Although rumours first started on 11th January that Dell was seeking to go private, this column broke the news “officially” five days later, and it has taken until 5th February to be announced. Paying an unacceptable 25% premium on his own shares as at 11th January 2013, Michael Dell has succeeded in his ambition. Dell’s share s fell 31% last year, who else would be so bold? Why pay any premium?

Dell has yet to articulate the strategy and the future vision he sees – but isn’t that the point? Going private means you don’t need to say anything. So do not hold your breath on the “how” and the “logic for the future”. Dell’s personal pension is wrapped up in this deal, and his bed fellows are a PE company called Silver Lake Partners and the elderly Microsoft Corporation in a $24.4 Bn deal. This deal should be seen in context – it is the largest leveraged deal in the world since the beginning of the financial crisis of 2007/8. It is extraordinary and deserves a lot of attention.

The mere $2bn partner of Microsoft is not surprising – they need friends and surety for their less than popular software. Be assured that it is a token investment / loan not a full commitment. A temporary commitment no more. So what of Dell himself and Silver Lake? $10Bn of borrowing even in the depressed market of today is going to take a lot of servicing. If interest rates do increase this represents a tight noose around the neck of a company who crave less intrusion, less inspection, less clarity of purpose and holding to deadlines and performance targets. This is the essence of the logic of going private – no quarterly intrusions and justifications.

Analysts are pre-occupied with hardware and software – is Microsoft finally going into mobiles, tablets and other portable devices that that they have failed to achieve significant success in before; has Dell a master plan for tablets; etc. This is NOT where the margins are – this is where the turnover is. Turnover impresses the market, margin makes the shareholder happy. Let us not forget the services side of Dells business. Despite the reckless over-payment for Perot Systems – as we stated previously Dell has a bedrock service company. Here is where the future lies here is where the margins can be measured in double digits.
Dell’s biggest test in the coming two years will be setting out the role of services and software development and the positioning for the conventional hardware where it belongs in a defined box and marked “temporary” and more importantly “designed in US but Made in China”. Only then is Michael Dell’s future recognition assured a place in history.

Michael Dell made a brave but ill-advised decision to buy a second rate service provider called Perot Systems in 2009. At that time we speculated that if Dell understood the true value of the outsourcing services industry and its double figure margins then there would be an opportunity for Dell to become a giant and to rival the then mighty HP acquisition of EDS in May 2008.

The ludicrous price Dell paid ($3.9Bn) and the inept executive and second rate management he inherited from Perot predictably failed in all areas except healthcare and all geographies save the mighty US of A where Perot had critical mass. And Dell provided another example of shareholder value destruction by M&A, when the acquirer has no expertise in the acquiring company – look at HP’s increasingly disastrous handling and lobotomising of EDS, or the probable failure of Logica in the CGI family.

Dell’s stock has fallen 43% over the last five years. Now, predictably to any industry observer, Michael Dell is seeking to undertake a leverage buyout in cooperation with private equity companies TPG Capital and Silver Lake. Again Dell and financial gurus will find ways to make the spreadsheets look convincing but we believe they will again miss the core issue.

The key question for clients and investors alike is what does Mr Dell believe he can achieve? On the hardware side where prices fall even faster than Dell’s stock price, will Dell try to again copy key aspects of Apple’s success? Dell failed previously and the only reason IBM did not fail is that they could smell the wind and sold the PC Division to Lenovo. Samsung is the only worthy competitor now – Dell would be in a poor third place and we would expect it to succumb to the forces of Amazon, Google or even god forbid the Microsoft Surface. Surely Dell will not attempt the mobile market again!

Will he appeal for more time to take the services divisions on to new highs? How will being “free” of the financial markets and more opaque help success to occur? With over $12Bn invested in strengthening Storage Services, Enterprise Software and adding consulting services Dell has sought to compensate for the drop in PC hardware revenues but we just cannot see how being private will help sales.

At a $19Bn Market CAP, and with the lowest valuation of all PC-hardware manufacturers (except HP), how can Dell possibly afford the finance costs of a leveraged buyout and deliver the kind of multiples his PE friends are looking for?

Still maybe Michael Dell is a sharp business man and maybe he knows something we do not – certainly in his 2010 speech in New York City he openly discussed the possibilities opened to him and three years later he stands ready to attempt to fulfil his dream. Certainly in being free of the quarterly scrutiny of the markets, he may have an opportunity to design a new company, leveraging his successes and failures and hitting his personal pocket. His MSD Capital personal investment fund is worth $9Bn. Apple’s market capitalization has shrunk lately to about $450Bn… and Dell’s ecosystem is positively microscopic compared to Apple’s, Google’s or Samsung’s.

