Connect with us

Business

Toshiba should overhaul board and management, major Japan pension fund says

Published

 on

Toshiba Corp’s proposal to split itself into three companies won’t solve its governance issues and the conglomerate should prioritise an overhaul of its board and management, said a senior executive at one of Japan’s largest pension funds.

Ken Hokugo, corporate governance director at the Pension Fund Association (PFA), said the interests of Toshiba management and shareholders are “not aligned”.

“The most orthodox solution to the discrepancy is to bring onto the board someone who can monitor and discipline management, and to let the revamped board to select the new chief executive,” he said in written responses to Reuters queries.

Hokugo declined to comment on how the PFA, which owns an undisclosed amount of shares in Toshiba, would vote on the conglomerate’s plan to break up into three companies – one for energy and infrastructure, another for electronic devices and a third to house its flash memory chip assets.

Nonetheless, his comments highlight broad shareholder concern about Toshiba, marking a rare public pronouncement from an influential Japanese pension fund, part of an industry that typically stays silent about companies they invest in.

The PFA, which provides benefits to people who have left their employee pension programmes, is one of the country’s largest pension funds with 12.5 trillion yen ($108 billion) in assets.

Foreign shareholders have, however, been more vocal about their concern, with several of them having a tense relationship with Toshiba management after it was found by a shareholder-commissioned investigation last year to have colluded with the trade ministry to blunt their influence.

Toshiba said in a statement to Reuters that its board and management firmly believe the break-up plan is “the best path to create additional value for our stakeholders.”

Hokugo noted successful turnarounds at Olympus Corp and chip materials maker JSR Corp, which both invited shareholder ValueAct Capital to take a board seat. “As a result of overhauls assisted by a ValueAct partner, their corporate values shot up,” he said.

Some Toshiba shareholders have told Reuters they are publicly or privately pushing the firm to do a more thorough review that would take into account potential private-equity bids.

Toshiba failed to formally solicit buyout offers during a five-month strategic review before deciding on the break-up, giving the impression that a split was a foregone conclusion for management, Hokugo said.

He also said it was understandable that some shareholders wanted to see a private equity deal as taking Toshiba private could allow for drastic measures that may be not possible for a listed company.

Hokugo also stressed that it should be up to shareholders, not management, to decide on the best option to increase corporate value.

Toshiba plans to hold an extraordinary shareholder meeting https://www.reuters.com/business/toshiba-shareholder-calls-extraordinary-meeting-vote-break-up-plan-2022-01-06 in March to gauge shareholder support for the break-up plan, but the exact date and what the bar will be for shareholder approval have yet to be decided.

It will also brief investors on Feb. 7-8 on the business strategies of the companies to be created from the break-up.

Years of accounting scandals and governance issues have seen Toshiba‘s market value more than halve to around $18 billion from an early 2000s peak.

($1 = 115.4500 yen)

 

(Reporting by Makiko Yamazaki; Additional reporting by Yuki Nitta; Editing by David Dolan and Edwina Gibbs)

Business

China cuts rates on policy loans for first time since April 2020 – CNBC

Published

 on


A woman walks past the headquarters of the People’s Bank of China in Beijing, China.
Jason Lee | Reuters

China’s central bank on Monday cut the borrowing costs of its medium-term loans for the first time since April 2020, defying market expectations, to cushion any economic slowdown.

The People’s Bank of China (PBOC) said it was lowering the interest rate on 700 billion yuan ($110.19 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions by 10 basis points to 2.85% from 2.95% in previous operations.

Thirty-four out of the 48 traders and analysts, or 70% of all participants, polled by Reuters last week predicted no change to the MLF rates, although a rising number of market participants start to forecast a rate cut.

With 500 billion yuan worth of MLF loans maturing on Monday, the operation resulted a net 200 billion yuan of fresh fund injections into the banking system.

The central bank also lowered the borrowing costs of seven-day reverse repurchase agreements, or repos, by the same margin to 2.10% from 2.20%, when it offered another 100 billion yuan worth of reverse repos into the banking system on the day, compared with 10 billion worth of such short-term liquidity tool due on Monday.

