Major International Business Headlines Brief::: 09 March 2023

Thu Mar 9 13:25:21 CAT 2023

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Major International Business Headlines Brief::: 09 March 2023 

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ü  JP Morgan sues former executive Jes Staley over Epstein ties

ü  Bao Fan: Why do Chinese billionaires keep vanishing?

ü  US-China chip war: Netherlands moves to restrict some exports

ü  Former Shell boss Ben van Beurden's pay package jumps to £9.7m

ü  Adidas unsure what to do with €1.2bn Yeezy goods

ü  UK microchip firms ask government for hundreds of millions

ü  Former Shell boss Ben van Beurden's pay package jumps to £9.7m

ü  Heathrow told to cut passenger charges again

ü  Foxtons boss: Struggling renters have to move further out of London

ü  Nigeria: CBN's Silence - Motorists, SMEs, Stores Reject Old Naira Notes

ü  Malawi: Empowering Women Beyond Human Rights

ü  Nigeria: Govt's Revenue From VAT, CIT Up 33% to N4.92 Trillion

ü  Nigeria: Govt Asks UK Court to Overturn $11bn P&ID Debt

ü  Uganda: Stop Excuses and Fight Poverty - Museveni Tells Ugandans

ü  Mozambique: Usd 15 Million Available for Small Enterprises Affected By Cyclones

 <mailto:info at bulls.co.zw> 

JP Morgan sues former executive Jes Staley over Epstein ties

JP Morgan Chase (JPMC) is suing former top executive Jes Staley over his links to sex offender Jeffrey Epstein.

The Wall Street giant alleges Mr Staley failed to disclose potentially damaging ties to the late sex trafficker.

A lawyer for Mr Staley declined to comment when contacted by the BBC.

JPMC is facing lawsuits from the US Virgin Islands and an unnamed woman alleging that it aided Epstein's sex trafficking by allowing him to remain as one of its clients.

The bank is attempting to make Mr Staley liable for any penalties it might face if it is found to have helped Epstein's sex trafficking crimes in the two lawsuits.

The lawsuits allege that Mr Staley "personally observed" Epstein abusing trafficked women and "spent time with young girls" he met through the disgraced financier, JPMC said in a Manhattan federal court filing on Wednesday.

"Staley persisted for years - from at least 2006 until his departure from JPMC in 2013 - in protecting Epstein in the face of attempts by JPMC to end the company's relationship with Epstein, omitted material information, made misrepresentations in the process, and continued to do so," the firm said.

"As a result of Staley's faithless service, JPMC is entitled to recover all compensation paid to Staley during the time period of his disloyalty," it added.

Who was Jeffrey Epstein?

Barclays freezes ex-boss's bonus amid Epstein links

Mr Staley worked in various roles at JP Morgan from 1979 to 2013. From 2001 he was chief executive of the bank's asset management operation, before heading up its corporate and investment banking business from 2009.

Mr Staley stepped down as the chief executive of UK bank Barclays in November 2021 after an investigation into his ties to Epstein.

At the time Mr Staley said he was "shell-shocked, angry and upset" at the findings and that he would contest them.

In February 2022, Barclays suspended millions of pounds in bonus share awards to Mr Staley.

Epstein died in a New York prison cell on 10 August 2019 as he awaited, without the chance of bail, his trial on sex trafficking charges.

It came more than a decade after his conviction for soliciting prostitution from a minor, for which he was registered as a sex offender.

This time, Epstein was accused of running a "vast network" of underage girls for sex. He pleaded not guilty.

Mr Staley has characterised his relationship with Epstein as professional. He said that his contact with Epstein began to "taper off" around 2013 when he left JP Morgan.-bbc

Bao Fan: Why do Chinese billionaires keep vanishing?

The disappearance last month of technology industry dealmaker Bao Fan has rekindled interest in a recent Chinese phenomenon - vanishing billionaires.

The founder of China Renaissance Holdings - with a client list that has included internet giants Tencent, Alibaba and Baidu - is seen as a titan in the country's tech sector.