In short we see a private Dell as a huge gamble and one that will be very closely watched.

Michael Dell made a brave but ill-advised decision to buy a second rate service provider called Perot Systems in 2009. At that time we speculated that if Dell understood the true value of the outsourcing services industry and its double figure margins then there would be an opportunity for Dell to become a giant and to rival the then mighty HP acquisition of EDS in May 2008.

The ludicrous price Dell paid ($3.9Bn) and the inept executive and second rate management he inherited from Perot predictably failed in all areas except healthcare and all geographies save the mighty US of A where Perot had critical mass. And Dell provided another example of shareholder value destruction by M&A, when the acquirer has no expertise in the acquiring company – look at HP’s increasingly disastrous handling and lobotomising of EDS, or the probable failure of Logica in the CGI family.

Dell’s stock has fallen 43% over the last five years. Now, predictably to any industry observer, Michael Dell is seeking to undertake a leverage buyout in cooperation with private equity companies TPG Capital and Silver Lake. Again Dell and financial gurus will find ways to make the spreadsheets look convincing but we believe they will again miss the core issue.

The key question for clients and investors alike is what does Mr Dell believe he can achieve? On the hardware side where prices fall even faster than Dell’s stock price, will Dell try to again copy key aspects of Apple’s success? Dell failed previously and the only reason IBM did not fail is that they could smell the wind and sold the PC Division to Lenovo. Samsung is the only worthy competitor now – Dell would be in a poor third place and we would expect it to succumb to the forces of Amazon, Google or even god forbid the Microsoft Surface. Surely Dell will not attempt the mobile market again!

Will he appeal for more time to take the services divisions on to new highs? How will being “free” of the financial markets and more opaque help success to occur? With over $12Bn invested in strengthening Storage Services, Enterprise Software and adding consulting services Dell has sought to compensate for the drop in PC hardware revenues but we just cannot see how being private will help sales.

At a $19Bn Market CAP, and with the lowest valuation of all PC-hardware manufacturers (except HP), how can Dell possibly afford the finance costs of a leveraged buyout and deliver the kind of multiples his PE friends are looking for?

Still maybe Michael Dell is a sharp business man and maybe he knows something we do not – certainly in his 2010 speech in New York City he openly discussed the possibilities opened to him and three years later he stands ready to attempt to fulfil his dream. Certainly in being free of the quarterly scrutiny of the markets, he may have an opportunity to design a new company, leveraging his successes and failures and hitting his personal pocket. His MSD Capital personal investment fund is worth $9Bn. Apple’s market capitalization has shrunk lately to about $450Bn… and Dell’s ecosystem is positively microscopic compared to Apple’s, Google’s or Samsung’s.

In short we see a private Dell as a huge gamble and one that will be very closely watched.

This column has highlighted many staggering incompetencies of the HP board in the past – its acquisition of EDS (write-off of $8Bn in August 2012); the acquisition of Palm (write-off of $3.3Bn in November 2011) and now $8.8Bn on the UK acquisition Autonomy. This is $20.6Bn is the twelve months to date! This is more than some countries annual budget. How is it that the shareholders are not baying for blood? Oh yes, then there is the small matter of HP’s worst ever results.

Then there is the dynamic decision making from the HP executive known as “stop – go – I will say that again”. Do you remember this? “We are out of the Tablet market … er let me rephrase that, we are fully committed to the tablet market”. Then of course there is the board cannibalistic tendency to fire their CEO’s unceremoniously and publicly – Fiorina, Hurd, Apotheker et al. And, least it be forgotten, Autonomy’s CEO, Mike Lynch and his entire executive team were executed in May this year.

Insiders suggest that this is when Meg Whitman first “knew of the accounting irregularities” – well Meg (and team), perhaps you need to read a bit more. Long before the acquisition of Autonomy in August 2011 the industry commentators were alerting the market to “revenue growth not consistent with changes in the deferred revenue line”. Analysts Berenberg and Canaccord both warned of this. This issue cannot have been in investigation for more than six months –surely?

