The European administrators of failed US investment bank Lehman Brothers have filed a court order in New York demanding $8bn (£4.4bn) be returned from the US to London.

A PricewaterhouseCoopers (PwC) spokesman said the money was needed to pay creditors, salaries, property bills and other day-to-day expenses.

Lehman’s European headquarters, where 4,500 staff worked, is based in London.

PwC is currently trying to find buyers for various parts of Lehman Europe.

‘No redundancies’

Before it went into administration last Monday, Lehman Europe frequently transferred money from its London HQ to its parent company in New York, said the BBC’s Joe Lynam.

“The money was usually kept overnight – earning interest – before being sent back to London.”

But, as the bank neared its end last Sunday, that did not happen and Lehman Europe found itself down by $8bn, having formally requested the money earlier in the week, our reporter said.

PwC also said it was hopeful of finding a single buyer of Lehman’s (European) equities group and investment banking businesses, which employ 1000 specialist staff.

“Who ever buys these groups will have to take on staff liabilities,” said Dan Schwarzmann, a PwC administator.

He added that PwC was hopeful that there would be no redundancies in these businesses, but could not rule it out.

Lehman’s demise sent shock waves through global markets, undermining confidence in the financial system.

Tighter regulation

The UK prime minister said that international regulation of the financial system must be brought up to date in the wake of the recent turmoil.

Gordon Brown told the BBC: “We’re in a new economy, a global financial economy, the world is changing very fast, but the governance of the global financial system has not caught up with it and that’s what’s got to change.”

The global financial impact of the demise of Lehman Brothers is still emerging as firms worldwide state their degree of exposure to the bankrupt firm.

In Hong Kong, angry investors marched to government offices on Sunday calling for action after losing money on investments linked to the failed investment giant.

Last week, UK bank Barclays snapped up some of the core assets of the Wall Street giant, including its New York headquarters, for $1.75bn.

News reported by The BBC

There are now about 50,000 drivers using “pay-as-you-go” car sharing clubs, says the industry body, Carplus.

Club members normally pay an annual fee then a price per hour to use the vehicles which are parked close to their homes.

The four biggest clubs are in London and 14 other UK cities and are hoping to expand further.

One expert believes if rapid growth continues, drivers may struggle to get the car they want when they want it.

Big business

Streetcar, the UK’s biggest club, claims to be tripling in size each year and to now have 38,000 members.

City Car Club claims to have 7,000 members and to have increased by 125% in the last year.

“I’m a pay-as-you-go kind of person” Michael, car club customer

Zipcar, which launched in London in July 2007, claims it now has 5,500 members and is growing by 20% a month.

Whizzgo, established four years ago, claims to have grown 115% in the last year to almost 5,000 members.

Outside London, clubs also operate in cities such as Belfast, Edinburgh, Norwich, Brighton and Cambridge.

Why join?

Michael, a freelance photographer who lives in Hove found it hard to park both family cars outside his property.

“We have seen a lot of increased interest and members since the fuel price rises and the credit crunch” Philip Igoe, Carplus

Two years ago he sold one car and joined Whizzgo.

He says at the moment few people use his local car, so he can have it more or less whenever he wishes:

“I’m a pay-as-you-go kind of person so I like the fact that I know I’ll need a car for three hours and it’s going to cost me £20 in total.”

Most clubs charge an annual membership fee.

The club then charges customers between £3.50 and £7 an hour which includes a free daily petrol allowance of between 30 and 60 miles.

“Car clubs work best when there’s good public transport to support people using the car” Paul McLoughlin, managing director of Zipcar

After that, members are charged per mile.

Members who return their cars late, dirty or without enough fuel can face fines in some cases up to £50.

Insurance cover is standard but if a vehicle is damaged drivers can be liable for the first £500 of damage.

Most clubs require you to be at least nineteen years old and to have held a licence for at least a year.

Members can book cars online or by phone.

Financial driver

Philip Igoe, co-director of the car club umbrella organization Carplus says economic conditions are a big factor in the increased membership:

“We have seen a lot of increased interest and members since the fuel price rises and the credit crunch hit.

“For most people I think the driver is financial.”

“There will come a time when the car you have had almost total freedom to use is pre-booked.” John Lewis, of the British Vehicle Rental and Leasing Association

The clubs are generally welcomed by local councils, which hope they will ease parking and reduce the number of car journeys.

Transport for London has provided £600,000 to London boroughs to fund the expansion of car club bays across the city.

Car clubs are spreading much more slowly outside the UK’s main urban areas.

Country clubs

Paul McLoughlin, managing director of Zipcar says there are hurdles to overcome to reach less densely populated areas:

“Car clubs work best when there’s good public transport to support people using the car on a pay-as-you-go basis.”

The clubs are trying to keep prices low to encourage the take up of membership, but some members fear prices may have to rise in the future if they are to become sufficiently profitable in the long term.

John Lewis, managing director of the British Vehicle Rental and Leasing Association, says popularity may bring its own problems:

“There will come a time when the car you have had almost total freedom to use is pre-booked.

“The problems start to arise when the car is utilized for 75% of its time.

“When you’ve booked the car and the previous owner doesn’t bring it back.”

News reported by The BBC

The four companies in the race to run rail services in the South East have been announced.

The Department for Transport said National Express, Stagecoach, Govia and NedRailways would contest the new South Central franchise.

The eventual winner of the deal will run trains in south London, parts of Kent, Sussex, Surrey and Hampshire.