Mr Bao's case has followed a well-trodden path: he went missing for days before his company announced that he was "co-operating in an investigation being carried out by certain authorities in the People's Republic of China".

As has also become customary, there has been no word yet on which government body is carrying out the probe, what it is about or Mr Bao's whereabouts.

The mystery shrouding his disappearance comes after a number of Chinese business leaders have gone missing in recent years, including Alibaba boss Jack Ma.

While vanishing billionaires tend to get much more attention, there have also been a number of less publicised cases of Chinese citizens going missing after taking part in, for example, anti-government protests or human rights campaigns.

Mr Bao's disappearance has once again shone a spotlight on the view that this is one of the ways that President Xi Jinping is tightening his control of China's economy.

It came in the run-up to the annual National People's Congress (NPC), a rubber-stamp parliament, at which plans for the biggest overhaul in years of China's financial regulatory system were announced this week.

A new financial regulatory watchdog will be set up to oversee most financial sectors. Authorities said this would close current loopholes caused by multiple agencies monitoring different aspects of China's financial services industry, worth trillions of dollars.

In 2015 alone, at least five executives became unreachable, including Guo Guangchang, chairman of conglomerate Fosun International, which is best known in the West for owning English Premier League football club Wolverhampton Wanderers.

Mr Guo went missing in December of that year, with his company announcing after his reappearance that he had been assisting with investigations.

Two years later Chinese-Canadian businessman Xiao Jianhua was taken from a luxury hotel in Hong Kong. He had been one of China's richest people and last year was jailed for corruption.

In March 2020 billionaire real estate tycoon Ren Zhiqiang vanished after calling Mr Xi a "clown" over his handling of the pandemic. Later that year, after a one-day trial, Mr Ren was sentenced to18 years in prison on corruption charges.

The most high-profile disappearing billionaire was Alibaba founder Jack Ma. The then-richest person in China vanished in late 2020 after criticising the country's financial regulators.

The planned mega-listing of shares in financial technology giant Ant Group was shelved. And despite donating almost $10bn (£8.4bn) to the 'Common Prosperity' fund, he has not been seen in China for more than two years. He has also not been charged with any crimes.

At the time of his disappearance Jack Ma was the richest person in China - he criticised financial regulators

Mr Ma's whereabouts remain unclear, although there have been reports of him being seen in Japan, Thailand and Australia in recent months.

The Chinese government insists the actions taken against some of the country's richest people are purely on legal grounds and has pledged to root out corruption. But Beijing's actions also come against the backdrop of decades of liberalisation of what is now the world's second largest economy.

This opening up helped to create a swathe of multi-billionaires who, with their immense wealth, had the potential to wield considerable power.

Now, some observers say, under Mr Xi, the Chinese Communist Party wants that power back and it is going about the task in ways that are often clouded in mystery.

The theory goes like this: Big business, especially the technology industry, saw its power grow under the policies of Mr Xi's predecessors Jiang Zemin and Hu Jintao.

Prior to that, Beijing's focus had been on traditional centres of power, including the military, heavy industry and local governments.

While maintaining a tight grip on these areas, Mr Xi has widened his focus to bring even more of the economy under his control. His Common Prosperity policy has seen major crackdowns in much of the economy, with the technology industry coming in for particular scrutiny.

"Sometimes, these incidents are orchestrated in a way to send a wider message, particularly to a specific industry or interest group," Nick Marro from The Economist Intelligence Unit told the BBC.

"At the end of the day, it does reflect an attempt at centralising control and authority over a certain part of the economy, which has been a key feature of Xi's governance style over the past decade," he added.

"Beijing remains focused on ensuring that big technology platforms and players do not develop their own brands and influence that makes them difficult to rein in and more likely to go against Beijing's preferences," Paul Triolo, head of China and technology policy at global advisory firm Albright Stonebridge Group said.

Also key to Common Prosperity is the rule of law and that the rules must apply to rich or poor alike.

Beijing maintains that the policy is aimed at narrowing the widening wealth gap, which many agree is a major issue that could undermine the Communist Party's position if left unaddressed. The country has seen growing inequality - and Mr Xi is said to face pressure from ultra-leftists who want to move closer to the party's socialist roots.