As the Financial Times points out HP employed experts on this transaction KPMG as auditors and bankers Barclays and Perella Weinberg. Autonomy however had Deloitte’s as auditors and Qatalyst, Goldman Sachs, CitiGroup, Bank of America, UBS and JP Morgan … six banks on its side! Is it vaguely possible that these institutions too do not read, communicate with the market or buy analysis that the rest of us take for granted? It appears so.

Some real questions need to be asked on the latest Autonomy write down, such as the goodwill sat in the books $6.9Bn. In accounting terms this means that HP admit that they paid $6.9Bn more than the net assets of the company. So how can HP claim financial irregularities of $8.8Bn on a net worth of $4.1Bn? This is nonsense.

Despite this Meg has now committed HP to legal action to recover the monies from the Autonomy shareholders and presumably the next stop is the auditors for due diligence failures. Diversionary tactics to de-emphasis HP’s worst ever figures? Surely not.

Perhaps Meg you should break with HP board protocols and consult your shareholders first. Let us not forget that Meg was a member of the HP board and voted in favour of the deal before Apotheker ’s departure, and so she must bear some culpability.

Writing down 80% of Autonomy’s purchase price is a shareholder decision surely? Shareholders need to rally and clear out this incompetent board and CEO, once and for all.

The outsourcing industry is in the crapper. There are precious few outsourcing virgins out there, there are virtually no mega deals left in the market. The service providers have economic models still suited to the “early and good old days”, they still pay huge salaries and commissions to staff who cannot now sell economic large deals, their own marketing department are undermining the whole of their economic proposition with “cloud everything, pay per unit, plug and play anything, minimal commitment” and all at commodity pricing and near zero profit margin. With large over-supply in the market further consolidation is imminent, especially in tier two and three suppliers the most likely be acquired in the short term, such as Xchanging, Phoenix IT and even Unisys.

Clients, including the outsourcing industry bedrock of central and local government, have ceased buying on a large scale, favouring plug and play, short term, zero asset transfer type transparent deals where tier three providers (Capita, Serco, et al) regularly succeed in beating tier one providers (IBM, CSC and HP) by virtue of their agility and instant and devolved decision making down to middle management whilst the tier one providers still decide via investment committees and achingly slow internal processes. Then there is the fact that tier one’s do not provide the services they say they do – for example BT offers but does not provide all its own datacentre services having subbed them out years ago to HP. Desktop provision by third parties would make clients really nervous if they really knew in detail at decision making time. So as a buyer, what are you buying and from whom and where do you sit when market consolidation happens?

So clients, can you go find yourself an independent intermediary and can they really tell you how any supplier will sub and divide your portfolio of services?  Few can. This it important – you bet your sweet $%£& it is!! How can you plan for the future when you put at risk your own career, based on limited or incomplete knowledge and with consultants who primary skills are in RFP’s r 4US and running a process? Why aren’t consultants held to account? They should be.

So why does Lex say outsourcing is costing you personally money – the facts are in today’s headlines, for example the FirstGroup fiasco with Virgin is headlined at costing the British taxpayer (that would be you) around £40m. Sources close to Lex believe that this is the mere tip of the iceberg, with a final price tag of between £300m and £400m once the lawyers have costed the 20% drop in FirstGroup’s share price, the impossibility of running a secondary “fair” tendering process, the whole rethink of government of evaluation criteria, the associated governance changes necessary, the refunds of the original tendering parties bid costs, etc.

What then about the sheer cost of litigation proceedings of other government cock ups (corporate cock-ups seldom hit the press) – let’s take the NHS project. State sponsored litigation here is against CSC and Fujitsu, with BT and Accenture settled some time back. At stake is about £2Bn. That is two thousand million for any Americans in the room. Costs are running at many tens of millions so far. Any state failure to win can be measured in hundreds of millions for the tax payer.

In addition, if you happen to have a pension (remember those “financial protection policies” for when you retire) then think of the costs associated with various failed outsourcing deals in the top investment portfolios. Let’s not bother with who is to blame – client or supplier, but all shareholders need to know about these failures of management and executives in huge outsourcing deals, such as service provider and previous pension-fund sweetheart G4S. Now there is at least £200m of costs to be written off, never mind the brand impact; AstraZeneca’s fight with IBM – final costs undisclosed but it was a £900m contract; the Thompson Reuters cancellation of the £500m Fujitsu deal and still subject to ongoing legal action; bad software upgrades by an outsourcer that made RBS’ systems unable to process payments for both individual and business customers hitting NatWest and Ireland’s Ulster Bank – compensation run to millions;  the DWP’s  cancellation of the £300m deal with Fujitsu; DBS and IBM’s “repeated failure to apply the correct procedure when addressing instability in the communications link of the storage subsystem resulted in the service outage” of a national ATM’s at peak times, etc, etc the list goes on and on.

