Tieto and the Federation of Finnish Financial Services have presented an initiative on digitalized value-added tax (VAT) reporting. The new standard would allow companies to report VAT information faster and facilitate real-time reporting. Adopting a uniform standard could help to increase European tax revenues by up to EUR 160 billion a year.

The new ISO 20022 standard devised and developed by Tieto and the Federation of Finnish Financial Services will help to enable real-time value added tax (VAT) reporting. The standard allows the necessary information in each invoice to be reported to the tax authorities in digital form. Adopting the new standard across Europe could potentially increase tax revenues by up to EUR 160 billion through the collection of currently unreported VAT.

- Digitalization is the best weapon for combatting the shadow economy. The newly published standard for easy VAT reporting will help to advance the transition towards electronic invoicing in Europe. It will also lighten the burden of reporting carried by the companies by means of automatization and real-time reporting. “We are proud to have been able to contribute to the fight against the shadow economy by offering efficient new digital tools for companies and organizations,” says Kimmo Hannus, Head of Business Integration Brokerage at Tieto.

- Tieto is actively involved in the ecosystems of the financial sector. Together with the Federation of Finnish Financial Services, we played an active role in the specification work related to the new standard. We have also collaborated closely with the tax authorities to establish common ground rules, Hannus continues.

- The implementation of the new standard will promote uniform VAT collection policies across Europe. The VAT deficit does not constitute a large problem in Finland. For Finnish companies, the most significant aspect is that implementing real-time VAT reporting at the European level would provide for a fairer competitive environment, says Pirjo Ilola, Head of Payments Standardisation and E-invoicing at the Federation of Finnish Financial Services.

Pirjo Ilola notes that this new standard represents the third time the Federation of Finnish Financial Services has contributed to the creation of an ISO standard.

Both Tieto and the Federation of Finnish Financial Services hope for fast and extensive adoption of the standard by the tax authorities, public sector and companies, so that its benefits can be claimed as quickly as possible. The standard is available free of charge on the ISO 20022 website.

Tieto is active in promoting digitalization in Finland and the development of the financial sector ecosystem. Among other things, Tieto has developed and implemented the Siirto payment platform, Finland's first real-time multi-banking platform for mobile payments. The company has also been strongly involved in advancing the digitalization of cash and card payment receipts as part of the TARU project.

(Source: Tieto)

A group of 31 MPs from across the political spectrum have called on the Government to protect consumers from unsafe carbon monoxide alarms, which fail to comply with the industry wide safety standard BS EN 50291. 

A recent investigation by the consumer right group Which? found that many alarms bought in the UK, online, fail to comply with the BS EN 50291 safety standard, which means they can leave people at risk of carbon monoxide poisoning even if they have an alarm.

In response to the findings, Jim Fitzpatrick MP tabled a motion in Parliament calling for Government to take action. The Early Day Motion has been signed by 31 MPs, including Labour, Conservative, SNP and SDLP members.

The EDM says: “That this House notes with concern that a recent investigation by the consumer group Which? found that there are carbon monoxide alarms available to buy online in the UK that are not compliant with the BS EN 50291 industry safety standard; further notes that such noncompliant alarms can fail to detect dangerous levels of carbon monoxide, leaving consumers with a false sense of confidence and thus exposing consumers to the risk of carbon monoxide poisoning; notes that eBay, Amazon and Robert Dyas have all taken positive steps to remove dangerous carbon monoxide alarms and detectors from their product lines; and calls on the Government to ensure that all carbon monoxide alarms on the market in the UK are compliant with the BS EN 50291 standard.”

Jim Fitzpatrick MP said: “As a former firefighter, I am all too aware of the devastating impact of carbon monoxide poisoning. It is a silent killer. You can’t see it, smell or taste it, but it can kill without warning. Installing a carbon monoxide alarm could save your life, and compliance with the standard will ensure that consumers aren’t being put at risk by dodgy devices.”

Independent tests by Which? found that alarms claiming to meet the safety standard were, in fact, not compliant. Alarms produced by leading brands, however, passed every one of the group’s 312 gas detection tests.

