M. Montebourg Has Had Second Thoughts ...

... but the Genie is out of the bottle.

On Monday, Arnaud Montebourg, the French Minister for Industrial Recovery, stated that Arcelor Mittal was no longer welcome in France, and accused the steelmaker of "lying" and "disrespecting" the country.

M. Montebourg has since decided that Arcelor Mittal might be welcome in France after all, and French Finance Minister Pierre Moscovici has spent some time today trying to bury a truly colossal blunder under a welter of would-be soothing phrases.

Unfortunately, M. Moscovici's description of the possible nationalisation of Arcelor Mittal's Florange Plant as a 'temporary mechanism' is unlikely to prove very soothing to any profitable (and therefore potentially vulnerable) foreign owned business operating in France.

Unfortunately, too, I feel sure that M. Moscovici's assurances - given in Paris to an audience of US and British investors - that his Government has no intention of returning to 'an older way of thinking' or carrying out massive, general, and permanent nationalisations was received with a large degree of politely unspoken but deeply felt scepticism.

The BBC's correspondent in France has reported that business leaders there have expressed concern that the government's rhetoric is undermining confidence in French industry. They might well. It's one thing to let the Genie out of the bottle, but it's quite another thing to try and put it back.

In the meantime, I do sincerely hope and trust that someone had the good sense to apologise for M. Montebourg's intemperate and unjustifiably personal remarks when Mr. Mittal met with M. Hollande today.

The French, Mittal, and Intangible Assets

Arcelor Mittal announced in October that it planned to close two of the furnaces at its Steel Plant in Florange due to lack of demand in the steel industry. It was a business decision - and I suspect a very difficult decision to make, given that Florange is a traditional steel town and that over 2,000 workers would be affected by any closure - but it was, I believe, a good, reasonable, and well-founded decision given all the circumstances.

The reaction of the French Government has been neither businesslike nor reasonable, nor very sensible.

Arcelor Mittal gave the French Government a grace period of 60 days to look for a new owner for the two idled furnaces. The French government has apparently received two offers - but only for the entire Florange site. Mr Mittal, very reasonably, has refused to sell the entire operation, for which he paid £21.8bn when he took over Arcelor in 2006, and which employs a total of 20,000 workers. In response, the French Government is looking to seize and nationalize the whole of the site should Mr Mittal refuse to accede to its demands.

As if that were not more than enough, Arnaud Montebourg, French Minister for Industrial Recovery, told French business daily 'Les Echos' that Arcelor Mittal was no longer welcome in France, and accused the steelmaker of "lying" and "disrespecting" the country. The problem, he said, "isn't the furnaces in Florange, it's Mittal"

According to the BBC, the Mittal family said they were "extremely shocked" by these comments. I don't blame them. I'm extremely shocked myself.

I'm shocked by the inability of the French Government to recognise that a business must cut its losses if it is to remain a viable business and able to continue to employ some, albeit not all, of its workforce.

I'm shocked that any Government anywhere could fail to foresee the effects of its actions on future foreign investment.

I'm shocked that a Government Minister should feel it appropriate to make rude (and possibly defamatory) comments to a newspaper - and never mind what Minister, what Government, and what newspaper.

What shocks me most of all, though, is the fact that in its desire to seize a tangible asset - which may or may not yield the billions of Euros that it hopes to get from it - the French Government has not taken into account the intangible assets they will lose by doing so.

Lakshmi Mittal and his family will always be welcome in Britain whether they decide to invest their money in Britain or not. Hardworking, decent people are 'intangible assets', and money has nothing to do with that.

Hard Times & Employee Fraud

Earlier this year, an analysis of frauds recorded on the UK's Fraud Prevention Service Staff Fraud Database revealed an increase in the level of fraud committed by employees in 2011. This was reported "In Brief" at the time in the Institute of Credit Management Magazine under the title "Shifty Staff".

I have to say that I took exception to the title "Shifty Staff" - and that I found that "In Brief" didn't do the subject justice.

