OTTAWA: Canada’s corporate ethics watchdog on Tuesday (Jul 11) launched separate investigations into Nike Canada and mining company Dynasty Gold to probe allegations that they used or benefited from forced Uyghur labour in their supply chains and operations in China. The investigations were launched after an initial assessment of complaints aboutContinue Reading
The danger of a fuel vapour explosion at a petrol station is adding to the hazards of clearing a long, collapsed section of elevated highway from Luang Phaneg Road in Bangkok’s Lat Krabang district.
About 100 metres of the elevated bypass, which is still iunder construction, colllapsed on Monday evening, killing an engineer and a construction worker, injuring 12 other people crushing cars on the road below and toppling power poles.
A concrete span about 100 metres long fell from a height of 20 metres onto Luang Phaeng Road between the Luang Phaeng branch of Lotus and Jorakay Noi police station about 6pm.
Police on Tuesday closed the inbound side of Luang Phaeng Road to all traffic.
Officials said it would take 3-4 days to clear away the debris – shattered concrete, reinforcing bars and steel supports.
City governor Chadchart Sittipunt said he would try to ensure Luang Phaeng Road is reopened to traffic in three days.
He said the elevated road was being built by a consortium of two qualified companies, Tharawan Construction and NPA Construction.
The governor said a crane known as a launcher and used to lift the section of elevated road had first tilted to one side, and then both fell onto Luang Phaeng Road. The investigation into why this happened was continuing, he said.
Deputy city clerk Narong Ruangsri said clearing of the road and its reopening to traffic was being given priority.
Mobile cranes were brought in to lift the fallen structures, which would be cut into smaller pieces for removal. Aerial drones were providing an overview of the site to aid planning and ensure safety.
The task was made more hazardous by limited space and the need for extreme caution because of a close-by petrol station, where vapour emissions had to be continuously monitored. A spark could trigger a fuel vapour explosion, he said.
The fallen span is part of an elevated road costing 1.6 billion baht being built between Onnut and Lat Krabang under contract to the Bangkok Metropolitan Administration.
It’s looking increasingly like the time for sustainable finance to shine. After a fall in the year-on-year volume of green, social and sustainability (GSS) instruments globally during 2022, a rebound is forecast this year – to around US$1 trillion in issuance, forecasts S&P Global.
Asia Pacific (APAC) is well-placed to capitalise on this upswing. S&P Global’s projections, for example, are that GSS issuance volume in the region will jump by as much as 20%, to reach US$240 billion, roughly a quarter of the global landscape.
The longer-term story looks promising, too, especially amid ambitious climate goals. Even in South-east Asia alone, about US$180 billion needs to be invested in clean energy projects every year until 2030 to keep the transition journey on track, based on the International Energy Agency’s Sustainable Development Scenario. Putting this in context, from 2016 to 2020, investment in clean energy was $30 billion per year, on average.
Adapting to climate change is certainly a key driver. But according to more than 100 investors and borrowers in APAC who took part in the 6th annual poll by ANZ and FinanceAsia in April and May 2023, multiple dynamics indicate an ever-bigger role for GSS instruments.
Among the key factors is a mix of policy and regulatory initiatives to foster greater transparency. This should, in turn, boost investor demand and issuer appetite. At the same time, as this segment of the region’s capital market continues to mature, active GSS bond investors and issuers can expect greater potential for newer formats of issuance to help bridge social and environmental priorities such as biodiversity and gender equality.
10 top takeaways from the survey
Read more survey findings and analysis here
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SINGAPORE: Temasek Holdings on Tuesday (Jul 11) reported a 5.2 per cent fall in the value of its net portfolio and signalled a “cautious” investment stance ahead amid a challenging macroeconomic environment.
For the financial year ended Mar 31, its net portfolio was valued at S$382 billion (US$287 billion), down S$21 billion from the record S$403 billion it achieved a year ago, according to its latest annual review.
Its one-year total shareholder return, which takes into account all dividends distributed to the shareholder minus any capital injections, turned negative to -5.07 per cent from the 5.81 per cent gain a year ago.
This was largely due to a fall in equity valuations, both in the public and private markets, Temasek’s chief financial officer Png Chin Yee said at a press conference.
While its portfolio companies in Singapore remained resilient, its global direct investments saw a reversal of gains from the high valuations in the last two years, particularly in the technology, healthcare and payments space, as valuations de-rated in the higher interest rate environment.