Chair of the All-Party Parliamentary Carbon Monoxide Group, Barry Sheerman MP, said: “It is fantastic to see so much support for action on this important issue. Carbon monoxide is an insidious killer, and market wide compliance with the industry safety standard would add a vital extra layer of protection for consumers.”

The Bar Council has warned that the UK economy and London’s position as the leading centre for dispute resolution will suffer if Brexit negotiations do not ensure that UK court judgments are enforceable in EU Member States, once Britain leaves the European Union.

In written evidence to the Commons Justice Select Committee, published today, the Bar Council said:

 “In a globalised world, it is crucial that the judgments of one state are enforced by the courts of another.

“It is critical that UK citizens, businesses, institutions and the UK Government retain the right to have judgments which they have obtained in the UK courts efficiently enforced, and to have the jurisdiction of the UK courts recognised, throughout the EU.

“This is also essential in order to retain our position as the leading dispute resolution centre in the world, with the important economic benefits which this brings.

“These mechanisms are vital for the healthy functioning of the UK economy in general and the UK legal sector in particular.”

English law is the most commonly used law in international business and dispute resolution and is the main choice of law for commercial contracts, but the Bar Council has cited anecdotal evidence that some international parties may already be choosing not to use English jurisdiction clauses.

The Bar Council evidence said:

 “Anecdotally, the Bar Council has heard of a number of cases where parties are being advised not to choose English jurisdiction clauses in their contracts because of the uncertainty surrounding the jurisdiction and judgments regime.

“Much international dispute resolution work comes to English lawyers because the parties to a dispute have chosen to have their dispute resolved in the English courts. If jurisdiction clauses designating the English courts are not effectively respected in the EU, this will make such clauses considerably less popular.”

There has been much media and parliamentary scrutiny recently of Taylor Wimpey’s policy to include 10-year doubling ground rents on new build leasehold properties. A number of Taylor Wimpey’s ex-customers are considering legal action against the conveyancing solicitors who acted on their behalf, as they feel conned by the lease terms and claim their properties are now unsellable.

Louie Burns, Managing Director of leasehold enfranchisement specialists Leasehold Solutions, argues that the legal profession should brace itself for a wave of litigation from home owners who feel they were given inadequate advice by their conveyancing solicitors or valuers.

Burns said: “The case of Taylor Wimpey highlights an endemic problem with new build property in the UK, as more and more house builders are including onerous ground rent schedules on new build leasehold properties. Recent legislation, including the Disclosure Act (2014) and the Consumer Rights Act (2015), gives home owners the opportunity to seek legal redress against solicitors for professional negligence, where they can prove they were not given adequate information to make an informed decision.”

The Consumer Rights Act specifically mentions that complex future financial implications must be spelt out very clearly, and warns against confusing wording around these issues. If the advice or terms offered by solicitors were found to have been obfuscated then the legal firms involved would be open to a legal challenge by the consumer. This represents a significant shift from the previous accepted consumer law concept ‘buyer beware’.

Burns continued: “What would qualify for professional negligence in these cases is the lack of written advice on the serious future financial implications of the terms of the lease in question, namely the onerous ground rent schedules; where this isn’t evident the solicitor may be held to account.

“The Taylor Wimpey case is just the tip of the iceberg; this issue is on a scale akin to the PPI scandal which has dogged the banking industry for nearly a decade.”

“The cost implications can be huge for an errant solicitor (or valuer) but each case is different. In a recent example, home owners won their case by demonstrating the implications of the ground rent increases were not adequately explained, leading to a settlement which imposed an average of £17,000 in costs for each law firm involved. On a more complex case it could be much higher.”
Research by Leasehold Solutions suggests that around 80% of new build flats are sold with onerous ground rent schedules included in the lease terms. More than 42,500 new build leasehold properties were sold during 2015.

Taking the average costs from Leasehold Solutions’ recent example, the company has estimated that the cost to the legal profession from professional negligence claims could reach £578 million for 2015 alone.

Burns concluded: “From a risk point of view, all those involved in the marketing and sale of leasehold properties, both new build and existing homes, must now review the way they present advice to their clients, to ensure they do not return at a future date to seek legal redress.

