Weekly updates from our London branch
Your source of financial, corporate and commercial law insights
Week of September 25, 2023
Greetings from the London office of Grimaldi Alliance!
We are excited to bring you the latest news and updates from the hearth of the UK’s vibrant legal and business landscape. Our team of legal experts is at the cutting edge of corporate, financial, and commercial law, pioneering innovative and strategic solutions to our clients’ most complex challenges. Below is a glimpse of our recent impact in London and across the UK.
Highlights from the London Office
Our London office is currently engaged in the ongoing process of assisting a valued Italian client within the agricultural industry as they work towards acquiring the UK branch of a prominent distributor. This strategic endeavour showcases our steadfast commitment to providing comprehensive support to our clients in their international ventures. Our team of legal experts has been working diligently to facilitate a smooth and successful acquisition process. The advice covered all corporate and transactional aspects as well as real estate assistance for the negotiation of a commercial lease for the acquisition of an industrial unit. As this acquisition unfolds, it not only aims to strengthen our client’s presence in the UK but also stands as testament to our proficiency in guiding clients through intricate cross-border transactions.
Navigating Legal Waters with our Experts
A Guide to Directors’ Duties in the UK
Navigating the intricacies of directors’ duties is essential for every director in the UK, as stipulated in the Companies Act 2006. This guide breaks down the seven key duties and sheds light on their practical implications:
1. Duty to Act Within Your Powers: Directors must operate within the bounds of their company’s constitution, encompassing the articles of association, resolutions, and agreements. Deviating from these powers can result in legal action.
2. Duty to Promote the Success of the Company: Directors must make decisions that benefit all shareholders while considering long-term consequences, employees, business relationships, the environment, community, and maintaining fairness among shareholders. The focus is on holistic success, not just profits.
3. Duty to Exercise Independent Judgement: Directors must act independently and not be influenced by third parties, although they can seek expert advice as long as they exercise independent judgment.
4. Duty to Exercise Reasonable Care, Skill, and Diligence: Directors are held to a standard of competence, taking into account their general knowledge and any specific expertise. Falling below this standard can lead to breaches of duty.
5. Duty to Avoid Conflicts of Interest: Directors should steer clear of situations where their interests conflict with those of the company. Seeking authorisation from independent directors can mitigate such conflicts.
6. Duty Not to Accept Benefits from Third Parties: Directors should refrain from accepting personal benefits from third parties connected to their role as a director, as it can be seen as a breach of duty.
7. Duty to Declare an Interest in Transactions: Directors must declare any interest, including indirect ones like family connections, in transactions involving the company. Consequences of breaching these duties vary, ranging from repaying profits, compensating the company for losses, returning misappropriated property, to facing injunctions against certain actions.In particular, directors are encouraged to maintain a thorough understanding of these duties and seek guidance when in doubt. Compliance not only ensures ethical governance but also safeguards against potential legal repercussions. We encourage you to reach out to our London team should you require further guidance on this topic.
Financial Insights UK
Inflation and Interest Rates: Current Developments Unveiled
In a recent Bank of England meeting, an unprecedented decision was made to maintain the policy interest rate at 5.25%, marking the first halt in rate hikes since November 2021. This comes as consumer price inflation for the year ending August was at 6.7%, slightly down from July’s 6.8%. While this dip in inflation hints at a potential shift, the decision not to raise interest rates suggests that the ongoing cycle of monetary tightening may have reached its peak. UK inflation, well above the 2% target, could keep interest rates above 5% in the medium term, impacting both savers and the broader economy with higher mortgage rates and limited investment opportunities due to costly borrowing. Forecasts from both the Bank and the National Institute of Economic and Social Research (NIESR) indicate a gradual easing of inflation, with the consumer price index (CPI) expected to remain above the 2% target beyond 2024. The intricate link between inflation and interest rates, along with the role of monetary policy in managing inflation, remains crucial in understanding these developments. Multiple factors, such as supply shocks, geopolitical events, Brexit, and a tight labour market, contribute to the UK’s high inflation, exacerbated by its dependence on imported goods and services. While a gradual decline in inflation is anticipated, its timeline remains uncertain, contingent on global and domestic factors, making ongoing economic resilience and inflation persistence key factors in future monetary policy decisions.
City of London’s Ambitious Post-Brexit Financial Vision
The City of London has unveiled a strategic proposal to reinvigorate the UK’s financial sector after Brexit. The plan aims to boost the economy by £225 billion ($281 billion) by 2030, with a focus on enhancing global competitiveness. To achieve this, a new council is proposed, chaired by the finance ministry and composed of industry experts and regulators. This initiative comes as London grapples with the relocation of key financial activities to the EU post-Brexit. The report emphasises the need for a systematic, forward-looking strategy akin to rival financial hubs like Singapore. The plan’s success hinges on the adoption of eight key “big moves,” including regulatory reforms to free up capital. Discussions with political parties ahead of an upcoming general election aim to gather broad support. If realised, these measures could catapult London’s financial sector to unprecedented success.
Takeover of the week UK
Regulator Approaches Approval for Microsoft’s Activision Blizzard Buyout
The UK’s competition regulator has expressed optimism about Microsoft’s revised takeover proposal of Activision Blizzard, signalling that it “opens the door to the deal being cleared.” This comes after the initial $69 billion transaction was blocked earlier due to concerns about potential competition restrictions in the emerging cloud gaming sector. In its revised offer, Microsoft has proposed divesting cloud rights for existing and future Activision PC and console games to French game publisher Ubisoft Entertainment. While the regulator acknowledges some residual concerns, Microsoft’s proposed remedies have been provisionally accepted to address these issues. The regulator’s consultation on the matter will end on October 6. Microsoft and Activision both welcomed the positive development and are working towards final approval, with a deadline set for October 18. The UK’s regulatory response is part of a broader investigation into the acquisition, which has also faced scrutiny from European and U.S. authorities.
Country
United Kingdom
