Underlying results were in line with most estimates and the shares climbed 19p to 630p as the market

Underlying results were in line with most estimates, and the shares climbed 19p to 630p, as the market breathed a sigh of relief.The education unit, which includes the newly purchased HarperCollins Educational Publishing, posted seasonal losses, but was on track for a strong performance in the second half of the year. The sale, to aggressive regional newspaper publisher Newsquest, marks a continuation of Pearson’s move from “traditional to screen-based media,” Lord Blakenham, chairman, said yesterday. The company also announced the purchase of another 30 per cent of Les Recoletos, the Spanish media concern, taking its share to 95 per cent at a cost of pounds 86.8m.
But while media analysts cheered the deals, there was still disappointment over the company’s continuing problems with its US CD-Rom subsidiary, Mindscape, and some concern about the ballooning costs associated with retuning millions of VCRs in advance of the launch of Channel 5, in which Pearson has a 24 per cent stake.Pre-tax profits slid 40 per cent in the first half of 1996, to just pounds 30m from pounds 50m last time, largely on the effects of the poor performance of Mindscape, which had been widely trailed. Pearson, the media and entertainment giant, yesterday took the sting out of poor interim profits by unveiling the sale of its regional newspaper group, Westminster Press, for pounds 305m – marginally ahead of City expectations. The European Union’s Investment Service Directive, (which provides firms with “passports” to do business in any EU nation) was implemented in the UK last January.Half the EU countries had not implemented it yet, said Mr Durlacher, and Germany was not planning to do so until mid-1997.The annual report said the SFA made a net deficit after tax of pounds 890,000 for the year to March 31 due to the cost of systems redevelopment.Comment, page 15. We were not able to bring a case against Peter Baring [the former chairman of Barings] or Andrew Tuckey [another senior executive] because there was no evidence of wrong-doing. We were roundly attacked in the press for that.”In response, the SFA next week will start consulting its members over new powers which it proposes will allow it to prosecute or take other action against senior management for problems in their firms.There was one silver lining to the year, Mr Durlacher added.

They will be required to make fewer exposure reports, which in derivatives can be time-consuming and expensive.The SFA plans to impose extra training requirements where problems are greatest, reduce reporting burdens in some areas where a firm’s systems and standards are proven, and scrap “uneconomic, ineffective or unnecessarily burdensome” rules.Mr Durlacher admitted the SFA had taken “a pounding” for its roles in Barings and Sumitomo, and that the regulator had ended the year 1995/6 “wiser”.The SFA chairman said that when the collapse of Barings “exploded on the scene” the SFA immediately had to review its reporting procedures and make sure that co-operation with the bank of England was working properly, that “nothing was falling between the cracks”.The SFA’s disciplinary investigation that followed into Barings had been “a very difficult process, very much in the public eye. Traditionally, capital cover for many securities transactions has been 100 per cent of the worth of the deal. This could be cut to as low as 8 per cent for well- managed firms.In this “carrot-and-stick” approach, well-run firms will have red tape slashed. This might even necessitate some firms seeking a capital injection, Mr Durlacher said.This would have a big impact on security firms’ costs, he added. If their systems for controlling counter-party risk, or credit for securities transactions, were found to be inadequate they would be forced to put aside more capital to safeguard such risks. Russia has some good cops; you just have to know how to find them.Phil Reeves. The Securities and Futures Authority plans to slash compliance costs and red tape for well-managed City firms and raise costs for poorly managed ones in a radical attempt to “prevent another Barings”.

After an “annus horribilis” for the securities regulator which started with the collapse of Barings bank and ended with the Sumitomo copper scandal, the SFA chairman, Nick Durlacher, said it was time to concentrate compliance resources where they were most needed.
The SFA is moving away from concentrating on which sectors are risky, and instead is looking at which firms handle risk well, and those that do not.Mr Durlacher said: “We will look at the inherent quality of the firm rather than the type of business it does. SFA inspections for good firms will be far less frequent.”Unveiling the regulator’s annual report for 1995/6, Mr Durlacher said poorly run firms would be penalised in a number of ways. An hour later I was flying west.The police in Vladivostok, always poorly paid, haven’t seen any wages for several months.Not once did either officer ask for money or gifts, or anything other than a warm farewell handshake. There is no Western equivalent of the distrust, doubt and unco-operativeness that can occupy the space between the hairline and the cheekbones of a Russian bureaucrat.We ended up pleading my case in the airport director’s office, as if before a judge in chambers. After studying the paperwork, half-moon glasses perched on his nose, he relented, and jotted out a note. “The airlines don’t have to take any notice of the city police,” he said, flourishing his badge in yet another face, “I’d say your chances are 50-50.”Together, the two braved the permafrost frowns of airline officials. Very little, he replied.I do not know whether it was pity, kindness, the vodka or a desire to rid himself of a nuisance, but after offering me a bed at his place for a few days, the major and a female captain took me to the airport.Here the major padded wolfishly around until he found the right person.

Nothing about this young detective’s appearance (tatty jeans and sneakers, mouth full of gold teeth), his office (cubby-hole with a photo of his Cossack grandfather and a safe containing his coffee supply) or his views (tsarist) inspired hope.What chance was there of getting a flight to Moscow without a ticket, I asked, as he poured us a large vodka from a tin can. The duty captain wore one of those heard-it-all-before faces; the reek of vodka hung in the air.I was interviewed by a detective who asked one question: “Did the barmaid do it?” Answer: “I very much doubt it; she was nowhere near me.” I knew the cops wanted to shelve the crime as soon as possible; what I wanted was a way home.It was at this point that I met Major Sergei Zhukovsky. Their walkie-talkies and bully-boy swaggers were evidently intended to resolve larger issues. Two young policemen arrived, looking like mackerel entering a shark pool. Mystifyingly, they took in a waitress, and carted us all off to the decrepit police station.In mafia-infested Vladivostok, where there are three or four murders a night, a stolen wallet is about as interesting as a case of apple scrumping. At this time of year, it is as clammy as a Russian bath-house. Power cuts sometimes last all day, because the Kremlin is delaying energy payments.I demanded that the police be called to the bar, after failing to persuade its security men to get involved.

I had $8.Some cities are worth being stranded in for a day or two, but Vladivostok – until six years ago a Soviet naval base closed to foreigners – is not among them. Automated bank tellers, freephone numbers, telephone cards, reverse charge calls – all have yet to come to this litter-strewn backwater on the Sea of Japan Cash is everything. It contained credit cards, almost all my cash, and my air ticket home. Weary after three days on the Trans-Siberian railway, I had made the mistake of leaving my jacket on a chair in a bar for a few moments.Anywhere else, the matter could be resolved by calling your credit card companies and wiring some money overnight Not here. Westerners in Moscow face demands for money from traffic cops with such frequency that they refer to the lollipop-shaped batons with which patrolmen wave down cars as “pazhaluista sticks” – “please” sticks. Police forces the world over have their bad apples; in Russia they seem to come by the barrel-load.
Yet it is only fair to report an incident which proves there are exceptions, albeit 5,587 miles to the east of the capital.It was in the sea port of Vladivostok that I was relieved of my wallet. Had he stuck to this version in his testimony, Priebke would probably be serving a jail sentence today..