“In order to achieve the openness and transparency required under the Consumer Rights Act, conveyancing solicitors must ensure that the lease terms are expressed fully, clearly and legibly, containing no concealed pitfalls or traps.”

(Source: Leasehold Solutions)

New risks such as cyber incidents or data privacy, rising regulator and shareholder activism and the influence of third party litigation funders are putting corporate leaders under more pressure than ever of falling foul of investigations, fines or prosecution over alleged wrongdoing, says Allianz Global Corporate & Specialty (AGCS), a leading provider of Directors and Officers (D&O) insurance globally.

Directors and officers are walking a managerial tightrope as executive liability continues to increase annually. There is a growing trend towards seeking punitive and personal legal action against executives for failure to follow regulations and standards which could result in costly investigations, criminal prosecutions or civil litigation putting the company’s assets, or their own, at risk, AGCS says in its new report D&O Insurance Insights: Management liability today. “While the legal landscape differs strongly from country to country, increasing shareholder or regulatory action has become a global phenomenon that needs to be given top priority within companies’ internal risk management departments,” says Bernard Poncin, Global Head of Financial Lines, AGCS.

D&O litigation – lengthier and more costly
According to AGCS analysis, non-compliance with laws and regulations is now the top cause of D&O claims [1] by number, followed by negligence and maladministration/lack of controls. The average D&O claim for breach of duty costs over $1 million (€1 million). However, in large corporate liability cases D&O claims can be valued in the hundreds of millions of dollars. AGCS observes a general trend for D&O claims to be dismissed or resolved more slowly, meaning lengthier litigation, increased defense costs and higher settlement expectations. For example, the average US securities class action case takes between three and six years to complete while legal defense costs average around $10 million, rising to $100 million for the largest cases. In the past six years defense costs have almost doubled for large D&O claims in the US. The influence of third party litigation funding is also changing the global litigation map, with it being pivotal in the development of collective actions against financial institutions and commercial entities and their directors and officers.

Management in the UK could be prosecuted for failure to prevent fraud by staff
Speaking at the Cambridge International Symposium on Economic Crime in September this year, the Attorney General reiterated the Prime Minister’s priority of expanding economic opportunities - meaning businesses "of all sizes" should be better held accountable for their failures. The Attorney General also restated the intention to consult on extending the criminal offence of 'failure to prevent' to other economic crimes such as fraud and money laundering so that firms are properly held to account for criminal activity that takes place within them.

“If a new corporate offence of failing to prevent economic crime is introduced in the UK, it will represent a huge expansion in corporate criminal liability,” said Terry FitzGerald, Head of Commercial D&O and Financial Institutions, UK at Allianz Global Corporate & Specialty. “Although these particular reforms are focused on corporate liability, there is, of course, a broader drive to hold individuals accountable in the event of criminal conduct or regulatory breaches at their companies.  In recent years, increasing emphasis has been placed on personal accountability across all business sectors, with Deferred Prosecution Agreements now a means to further increase cooperation with regulators and encourage best practice. Reform in this area could ultimately have a fundamental impact on the risks faced by senior executives.”

The risks and potential liabilities of senior executives have never been greater
Litigation against companies and their officers is on the rise. In the US, the number of security class action filings is rising and, at mid-year, was on course for its highest annual total for 12 years [2]. Many Asian countries such as Japan, Hong Kong, Thailand and Singapore are also moving towards a more litigious culture. The increase in claims has also been pronounced in Germany where the number of D&O claims for AGCS alone has tripled in the past 20 years.

Cyber risks on the board agenda
The landscape for executives is further complicated by a number of emerging perils, such as liability around cyber-attacks and data privacy. In the US; several class actions have already been filed related to data breaches. Data protection rules around the world are becoming increasingly tough, with severe penalties for non-compliance. As a consequence, AGCS experts anticipate cyber security-related D&O litigation more widely in the US, but also in Europe, the Middle East and Australia – if there has been negligence in any failure to protect data or a lack of controls. “Many directors used to see cyber as an IT issue and not an exposure for the board to consider,” explains Emy Donavan, Regional Head of Cyber Liability North America, AGCS. “But there is no escaping cyber risks and directors need to be adequately informed, otherwise they will leave themselves exposed.”

