So Company A agrees to pay half of last year’s net profit to settle a prosecution. This puts the problem behind it, allowing the incoming boss to start with a clean sheet. The share price goes up, and we can all look forward rather than back. Thus the spin successfully put on the humdinger $1.4bn payment by Reckitt Benckiser concerning a business it left almost five years ago.

As a demonstration of the dark art of communications, it’s a peach. As an indication of corporate practice today, it’s a rotten one. The indictment from the US Department of Justice of “Company A” is devastating, and the incoming boss, Laxman Narasimhan, would hardly have moved from PepsiCo to take this hospital pass without a settlement.

Starting in 2007, Reckitt had pushed its Suboxone film hard as a better (and patent-protected) way to wean addicts off opioids. The DoJ alleges that there was no scientific evidence to back claims the company made, no regard for the truth about the drug’s safety and that healthcare providers were deceived. Both Rakesh Kapoor, Reckitt’s departing CEO, and his predecessor Bart Becht had endorsed Suboxone film. In 2014 Reckitt demerged Indivior, the provider, and that company remains in the DoJ firing line.

Reckitt is renowned for paying its CEOs vast sums. Mr Becht peaked at £92m when he left in 2011, and Mr Kapoor £23m in 2015. Mr Becht had wrought a remarkable transformation during his long tenure, multiplying the share price five times.

Mr Kapoor’s lavish rewards have drawn more criticism, especially since Reckitt shares have gone nowhere in the past three years. There have been other mis-steps, but the Suboxone case dwarfs everything before it, not least because of the hundreds of thousands of US lives the opioid crisis is costing.

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Unless the DoJ’s indictment is a work of fiction, Reckitt and Mr Kapoor have serious questions to answer, particularly regarding the morality and ethics of continuing to promote a dangerous pharmaceutical product that, by common knowledge, was being widely misused.

Thanks to the $1.4bn payment, the case will never come to court, so the questions are unlikely ever to be answered. Reckitt will insist we look forward rather than back. Mr Kapoor will keep his multimillion-dollar bonuses because, of course, nobody at the top has done anything wrong.

It’s a pile-up

Britain’s motor industry is in a desperate state. Production is plunging, demand for new cars is soggy and prices of used cars fell 8 per cent last month alone. The trade is accustomed to violent swings as consumer sentiment lurches between optimism and pessimism, but today there are more ominous secular trends as well.

The government’s “war on diesel” has effectively demonised the class of motor that we were recently being urged to buy because they are more fuel efficient. Sales and second-hand values are collapsing. We are now being urged to buy electric cars, and are understandably suspicious, despite generous subsidies.

The motor trade has hardly helped itself, behaving like, er, second-hand car salesmen with insurance and financing. Lookers, the UK’s biggest distributor, admitted last month that the Financial Conduct Authority was investigating, and followed up last week with a profit warning that sent the shares to a 10-year low.

There may be worse to come. Britain’s youth appears indifferent to cars. The rise of Uber, the reluctance to be always the designated driver to the pub, and now the possibility of a curfew, is discouraging applicants for a driving test that has become progressively harder to pass.

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Lookers’ balance sheet net equity is £400m, mostly in freehold property. The market capitalisation is £170m at today’s 46p. Ex-car showroom flats, anyone?

Pension this fiction off

The row over the pension payments to Bill Winters at Standard Chartered has again highlighted the ridiculous fiction that these are anything to do with pensions as the rest of us understand them. For someone like Mr Winters they are merely another few chips in the pile of his rewards, since the payments attract no meaningful tax breaks, and he will not be CEO for more than a few years. Were the remuneration committee under Christine Hodgson less timid they would simply add the payment to his salary and be done with it.

A full list of Neil Collins’ financial interests can be found at www.ft.com/collinsportfolio



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