WHAT ARE THEY DOING ABOUT IT? After years of denying there was a problem and facing boycotts, Nike announced a U-turn last year. As a result, the Ombudsman recommended that full compensation was paid to the 85,000 people who had followed the Government’s advice, but ended up losing their savings through no fault of their own.The Prime Minister, Tony Blair, tossed aside the report’s findings, claiming the Government could not be expected to underwrite the private sector.Although yesterday’s announcement will ensure more people will receive compensation, the extension of the FAS was subject to several caveats. Speaking in the House of Commons yesterday lunchtime, John Hutton, the Work and Pensions Secretary, said he would extend the reach of the Financial Assistance Scheme (FAS) to compensate all those who were within 15 years of retirement in May 2004.
Under the current FAS rules, only those who are within three years of retirement are eligible to claim.Although the move was welcomed by some as a step in the right direction, the decision still leaves at least 40,000 people who will not receive a penny of compensation for the loss of their retirement savings.In March, the Parliamentary Ombudsman found the Government guilty of maladministration in relation to its regulation of occupational pensions in the 1990s, claiming that it had told people in final salary pension schemes that their savings were guaranteed. The Government finally conceded yesterday to pay compensation to some 30,000 more people who lost their retirement savings when their companies went bust at the start of decade.

The threat concerns the Sakhalin-2 project, the largest direct foreign investment in Russia, and a venture that will result in the world’s biggest liquefied natural gas plant in the far east of Russia. Shell has a 55 per cent stake in the $10bn (£5.3bn) project while two Japanese firms own the other two stakes. The Russian government has a revenue-sharing arrangement with the consortium but is known to be keen to get a direct stake in the project as Moscow seeks to bring more strategic energy reserves under the Kremlin’s control.
President Vladimir Putin has already urged Shell to honour a promise it apparently made to surrender a 25 per cent stake in the project in exchange for a share of a Siberian gas field.Yesterday the pressure intensified when the Natural Resources Minister said it supported radical advice it had received from the country’s Academy of Natural Science urging it to take a 51 per cent stake in three different revenue-sharing projects including Sakhalin-2.”The Academy suggests boosting the presence of Russian companies in these consortiums to 51 per cent as one of the measures to boost efficiency,” it said.The other two projects were the Sakhalin-1 oil and gas venture, in which Exxon has a 30 per cent stake, and a large oil extraction operation in Russia’s far north in which Total is involved.The ministry said it intended to act on the academics’ recommendation and to write to other government ministries to “correct the situation”.Shell declined to comment but is known to have incurred the Kremlin’s wrath due to massive cost overruns on Sakhalin-2, which have prompted the Anglo-Dutch firm to ask the government to allow it to double its investment to $20bn.There were also reports that the Natural Resources Ministry intended to take legal action against Total, a company the authorities believe is mismanaging its Russian investments, and to initiate detailed investigations into the efficiency of Shell and Exxon.When revenue-sharing projects such as Sakhalin-2 were launched in the 1990s, Russia was relaxed about giving foreign firms large stakes in big oil and gas projects, but under Vladimir Putin that policy has changed and Russian, often state-controlled, firms usually take a 51 per cent stake.The Natural Resource Ministry’s threat came on a day when Mr Putin told a summit of EU leaders the West could count on Russia as a reliable energy partner.. Royal Dutch Shell’s flagship investment in Russia was facing uncertainty last night after the Natural Resources Ministry threatened to scale back the company’s stake in a huge liquefied natural gas project to allow the Kremlin greater control. We’re a high-risk, high return kind of company.”Developing drugs is a tricky business, he contends.

“It’s more difficult to discover and develop a new drug than to put a rocket on the moon and it also costs more money.” Moreover, drugs continually come off patent and need to be replaced by new ones.Mr Garnier, born in Normandy, often returns to France to visit his mother in Strasbourg or to go hiking in the mountains He does not know what he will do when he retires. For now, he is focused on “finishing the game plan that was put in place at the time of the merger” and guiding the board to pick a successor, likely to come from within the company.. More than half of GSK’s research is carried out in the UK and only 30 per cent in the US.In the public eye, the pharmaceutical industry stands accused of making excessive profits through inflated drug prices But Mr Garnier vehemently defends the industry. This is Great Britain – this is a country of resistance and resilience,” Mr Garnier said.

Asked whether he would consider relocating the business to the US, where he lives just outside Philadelphia, he said the group would not “flee the country” and would stay as long as the UK government supports science and innovation. But Mr Garnier said he was encouraged by the reaction of his investors. While some elderly people were clearly frightened, others vowed to double their stakes in GSK in defiance “Mostly the answer was resilience and a kind of anger. A memorable moment was the “fat-cat” pay dispute in 2003 when he refused to climb down over his huge pay package and became the first FTSE 100 chief executive to have his pay agreement thrown out by investors.Early in his tenure he was faced with a public outcry over the pricing of HIV/Aids drugs but defused the row by agreeing to sell cut-price pills to Africa. They have shrunk, they don’t have a very strong pipeline and therefore some will need to be rescued, so there will be defensive mergers in the future.” Recent speculation has centred on GSK’s British rival AstraZeneca, which is struggling to rebuild its minimal pipeline, as a takeover target.Mr Garnier, who is known as JP, has frequently courted controversy during his time at GSK. “I just couldn’t do it at SmithKline because there was resistance from all the senior scientists because their own jobs would disappear.

The merger provided the earthquake that was necessary.”However, two years ago Sir Richard cast doubts on the benefits of the merger, and Mr Garnier conceded that big mergers take time.He believes there is more industry consolidation to come “Some companies are having great difficulties. But the idea of these centres of excellence in clinical development (Cedd) originated long before Mr Yamada’s tenure, and it took the merger of Glaxo and SmithKline to make it happen. “The concept of Cedds was something we thought about long and hard before the merger,” Mr Garnier said. In a remarkable turnaround from the threadbare pipeline it had six years ago, the number of new products in development has doubled to 97.That turnaround was masterminded by GSK’s departing head of R&D, Tachi Yamada, who broke up the company’s huge research organisation and reorganised it into small, nimble, biotech-style units.