The mystery surrounding the billionaires' disappearances as well as wider concerns over Beijing's approach to business may have significant unintended consequences.

Some China watchers suggest the government risks deterring new business talent.

"The danger for Beijing in making targets out of tech billionaires is putting more pressure on technology entrepreneurs hoping to become the next Jack Ma," Mr Triolo said.

Mr Xi appears aware of the risk of spooking business sentiment, and in a speech to NPC delegates this week he stressed the importance of the private sector to China.

But he also called on private enterprises and entrepreneurs to "be rich and responsible, rich and righteous, and rich and loving".

Besides the announcement of a new financial watchdog, bankers were also warned last month to not follow the example of their "hedonistic" Western counterparts.

Commentators see this as further evidence that Mr Xi has the financial system in his sights.

"In recent months, we've been seeing hints of the Common Prosperity agenda bleed into financial services, particularly in regards to remuneration and bonus schemes for senior executives, as well as the pay gaps between management and junior staff," Mr Marro said.

It remains to be seen whether or not Mr Xi's crackdown on billionaires will help him significantly tighten his grip on power.

What is certainly at risk though is confidence in China's financial markets, businesses and ultimately the economy as a whole.-bbc

US-China chip war: Netherlands moves to restrict some exports

The Dutch government says before the summer it will put restrictions on the country's "most advanced" chip exports to protect its national security, following a similar move by the US.

It will include technology produced by computer chip equipment maker ASML.

ASML is one of the most important firms in the global microchip supply chain.

Semiconductors, which power everything from mobile phones to military hardware, are at the centre of a bitter dispute between the US and China.

"This is a real step forward, a real victory for the US and also very bad news for China. US-China relations are already in a pretty bad place. This clearly will make things even worse," Dexter Roberts, a senior fellow at the Washington-based Atlantic Council think tank, told the BBC.

The measures will affect "very specific technologies in the semiconductor production cycle," the country's trade minister Liesje Schreinemacher said.

"The Netherlands considers it necessary on national and international security grounds that this technology is brought under control as soon as possible," she said in a letter to lawmakers on Wednesday.

Ms Schreinemacher added that the Dutch government had considered "the technological developments and geopolitical context," without naming China or ASML.

Under the new rules, companies would have to apply for licenses to export technology including "the most advanced Deep Ultra Violet (DUV) immersion lithography and deposition".

ASML said in a statement that it expects the restrictions to apply to its "most advanced immersion DUV systems".

The company added that "based on today's announcement, our expectation of the Dutch government's licensing policy, and the current market situation, we do not expect these measures to have a material effect on our financial outlook."

Lithography machines use lasers to print miniscule patterns on silicon as part of the manufacturing process of microchips.

Since 2019 the Dutch government has stopped ASML from selling its most advanced lithography machines to China.

In October, Washington announced that it would require licences for companies exporting chips to China using US tools or software, no matter where they are made in the world.

The US has been pushing the Netherlands and Japan to adopt similar restrictions.

Meanwhile, South Korea's trade ministry raised concerns over the US policy on semiconductors earlier this week.

"The South Korean government will make it clear that the conditions of the Chips Act could deepen business uncertainties, violate companies' management and technology rights as well as make the United States less attractive as an investment option," the ministry said.

South Korea is home to major microprocessor manufacturers including the world's biggest memory chip maker Samsung.-bbc

Former Shell boss Ben van Beurden's pay package jumps to £9.7m

Former Shell boss Ben van Beurden received a pay package of £9.7m last year, up more than 50% from 2021.

His pay was revealed in the oil and gas giant's annual report and accounts.

Shell reported the highest annual profits in its 115-year history last year after a surge in energy prices following Russia's invasion of Ukraine.

Massive profits made by energy firms have added to pressure to tax them more as households struggle with rising energy bills.

Shell made a record $39.9bn (£32.2bn) profit in 2022, double the previous year's total.

When its results came out in February, opposition parties said the company's profits were "outrageous" and that the government was letting energy firms "off the hook" on taxation.

