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Scrapping OFR "unlawful" says lobby group

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8th Dec 2005
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Gordon Brown may face a legal challenge to his decision to scrap the OFR, which would have required publicly-listed companies to report annually on social and environmental issues that affect their business.

Environmental lobby group Friends of the Earth has written to the Chancellor warning that they will seek a judicial review, unless he can satisfy them that his decision was lawfully made. The group claims the decision was unlawful because it was "procedurally unfair, irrational/perverse, a breach of legitimate expectation, and based upon material errors of fact".

The lobby group cites several reasons for their stance:

' The chancellor's failure to consult before making the decision was in breach of the government's own Code of Practice on Consultation and denied key stakeholders the opportunity to comment
' His decision was based on a false premise (he claimed the OFR represented an example of the "gold-plating" of EU regulations when it actually arose from an independent policy making and legislative process known as the Company Law Review)
' The decision was irrational because the government has gathered evidence over many years which supports the OFR which have been disregarded in the decision making process
' The decision ignores the Government's own promise to carry out a review of the OFR

Craig Bennett, head of the Corporate Accountability Campaign at Friends of the Earth, concludes: "[The decision] appears to have been made purely a sop to the CBI to protect his reputation as a pro-business Chancellor, rather than in the interest of society as a whole. The huge outcry against his decision is an indication of just how wrong he was."

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By listerramjet
13th Dec 2005 10:58

perhaps I am a jaded old cynic
but if it is friends of the earth that are complaining then perhaps gordon has a point? making annual accounts bigger is hardly environmentally friendly!

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By AnonymousUser
12th Dec 2005 17:01

Response
The uk keep investors in the dark because the investors are not interested in their investments.

As long as they don't lose money who cares. I have invested £2,000,000 in a company called moneyforeveryone.com and as long as my monthly cheque for £25,000 arrives, I am happy.

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By AnonymousUser
09th Dec 2005 16:08

Making accounts useful to investors
Look at the difference between US reporting and UK reporting on this one.

US reports contain a reasonably detailed discussion of the material events in the year and their impact on the entity's results. Good information for investors to see the company as management see it.

UK accounts have the directors' report and a few other basic documents which are much more limited in ambition and hugely LESS informative.

Why does the UK keep investors in the dark? The OFR would have plugged this gap.

I am disappointed at its being scrapped.

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