Other new management risks include negative disclosures or allegations around environmental pollution, climate change and modern slavery which could result in reputational risks and shareholder activism, public outcry or governmental action.

Mergers and acquisitions (M&A) continue to be a key driver of D&O litigation and is predicted to continue at rapid pace in future. “M&A, but also divestitures, belong to the more riskier moments in the life of a company,” says Poncin. “Expectations are always high, and synergies are easier planned than realized.”

Highly sophisticated risk management required
In order to tackle the increase in executive risk in future directors need to develop a highly sophisticated risk management culture. Examples include instilling first-class cyber and IT protection, keeping records of all information relevant to a managerial role and maintaining open communication with authorities, investors and employees. Executives should ask tough questions about compliance related topics such as sanctions, embargoes, domicile registrations, price-fixing and fraud and also learn more about “classic” D&O exposures such as M&A, capital measures and IPOs. The AGCS report contains best practice advice and checklists outlining how executives can mitigate risk.

D&O insurance has become a regular part of companies risk management in the past 20 years. It provides financial protection for managers against the consequences of actual or alleged “wrongful acts”. Common D&O risk scenarios include HR issues, shareholder actions, reporting or disclosure errors. Coverage does not include fraudulent, criminal or intentional non-compliant acts or cases where directors obtained illegal remuneration, or acted for personal profit.

[1] AGCS analysed 576 claims between 2011 and 2016

[2] 119 new federal securities class action cases filed during 1H 2016, Cornerstone Research and the Stanford Law School Securities Class Action Clearinghouse’s report

(Source: Allianz Global Corporate & Specialty)

In October this year, fees for appeals in the Immigration and Asylum Chamber of the First-tier Tribunal increased from £80 to £490 for a decision on papers, and from £140 to £800 for an oral hearing. This change represented a 500% increase in fees.

The Government has today announced a reversal of that increase, with immediate effect. Additionally, the Government has said that it is reviewing the role of fees in the Upper Tribunal and that it will consult on new plans for tribunal fees, including in both first and upper tier immigration and asylum chambers, in due course.

Chairman of the Bar, Chantal-Aimée Doerries QC said: “The withdrawal of the recent substantial increase in immigration and asylum fees is a welcome step, as is the announcement that those who have already paid this fee will be reimbursed. These fee increases risked seriously restricting access to justice.”

“The impact of such huge fees is not only to restrict access to justice; where the appeal process is unaffordable, the rule of law is also undermined.

“There is still a great deal to be done to address the problems caused by other recent increases in court and tribunal fees and charges. As the Justice Select Committee reported earlier this year, we have seen a drop of almost 70% in the number of cases brought before employment tribunals, but no real change in success rates. This indicates that thousands of people who have valid cases are unable to exercise their rights at work. Additionally, anyone who brings a money claim must now pay up to £10,000 up-front, just to gain access to the court.

“Whilst today’s announcement is encouraging, the Bar Council remains concerned about the remaining enhanced and increased court fees. We will continue to push for an approach to court and tribunal fees and charges which puts access to justice at its heart.”

(Source: The Bar Council)

Increasingly within the self-employed economy, and amongst start-up and scale-up communities, businesses require a commercial adviser who really understands their business and can guide them through legal and commercial pitfalls, dot the I’s and cross the T’s on detailed legal drafting, and provide solutions.

However, lawyers and professional services firms appear to be out of sync. In the legal industry, training focuses on minimising risk rather than changing the approach to deal with the new economy. Both detailed drafting and providing commercial advice are two big-risk areas, because they require good knowledge and experience. Where does this experience come from? Senior lawyers are focused on billable hours and so on the job training is not encouraged. They may provide simple drafting, proofreading or administrative tasks, but ultimately success is measured in billable hours, rather than in improving and properly training junior lawyers, hence enabling better work to be done at lower rates.

Lawyers to highlight problems and only the seniors to provide solutions? This possibly limits negligence but then how do junior lawyers learn or gain confidence or commerciality? What are the reasons for this? Perhaps if the junior lawyer gets too good, the client might believe they can get the same work at lower cost and form the relationship with the junior lawyer? Alternatively, if the junior lawyer builds relationships and expertise, they may leave and set up on their own, possibly taking clients with them.