Data commissioned by Lex shows that the extra costs to shareholders in the UK’s FTSE 250 companies alone, to recover, migrate and re-implement IT systems ran to a minimum £480m in the year March 2011 to March 2012. UK plc (Her Majesty’s government) outshines this figure four or five fold.

So do you still think that as a tax payer and shareholder that outsourcing is not costing you money, personally?

Long suffering shareholders of Phoenix, providers of data hosting, disaster recovery and datacentre services, drew in a deep breath on Wednesday when news that CEO David Courtley had tendered his resignation filtered through.

Forced or voluntary it lays open the very real possibility of a trade or private equity sale in the next few months.

Already rocked by poor performance and a major £14m accountancy fraud, shareholders were shocked in September to “welcome” rottweiler Martin Hughes, the driving force behind Toscafund, acquiring an 8% stake to become the group’s second-largest shareholder, behind Aberforth Partners with 16 per cent.

‘While accounting irregularities seem to happen too frequently in the technology sector, the result is that the companies get sold … Phoenix IT could follow” said Panmure Gordon analyst George O’Connor. NetStore, Horizon Technologies, Synstar and Computerland all follow the pattern.

Meantime Deloittes have resigned as auditors and been replaced by PwC, and no announcement of a replacement for Courtley has been made.

Lex expects the £116m market capitalisation business to be put up for sale before the end of this month. In today’s market conditions and with the stock now a third lower than its float price in 2004, shareholders can expect to take another cold shower.

We left Part One of this series with HP CEO Meg Whitman referring to EDS by name and telling a meeting of HP partners that “EDS is going to be a great turnaround story” – having eliminated the name EDS, the CEO now seems intent on reviving it. With a projected 13% drop in revenues in the next year, the loss of four major accounts and a mere 3% return, any “great turnaround” would truly be a miracle.

To understand whether miracles could still happen, lets concentrate only on HPES (or is it EDS now?) in Europe. The UK in particular has been the bedrock of sales and above all profitability for this global player for decades. In August, Mike Nefkens a long term EDS’er and Anglophile replaced John Visentin. Mutterings about this move being only temporary, are wrong. Nefkens is the man for HPES globally. The equally capable Howard Hughes (again an EDS’er) stepped into Nefken’s old role as European ES leader having run many large client contracts, the last being the huge UK defence project – DII, one of EDS’s barnstormer accounts worth many £Billions.

Both men have had solid experience running large client accounts and thus have the empathy and understanding to drive a real client focus. Both are used to factoring considerably more risk into their deals/contracts than HP ever felt comfortable with. If Whitman truly sees a turnaround she must embrace more “educated risk” from the duo.

Between the two men, the importance of Autonomy will not be lost. Security and Big Data are huge markets and there is little competition of any credible nature in a managed services sense, but large-scale investment here will be crucial. Whitman must provide this investment.

Expect HPES to dictate what they want more explicitly – whole end-to-end responsibility, not fragmented parcels of work even of a very large scale. They want to make a real difference or they don’t want the work. Expect “no bid” replies more often – size, complexity, longevity will become more important to HP. Expect existing accounts to be targeted first for additional mutual commitment, for more devolved powers and nimble decision making in the existing account management team, particularly where competitive frameworks for new business are concerned, for example in Rolls Royce and central government contracts. Expect loss making accounts to be terminated unceremoniously.

Turning briefly to the US, Nefken has Denis Stolkey running the Americas with James Best as his Sales lead, both are again long term EDS’ers. Hughes is supported by Martin Southgate running sales, once again a old fashioned EDS team come together. And finally and very interestingly, Mary McHugh who was running ITO delivery has gone and Tom Egan, another EDS veteran, has taken over.

In Part One, I mentioned a certain Deja Vu. Can you feel it? What seems to have happened is that by accident or design the lost ninth legion of EDS seems to have reassembled and they now have control of all the strategic vantage points. But do they have what it takes to turn the corner? Provided the US HP mafia lets them have their head and agree to a loosening of controls to allow them to do what they do – large profitable deals will follow.

