The race to succeed Liz Truss as UK prime minister is already under way, with four senior Conservatives considering bids to become the party’s fifth leader in six years.
Three candidates who ran in the last contest may stand again. Former chancellor Rishi Sunak is the bookmakers’ favourite and has by far the most organised campaign team at Westminster.
The decision by Sir Graham Brady, chair of the 1922 committee of backbench MPs, in conjunction with the Conservative party’s board, to set a threshold of 100 votes to make it on to the ballot paper will rapidly whittle down candidates. Even if the vote by the 357 Tory MPs is evenly split, no more than three candidates will be able to get through.
If two candidates remain after the initial ballot on Monday, MPs will hold an indicative vote to signal to the grassroots who commands the most support in the parliamentary party. The 170,000 members would then choose the next leader by Friday October 28.
One senior Tory thinks it is possible that only Sunak will reach the 100 vote threshold in the first round if a number of other candidates enter the race and split the vote, making him the immediate winner. He could therefore become prime minister by Monday evening.
Penny Mordaunt, leader of the House of Commons, is widely seen by Tory MPs as his strongest challenger, while ex-home secretary Suella Braverman is also expected to enter the contest.
Following Truss’ abrupt resignation as party leader on Thursday afternoon, two other prominent Tories — chancellor Jeremy Hunt and former levelling up secretary Michael Gove — immediately ruled themselves out.
But the wild card contender is former prime minister Boris Johnson, who is being urged by supportive Tory MPs to stand again. Close allies of Johnson, who is currently on holiday, said he had “genuinely not decided” whether he would run.
Johnson remains deeply unpopular among many Conservative MPs because of the partygate scandal over lockdown-breaking parties. “Surely he won’t get the support,” one ally said.
The former prime minister is also facing an inquiry by the Commons privileges committee into allegations he misled MPs over the partygate affair. If found guilty, he could be suspended from parliament. “Anyone but Boris, anyone please,” one MP said.
Senior Conservative MPs said that there was an “overwhelming mood” for a show of unity after the chaos of Truss’s 44 days in office. One MP said: “Everyone has the desire to get on with life quietly now. Most people can live with Rishi or Penny. Anyone else is going to be very divisive.”
Supporters of Sunak said it was “almost certain” that he would stand in the contest, noting that he had predicted Truss’ economic plan would lead to ruin. One pro-Sunak MP said, “this is his time, and I think he has it in the bag”.
The former chancellor is likely to run on a platform of returning to fiscal prudence and fixing the £40bn hole in the public finances, although supportive MPs said no decisions had been taken.
A recent survey of Conservative members found that were the Truss-Sunak contest to be run again, the former chancellor would win by 60 per cent. His supporters among Tory MPs were actively canvassing prior to Truss’s resignation.
Sunak took an early joint lead with Johnson on Thursday, with 13 Tory MPs publicly declaring they would support both candidates. The former chancellor’s backers include former city minister John Glen and chair of the Northern Ireland select committee Simon Hoare.
Half a dozen prominent Tories announced they would back Mordaunt, including former business secretary Andrea Leadsom and ex-culture secretary Maria Miller.
Supporters of Mordaunt said party grandees were trying to “weld Penny and Rishi together”, encouraging them to come to an agreement to ensure an orderly transfer of power. Under this putative deal, the two would agree to serve in each other’s administration helping to unite the party.
In Mordaunt’s last leadership bid she said the government “needs to become a little less about the leader and a lot more about the ship”, and her allies say she might back a deal with Sunak — partly because she believes she might inherit the Tory crown if the party loses the next general election.
Although Mordaunt had not formally declared on Thursday afternoon, a grassroots social media campaign was already under way to promote her as a unity candidate. One ex-minister, who supported her in the last contest, said “there are too many people who dislike Rishi, whereas Penny is acceptable to everyone.”
Meanwhile Braverman has not decided whether she will stand in the contest according to MPs close to the former home secretary. If she does, she is likely secure support from the right flank of the Conservative party.
Original Source: ft.com
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Bankman-Fried Empire Includes Billions of Dollars of Illiquid Investments
Sam Bankman-Fried’s business empire includes billions of dollars of illiquid venture capital investments, according to internal records seen by the Financial Times, underscoring the uncertain recovery facing customers of his collapsed FTX exchange.
The 30-year-old entrepreneur, once a star of the crypto industry, on Friday placed FTX international, its independent US arm, and his proprietary trading firm Alameda Research into a joint bankruptcy process in Delaware federal court.
Initial filings listed both assets and liabilities of the group at between $10bn and $50bn. FTX’s new chief executive John Ray, who was brought in to chair Enron during its liquidation, said the companies had “valuable assets” and that the bankruptcy would maximise recoveries.
The sprawling venture capital portfolio will add to the complexity of the insolvency proceedings, which itself includes more than 130 companies controlled by Bankman-Fried. FTX’s collapse is among the most dramatic failures in the crypto industry not just this year, but since the creation of bitcoin more than a decade ago.
FTX and its affiliates have not yet disclosed the exact size of their liabilities and assets, and the shortfall that likely exists. FTX’s recently departed head of institutional sales, Zane Tackett, said on Twitter on Friday that the shortfall ran into billions of dollars. FTX did not immediately respond to a request for comment.