This somewhat defensive approach does not seem in the long term best interests of the client and nor of the firm. We are seeing more and more lawyers leave the bigger firms - and even the profession – due to the absence of training, limited access to clients and mundane work. The vast sums invested into recruitment and early stage technical training are lost when firms do not follow-up with post-qualified on the job training and development. Furthermore, huge amounts of money are then spent on lateral hires (in terms of recruitment fees and guaranteed minimum drawings) when there is, consequently, a dearth of decent lawyers coming through from the ranks to fill the higher levels.

This defensive strategy, which seeks to avoid risk by limiting on the job training and development, does not deliver what the market requires and it does not save costs. Furthermore, a group of risk-averse, under confident, frustrated junior lawyers without a commercial skillset perpetuates the risk culture that firms are supposedly seeking to avoid.

Instead, the approach needs to be longer term - senior lawyers must be appropriately incentivised for spending time on training junior lawyers as they come through. Firms must be confident enough to take a bet on retention. This longer-term approach has been seen before. In the last global recession, the most robust companies were often the family-focused businesses in Germany, adopting a Mittelstand (Middle Ground) approach, focusing on good training and long term investment.

Currently our big law firms focus on short term profit rather than long term structure and prosperity. For some, this approach works well. For most however, it does not. Ongoing training for lawyers and other professional advisers should be more than a ‘nice to have’. It is a critical piece of the successful development of the services profession wrestling with how best to survive and prosper in the high growth economy. Problem solvers are in very short supply because, paradoxically, the risk of creating them, is perceived as too great.

Authored by David Farquharson, Co-Founder and Partner at Ignition Law.

(Source: Ignition Law)

Image by NYPhotographic

Lawyers have become increasingly concerned that Legal Professional Privilege (LPP) is being undermined by the Serious Fraud Office (SFO): they are anxious that this fundamental common law right may become further diminished as the SFO increasingly challenges companies which claim LPP while under investigation. But are they right to be concerned, and if so, why is the SFO making them so anxious?

LPP is an ancient common law right - an absolute right - which belongs to the client, either as an individual or as a company, and not the lawyer. There is an obligation on lawyers (a professional duty) to advise clients of their LPP rights, which they can assert whenever appropriate.

However, according to the SFO, companies being investigated by the agency can be asked to waive those rights relating to any information that it might want to access. And if any internal investigation is conducted, the SFO requires that it should be arranged so that LPP does not apply. The quid pro quo is that companies will receive ‘cooperation credit’ from the SFO, which may prove beneficial when it considers any potential prosecution.

What information is privileged, and to what extent, is far from straightforward: each case is different. And waiving LPP carries risks. Information can subsequently be used as evidence against the company showing its hand, while it can also become public during court proceedings and then published by the media if there is no restriction in place. This can have enormous adverse consequences for a company’s brand, share price and reputation.

SFO investigations are routinely complex with myriad regulatory, civil and criminal law issues, often in multiple jurisdictions. Understandably, any company which believes that it might become subject to an external investigation may choose to conduct its own internal investigation first, and consult its lawyers. Problems arise later when the SFO wants to access the investigation records made by that company’s lawyers.

It is therefore unsurprising that most disputes relating to LPP claims have their genesis in requests by the SFO for information which was originally part of an internal investigation - often completed before any SFO investigation has begun. David Green QC, the SFO’s director, has repeatedly expressed concern that such LPP claims are misused to frustrate SFO investigations, and he has said that the SFO will litigate over “false or exaggerated” claims, although this has not yet happened.

Naturally, the SFO wants the maximum possible disclosure to assist in any investigation that it might undertake. Cooperation is important because a company that is seen to be fully cooperative has a much better chance of not facing a courtroom following an investigation.

But further problems potentially arise when witnesses who are interviewed as part of an internal investigation then become witnesses at trial, should the investigation proceed that far. Even so, the SFO is battling to force companies to give up their LPP rights.