Over a longer term, its 10-year and 20-year total shareholder returns stood at 6 per cent and 9 per cent respectively, down slightly from 7 and 8 per cent in the previous year.
The state investor is one of the three entities tasked to invest Singapore’s reserves, with part of its returns tapped every year for the annual Budget.
Under the Net Investment Returns Contribution (NIRC) framework, the Government can spend up to half of the long-term expected investment returns generated by Temasek, sovereign wealth fund GIC and the Monetary Authority of Singapore.
Temasek invested S$31 billion and divested S$27 billion in the last financial year, as it adopted a cautious approach amid global uncertainties. Deal activity globally also slowed down as liquidity tightened, it said.
Overall, Asia remained the anchor of the investor’s portfolio at 63 per cent, with Singapore (28 per cent), China (22 per cent) and the Americas (21 per cent) remaining the top three markets.
Transportation and industrials (23 per cent) and financial services (21 per cent) continued to account for the biggest sectors in Temasek’s portfolio.
The proportion of unlisted assets in its portfolio made up 53 per cent of the portfolio, up 1 per cent from a year ago, which saw unlisted assets overtaking listed assets for the first time.
Temasek said its unlisted portfolio is “well diversified” across geographies and sectors, with steady growth over the years due to investments in “attractive opportunities” in private markets and the increase in the value of its unlisted assets.
Over the last decade, the unlisted portfolio has generated returns of over 10 per cent per annum on an internal rate of return basis, delivering higher returns than its listed portfolio, it added.
These include returns when the unlisted investments were listed or sold, as well as from the strong performance of the underlying companies. For example, some of its holdings, such as payments technology provider Adyen and on-demand services platform Meituan have listed with “significant value uplift” in the past five years.
On its early-stage portfolio, Ms Png said Temasek invests in early-stage companies as part of identifying future trends and to gain insights into emerging technologies and business models.
To manage the higher risks that come with these investments, it has kept its exposure to early-stage companies to 6 per cent of its total portfolio, she added.
Temasek said last November that it would write down its US$275 million investment into cryptocurrency firm FTX. In May, it said it had cut the compensation of its senior management and the investment team involved in the failed investment.
This comes as companies sought to diversify their supply chains away from China, when there had been no end to the country’s zero-COVID policy in sight. Trade tensions with the United States have also raised concerns among businesses.
Online logistics platform Container xChange founder Christian Roeloffs has observed a significant number of excess containers at China’s ports.
Mr Roeloffs said price is not the only factor in his business decisions.
“If I deal with an export country, where I can’t rely on politics to create a climate or an environment for reliability, but the politics that creates a climate of sort of severe restrictions of ongoing production, then I’m more inclined to move to more reliable alternatives,” he said.
Observers pointed to other challenges that lie ahead, as the world’s second-largest economy tries to put the COVID-19 pandemic behind it.
Reading Football Club is in turmoil. It faces a winding-up petition over unpaid tax, a league charge of failing to pay players on time and it’s fallen to the third tier of English football.
The siblings are now one of northern China’s wealthiest families, with a love of football said to have been swelled watching Manchester City in the early 2000s.
But they are rarely heard from in the UK, staying out of the public eye even as Reading FC struggle on the pitch and the club deals with what it says are “significant financial challenges”.
While they took over the club as a duo, Dai Yongge is now referred to as Reading’s sole owner.
The firm he heads, Renhe Commercial Holdings, was a family business empire built off the back of developing underground air raid shelters into shopping malls.
Building in that way helped the firm legally avoid regulations and taxes applied to retail developments above ground, the company itself said in a filing to the Hong Kong stock exchange.
Their first underground centre opened in 1992. By 2016, the firm had a network of 23 malls.
It was so successful that in 2014, Dai Xiuli was named by Forbes as one of the richest women in the world, with an estimated fortune of $1.2bn (£715m).
That proved a pivotal year for brother and sister. In it Dai Xiuli was divorced from her then husband, British maths teacher Tony Hawken.
She also made an apparent decision to step back from the family business. Forbes reports that she transferred her controlling stake in Renhe to her brother as a free gift.
Two years later, despite a downturn for the business, Mr Dai and his wife Zhang Xingmei still enjoyed an estimated $931m (£656m) fortune.
A restructuring saw the firm adopt the new name China Dili Group and focus on running agricultural markets.