Any gap between assets and liabilities will be influenced by the value that can be recovered from almost $5.4bn that FTX and Alameda invested in almost 500 crypto companies and venture capital funds, according to the records seen by the FT.
The largest of those investments is $1.15bn that Alameda ploughed into crypto mining group Genesis Digital Assets between August 2021 and April 2022, the records show.
Publicly traded mining companies have sold off sharply over the past year as the crypto market has declined. The HashRate crypto mining index, which tracks such stocks, is down 75 per cent since August 2021. Genesis did not immediately respond to a request for comment.
The records also list more than $1bn invested across about 40 funds run by venture capital firms, including some that were investors in FTX such as Sequoia Capital. Those holdings include a $300mn investment by Alameda in K5 Global, the firm run by Michael Kives. The investment amounts to 30 per cent of K5’s general partnership, and $225mn of the total sits in Elon Musk’s SpaceX and Boring Company, and other unidentified businesses, according to the records.
Earlier this year, texts released during Musk’s litigation with Twitter showed Kives suggesting Bankman-Fried as a co-investor in the social media company. Musk was dismissive of the FTX founder and ultimately took money from the head of rival exchange Binance, Changpeng Zhao.
Other big bets detailed in the records include a $500mn investment in Anthropic, an artificial intelligence “safety and research company”, made by Bankman-Fried through Alameda earlier this year. Anthropic did not immediately respond to a request for comment.
Source Here: ft.com
Sam Bankman-Fried’s $32bn FTX Crypto Empire Files for Bankruptcy
FTX, the once high-flying crypto currency group, has filed for bankruptcy protection in the US, marking a stunning collapse of the $32bn empire built by the colourful 30-year-old entrepreneur Sam Bankman-Fried.
The filing in Delaware federal court on Friday included the main FTX international exchange, a US crypto marketplace, Bankman-Fried’s proprietary trading group Alameda Research and about 130 affiliated companies.
FTX’s failure came after Bankman-Fried desperately sought billions of dollars to save the exchange this week after it was unable to meet a torrent of customer withdrawals in a run prompted by concerns over its financial health and links to Alameda.
The collapse of such a prominent group, which advertised during the US Superbowl and whose shorts-wearing, charismatic founder was a leading donor to the Democratic party, has rocked the notoriously volatile crypto industry.
Bitcoin dropped 5 per cent to a fresh two-year low of $16,492 after the FTX bankruptcy was announced. Changpeng Zhao, chief executive of Binance, earlier on Friday said the fall of FTX left crypto facing a financial crisis akin to 2008 and that more businesses could fail in its wake.
Bankman-Fried, who one week ago was among the most respected figures in the sector with a $24bn personal fortune and close links with Wall Street and celebrities, resigned as FTX’s chief executive on Friday. John R Ray, a restructuring specialist who oversaw the Enron and Nortel Networks bankruptcy cases, will take the reins.
“The FTX Group has valuable assets that can only be effectively administered in an organised, joint process,” Ray said.
In just over three years, FTX had secured a $32bn valuation and had wooed a roster of blue-chip investors, including Paradigm, SoftBank, Sequoia Capital and Singapore’s Temasek. Venture capital firms Sequoia and Paradigm have in recent days marked their investment down to zero.
The sprawling business empire run by a tight-knit group of longtime associates around Bankman-Fried, many of whom lived together in a Nassau penthouse in the Bahamas, has around 100,000 creditors and $10-50bn of assets and liabilities, according to the filing.
The US Securities and Exchange Commission is investigating FTX, which includes examining the platform’s cryptocurrency lending products and the management of customer funds, according to a person familiar with the matter.
The bankruptcy filing follows a frantic week in digital asset markets. Rumours about the financial health of FTX and its trading affiliate Alameda Research culminated on Monday in a run on the exchange with insufficient readily accessible assets to meet $5bn in customer withdrawals.
After appeals to its investors and rival exchanges, FTX halted the demands on Tuesday and agreed a rescue by the world’s largest crypto bourse, Binance, led by Zhao, a one-time partner turned arch-rival of Bankman-Fried.
That deal fell through a day later after Binance said due diligence revealed insurmountable financial problems at FTX. Last-ditch efforts to find another investor to supply up to $8bn failed in recent days.
FTX Digital Markets Ltd, the group’s subsidiary in the Bahamas, where it is headquartered, is not included in the bankruptcy proceedings. The Securities Commission of The Bahamas froze the subsidiary’s assets on Thursday and appointed a provisional liquidator.
LedgerX, a regulated US futures exchange, and a subsidiary in Australia are among other units not included in the filing. The group’s Australian business has already been placed into administration while Japanese watchdogs suspended operations of FTX’s affiliate in the country.
Bankman-Fried has blamed mistaken accounting of the exchange’s liquidity and leverage for the collapse.
“I’m really sorry, again, that we ended up here,” he said following Friday’s filing. “I’m piecing together all of the details, but I was shocked to see things unravel the way they did earlier this week.”
Additional reporting by Stefania Palma in Washington
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