According to a recent article by Bankim Thanki QC, Hodge Malek QC, and Colin Passmore, senior partner at Simmons & Simmons: “Alun Milford, SFO General Counsel, recently confirmed that the SFO does not regard itself as constrained from asking for first witness accounts even if they are privileged. He further noted that the SFO will view as a “significant mark of cooperation” any decision to (i) waive a well-made-out claim to privilege and disclose witness accounts sought; or (ii) structure an internal investigation in such a way as not to attract privilege claims over interviews of witnesses.”

In May, Matthew Wagstaff, Joint Head of Bribery and Corruption at the SFO, outlined what the agency regards as proper cooperation. The deal is that ‘cooperation credit’ will be given in return for a waiver of privilege. Genuine claims to privilege are fine, but the SFO does expect to be able to see first witness accounts, which it regards as “factual narrative” and not privileged. Wagstaff also said that companies are expected to provide the SFO with any independent investigation report that it has undertaken.

But there might be a discernible undertone of duress in this arrangement: companies feeling pressured to comply with requests with the implication that they might even be denied the chance of negotiating a Deferred Prosecution Agreement (DPA) with the SFO - only two have so far been agreed since they were introduced last year - and will instead face trial. It also flies in the face of the well-established principle that ‘no adverse inference may be drawn’ when LPP is properly asserted.

Any decision by a company to waive its privilege manifestly needs to balance the risks against the preferable option of cooperating with the SFO and being fully transparent. Indeed, it may sometimes be pragmatic to waive privilege, even taking account of the risks. But such a decision must be made without the prospect of any undue pressure from the SFO. Regrettably, this might not always be possible.

The new DPA arrangements might offer a compromise solution that can be further developed: giving the SFO a brief oral summary of the findings, without any written notes from the internal investigation being handed over. This approach received a sanction from the court in both of the DPAs so far agreed. It may allow companies to co-operate with the SFO without losing their LPP.

For now, it is only an idea. The Law Society of England and Wales launched a consultation about its new guidance on LPP in July, noting that ‘it is of particular significance as LPP has faced threats from several directions of late.’ Its findings have yet to be made public.

In balancing the need to prosecute fraud properly and vigorously, the SFO also has to consider the importance of LPP and the longstanding principle that it is the client’s right. However urgent the imperative to remove potential obstacles to access relevant information relating to a company’s internal investigation, the SFO cannot simply strike at LPP as if it were some kind of Gordian Knot that can be cut through with one blow. Attacking LPP in this way undermines the very basis of the relationship between lawyers and their clients.

In pursuit of justice, the baby should not be thrown out with the bathwater.

(Source: Journalist Dominic Carman Twitter: @CarmanDominic)

VTG Aktiengesellschaft (WKN: VTG999), one of Europe's leading wagon hire and rail logistics companies, has gained a new major shareholder. Morgan Stanley Infrastructure has communicated that it will hold 29% of the company’s share capital and will thereby become the company’s largest shareholder. Andreas Goer, founder of AAE (Ahaus-Alstätter Eisenbahn), which was acquired by VTG AG in 2015, sold all of his shares at a price of EUR 29.00 per share.

"I am very pleased to have Morgan Stanley Infrastructure as a strong investor with broad experience in infrastructure investments," noted Dr. Heiko Fischer, Chairman of the Executive Board of VTG Aktiengesellschaft, commenting on this development.

Morgan Stanley Infrastructure informed VTG AG that there is currently no intention to acquire 30% or more of VTG AG.

The closing of the share purchase agreement is subject to the approval by the cartel authorities.

Morgan Stanley Infrastructure’s share purchase will make it VTG's largest shareholder, before Kühne Holding AG, which owns 20% of the company's shares. A further 10% are held by the Hamburg-based Joachim Herz Stiftung.

Interview with Dr. Andreas Helbing of ADB Altorfer Duss & Beilstein AG:

Please tell me about your involvement in the deal?

As long-standing Swiss tax advisors of the seller, Mr. Andreas Goer, ADB took care of the Swiss tax aspects of the transaction. Allen & Overy, Germany, namely partner Dr. Hans-Christoph Ihrig, advised on the German legal and tax aspects.