The alternative is very clear – the current team have what it takes to interest any sensible Private Equity company to perform a successful management buy-out.

Meg Whitman, CEO of beleaguered HP, isn’t stupid but then she isn’t clever either. She has however learnt the art of political survival from her self-funded abortive attempt to become governor of California, which saw a $145m of election bill and a lesson in personal wealth destruction.

$4bn was the overnight market cap loss as a result of Whitman’s state of the nation review yesterday. HP shareholders bite deep again. But importantly and cleverly by referring to HP’s CEO mortality rate as “the single biggest challenge”, she has challenged the dysfunctional HP board very openly and publicly to give her time. The single biggest challenge HP faces is their in-fighting and corrosive board.

Whatever happens in the near future Whitman has secured herself a reputational “get out of jail free” card.

Whitman points to herself as the steady pair of hands that HP needs, whilst writing off 2013 economically and stating by 2015 that HP will “hum”. HP does not need another Mark Hurd spreadsheet jockey. HP needs a visionary leader, someone who not only sees the future but actually creates it.

In March 2011 Leo Apotheker (then HP CEO) stated “HP has lost its soul” and positioned himself as the anti-Mark Hurd CEO. Leo was “toast” a matter of weeks later, as was Mike Lynch (CEO of Leo’s brilliant acquisition of Autonomy) ousted in very unceremonial fashion, as was …, as was …

Deja Vu abounds, for example Leo was slated for the embarrassing launch and within days cancellation of the new HP Touchpad – last week Whitman announced a return to the tablet market – careful girl, don’t use that get out of jail card too soon!

The real client and market interest should lie with HP enterprise and outsourcing services, or HPES division which incorporates the remnants of the great EDS empire. Blamed largely for the $10.8Bn write down and positioned as being hit “by a slowing economy in most of our biggest regions including western European (that we be us then) and China”. Returning a mere 3% return HPES has been restructured to death and, according to influential CRN, been paraded around Private Equity companies without success.

Bizarrely Whitman now refers to EDS by name, something HPES management are not allowed to do, and recently told a meeting of HP partners that “EDS is going to be a great turnaround story” – there’s that damn Deja Vu things again.
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In Part Two of this story we will examine the case for an EDS revival.

This column has long advocated the splitting of HP into two companies – a separate Services entity and the retention of the Product company.

If you are interested in this, please check out the previous Lex columns on HP on our website.

Computer Weekly is reporting that Human Rights charity, Reprieve, has gathered documents that it says demonstrate CSC had been contracted to carry out multiple illegal CIA renditions.

CSC has been linked in court documents to the rendition of the German citizen Khaled El-Masri, whose case against CIA collaborators in the Macedonian intelligence services is pending at the European Court of Human Rights. Computer Weekly states that El-Masri was “was blindfolded, beaten, imprisoned incommunicado for 23 days, stripped, severely beaten, sodomised, chained, hooded, drugged, flown to Afghanistan, beaten, imprisoned for four months, interrogated by men in ski masks, threatened, denied legal representation, force fed, and flown to Albania on a plane allegedly chartered by CSC, where he was left on a remote road in the middle of the night approximately 1,500km from his home”.

“We think CSC was at the top of the contracting tree for this,” said Dr Crofton Black, a researcher at Reprieve. “It’s becoming increasingly clear that CSC was the prime contractor between the government and the companies that run the flight operations.”
This brings into sharp focus the mostly unpublicised activities of tens of outsourcing providers who today are contracted by the MoD, GCHQ, Homeland Security, the US Navy and other official “fronts” that outsource “other services” for and on behalf of CIA, MI6, and other shadowy organisations.

It is freely acknowledged that the invasion of Iraq was hugely dependant on the success and logistical genius of EDS systems (now HP). This is not a Dog of War story but a carefully controlled and contained end to end logistics and supply success story – irrespective of your politics. It was widely known in the outsourcing world that the invasion planning had begun and was unstoppable even before Congress and the UN officially sanctioned it.

So why should we be surprised that CSC, in its contracted flight scheduling duties, is allegedly at the heart of the shameful rendition saga. To CSC this is just part of the contract, how were they to determine the validity of individual flights and supporting logistics? Contractually CSC cannot be accountable.

And morally? Well, if you tender for and win the coordination of military traffic and applications you by definition need to expect a good percentage will be “dark ops” related. The lure of huge long-term stable contracts is all powerful and demanding. CSC has no case to answer for effective running of services where the contractor has no knowledge of the client’s objectives and needs to accept its client is legally entitled to and equally accountable to a higher authority.

