Manitoba Public Insurance’s board of directors voted unanimously to oust former chief executive officer Eric Herbelin from the Crown corporation after reviewing the findings of an internal investigation into his conduct.
On Tuesday, MPI board chair Ward Keith said he makes no apologies for calling an emergency meeting of the auto insurer’s governance committee over the long weekend.
The board voted to dismiss Herbelin with cause Sunday and his departure was announced that afternoon. MPI chief operating officer Marnie Kacher was appointed interim CEO.
“As chair of the board, I was not prepared to delay taking action until after the long weekend,” Keith said in an interview. “The board took what I believe to be the necessary and appropriate action and in as timely a manner as possible, considering the necessary due process.”
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MPI board chair Ward Keith says he makes no apologies for calling an emergency meeting of the auto insurer’s governance committee over the long weekend.
The investigation concerned Herbelin’s “work-related conduct,” Keith said. He declined to discuss the scope of the review or its findings, citing privacy concerns.
“After considering several factors, the board determined the relationship should be terminated and Mr. Herbelin was dismissed with cause,” he said.
The investigation was ordered by former MPI board chair Michael Sullivan prior to his resignation earlier this month, Keith explained.
A lawyer external to MPI was hired to conduct the review and the results were submitted last week and Keith said he was notified a few days later. Once informed of the results, Keith called the emergency board meeting, which requires 72 hours notice.
Herbelin took the top job at MPI in early 2021 with a resumé boasting 30 years of experience in the insurance business. The Swiss national held a series of management and executive roles prior to working at MPI, including as president of Elips Life Insurance, a Chicago-based subsidiary of a Swiss company.
He joined the publicly owned auto insurer during the COVID-19 pandemic and as MPI was already pursuing the largest technology modernization effort in its history, known as Project Nova.
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The MPI board voted to dismiss Eric Herbelin as CEO with cause Sunday and his departure was announced that afternoon.
Under Herbelin’s tenure, the project’s price tag ballooned from $100 million to $290 million, with Herbelin and the corporation blaming delays and cost overruns on incomplete advice from consultants hired to prepare the initial business case.
The hired help left out a number of expenses and overestimated MPI’s ability to deliver the changes necessary to move basic customer services online under the initial timeline, Herbelin told a legislative committee in December 2022.
One month later, the corporation was rapped by the Public Utilities Board, which ordered a closer look at MPI’s spending on Project Nova, citing concerns it had lost control of the $290 million budget.
In its decision to approve a 1.54 per cent rate increase for the average driver in 2023-24, the PUB said significant uncertainty remains with Project Nova and it remains concerned expenses will continue to rise.
Meanwhile, it came to light MPI awarded more than $12 million in untendered contracts to consulting firm McKinsey and Co. to help with the rollout of Project Nova. The revelation sparked a ministerial directive issued in February requiring the corporation to competitively source goods and services.
“The board took what I believe to be the necessary and appropriate action and in as timely a manner as possible, considering the necessary due process.”–MPI board chair Ward Keith
A second ministerial directive was issued in April ordering an external organization review of MPI to confirm whether MPI’s financial projections are sound, its hiring plans are good value for ratepayers and that the executive structure is appropriate, among other items. A report is expected by the end of the year.
And earlier this month, the Free Press reported Herbelin received a three per cent pay bump last year and spent 38 business days travelling despite Project Nova cost overruns and the PUB’s concerns.
Sullivan resigned as board chair shortly after.
On Tuesday, Keith declined to discuss board decisions made prior to his appointment and would not comment on raises or travel expenses provided to the former chief executive officer.
“Moving forward, having appointed Ms. Kacher as the interim president and CEO, I am really confident in her experience and her knowledge, and I also know that she’s well-respected not just within the company, but by stakeholders and business partners,” he said.
The leadership team is focused on successfully implementing Project Nova on schedule, preparing its next general rate application and providing good customer service while a search for a new, permanent CEO is underway, he said.
The Free Press was unable to reach Herbelin for comment Tuesday.
Justice Minister Kelvin Goertzen, who is responsible for MPI, said he supports the board’s decision to dismiss Herbelin, though he has not reviewed the findings of the internal investigation.
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Justice Minister Kelvin Goertzen, who is responsible for MPI, said he supports the board’s decision to dismiss Herbelin, though he has not reviewed the findings of the internal investigation.
“It deals with (human resource) matters and it’s not something I should be privy to see,” Goertzen said.
The Steinbach MLA said he is confident in the current MPI board and its chair.
NDP critic Matt Wiebe alleged Herbelin’s dismissal was a “political move” and the government should have acted sooner to address concerns at MPI.
“The issues that were identified with Project Nova should have been a major red flag for this government and it should have prompted them to act immediately to get control of the situation,” Wiebe said. “Instead of doing that, the government sat on its hands, refused to acknowledge the issues and, now, in a desperate attempt in an election year to distract or move past this issue… the minister wanted to make this change.”
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