Why is this a good deal for all involved?

The transaction allowed Mr. Andreas Goer to sell his entire shareholding in VTG at a price of EUR 29.00 per share to Morgan Stanley Infrastructure. This share purchase – which is subject to the clearance by the cartel authorities – will make Morgan Stanley Infrastructure VTG's largest shareholder, before Kühne Holding AG, which owns 20% of the company's shares. A further 10% are held by the Hamburg-based Joachim Herz Stiftung.

What challenges arose? How did you navigate them?

The sale of substantial shareholdings by Swiss tax resident individuals requires careful planning in order to reach a tax-efficient result. In the case at hand, such planning cleared the way for the transaction to be concluded.

ADB stands for Altorfer Duss & Beilstein and is based in Zurich, Switzerland (www.adbtax.ch). The firm was founded as a partnership in 1954 and transformed into a corporation in 2005. ADB is one of the leading tax law firms in Switzerland, offering national and international clients comprehensive consultancy focusing on Swiss and international tax law and bordering areas of Swiss business law.

Dr. Andreas Helbing focuses on corporate tax law consultancy for groups and SMEs. He advises in particular on the special issues arising in cross-border situations. In addition, Andreas advises private clients who, due to complex financial circumstances, have particular tax-related consultancy needs. Andreas also acts as a representative in tax litigation cases.

BGF recently invested £10m equity capital in RiverRidge Recycling. RiverRidge is the largest independent waste management operator in Northern Ireland, treating over 400,000mt of waste each year on behalf of local authorities, commercial businesses and individual households.

The owners of RiverRidge acquired a small skip hire and landfill site in 2011, and since then the business has grown via organic growth and acquisitions into a fully integrated waste management business that employs over 200 people.

The organisation, led by Managing Director Brett Ross, operates out of a number of sites located in Belfast, Coleraine, Derry-Londonderry and Portadown. It was the primary developer of the Full Circle Generation Energy from Waste facility located adjacent to Bombardier’s Wing Facility in Belfast. The £107m project which is nearing completion, was co-financed by Green Investment Bank, Equitix and P3P Partners.

BGF’s £10m investment is being used to support the company’s continued growth strategy as well as to further develop the group’s existing treatment and operations infrastructure. At the same time as BGF's investment, RiverRidge secured a new funding package from Bank of Ireland to further support growth.

Jim Meredith, current Chairman of Augean Plc, one of the UK’s leading specialist hazardous waste management businesses, and former CEO of Waste Recycling Group, co-invested alongside BGF and was appointed by RiverRidge as non-exec chairman. Paddy Graham, an investor at BGF, will also join the board of the company.

Brett Ross, MD of RiverRidge commented: “As a company we have worked tremendously hard over the past five years to allow us to become the market leader in Northern Ireland. It is therefore a significant endorsement of this effort to be able to announce the investment by BGF into our Group. We are looking forward to further growing the RiverRidge Group in the coming years and believe we have found partners, in both BGF and Bank of Ireland, who not only are best placed to support this progression, but also understand the strategy thoroughly.”

The £10m investment by BGF in RiverRidge is one of the largest single equity investments into a Northern Ireland company made in recent years.

BGF initially invests between £2m and £10m and can provide additional funding to support further growth. It backs private and AIM listed companies that typically have revenues of between £5m-£100m, across all sectors except financial services.

The Bank of Ireland has provided core funding facilities and support to the RiverRidge Group since the initial acquisition in 2011.

Interview with Avril McCammon of John McKee Solicitors:

Please tell me about your involvement in the deal?

We  have a particular interest as a firm in this sector, and our experienced banking team, led by Avril McCammon and Julie Huddleston, were able to work alongside Bank of Ireland, the advisers acting for the company, and the Business Growth Fund, to reach financial close in a timely manner.

Why is this a good deal for all involved?

The transaction showed the ability of a local company, supported by a local bank, to attract substantial additional investment.

What challenges arose? How did you navigate them?

The challenge, as in any transaction, is to reach a commercial agreement that is acceptable to all parties. All legal advisers worked together in a very pragmatic manner to ensure that the best results possible were achieved for each client.