CENTRAL BANK WARNS ON ABILITY TO MONITOR INSURANCE SECTOR - Central Bank deputy governor Cyril Roux told the Department of Finance in March it did not have sufficient powers or staff to effectively regulate the insurance sector and gently rebuked it for requesting that he provide a report on issues relating to the sector.
This emerges from correspondence between the Central Bank and the department, released yesterday to the Irish Times. In a letter to Mr Roux dated March 19th, Aidan Carrigan, assistant secretary in the department's financial services division, raised concerns at press reports suggesting price competition in the insurance market "may not be viable", and that reserve levels and actuarial knowledge in the sector might not be adequate. "I am therefore requesting that you provide a report setting out any issues of concern in the insurance industry, including in relation to RSA Insurance, Liberty and FBD Holdings," he said. Mr Corrigan asked Mr Roux to provide a statement outlining how the Central Bank was dealing with these issues, and an "assurance" it would take the "necessary action to underpin the financial stability of the system".
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PHARMA GIANT POZEN TO RELOCATE TO IRELAND - US pharma company Pozen has announced that it is moving its headquarters to Ireland after buying a Canadian rival, Aralez, in a deal worth $146m. Shares in the speciality drugmaker, which so far has struggled to get its cardiovascular drug approved, jumped by as much as 26% after the announcement. The deal will shift its domicile to Ireland and cut its tax bill, writes the Irish Independent The firm does not sell any products on its own, getting all of its revenue from product royalties and license payments. The two companies, which had combined turnover of about $50m last year, will combine under the title of a new parent firm Aralez Pharmaceuticals PLC. The move to Ireland will allow the firm to benefit from lower corporate tax rates. The US has the highest statutory corporate tax rate in the OECD, a combined rate of about 39% when taking into account federal and state taxes compared to Ireland's 12.5%. Pozen said that Aralez has received $350m in financing from a group of investors, including up to $200m in funding for future deals.
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TEGRAL TILES' IRISH SUBSIDIARY POSTS LOSS FOR 2013 - A doubling of revenues overseas by the Irish arm of building materials’ manufacturer Tegral was not enough to prevent further losses at the firm in 2013. Accounts just filed by the Co Kildare firm show it recorded pre-tax losses of €2.25m, following the losses of €2.23m posted for 2012, says the Irish Examiner. The losses came in spite of revenues increasing by 10% from €24.86m to €27.28m in the 12 months to the end of December 2013. European revenues almost doubled from €4.34m to €8.2m, with a note attached stating that the overall boost in revenues arose from an increase in intra-company sales to the UK region. The accounts show that the Belgian-owned holding company received a cash injection of €15m in 2013. The directors’ report said “management remains firmly concentrated on operational delivery. The company remains well positioned to take advantage of further appropriate prospects and continues to pursue opportunities in Tegral’s traditional rigourous and disciplined manner”. The principal activity of the firm continues to be the manufacture and the sale of roofing, cladding products, and profiled metal sheeting.
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HEWLETT-PACKARD AGREES $100m DEAL TO SETTLE AUTONOMY LAWSUIT - Hewlett-Packard has agreed to pay $100m to some of its shareholders to settle claims it misled them over the disastrous $11.1 billion purchase of UK software maker Autonomy, writes the Financial Times. PGGM, a Dutch pension fund manager that was leading one of several US class action lawsuits against the computer maker, agreed to the deal, which will be paid by HP’s insurer. The money will be split among investors who bought HP stock after the 2011 Autonomy purchase and saw the value of their shares tumble when the US company announced an $8.8 billion writedown. After the writedown, PGGM launched legal action alleging that HP had made “materially false statements and omissions” about the price it paid for Autonomy and the software group’s subsequent underperformance. The computer maker said: “While HP believes the action has no merit, it is desirable and beneficial to HP and its shareholders to resolve [to] settle the case as further litigation would be burdensome and protracted”.