In 2021, Mr van Beurden was paid the equivalent of £6.3m - he was paid in euros because Shell had yet to move its headquarters from the Netherlands to Britain.

He was replaced on 1 January this year by Wael Sawan, the former head of Shell's gas and renewables business.

The annual report said Mr Sawan was appointed on a salary of £1.4m, although performance-related payments can often add to the overall pay package considerably. Mr van Beurden's salary was £1.4m in 2022.

Mr van Beurden's pay package was criticised by human rights and environment charity Global Witness.

"It's a sign of just how broken our energy system is that Shell and other fossil fuel companies have made record-breaking profits from an energy crisis that's forcing families to choose between heating their homes and putting food on the table," said Alice Harrison, fossil fuels campaign leader at Global Witness.

"We're calling on the UK government to implement a people-first windfall tax in next week's Spring Budget, which includes executive bonuses."

Cost of living pressures

Inflation in the UK has been soaring, with huge increases in the cost of energy a key factor.

As prices rise across the board, putting pressure on struggling households, so oil and gas firms have been coming under political pressure.

When he was chancellor, Prime Minister Rishi Sunak brought in a 25% energy profits levy.

This was increased to 35% from January 2023 by current chancellor Jeremy Hunt, and will run until 2028.

The levy applies to profits made from extracting UK oil and gas, but not on refining, or selling petrol and diesel.

Less than 5% of Shell's profits come from UK production.

The scheme was criticised because it allowed oil firms to claim back 91p in every pound invested, including in oil and gas. This investment allowance will be reduced from 80% to 29% from 1 January.-bbc

Adidas unsure what to do with €1.2bn Yeezy goods

Adidas is still mulling the fate of the €1.2bn (£1bn) worth of shoes from Kanye West's Yeezy line that have piled up after the sportswear giant ended its partnership with the rapper last year.

But fans undeterred by the anti-Semitic comments from Mr West that prompted the break may yet be able to buy the goods.

Adidas boss Bjorn Gulden said the firm is considering selling the footwear and donating the profits to charity.

He said he had ruled out other options, such as burning them.

Giving them away for free is also complicated, Mr Gulden said, noting that the resale value of the shoes has surged.

A pair of Yeezy 350 "Zebra" shoes is now selling for between $340 and $360, compared to around $260 four months ago, John Mocadlo, boss of US footwear reseller Impossible Kicks, told Reuters.

The rise underscores the cost for Adidas after it cut ties with the rapper, who goes by the name Ye, in October saying it would "not tolerate antisemitism and any other sort of hate speech".

But Mr Mocadlo said the US chain had seen a 30% spike in sales since Adidas had parted ways with Mr West.

"A lot of people are targeting the product as collectors' items. They don't know he's associated with the product," Mr Mocadlo told the BBC.

He added that Adidas had "a lot of soul-searching to do" because people still wanted to buy the product.

Sonia Lyson is seen wearing Adidas yeezy slippers on July 21, 2021 in Berlin, German

IMAGE SOURCE,GETTY IMAGES

The firm put its nine-year collaboration under review after the artist, who has been diagnosed with bipolar disorder, showed a "White Lives Matter" T-shirt design at Paris Fashion Week, prompting widespread outcry. Days later, he posted anti-Semitic comments on his Twitter account.

Adidas said the split cost the firm €600m (£534m) in the last three months of 2022. It warned investors that the end of the deal could hit profits by at least €500m in the 2023 financial year.

If Adidas does sell the products, it will have to pay Ye according to its contract, Mr Gulden said, speaking at a press conference after the firm updated investors on its 2022 performance.

But the company put the likelihood of actually figuring out a way to repurpose the remaining products at just 15% to 30%.

Mr Gulden, who was named chief executive in November and took over in January, described the end of the deal as "very sad" but the right thing to do. He said he was still deciding what to do about the leftover inventory.

"The inventory is there, it's not running away," he said. "We should not do a decision just to please someone. We should do a decision when the consequences of that decision are the most positive that we can do."

