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Prospects for China’s exports and foreign investment “have probably never been dimmer” because of Asia’s financial crisis, a state-controlled newspaper admitted yesterday. The US utility was cleared to come back with a new bid last December.The PacifiCorp offer document shows that Derek Bonham, Energy Group’s executive chairman, will emerge with pounds 1.38m from shares in Energy Group if the bid goes through, based on Friday’s closing share price of 779p.. Both potential predators are still in discussions with Energy Group management but have yet to pounce formally.PacifiCorp last year offered pounds 3.6bn for the UK business, but the bid lapsed when the deal was referred to the Monopolies and Mergers Commission. In addition Energy Group said it had so far paid its other advisers, Morgan Stanley, some pounds 3.4m for work on the previous bid and would pay the bankers another pounds 7.6m for the new deal.PacifiCorp last week launched a raised pounds 4.06bn offer for Energy Group, but could face two other rival bidders in the shape of Texas Utilities, the Dallas power supplier and Nomura, the Japanese Investment Bank. It shows that if the deal goes through Goldman Sachs, the US investment bank which is advising PacifiCorp, will receive $13.3m (pounds 8.3m) for the work, plus “reasonable out of pocket expenses”.
PacifiCorp also confirmed that it had so far spent a combined total of $60m on bank fees, legal expenses and other costs in its attempts to acquire the UK power group, which owns Eastern Electricity, the UK’s largest regional power supplier.The offer document also reveals that PacifiCorp lost $65m (pounds 41m) on the foreign exchange markets after its original offer for Energy Group lapsed last summer.The US group had entered into foreign exchange contracts worth pounds 1.45bn to hedge against changes in the dollar exchange rate.Energy Group’s financial adviser, Lazard’s has already received pounds 2.5m and will gain a further pounds 5.8m if the PacifiCorp bid is successful, according to the document.

Fisher Prew Smith has since gone under, as has the firm of solicitors, Wall and Co, that handled many of the mortgages.. Financial advisers in London and New York would net almost pounds 30m from the takeover bid for Energy Group by PacifiCorp of the US, according to the offer document posted to shareholders over the weekend. The schemes were promoted by a Southport firm of financial advisers, Fisher Prew Smith, using monies advanced by West Bromwich. They payed the homeowner a lump sum out of the mortgage advance and invested the rest in assets designed to earn a high enough to pay the interest on the total mortgage.When the recession arrived the schemes collapsed as property prices fell and the value of the investments plummeted, leaving people with large outstanding mortgages and no means of payment. Depending on the outcome of the case several other building societies could find themselves with huge compensation bills.
Marketed to people over 60 who no longer had a mortgage but who had little income, the plans held out the prospect of a lump sum and a regular monthly income for life. The society is being sued for pounds 35m-pounds 40m by the Investor Compensation Scheme, which is seeking to recover money already paid out to hundreds of people who took out home income plans in the late 1980s.

West Bromwich Building Society is being taken to the High Court today on behalf of 1,000 elderly homeowners who bought mortgages promising an income for life which subsequently left them thousands of pounds in debt. The brutality of the Iraqi regime was so great that they had shot 1,200 long-term prisoners to solve a problem of prison overcrowding, Robin Cook, the Foreign Secretary, alleged yesterday.
He told the BBC television Breakfast with Frost programme that he had no intelligence to suggest that chemical or biological weapons could be used in retaliatory terrorist attacks on the United Kingdom; that was much more likely in Middle East countries.But Mr Cook added that there was a real risk involved. Robin Cook and Madeleine Albright both stepped up their rhetoric offensive on Iraq yesterday, as the prospect of real military action approached Anthony Bevins and Andrew Marshall report. He asked whether, if all United Nations sanctions, except for military equipment, were lifted at once, Iraq could immediately agree to allow UN inspectors to operate without restriction in accordance with the UN Security Council resolution.Letters, page 14.

“Despite all that has been said about attempts to find a diplomatic solution,” he said, “no American, or British minister has gone to Baghdad, unlike the Russian, French, Turkish and other governments, who have sent senior ministers for talks there.”Mr Benn himself yesterday sent an appeal to Tariq Aziz, the Iraqi Deputy Prime Minister, asking him to explore a possible solution to the crisis. “I mean, I don’t want to strike Iraq; I want an outcome which enables inspectors to get on with their vital job of stopping Saddam developing these arsenals of terror.”Tony Benn, the former Labour Cabinet Minister, said yesterday that any massive air attack on Iraq would isolate London and Washington from the majority of world opinion, and would have the gravest consequences. Six US F-117A stealth bombers are also due soon in Kuwait.Mr Cook said Saudi opposition would be studied with care. “We are not asking Saudi Arabia for the capacity to mount strike aircraft from Saudi Arabia,” he said. “I don’t know that there’s that much difference in principle between us,” he added. Western defence sources in Kuwait told Reuters news agency that British support aircraft had started arriving in Kuwait on Saturday with spare parts and support equipment for eight British Tornado bombers which are due to deploy in Kuwait today. “Will it be substantial, will it be sustained, will it be heavy?”, a television interviewer asked the US Secretary of State yesterday.

“It will be all those things,” she responded.Stoking the fires a little more, Mr Cook alleged yesterday that the brutality of the Iraqi regime was so great that they had shot 1,200 prisoners to solve a problem of prison overcrowding.”Do remember we are dealing with a very brutal, even psychopathic regime,” he told the BBC television Breakfast with Frost programme. “In the last two months, they decided that their prisons were overcrowded. They solved that by taking out every prisoner with over 15 years of a sentence, and shooting them .. A government that behaves with that kind of brutality … is not a government you can leave in possession of these terror weapons.”Military preparation is also escalating. But Saudi Arabia has far more extensive military facilities; and the lack of diplomatic support from Riyadh underlines the disintegration of the coalition formed during the 1990-91 Gulf War.Comments from Mr Cook, and his US colleague, show that the rhetorical offensive against Iraq is gearing up.