The Wardman Wire

According to the BBC yesterday, Virgin is emerging as the leading company to take over the Northern Rock:

Northern Rock is poised to name a consortium led by Sir Richard Branson’s Virgin Group as favourite to buy the bank, the BBC has learned.

The bank is expected to name the group as its preferred bidder on Monday.

Virgin’s bid includes an immediate repayment of £11bn of the £25bn the bank owes the Bank of England, with the rest to be repaid within three years.

Remember the Virgin Atlantic Fraud?

Less than 4 months ago another of Richard Branson’s companies - Virgin Atlantic - admitted to colluding with British Airways over a 1-2 year period to defraud it’s own customers of a sum (I think - I can’t find an exact figure) of £50-£100m by engaging in price-fixing of fuel surcharges.

Virgin Atlantic was an active participant in the price-fxiing. Richard Branson’s airline avoided a fine because it told the authorities first.

The BBC reported at the time:

What did BA do?

The Office of Fair Trading in the UK and the US Department of Justice have been investigating allegations of price fixing by BA in relation to fuel surcharges on long-haul passenger and cargo flights.

The airline’s chief executive, Willie Walsh, has admitted that members of staff breached company rules - and had contacted a competitor, Virgin Atlantic, over the level at which fuel surcharges were to be set.

This, he said, was “entirely unacceptable” and was condemned “unreservedly”.

How did competition watchdogs hear about the competition breaches?

Virgin Atlantic tipped off the OFT and helped with the investigation. In return, it has been given immunity and is not expected to be fined.

Under the OFT’s leniency policy, a company which has been involved in cartel conduct and is the first to give full details about it will qualify for immunity from penalties.

So was it all BA’s fault?

No. It seems that Virgin Atlantic was, by the very nature of collusion, complicit in what went on.

And while its decision to turn whistleblower may mean that it escapes a fine, its reputation is likely to be tarnished, say analysts.

According to the version of events given by BA, on three of the six occasions that the firms colluded, it was Virgin which approached BA about plans to change its fuel surcharge.

And did they apologise?

At the time the BBC Business Editor Robert Preston reported the story on August 1st, and noted the Virgin comment:

The two big birds – which have a huge share of business on important routes – were not competing properly on price over an extended period: they were giving each other comfort that they would not undercut each other on the fuel surcharge.

It is about as blatant a breach of competition law as it’s possible to imagine…

…it makes for quite rough justice, since – on BA’s account – Virgin was a willing participant in this shameful attempt to rig the market.

In other words, Virgin’s behaviour was well below the standards expected of it by customers.

Which begs only one question, if it’s not going to dispute BA’s narrative: where is the public apology from Sir Richard Branson?

UPDATE: 22:35 A spokesman for Virgin Atlantic has telephoned to tell me that le patron has now apologised. But the statement he then emailed is not actually in Sir Richard’s name. However, here it is: “Virgin Atlantic is sorry that the events took place and apologises to customers.”

Do you trust them

Well - do you?

Tags: richard branson, virgin group, fraud, price fixing, rough justice, virgin money, northern rock

[tags]richard branson, virgin group, fraud, price fixing, rough justice, virgin money, northern rock[/tags]

According to the BBC yesterday, Virgin is emerging as the leading company to take over the Northern Rock:

Northern Rock is poised to name a consortium led by Sir Richard Branson’s Virgin Group as favourite to buy the bank, the BBC has learned.

The bank is expected to name the group as its preferred bidder on Monday.

Virgin’s bid includes an immediate repayment of £11bn of the £25bn the bank owes the Bank of England, with the rest to be repaid within three years.

Remember the Virgin Atlantic Fraud?

Less than 4 months ago another of Richard Branson’s companies - Virgin Atlantic - admitted to colluding with British Airways over a 1-2 year period to defraud it’s own customers of a sum (I think - I can’t find an exact figure) of £50-£100m by engaging in price-fixing of fuel surcharges.

Virgin Atlantic was an active participant in the price-fxiing. Richard Branson’s airline avoided a fine because it told the authorities first.