Adblock test (Why?)



Source link

Continue Reading

Business

Credit Suisse chairman resigns after company probe – BBC News

Published

 on


Antonio Horta-Osorio, former chairman of Credit Suisse.

Reuters

The chairman of global banking giant Credit Suisse, Antonio Horta-Osorio, has resigned with immediate effect after an internal company probe.

He was reportedly found to have broken the UK’s Covid-19 quarantine rules.

The former boss of Lloyds Banking Group joined Credit Suisse after a series of scandals at the Swiss bank.

Now, Mr Horta-Osorio, who was the chairman of Credit Suisse for less than a year, has been replaced by board member Axel Lehmann.

“I regret that a number of my personal actions have led to difficulties for the bank and compromised my ability to represent the bank internally and externally,” Horta-Osorio said in a statement issued by the bank.

“I therefore believe that my resignation is in the interest of the bank and its stakeholders at this crucial time,” he added.

Last month, it was reported by the Reuters news agency that a preliminary investigation by Credit Suisse had found that Mr Horta-Osorio had breached Covid-19 rules.

He reportedly attended the Wimbledon tennis finals in July at a time when the UK’s Covid-19 rules required him to be in quarantine.

Speaking to the BBC, a spokesperson for Credit Suisse said that the bank would give no further details on Mr Horta-Osorio’s resignation other than those in its statement.

They also said that there were no plans to release the findings of the investigation.

Before joining Credit Suisse Mr Horta-Osorio was chief executive of British lender Lloyds Banking Group.

He was brought in to lead Switzerland’s second-largest bank to help clean up a corporate culture marred by its involvement with collapsed investment company Archegos and insolvent supply chain finance firm Greensill Capital.

In February 2020, then-Credit Suisse chief executive Tidjane Thiam resigned after a scandal revealed the bank had spied on senior employees.

2px presentational grey line

You may also be interested in:

This video can not be played

To play this video you need to enable JavaScript in your browser.

Adblock test (Why?)



Source link

Continue Reading

Business

UK government to cut funding for BBC – Mail on Sunday report

Published

 on

Britain’s government will cut the BBC’s funding by ordering a two-year freeze on the fee that people pay to watch the broadcaster, the Mail on Sunday reported.

The future of the licence-payer funded British Broadcasting Corporation is a perpetual topic of political debate, with Prime Minister Boris Johnson’s government most recently suggesting its funding needs to be reformed.

Set against an inflation rate expected to reach a 30-year high of 6% or more in April, freezing the licence cost at its current 159 pounds ($217.40) would provide some relief to consumers battling sharply rising costs of living.

But it would also be a large blow to the BBC’s finances as it tries to compete with privately funded news outlets and the likes of Netflix and other entertainment streaming services funded by consumer subscriptions.

In November, the government launched negotiations to agree how much the TV licence would cost, part of a five year funding settlement due to begin in April 2022.

The Digital, Media, Culture and Sport department declined to comment when asked about the Mail on Sunday report.

Culture secretary Nadine Dorries said that the licence fee settlement would be the last such agreement and tweeted a link to the Mail on Sunday article.

“Time now to discuss and debate new ways of funding, supporting and selling great British content,” she said on Twitter.

The BBC declined to comment on Dorries’ tweet or the Mail on Sunday report.

The opposition Labour Party said the funding cut was politically motivated.

“The Prime Minister and the Culture Secretary seem hell-bent on attacking this great British institution because they don’t like its journalism,” said Lucy Powell, Labour lawmaker and culture policy chief.

The BBC’s news output is regularly criticised by UK political parties. Its coverage of Brexit issues – central to Johnson’s government – has long been seen as overly critical by supporters of leaving the European Union.

Last week, one Conservative lawmaker said BBC coverage relating to parties in Johnson’s Downing Street residence during coronavirus lockdowns amounted to a “coup attempt” against the prime minister.

($1 = 0.7314 pounds)

 

(Reporting by William James. Editing by Jane Merriman)

Continue Reading

Trending