Now that’s where the real dilemma lies.

A week ago General Motors’ CIO Randy Mott signalled the end of 28 years of pioneering outsourcing deals by announcing that he was returning 90% of outsourced services back in-house. HP’s approximately $700m per annum (including hardware provisioning) outsourcing contract is now in full run down mode.

Returning IT in-house is an alarming and growing trend in both the private and government sector, for example, Islington Borough Council is currently bringing various services back in-house after 15 years of being outsourced.

The General Motors decision must frighten the executives and shareholders of HP and competitor giants such as IBM and CSC all the way through to the minnows such as Capita and Logica. Remember GM pioneered outsourcing when they originally bought EDS from Ross Perot in 1984, and twelve years later they spun EDS out as an independent company but not before giving it a significant and lengthy back to back contract for global services which basically guaranteed EDS credibility and financial stability to acquire business anywhere in the world. HP of course parted with $13.9Bn to buy EDS in 2008.

Two companies effectively pioneered outsourcing in the 1980’s, General Electric and General Motors. General Electric has spent the last five years exiting its large scale outsourcing interests and investments and now General Motors is doing the same by stating that they will transition services over the few years and will be recruiting thousands of IT staff worldwide.

Mott says the goal is to make GM more efficient and more productive. If anyone knows what he talking about then it is Mott – few people remember that Mott was CIO of HP and oversaw that company’s global restructuring of IT operations but left to avoid the short lived “Leo era”.

Ask yourself this question –how did Mott get this past the GM board? On the one side, the promise of cheaper and more efficient IT which is currently bought in as a service and so is nice and clean on the balance sheet. On the other side, the hiring “thousands of staff” with all the associated heavy pension and social costs; a hugely increased CAPEX budget to acquire the IT assets; the business risk and huge transition costs which will flow straight to the liabilities side of an already shaky corporate balance sheet. AND all this against a background of a global recession; loss of market share; and GM’s key product having to compete against the most intense competition this beleaguered industry has ever seen. How did he do it?

Either Mr Mott is a genius snake-oil salesman to have sold the idea to the CFO and board, or HP must be making obscene profits – enough to make this decision viable and worth the risk.

Answers on a post card …

It is not often that you get an exclusive story and that in addition has all the elements of a melodrama – sustained and significant fraud, greed and envy, betrayal, menace, multiple fast cars, hired muscle, and … you guessed it – Outsourcing!

What I hear you cry! – an outsourcer has been jailed for fraud! YES but whilst that is true, it is not your tier one players like IBM or HP, it’s more like your tier four player at the rats and mice end of the market. But an outsourcer nonetheless! Best of all, and you really really could not make this up – the villain’s name is … Thomas Scragg!

Picture this, a Wolverhampton payroll outsourcing company specialising in handling the wages of many local construction companies, called Mona Payroll was in fact a conduit for siphoning employee PAYE contributions into the back pocket of the CEO, one Thomas Scragg.

It is estimated that he stole £34m of contributions, aided by co-conspirators including accountants and auditors, over a six year period. Scragg was sentenced to 17 years, which we are given to understand is one of the longest sentences in British criminal history.

So was this the result of some bright young thing in HM Revenue and Customs long standing investigative division, or hard dedicated work by a specialist fraud unit of the Midland Police or as a result of a lodged complaint form a disgruntled previous employee? Actually, none of the above.

It was the reported concerns of neighbours who lived next door to Scragg’s hired muscle, bodyguard brothers Carl and Anthony Johnson who started driving around Wolverhampton in cars like a Porsche Cayenne, Ferrari Spider and a Lamborghini Murcielago. Scragg and the Johnson brothers also installed bullet proof glass in their homes. The brothers were found guilty of money laundering in Birmingham crown court and will be sentenced at a later date.

Please, you do need common sense to prevail when signing outsourcing deals, but remember what your Mum always told you, “Scragg by name Scragg by nature”.

Lest we do the man an injustice the dictionary offers this explanation: Scrag is 1. A bony or scrawny person or animal. 2. A piece of lean or bony meat, especially a neck of mutton. 3. Slang The human neck. tr.v. scragged, scrag•ging, scrags Slang To wring the neck of; strangle. There are many builders in Wolverhampton today, all of whom are lining up to “scrag” Thomas’ little scrawny neck given half a chance!!