Today in the pressMonday 18 February 2013 10.29
BANK RAISES ISSUES OVER VHI RISH EQUALISATION SCHEME - The Central Bank has raised a number of significant issues that could prevent the successful authorisation of the VHI as an insurer. In particular, it has questioned the effectiveness of the risk equalisation scheme under which the VHI is compensated for its older and more expensive customer base, writes the Irish Times. The European Commission has given the Government until the end of this year to have the VHI authorised or face sanctions including fines and a State aid inquiry. Authorisation would put the VHI on an equal footing with other insurers Aviva, Laya and Glo in terms of capital and solvency requirements. The Government may have to inject up to €200 million into the VHI to bring it into line. At an initial meeting with the Central Bank last month, Department of Health officials and representatives of the VHI gave conflicting assessments of the effectiveness of the risk equalisation scheme. Under the scheme, other insurers levy their customers and pay the funds into a central pool from which the VHI receives a compensating payment. The VHI claimed the scheme was 55% effective and that a revised scheme due to come into effect at the end of next month was marginally worse. The department claimed the scheme was 70-75% effective and would be improved with the goal of being up to 90% effective.
RONAN REVEALED AS INVESTOR WHO PART-OWNS BEWLEYS SITE - Developer Johnny Ronan, not NAMA or its liquidators, is one of the investors still behind the company that owns the landmark Bewleys building on Dublin's Grafton Street, the Irish Independent has learned. The iconic cafe is currently at the centre of a legal dispute over a €1.5m-a-year rent bill. Bewleys, part of multi-nation food group Aramark, is disputing the terms of an "upwards" only rent agreement that it signed with its landlord Ickendel Ltd. Under the terms of the deal, rent for the cafe doubled to €1.5m from €750,000 a year following a rent review in 2007 - at the height of the boom. The case has been heard at the High Court and a ruling is pending. Papers filed with the Companies Office in Dublin show that Ickendel Ltd is co-owned by high-profile developer Mr Ronan and businessman John Conlon. The company's loans are in NAMA but the state agency does not control the business, the Independent understands. Mr Ronan's involvement will surprise many observers after much of his once-vast property empire was seized by receivers and liquidators appointed by lenders, including NAMA, over hundreds of millions in unpaid property loans.
CYBERCRIME ATTACKS RISE 60% LAST YEAR - Despite a significant decline last December, last year as a whole saw a near 60% increase in cybercrime attacks on businesses, with global losses estimated at $1.5 billion (€1.12 billion). Most of these attacks were via phishing scams - criminals and hackers acquiring sensitive online information by masquerading as trustworthy entities. Companies in the US, Britain, Germany, India, and Brazil accounted for over 50% of attacks. But it is truly a global problem and Ireland is not immune. A survey conducted last year by Deloitte, in conjunction with global information management giant EMC, found that one-third of Irish companies had, in the preceding year, experienced cybercrime breaches. The average cost per attack amounted to around €40,000. These costs are generally rising all the time. This week sees leading international technology security firm RSA (part of the EMC group) host its annual conference in San Francisco. Speakers at the conference include internet ‘evangelist’ and Google vice-president Vint Cerf, Wikipedia founder Jimmy Wales, renowned games designer and author Jane McGonigal, former US secretary of state Condoleeza Rice, and Oakland A’s general manager - and subject of the film Moneyball - Billy Beane.
UK'S ROYAL MINT TO RESTART INDIAN PRODUCTION - Britain’s Royal Mint plans to manufacture gold coins in India to tap into the world’s largest gold market, and provide welcome news of UK investment to coincide with the start of Prime Minister David Cameron’s three-day visit to the country. The Financial Times says that the state-owned Royal Mint, which is Britain’s oldest manufacturer, said it would begin making its gold “sovereign” commemorative coins in India for the first time since 1918. It estimated the move could earn $125m a year by 2016. The news that a widely recognised British brand plans to invest in India came as Mr Cameron arrived in Mumbai on Monday to promote improved business links, alongside a delegation of more than 100 representatives from business, higher education and the creative industries. “It is great to see gold Sovereign coins being introduced back into India for the first time in almost 100 years,” Mr Cameron said in a statement. The Royal Mint hopes its coins, which will be made under license by MMTC-PAMP, an Indian gold producer and trader, will prove popular at the nation’s lavish weddings and innumerable religious festivals, where gold is an auspicious gift. The timing of the investment move was less auspicious, however, with Indian gold prices falling to their lowest level in about six months over the weekend, while previously buoyant gold demand in Asia’s third-largest economy dipped 12% last year, according to the World Gold Council.