Samsung boss on trial over ‘manipulated’ takeover deal

Lee Jae-yong arrives in court during his trial in Seoul, South Korea, in 2017. (Chung Sung-Jun/Pool Photo via AP/file)
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Updated 22 April 2021

Samsung boss on trial over ‘manipulated’ takeover deal

Samsung boss on trial over ‘manipulated’ takeover deal
  • Lee Jae-yong, the vice-chairman of Samsung Electronics and the grandson of the group’s founder, is accused of stock manipulation, breach of trust and other offenses

SEOUL: The jailed de facto leader of the giant Samsung group went on trial Thursday over an allegedly manipulated takeover in proceedings that effectively put South Korea’s system of conglomerate control in the dock.
Samsung — whose flagship subsidiary is among the world’s biggest smartphone and computer chip makers — is by far the largest of the family-controlled empires known as chaebols that dominate business in South Korea, the world’s 12th-largest economy.
Chaebol families often have only a small ownership stake in their empires, but maintain control through complex webs of cross-shareholdings between units.
Lee Jae-yong, the vice-chairman of Samsung Electronics and the grandson of the group’s founder, is accused of stock manipulation, breach of trust and other offenses when two other subsidiaries, Samsung C&T and Cheil Industries, merged in 2015.
A court spokesman confirmed to AFP that Lee was present in court.
Lee was the largest shareholder in Cheil Industries, and critics say Samsung sought to artificially lower the price of C&T to give him a bigger stake in the merged entity — a key part of the Samsung structure — consolidating his grip on the conglomerate ahead of his father’s death last year.
He is already serving a two-and-a-half year prison sentence for bribery, embezzlement and other offenses in connection with the corruption scandal that brought down South Korean president Park Geun-hye.
Lee’s father, Samsung chairman Lee Kun-hee, died in October, leaving his heirs a vast fortune and an inheritance tax bill of around 13 trillion won ($11.7 billion), with the first instalment due by the end of this month.
Samsung is crucial to South Korea’s economic health, and is active in sectors ranging from construction to health care to insurance.
But Vladimir Tikhonov, professor of Korean Studies at the University of Oslo, told AFP: “The most problematic aspect is the attempted continuation of the unchallenged dynastic rule over a company which is responsible over 20 percent of South Korea’s GDP.
“Samsung’s main stakeholders are its shareowners, including the minor ones, its workers and South Korean society as a whole,” he said.
“It is too big to be a dynastic property.”
The trial was originally due to start last month but was delayed when Lee had emergency surgery for appendicitis.
He apologized last May for some governance issues at the group, pledging to ensure “there will be no more controversy over the succession” and that he would not allow his children to take over from him at the firm.
 


Turks defend nature against Erdogan’s development push

Turks defend nature against Erdogan’s development push
Updated 2 min 19 sec ago

Turks defend nature against Erdogan’s development push

Turks defend nature against Erdogan’s development push
IZIKDERE: Lush, thick woodland and green tea fields coat the slopes of an idyllic valley, a slice of pastoral heaven near the Turkish president’s familial home that will soon be gone.
A government-friendly company plans to extract 20 million tons of stone from a quarry in the northeastern town of Ikizdere for one of President Recep Tayyip Erdogan’s latest development projects.
The locals are rising up in protest, challenging the government and its priorities in a region dear to the powerful Turkish leader’s heart.
Under the ruling Justice and Development Party (AKP), in power since 2002, Turkey has seen rapid modernization, with new airports, roads and bridges.
The AKP says robust infrastructure will help transform the nation of 84 million people — still considered an emerging market — from a regional player into a global force.
Critics argue that Turkey is sacrificing the environment as it develops, with forests among natural resources destroyed by companies close to Erdogan for profit.
Residents of Gurdere village in Rize province, the Black Sea home of Erdogan’s family, have protested against the planned quarry in Iskencedere valley since late April.
But in a country where dissent is poorly tolerated, the Rize governor issued two 15-day bans on protests in May and June, after standoffs between security forces and older women in headscarves.
Residents say their livelihoods and nature will be demolished by the quarry, which the company, Cengiz Holding, and Ankara say is needed for a new logistics port nearby.
The gushing sound of freshwater streams reverberate around the valley, a rarity in a country pushing ahead with urbanization at great speed.
Organic tea grows in abundance. Brown bears roam the forests, and villagers produce chestnut honey.
One of those picking tea was Pervin Bas, who was among several detained during the protests.
“We have honey, we have tea, we feed our animals with these forests,” Bas, 50, said after spending the morning picking tea leaves.
“I used to feed my animals there, and now they are stuck in the barn. They’ve even punished my animals,” she said.
Gungor Bas, a relative of Pervin, said he felt pained by the destruction wrought on the place where he spent his childhood.
“Dust coats our houses,” the 58-year-old said.
There are two legal cases against the quarry, lawyer Yakup Okumusoglu said.
Cengiz wants this quarry because it is conveniently close to the planned Iyidere logistics port, he said. But the company told AFP the site was chosen by the transport ministry.
“You say there’s stone below, but above there’s life, a life of so much more value. This belongs to everyone,” villager Asuman Fazlioglu, 60, said.
Transport and Infrastructure Minister Adil Karaismailoglu last month said “marginal groups” and “outsiders” sought to exploit the protests and that villagers actually backed the quarry.
Erdogan inaugurates hospitals and dams with bombastic speeches appealing to his base craving a stronger Turkey.
The opposition says the tenders given to companies are a way to keep Erdogan’s friends in construction happy rather than serving a real infrastructure need.
Cengiz Holding was among the top 10 contractors worldwide with the most public-private partnership projects between 1990 and 2018, according to the World Bank.
“This government prioritizes money over the environment,” said Ali Oztunc, a main opposition party vice chair responsible for environmental issues.
“They love the green of the dollar more than the green of the trees,” Oztunc said.
Experts say a focus on growth alone can be misguided.
“We cannot call it development when there is no value given to nature, earth, air, water,” said Chamber of Environmental Engineers (CMO) chair Ahmet Dursun Kahraman.
“Development is a yarn. We keep saying we’re developing since the Ottoman Empire. It’s 2021 and we’re still apparently going to develop,” Okumusoglu quipped.
Erdogan proudly points out that Turkey now has 56 airports, up from 26 when he came to power.
One of the airports due to open later this year is in Rize, which was built with stone from another quarry hit by protests four years ago.
Its once-green valley is now covered in black and grey.
The gaping wound is a sore point for some villagers, who say there are daily dynamite explosions while trucks kick up dust as they come and go.
“This was a green area. We had different kinds of trees. Animals lived here, birds lived here. There were gazelles, deers. They’ve all gone,” Mahir Karaca said.
The 42-year-old villager said he was not against having an airport.
“As long as it provides a service, as long as it’s good for the country, no one is against this,” he said.
But in Ikizdere, they remained defiant.
“We haven’t lost,” said Zeynep Bas, 43, who is related to Gungor and Pervin.
For environmentalists, deforestation is a major worry.
Up to four million trees were chopped during the construction of Istanbul’s third major bridge, activists say, while others claim up to 13 million were cut for Istanbul’s newest airport, which opened in 2018.
“The future of forests is now at risk,” said Foresters’ Association vice president Husrev Ozkara. “It’s not just about cutting one tree, what is actually damaged is the forest’s ecosystem.”
Cengiz promised that once the stone was extracted, it would ensure vegetation and trees would be planted to “restore the natural life.”
The CMO’s Kahraman dismissed this as “baseless.”
“It’s deception. You’re going to take rock from there, how will you then plant a tree?” Kahraman asked, adding that the quarry’s impact would be felt across generations.
“This is how we should look at such actions and projects. What are you leaving behind?“

