UK regulator investigating Carillion statements

Carillion shares have lost 90 percent of their value since the profit warning on July 10. The building and services company’s market capitalization stands at about £70 million, according to Thomson Reuters data. (Reuters)
Updated 03 January 2018
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UK regulator investigating Carillion statements

BENGALURU: Britain’s Financial Conduct Authority (FCA) is investigating statements made by Carillion over seven months up to and including a profit warning last July, the struggling building and services company said on Wednesday.
Carillion, which is involved in major infrastructure projects for the British and other governments, has been fighting for its survival after costly contract delays and a downturn in new business. In November it issued its third profit warning in five months.
The investigation by the markets watchdog concerns “the timeliness and content of announcements made by Carillion between December 7, 2016 and July 10, 2017,” the company said in a brief statement to the London Stock Exchange.
Carillion said it was cooperating fully with the FCA.
In the period under review, Carillion released a full-year trading update, its 2016 results, an annual general meeting statement and a 2017 first-half trading update. Its shares fell more than 54 percent over the seven months.
The company announced on July 10 it would undertake a review of its business, suspended its dividend, announced divestments and said it expected overall performance to be below management’s previous expectations.
Carillion also said then that Richard Howson would step down as chief executive and named Keith Cochrane as interim CEO.
Analysts estimate the company is also grappling with debt including provisions, pensions and accounts payable of about £1.5 billion (SR7.55 billion).
Carillion shares have lost 90 percent of their value since the profit warning on July 10. Carillion’s market capitalization stands at about £70 million, according to Thomson Reuters data.
Carillion and FCA declined to provide any additional details on the investigation.
Carillion last month moved forward the start date for new chief executive Andrew Davies forward to January 22 from April 2.
Davies, head of family-owned builder Wates Group and formerly with defense company BAE Systems, will replace interim CEO Cochrane.


Saudi-backed SoftBank to ramp up tech investment

Updated 20 June 2018
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Saudi-backed SoftBank to ramp up tech investment

  • SoftBank CEO Masayoshi Son to step up company's "unicorn hunting" investment strategy
  • Saudi Arabia's PIF has contributed $45 billion to SoftBank's Vision Fund

LONDON: Japanese conglomerate SoftBank will double down on its ambitious tech investment strategy, in a move that could create opportunities for further collaboration with Saudi Arabia’s Public Investment Fund (PIF).
SoftBank — which owns Japan’s third-largest telecoms operator — has emerged in recent years as one of the world’s largest tech investors, acquiring stakes in companies including Chinese e-commerce giant Alibaba, and UK chipmaker ARM Holdings.
It last year launched the $100 billion Vision Fund, boosted by a $45 billion investment from PIF. It attracted $93 billion in funds last year, aided by contributions from Abu Dhabi’s Mubadala Investment Company, Apple, Foxconn and others, making it the world’s largest buyout fund.
The Vision Fund has invested in disruptive firms, especially those in the technology space, including Swiss pharmaceuticals startup Roivant, office space company WeWork, and enterprise messaging service Slack.
CEO Masayoshi Son signaled that such dealmaking will become even more of a focus for SoftBank.
“I have spent 97 percent of my time on managing the telecoms business and only 3 percent on investing,” he told investors at the group’s annual meeting on Wednesday, Reuters reported.
Reversing that balance will allow SoftBank to grow faster, he said.
Son’s comments fit with a transformation underway at SoftBank from a domestic telecoms firm to “unicorn hunter” — as Son termed it — focusing on late-stage startups around the world.
Last month, SoftBank invested $2.25 billion in GM Cruise, the carmaker’s autonomous vehicle unit, complementing its shareholdings in China’s Didi Chuxing, the world’s largest ride-sharing app, as well as rivals Uber, Grab and Ola.
The Vision Fund will initially invest $900 million in GM Cruise Holdings, investing the remaining $1.35 billion when GM’s Cruise AVs are ready for commercial deployment. The investment gives the Vision Fund a 19.6 percent stake in GM Cruise.
Saudi Arabia’s PIF has been key to SoftBank’s tech investment strategy with its contribution to the Vision Fund, with the Kingdom also benefiting directly from partnerships with SoftBank.
Son said in November that SoftBank planned to invest as much as $25 billion in the Kingdom in the next three to four years, and aimed to deploy up to $15 billion in Neom, a futuristic city to be built on the Red Sea coast.
PIF and the Vision Fund in March announced a partnership to build the world’s largest solar project in Saudi Arabia, with a capacity of up to 200 gigawatts, in line with the Kingdom’s solar ambitions as set out in Vision 2030.
The agreement will establish an electricity generation company in Saudi Arabia, and will commission two solar plants with a capacity of 3GW and 4.2GW by the end of next year. It envisages localizing a significant portion of the renewable energy value chain in the Saudi economy, including research and development and the manufacturing of solar panels.
SoftBank shareholders on Wednesday approved the appointment of three executive vice presidents — SoftBank unit Sprint Corp’s former chief executive, Marcelo Claure, and former bankers Katsunori Sago and Rajeev Misra.
Bolivian-born billionaire Claure was appointed SoftBank’s chief operating officer in May, tasked with driving cooperation between the group’s portfolio companies. Former Goldman Sachs executive Sago became chief strategy officer on Wednesday and will focus on group investment. Misra runs the Vision Fund.
Son yesterday bemoaned the so-called conglomerate discount weighing on SoftBank’s shares at its investor meeting.
He said when the market value of stakes the firm holds in companies such as Alibaba Group Holding and ARM Holdings are taken into account, SoftBank’s shares should be trading above 14,000 yen ($127), rather than about 8,000 yen currently.