In 2021, Dili Group said it donated 16.2m Chinese yuan (£1.8m) to Wuhan, the city at the centre of the Covid pandemic, although it did not operate a market there.
The Dais interest in football is reported to have blossomed years earlier when Dai Xiuli lived in England.
Her love of the game is reported to have swelled watching Chinese defender Sun Jihai play for Manchester City in the early 2000s.
By 2007 the Dais had taken over Chinese club Shaanxi Chanba, relocating it first to Guizhou in 2012 and then to Beijing in 2016.
Sun Jihai even signed for the club – renamed Beijing Renhe – towards the end of his playing career. But by 2021 Beijing Renhe had been entirely dissolved as a business.
The Dais had already turned their attention to English football.
In 2017, they made a failed attempt to buy Hull City. The Reading takeover was completed in May of that year.
“One of my first priorities will be to visit the development site for the new training ground,” Dai Yongge told the club website back then.
“We also intend to revisit stadium extension plans with the vision of creating world-class facilities at the club.”
However, their six-year stewardship has been an “unmitigated disaster”, according to Reading fans group Sell Before We Dai.
The campaign group cites the club’s “excruciating financial losses” – £146m in the five years to June 2022, according to Companies House – as well as the English Football League charges.
Reading have issued £82m worth of shares since the 55-year-old tycoon took control of the club, according to Companies House.
After last season’s relegation to English football’s third tier, Royals chief executive Dayong Pang told fans he was “confident” the club would “fully correct the mistakes that were made many years ago”.
In a statement, he added: “As a club, financially we continue to face a number of significant challenges and our owner, Mr Dai, is working very hard to resolve those issues to ensure the future of Reading Football Club is stable, successful, progressive and positive.”
The BBC has contacted Reading and their owner Dai Yongge for comment, but they are yet to respond.
Additional reporting by the BBC’s Zhijie Shao in Hong Kong.
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ReutersApple supplier Foxconn has pulled out of a $19.5bn (£15.2bn) deal with Indian mining giant Vedanta to build a chip making plant in the country.
The move comes less than a year after the companies announced plans to set up the facility in Prime Minister Narendra Modi’s home state of Gujarat.
Some analysts say it marks a setback to the nation’s technology industry goals.
However, a government minister says it will have no impact on the country’s chip making ambitions.
Taiwan-headquartered Foxconn told the BBC that it will now “explore more diverse development opportunities”.
The firm also said the decision was made in “mutual agreement” with Vedanta, which has assumed full ownership of the venture, but did not give details on why it withdrew from the deal.
“We will continue to strongly support the government’s ‘Make in India’ ambitions and establish a diversity of local partnerships that meet the needs of stakeholders,” Foxconn added.
New Delhi-based Vedanta said it had “lined up other partners to set up India’s first [chip] foundry”.
“The surprise pull-out of Foxconn is a considerable blow to India’s semiconductor ambitions,” Paul Triolo from global advisory firm Albright Stonebridge Group told the BBC.
“The apparent cause of the pull-out is the lack of a clear technology partner and path for the joint venture,” he added. “Neither party had significant experience with developing and managing a large-scale semiconductor manufacturing operation.”
However, Rajeev Chandrasekhar, India’s Minister of State for Electronics and Information Technology, said on Twitter that Foxconn’s decision had “no impact on India’s semiconductor fab[rication] goals. None.”
Mr Chandrasekhar added that Foxconn and Vedanta were “valued investors” in the country and “will now pursue their strategies in India independently”.
The Indian government has been working on strategies to support the chipmaking industry.
Last year, it created a $10bn fund to attract more investors to the sector, in a bid to become less reliant on foreign chipmakers.
Prime Minister Modi’s flagship ‘Make in India’ scheme, which launched in 2014, is aimed at transforming the country into a global manufacturing hub to rival China.
In recent years, several other firms have announced plans to build semiconductor factories in India.
Last month, US memory chip giant Micron said it would invest up to $825m to build a semiconductor assembly and test facility in India.
Micron said that the construction of the new facility in Gujarat will begin this year. The project is expected to directly create up to 5,000 roles, and another 15,000 jobs in the area.
