listing to the main market.

Mr Kozel's £8.8m award for 2012 actually represented a sharp decline on his pay in the previous year, which topped $22.2m (£14.4m).

Mr Kozel has sought to defend his remuneration by arguing that Gulf Keystone has delivered more than £1bn of value to shareholders and a return of more than 4000% since the company's listing.

An ally of his said recently that the chairman's pay reflected an "overall balanced mix of remuneration and reflects exceptional performance for the year and confidence in future cash flows".

However, Gulf Keystone's shares have fallen sharply from highs triggered by takeover speculation, while it has also been embroiled in legal action brought by a former adviser which has claimed it is owed roughly £1bn in compensation.

Gulf Keystone declined to comment.

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Twitter Takes On Tax Expert To Avoid Woes

By Pete Norman, Sky News Online

Twitter is bolstering its international operations ahead of an expected flotation by employing its first full-time tax manager to ensure complex company structures comply with laws across Europe.

Based in its international headquarters in Dublin, the job will include oversight of the preparation and filing of all business tax returns.

The social media giant described the new role as being "in a fast-moving, challenging, yet fun environment".

Sky News understands Twitter is hiring a number of new key finance personnel as part of its extensive international expansion plan.

The tax manager will be responsible for taxation affairs across Europe, the Middle East and Africa (EMEA) and is expected to "implement and monitor transfer pricing strategy".

Transfer pricing is a system whereby goods or services are supplied and charged between arms of a multinational firm, sometimes across national borders and jurisdictions.

Twitter UK Ltd answers to Twitter International Company in Ireland, which is wholly-owned by Twitter Inc - one of at least three companies California-based Twitter has formed in the US state of Delaware.

However, leading American multinationals have been under increasing UK parliamentary scrutiny in recent months over transfer pricing.

The tax expert role advertised by Twitter International

Last week the UK arm of Twitter filed its abbreviated accounts for the year ended December 31 with business regulator Companies House.

Twitter declined to confirm that UK sales were routed through Ireland.

But its accounts revealed that "turnover represents the value of services provided to other Twitter group companies".

A Twitter UK spokesperson told Sky News: "Since Twitter UK opened in 2011 we have been steadily building our team, focusing on promoting great uses of Twitter by all elements of UK society - the arts, sport, Government, and brand partners."

UK profit for 2012 was listed as £108,907, up from £16,499 in the previous year. Twitter UK was formed in June 2011.

The company's taxation and social security liability also increased from £36,800 in 2011 to £326,949 in 2012.

"There have been a number of significant changes and you can see the company's tangible assets in the 2012 accounts have substantially increased to £504,595 from £2,696 in 2011," Maung Aye, corporate solicitor and Mackrell Turner Garrett associate, told Sky News.

"Another factor to consider is whether the assets and equipment of the now dissolved TweetDeck Ltd were absorbed into Twitter UK Ltd so that the application can be continued for its users."

Last December Sky News revealed that Twitter UK and its sister firm TweetDeck Ltd were fined by Companies House for failing to file their 2011 accounts on time.

Twitter CEO Dick Costolo resigned his role as Twitter UK director

Two of Twitter's top American officials, chief executive Dick Costolo and head of trust Alex Macgillivray, were directors of the TweetDeck. The two executives, along with chief operating officer Ali Rowghani, were directors of Twitter UK.

Although Twitter UK finally filed its 2011 accounts TweetDeck did not and was forcibly dissolved by the business regulator on May 7 this year.

On May 9, Mr Costolo resigned his remaining British directorial role - with Twitter UK - and his position was taken by Irish ex-'Big Four' chartered accountant Laurence O'Brien, who is in charge of international operations in Dublin.

Forbes magazine has reported that Twitter may seek a public flotation in 2014, saying it could be worth more than $11bn (£6.8bn) to investors if it successfully monetises the service without disenfranchising users.

Meanwhile, the micro-blogging site has fought against spam attacks masquerading as legitimate tweets.

In January, hashtags for the World Economic Forum in Davos were bombarded with so-called spam bots and porn bots, while a recent swamping involved diet aid spams.

In both cases Mr Costolo responded to complaints personally by tweeting that the company was dealing with the problems.

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Warm Weather Gives High Street A Boost

By Emma Birchley, East of England Correspondent

The feelgood factor from some warmer weather has helped boost retail figures for June, by getting more people out spending.

Like-for-like sales rose by 1.4% last month compared to 2012, according to the British Retail Consortium with clothing and footwear seeing the biggest increases.

Helen Dickinson, director general of the BRC, said the better weather made a "huge difference".

"Within clothing and fashion sales, people have been waiting for the weather to get better before they were encouraged out into the shops.

"But it also required retailers to be pretty competitive on pricing in order to enable them to do that - so there was a lot of promotional activity mixed in to encourage us to do that spending."

Nicola Sexton owns a shoe boutique in the Suffolk market town of Bury St Edmunds and has noticed the effect the sunshine has had on customers.

"People feel better within themselves. They come in and they are far more inclined to spend and find something new.

"When it's raining outside and dull the last thing you want to be doing is taking your boots off and trying on shoes."

Retail sales have increased for five out of the first six months of the year.

And the number of retailers going into administration in the first half of 2013 is 30% lower than the same period last year.

But John Deane-Bowers, who owns Trotter and Deane menswear, believes there could still be tough times ahead.

"I don't think we should be under any illusions. Business is very tough and if we weren't working hard to stimulate business we might well be suffering along with plenty of others."

More good weather will undoubtedly help. And after the Jubilee and Olympics proved such a stimulant for business in 2012, the biggest factor this summer could well be the arrival of a royal baby.

Chris Wade, chief executive of Action for Market Towns said: "An event like that makes people feel better. Andy Murray winning the tournament makes people feel better and people coming into the town centre and spending, that gives shops a boost."

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