Certainly, "In Brief" stated, quite rightly, that whilst SME's are aware of the danger of customer fraud, they are reluctant to recognise the risk of fraud on the part of staff - people they believe they know well. Sadly, "In Brief" was too brief to take account of the fact that hard times increase the temptation to steal, or give advice as to how to minimise the risk and remove the temptation.

Some time ago, I wrote quite a long article about fraud and how to avoid falling victim to it - and you can find it at top right on the menu of this blog under the title "Look Out For Fraud". It isn't a perfect recipe for avoiding fraud, but it may give you something to think about and some ideas as to how to minimise risk and remove temptation.

In the meantime, please bear in mind that two thirds of all employee fraud is motivated by debt, gambling, or need. "Shifty" is not quite the word to describe people in the grip of those forces.

SMEs are not social workers and have neither the time nor the resources to help staff deal with the problems that might drive them to steal, but information as to how to deal with debt in particular is freely available - and there is no reason why those resources should not be made available in the office. Even if it means posting notices in the lavatories.

The Rule in Clayton & Invoice Allocation

Invoices should never remain outstanding beyond the period specified by the Terms & Conditions that form the basis of the Contract, and everybody knows that.

That invoices do remain outstanding long – sometimes very long – past their due date isn’t as unusual as it should be, and everybody knows that, too.

One other thing that everybody knows: not only do some debtors fail to pay to terms, they also insist upon paying or part paying outstanding invoices intermittently and in defiance of any logical pattern or system – so much so, indeed, that incredulous credit personnel on the receiving end of these intermittent funds are left to wonder whether their client counterparts are playing some hitherto unknown form of Lotto, and pay invoices only as they are hauled out of a bin, randomly and at irregular intervals.

The Rule in Clayton’s Case (Devaynes-v-Noble(1816) 35 ER 781) enables a Creditor, if it so wishes, to legally and justifiably allocate payments received on a ‘first in’, ‘first out’ basis. The debtor should be told that this is being done, and why – and does not have the right to argue the point.

Clayton’s Case was good law in 1816, and it is good law now – and as many Companies follow it (whether they know of its existence or not) and allocate payments received to debts in the order in which debts are incurred, the fact that invoices are not paid in the correct sequence wouldn’t seem to matter very much, but where there are a great many pro forma invoices, this apparently simple method of allocation can create such an impenetrable maze of possibilities that neither debtor nor creditor can be sure of what is, or is not, outstanding.

This does not means that moneys cannot be allocated on a ‘first in’, ‘first out’ basis, but it does mean that, sometimes, it shouldn’t be.

Allocating moneys received to the invoices that it is intended to pay, or part pay, enables the creditor to state with certainty that a debtor has paid this, this, that, and part of that on such a date, and that this, this, that, and part of that therefore remains unpaid, and is due and owing as of today.

Keeping things on track in this way is not the neatest or the easiest way to go – and everybody know that – but it keeps the record straight, avoids the possibility of future confusion and disagreement, and will save a lot of time and trouble in the end.

No one wants to spend an entire weekend – to say nothing of most of the preceding Friday and a good chunk of the following Monday – sorting out a problem account if the origins of the problem are lost in the mists of time.

I know that.

The Case of The Phantom Franc

I have always been intrigued by ghosts. They seem to conform to certain rules - follow particular patterns of behaviour according to type - but they are so capricious that one can never be sure of seeing enough of them to take proper note of their behaviour, or be sure that they are conforming to any rule at all.

All of which makes The Case of the Phantom Franc so very interesting.

The Franc is, of course, certainly dead - we all know that, because many of us attended the funeral - but I have to say that I never encountered such a persistent and reliably visible apparition. It lingers in a thin column on my Bank Statements, whispers the price of a single leek in the Supermarket, lurks gloomily at the foots of bills from the garage. It appears,in fact, a lot less capriciously than it should, and far more often than one would expect, for the ghost that it is supposed to be.

Perhaps it isn't a ghost.