Zambia case puts corporate ethics guff on notice 11 Apr 2019 Britain’s Supreme Court says Vedanta can be sued in London for pollution offences in the African state. Multinationals have tended to trumpet corporate social responsibility at head office, while ignoring sins at subsidiary level. Whatever the case’s outcome, that will change.
Roundup crisis could snarl Bayer in activist weeds 29 Mar 2019 The chemicals maker has lost 40 bln euros in value since U.S. juries said its glyphosate herbicide causes cancer. With science on Bayer’s side, delaying any settlement makes sense. But the longer the German group’s shares remain low, the more vulnerable it looks to interlopers.
Swedbank CEO exit still leaves iceberg of problems 28 Mar 2019 The Swedish lender has dismissed CEO Birgitte Bonnesen shortly before its annual meeting. That was almost inevitable given allegations that the lender was involved in money laundering in the Baltics. The problem for investors is that the scandal will last longer than her tenure.
Wirecard’s relief surge has gone too far 26 Mar 2019 The 15 billion euro payment group’s shares rose more than a quarter after a review found no evidence of any misconduct that would have a material financial impact. Its valuation is now uncomfortably close to sector stalwarts Visa and Mastercard. A bigger discount is merited.
Hong Kong fumbles its China extradition fix 21 Mar 2019 The city may exclude white-collar crimes from a mooted deal to exchange suspects with the mainland, to assuage the business community’s concerns. Unfortunately, such an awkward compromise would only confirm the tension between the financial hub’s needs and Beijing’s ambitions.
Legal woes poison Bayer’s prospects 20 Mar 2019 The German chemical group’s shares fell another 12 pct after a second U.S. jury said its Roundup weed killer causes cancer. Its value is down $34 bln since August and investors reckon its crop sciences unit is worthless. With thousands of cases pending, even that may be generous.
China’s hasty investment law garbles the message 15 Mar 2019 Lawmakers have passed new rules affecting foreign firms from BASF to BMW, fast-tracking reforms to ease U.S. trade tensions. The result, though, seems awkwardly vague, drawn up with little outside input. That suggests the aim is a diplomatic win: real change will take longer.
Raiffeisen is stalked by spectre of Danske 5 Mar 2019 Shares in the Austrian lender and two Dutch banks fell after media reports of money-laundering allegations. The former is the hardest hit since investors think the latter have stronger defences. Fears of a Danske-style U.S. probe mean they are in no mood to defer judgment.
Arrests give investors new reason to avoid Russia 26 Feb 2019 Sanctions imposed on some well-connected oligarchs have already spooked foreign money managers. The detention of Baring Vostok executives including founder Michael Calvey highlights domestic dangers. Less capital will be willing to navigate the risks.
Khashoggi is ghost at Milken’s Abu Dhabi confab 15 Feb 2019 Financiers at the billionaire’s annual Gulf shindig adopted a Trumpian shrug over Saudi agents’ murder of the dissident journalist. Lucrative forthcoming Aramco deals and White House support for the regime explain why. But the issues raised by Khashoggi’s death still linger.
Cannabis brings out mellow side of U.S. politics 13 Feb 2019 It’s one of the few issues on which most Americans agree, and a revived proposal to let banks serve state-sanctioned marijuana producers has a chance of becoming law. Fully legal weed remains a long way off – but that is something few in the industry actually want.
Holding: SEC stays classy on class-action lawsuits 13 Feb 2019 The U.S. watchdog allowed Johnson & Johnson to block a proposal to ban shareholders from suing en masse. The move preserves an essential check on corporate fraud – for now. Rising litigation and Supreme Court hostility to securities cases may soon force the regulator to yield.
Holding: Boards miss message about personal email 5 Feb 2019 Until recently, directors and officers could chat on individual accounts with near impunity. Now courts are forcing bosses at Uber, Facebook, Papa John's and elsewhere to cough up private and often incriminating texts. Think twice before sending that smiley-face emoticon.
M&A conflict case is advert for independent advice 31 Jan 2019 United Natural Foods is suing Goldman Sachs, saying the firm put its own interests first when it advised on and financed an acquisition. Goldman disagrees. Whatever the reality, having one adviser in multiple roles may be efficient, but it carries some risk of bad blood later.
Europe’s telcos have 20 bln reasons to love Huawei 29 Jan 2019 Ditching the Chinese supplier could push up costs for the region’s carriers, and knock 7 pct off their market value. Politicians may deem that a price worth paying to ensure the security of mobile networks. Yet slow-growing, debt-heavy telcos hardly need another cash flow hit.
Deripaska markdown will persist at En+ and Rusal 28 Jan 2019 The Russian metals groups have been freed from U.S. sanctions. Though their shares have perked up, they still trade below pre-sanctions level. Given the risk of new penalties should previous majority owner Oleg Deripaska exercise control, the valuation gap will linger.
Ghosn successors may further strain Nissan ties 24 Jan 2019 Renault has well-qualified successors lined up to replace its former CEO and chair, who resigned. They have the French state’s implicit backing. The political association could, however, raise hackles at its Japanese partner, making it harder to resolve the crisis in the alliance.
Renault-Nissan saga will eventually favour France 21 Jan 2019 Governance changes on the Japanese side may reduce its French partner’s board power. Yet Renault’s 43 pct stake is its trump card, and Nissan’s moves to skirt it are likely to fail. It’ll take time, but Paris should one day get what it wants: closer integration and maybe a deal.
PG&E takes one for the California wildfire team 14 Jan 2019 The utility is readying a bankruptcy filing, facing $30 bln of fire-related liabilities partly thanks to the Golden State’s questionable legal norms. Poor planning, including inadequate insurance, was its own fault. But state and other government actors have also fallen short.
Bond markets shrug off Danske dirty-money risks 11 Jan 2019 The bank at the centre of a money-laundering scandal saw its cost of issuing risky debt more than double. Still, its yields are far below those of Italy’s UniCredit. The troubles at the Danish lender may have further to run, and are harder to predict, than Rome’s political drama.