HANOI: More than 50 officials went on trial in Vietnam on Tuesday (Jul 11) for alleged corruption over repatriation flights during the COVID-19 pandemic, a scandal that has seen several senior ministers fired. The case is part of a major anti-corruption drive that led to President Nguyen Xuan Phuc’s suddenContinue Reading
Getty ImagesTour operators accused of safety failures in the lead up to the deadly White Island volcano disaster are facing a landmark trial in New Zealand.
Twenty-two people died when the country’s most active volcano suddenly erupted on 9 December 2019.
It had been showing signs of unrest for weeks, with workplace regulators saying the eruption was not unforeseeable but tour operators were unprepared.
Six parties face fines of up to NZ$1.5m ($928,000; £724,000) if found guilty.
At the time of the eruption, 47 people were on White Island – also known by its Maori name of Whakaari. Almost half of those present were killed, including 17 people from Australia, three from the US, and two from New Zealand. Another 25 people were injured, many suffering horrific burns.
The disaster prompted the most extensive and complex investigation ever undertaken by WorkSafe NZ, the nation’s main health and safety regulator, which itself has been criticised for failing to monitor activities on the island between 2014 and 2019.
Thirteen parties were initially charged in December 2020 with exposing people to risk of harm under the health and safety act. They were accused of failing to assess and mitigate risks, to adequately inform tourists of the dangers, and to provide protective equipment.
“This was an unexpected event, but that does not mean it was unforeseeable and there is a duty on operators to protect those in their care,” WorkSafe chief executive Phil Parkes said at the time.
None of the charges relate to events during or after the eruption, and the defendants include companies which did not have tourists at the volcano at the time.
The case against one tour operator has since been dropped, and another six pleaded guilty before trial – some just days ago. Most are yet to be sentenced.
White Island Tours, which was responsible for the safety of all except one of those killed, is among the companies which have admitted the charges.
Six defendants remain, including members of the Buttle family, who have owned White Island since 1936.
Peter, James and Andrew Buttle, the three brothers who inherited the island, have been charged in their roles as directors of Whakaari Management – which granted licences to tour operators and also faces charges at a company level.
ID Tours New Zealand Limited and Tauranga Tourism Services Limited are also contesting their charges in court.
The judge alone trial, which begins hearing evidence on Tuesday, is expected to last four months.
Once a popular sightseeing destination visited by thousands every year, tourists have not been back to White Island since the tragedy.
The volcano had been erupting in some form since 2011, and was rated at Volcanic Alert Level 2 at the time of the disaster, indicating “moderate to heightened volcanic unrest”.
TOKYO – It’s no surprise, perhaps, that SoftBank Group’s 22% stock rally these last 12 months exactly mirrors that of the broader Nikkei 225 index.
Few Japanese conglomerates have benefited more from the Nikkei rally – or from the Bank of Japan’s ultra-loose policies – than the one that Masayoshi Son built.
Case in point: SoftBank’s telecom unit just pulled off one of the biggest yen bond sales in recent memory thanks to wide-scale market expectations that the BOJ will keep its foot on the monetary gas.
SoftBank‘s feat in raising US$840 million managed to lift confidence in credit markets that big debt issuance deals were back. It more than confirmed promising hints from earlier sales by Mitsui Fudosan Co and Kubota Corp. It was even better that the SoftBank sale was supersized from an initially planned US$350 million amid demand that was more than twice what SoftBank anticipated.
Yet as much as SoftBank is benefiting from the Nikkei rally and the BOJ’s largess, it remains unclear if one of Japan’s three richest men is ready to return the favor.
The reason Son is a subject of global intrigue is the US$100 billion SoftBank Vision Fund he created in 2017. It has since remade the global venture capital game, with Son adding the financial firepower of a Vision Fund 2. Very quickly, a meeting with Son’s team became the top aspiration for young entrepreneurs from Silicon Valley to Hyderabad to Seoul.
Son’s VC ambitions were always a way to tap growth outside aging Japan. Japan’s deflation, dismal demographics and a play-it-safe corporate culture had Son deploying billions and billions in China, India, South Korea, Indonesia, Bangladesh, Brazil, Kenya, Israel and elsewhere.
The plan was to ride a herd of tech “unicorns” around the globe to riches SoftBank could no longer find at home in Japan.
At the core of Son’s vision, of course, was recreating the magic he achieved with China’s Alibaba Group 23 years ago, around the same time the BOJ pioneered quantitative easing.
In 2000, Son had the remarkable foresight to hand US$20 million to an obscure English teacher in Hangzhou. By the time Jack Ma took Alibaba public in New York in 2014, SoftBank’s stake was worth more than $50 billion.