He added: "There are so many people that have an interest in this from different communities from around the world," he added. "I've only been involved in this for seven weeks, and I don't feel qualified to make a decision based on the facts I have."-bbc

UK microchip firms ask government for hundreds of millions

The boss of one of the UK's leading microchip firms is calling for the government to invest "hundreds of millions" in the sector.

Millions of products from cars to washing machines and mobiles rely on microchips also called semiconductors.

Scott White, of Pragmatic Semiconductor, said without a huge funding boost UK firms will go abroad.

The government said it would soon publish its strategy to improve access to skills, facilities and tools.

It comes as a new report says the UK government "must act now to secure the future of the vital UK semiconductor industry".

What was the chip shortage all about?

Mr White, Pragmatic's chief executive, said the government "can't just spend a few tens of millions of pounds" on the semiconductor sector, as "that isn't enough to move the needle".

"It has to be hundreds of millions, or even more than £1bn, to make a substantive difference," he said.

"It is not about unfair subsidies, it is about having a level playing field with other countries around the world."

Mr White said that other governments were "investing substantially" in their microchip industries, and that the UK had to follow suit.

Pragmatic Semiconductor employs 200 people across its headquarters in Cambridge and at two production sites in Country Durham.

Mr White added that while the company wanted to keep manufacturing in the UK, "that only makes sense if the economies are justified compared to elsewhere".

A joint report published on Thursday by the Institute of Physics (IOP) and the Royal Academy of Engineering (RAE) found "skills shortages, high costs and low public awareness threaten the UK's position in the vital semiconductor race".

The study follows a global shortages of microchips in recent years temporarily halted production of everything from games consoles to cars.

The IOP and RAE are calling for financial support for the sector in the UK.

They also want to see more children encouraged to study sciences at school, to help increase the number of qualified potential employees, and highlighting the importance of the sector.

The report - entitled UK Semiconductor Challenges and Solutions - also calls for the government to release its long-awaited national semiconductor strategy. This has now been two-years in the making.

The IOP's director of science, innovation and skills, Louis Barson, said the UK cannot simply rely on importing the microchips it needs.

He said: "We need a strong homegrown semiconductor industry, and that is critical to our economic security and physical security."

More BBC news and features on global trade

The UK's semiconductor sector is valued at $13bn (£11bn), according to one recent estimate. That might sound like a lot, but the global industry is said to be worth $580bn (£490bn).

Meanwhile, a parliamentary report last autumn said that the UK only produced 0.5% of the world's semiconductors.

The IOP says that there are currently 40 or so semiconductor firms in the UK, with 25 doing manufacturing work. And it estimates that the total workforce is around 11,400 people.

There have recently been some worrying signs for the industry in the UK.

Last week, the UK's top chip-designer Arm announced that it would be listing its shares on the New York Stock Exchange instead of London's. The news came despite UK Prime Minister Rishi Sunak meeting with bosses from Arm's parent company, Japan's SoftBank.

In addition, another UK chip firm, IQE, has already warned that it might have to relocate abroad without more government support for the sector.

All this comes against a backdrop of big overseas government investment in the semiconductor sectors. Last summer, the White House announced that it would invest $50bn in the industry in the US over five years, $29bn in boosting production, and $11bn in research and development.

It is a similar picture in the European Union, with Brussels planning to invest €43bn ($46bn; £38bn).

"Other countries are continuing to invest significantly in their own semiconductor industries, and the UK will fall behind without timely government action and a coherent strategy," said Prof Nick Jennings, chairman of the RAE's engineering policy centre committee.

In addition to the matter of funding, the IOP and RAE want the government to confirm that it will proceed with its proposed plan to set up a national body for the sector, a so-called "semiconductor institute".

"Crucially it could speak for the sector, provide a coordinated voice that would allow the industry to present a united front," said Mr Barson.

A government spokesman said: "Our forthcoming semiconductor strategy will set out how the government will improve the sector's access to the skills, facilities and tools it needs to grow. The strategy will be published in due course."-bbc

Former Shell boss Ben van Beurden's pay package jumps to £9.7m