Mark Kleinman: Pound shop PM bargains on rescue

Mark Kleinman, Sky News' City editor, reflects on Prime Minister Andy Burnham's perceived role in rescuing Poundland, a discount chain based in his Makerfield constituency. Burnham has intervened in the crisis due to its impact on employees and their families. The government's response to the situation, however, has been seen as lacking in effectiveness, with Gordon Brothers, Poundland's majority-owner, displaying disdain for the chain's management and employees.

Despite Gordon Brothers' interest in a solvent bid, Pepco Group, the former owner's Warsaw-listed entity, has offered to defer repayment conditions on the loan it holds. This development has been viewed as a clear example of vulture capitalism, a term used to describe the ruthless acquisition of distressed companies. The annual vote on pay, a mechanism that ensures accountability between pay, performance, and shareholder interests, is also under threat.

The government's consultation on corporate governance reform may weaken this vote, potentially leading to reduced flexibility for companies. Meanwhile, the restructuring market in Britain has seen a shake-up as Interpath, a firm that previously managed the sector's insolvency and restructuring operations, has been acquired by Bridgepoint.

Additionally, two key partners from FTI Consulting's European restructuring practice are leaving to join Berkeley Research Group, indicating a shift in the industry landscape.