The feat earned Son a reputation as the Warren Buffett of Japan. The launch of his Vision Fund was an attempt to replicate that success over and over again.
Yet Son has found that to be easier said than done. Among the big swings that Son missed: a perplexing fascination with WeWork, which over time became the Vision Fund’s cornerstone investment. Son bought into founder Adam Neumann’s claims to be creating the next Apple Inc with his office-sharing empire.
By 2019, as WeWork looked more like a financial house of cards and epic losses mounted, Son admitted “really bad” judgment in having championed the company as the next big thing. As Son scrambled to stabilize the Vision Fund, sandbagging efforts included selling roughly $7.2 billion worth of Alibaba. Son’s team is also working on an initial public offering of Arm Ltd, SoftBank’s chip unit.
Might Son now pivot to investing big in Japanese startups as opposed to prospective Chinese unicorns?
A few big data points have changed some Asia-region calculus since Son’s WeWork debacle:
In recent days, US Treasury Secretary Janet Yellen and Chinese Premier Li Qiang tried their hand at rebooting the Sino-American relationship. But with US President Joe Biden’s team determined to limit Chinese access to key technology like semiconductors — and Xi curbing exports or rare earth materials — tensions appear to be going from bad to worse.
This has Team Son rethinking its aversion to putting big money to work in Japan. Here, Buffett’s own bets on Japan’s economy may come into play.
In May 2022, Prime Minister Fumio Kishida took his campaign to lure more foreign capital to London, where he implored businesspeople to “invest in Kishida.” It was a play on a plea that Kishida’s mentor had made in New York nine years earlier.
In September 2013, then-Prime Minister Shinzo Abe brought his “buy my Abenomics” tour to the floor of the New York Stock Exchange. Abe pledged to reduce bureaucracy, loosen labor markets, incentivize innovation, boost productivity, empower women and reclaim Tokyo’s place as Asia’s undisputed financial center.
Mostly, though, Abe relied on BOJ easing to juice Japanese gross domestic product via a weaker yen. That, and some modest tweaks to corporate governance had Buffett and his ilk kicking Japan’s tires.
The so-called “Buffett effect” first hit Japan in August 2020. The Oracle of Omaha surprised many in the Tokyo establishment with sizable investments in five old-economy companies. Buffett took 5% stakes in rather stodgy “sogo shosha” trading houses: Itochu, Marubeni, Mitsubishi, Mitsui and Sumitomo.
The bets paid off handsomely. Last month, around the time Buffett topped up those investments — to an average 8.5% — shares had roughly doubled among his initial five investments. Buffett, true to his value-investing-guru reputation, front-ran the Nikkei’s biggest rally in 30 years.
The question now is how Son responds. Part of it involves how Kishida plays things.
Kishida took power in October 2021 with grand plans to implement a “new capitalism.” Part of the scheme involved redistributing wealth to increase domestic consumption. Kishida also aimed to enliven Japan’s startup scene.
One early Kishida idea that holds great promise: devising a way to harness the $1.6 trillion Government Pension Investment Fund – the largest of its sort – to finance a startup boom. There, Kishida talked of facilitating the “circulation” of GPIF’s ginormous asset pool “into venture investment.” He talked of championing “stock options and other measures to promote the growth of start-ups.”
According to Ranil Salgado, an economist at the International Monetary Fund, there’s a need for a “holistic approach to address the constraints in the labor market, as well as improving the financing options and entrepreneurial education.”
Salgado adds that the “grand design of the new form of capitalism” includes measures to support venture capital, such as through public capital investment. In addition, it recognizes the constraint of personal guarantees on entrepreneurship, highlights the importance of entrepreneurial education, and strengthens the role of universities as startup hubs.”
Increased availability of venture capital equity funding, Salgado says, “is crucial to support startups and innovation. Reduced personal guarantees could help encourage entrepreneurship and allow unproductive firms to exit, which could in turn support investment and innovation, generate employment and improve productivity.
“Furthermore,” he says, “a more flexible labor market and a gradual shift from the lifetime employment system could encourage the most talented college graduates to venture and create new companies and have a reasonable backup option in case startups fail.”
Yet how SoftBank responds to these challenges and myriad others may decide how Asia’s number two economy fares in competition with the continental colossus that’s number one.