Rail minister Tom Harris promised less crowding on the franchise which is due to start in the summer of 2009.

‘Important franchise’

Mr Harris said: “We look forward to seeing strong bids from each of the competitors for this important franchise.

“We want passengers across the franchise area to see improvements – longer trains, safer stations and later running services.”

The franchise will consist of services currently run by Southern and will include the Gatwick Express.

It will also take in the Tonbridge to Redhill route now run by Southeastern.

Smartcards, including Oyster cards, will be used across the franchise area.

Major improvements such as the extended East London Line and the £5.5 billion Thameslink upgrades will also have to be supported by the successful bidder.

National Express currently runs the East Coast and East Anglia rail franchises and Stagecoach runs East Midlands and South West routes.

Dutch firm NedRailways runs MerseyRail and Northern services jointly with Serco, while Govia runs Southeastern and London Midland trains alongside the Southern franchise.

The invitation to tender will be issued in autumn 2008, with the successful bidder expected to be announced in the summer 2009.

News reported by The BBC

British Airways endured a bumpy ride at its annual general meeting in London yesterday, after shareholders voiced a series of grievances including the airline’s ban on the supermodel Naomi Campbell, and called for chief executive Willie Walsh’s head over Terminal 5′s troubled opening.

The chairman, Martin Broughton, admitted that BA’s extra fuel costs would surpass £1bn this year, and the airline was “up to our necks in perhaps the biggest crisis the aviation industry has ever known”.

One investor said Mr Walsh should have resigned over the Terminal 5 affair, which instead saw two directors depart. He said: “Why were two long-standing junior managers dismissed when he is still here?”

The shareholder turned on Mr Broughton, saying: “The chief executive should be considered for replacement, and so, given your complacency, should you.”

The chairman and the chief executive apologised for T5′s opening, which another shareholder called a “disaster”. Mr Walsh said: “We made mistakes and we let people down. Though the mistakes were by no means the sole preserve of BA, we held our hands up, we took responsibility and we apologised.” The executives added that it was now working well, and that they received daily letters and emails praising the terminal.

Mr Walsh admitted that breaking even this year would be “a considerable achievement,” adding that the economic conditions meant BA would probably scrap the planned 2 per cent boost in flights this year. However, he pledged: “We will not cut flights that our customers most value.”

Mr Broughton said BA continued to talk to American Airlines about potential closer co-operation, adding that the economic climate could well lead to more airline mergers.

Other grievances aired included an employee who said he had been racially abused because he was Scottish.

One shareholder demanded that BA lift its ban on Naomi Campbell, who was arrested after a row over her luggage on a flight to Los Angeles in April. The shareholder said she should be welcomed back because she was highly regarded by the Afro-Caribbean community. Fellow investors disagreed, booing and heckling.

Mr Broughton said: “Anyone who acts like Naomi Campbell acted on that plane will be arrested, will be charged and will be banned. I don’t care what colour they are.”

Another shareholder called for a new airport to be built “somewhere along the Thames”. Mr Walsh doubted anyone would invest in a project that would cost up to £35bn.

News reported by The Independent

Royal Bank of Scotland shareholders have agreed to buy more than 95% of the shares offered in a £12bn rights issue.

The rights issue is the biggest in UK corporate history, and the firm said investors would take up 5.8bn new shares at a value of 200 pence each.

But shares in RBS ended 5% lower in London at 234 pence.

The bank is not alone in having to ask investors for extra cash after problems in the world credit and US housing markets cut the value of its assets.

Banking sector blues

HBOS and Bradford & Bingley have also asked their investors for extra cash.

Analysts are particularly concerned that HBOS, which was formed by the merger of Bank of Scotland and Halifax, will struggle to raise the £4bn it requires to help restore the bank’s finances.

This is because private investors, rather than institutional investors, dominate its share base and are generally less supportive of rights issues.

HBOS’s shares ended 7.2% lower, while Barclays shares fell almost 6% on speculation that it would be the next bank to try and sell new shares.

“It’s a good level of takeup for one of the biggest ever rights issues, done in not easy circumstances” Alan Beaney, Principal Investment Management

Check RBS’s share price

Royal Bank of Scotland (RBS) shares have more than halved in value over the past year – including a 25% slump since the rights issue was announced in April.

Despite a brief rally last week, analysts warned that the bank and its shares may remain under pressure in the coming weeks.

Fundraising

RBS and other banks have suffered from a drop in the value of risky assets, particularly those focused on US sub-prime mortgages.

Sub-prime borrowers are those with poor or non-existent credit histories, and in recent months the number of defaults has jumped.

As a result, many lenders have had to find ways of boosting their cash reserves.

RBS’s circumstances have been exacerbated after it headed a group that bought Dutch lender ABN Amro for 71bn euros last year.

There are about 200,000 RBS shareholders; 93% of the shares are held by major investors, such as pension funds, with the other 7% owned by private individuals.

Shareholders are generally not keen on new share issues because it means that their investments are diluted, the firms’ earnings are spread more thinly and each share takes a smaller slice of the company’s earnings.

To compensate for these downsides, they are offered the shares at a discount to the market price so they could sell for a quick profit.

“It’s a good level of takeup for one of the biggest ever rights issues, done in not easy circumstances,” said Alan Beaney, head of investment at Principal Investment Management.

“The company (RBS) is still trading reasonably well and now doesn’t have that capital worry so maybe it can be knocked forward now.”

News reported by BBC