OPEC+ has a role in containing inflation, says Saudi oil minister

OPEC+ has a role in containing inflation, says Saudi oil minister
Updated 24 June 2021

OPEC+ has a role in containing inflation, says Saudi oil minister

OPEC+ has a role in containing inflation, says Saudi oil minister
  • The minister also warned that the increase in oil prices was not clear and could be due to “real supply and demand” or due to “expectations and trajectories that are excessively optimistic”

RIYADH: Saudi Arabia’s Energy Minister, Prince Abdul Aziz bin Salman said the OPEC+ alliance will play a role in “taming and containing” inflationary pressures, just hours after Brent crude surged back above $75 a barrel, Bloomberg reported.
“We also have a role in taming and containing inflation, by making sure that this market doesn’t get out of hand,” he said Wednesday at a conference organized by Bank of America Corp., according to a recording of his remarks obtained by Bloomberg News.
The minister also warned that the increase in oil prices was not clear and could be due to “real supply and demand” or due to “expectations and trajectories that are excessively optimistic,” he said.
He said the group should remain cautious because the oil market wasn’t out of the “doldrums” created by the coronavirus pandemic. He also warned traders against conflating caution with inaction, Bloomberg said.
“We have to be cautious. But caution doesn’t mean we don’t have to do something,” he told the conference. “It means we have to ensure that we don’t make


Bitcoin Fund breaks new ground in Middle East with debut on Nasdaq Dubai

Bitcoin Fund breaks new ground in Middle East with debut on Nasdaq Dubai
Updated 24 June 2021

Bitcoin Fund breaks new ground in Middle East with debut on Nasdaq Dubai

Bitcoin Fund breaks new ground in Middle East with debut on Nasdaq Dubai
  • The fund has roughly $1.5 billion in assets under management and plans to double that next year

DUBAI: The Bitcoin Fund debuted on the Nasdaq Dubai on Wednesday, becoming the Middle East’s first listed cryptocurrency fund.
The fund, which was listed by Canadian digital asset management firm 3iQ on the Toronto Stock Exchange last year, has roughly $1.5 billion in assets under management and plans to double that next year.
“With the listing of the Bitcoin Fund, it’s going to give people access in the region to this fund on the Dubai exchange in the hours that the Dubai exchange trades at,” Frederick Pye, the chief executive officer of 3iQ, told Reuters.
“If the volumes are significant, we’ll be looking to raise capital to increase the size of the Bitcoin Fund here in Dubai and we will continue to issue shares based on the demand that comes from the region,” Pye said in an interview.
The listing will help satisfy demand for investment diversification in the region, as well as environmental, social and governance (ESG) needs, such as for pension funds and family offices, Pye said.
Dalma Capital, a Dubai-based alternative investment firm, was lead arranger for the Nasdaq Dubai listing. Corporate finance adviser 01 Capital and investment firm Razlin Capital, both based in London, advised on the listing and Pinsent Masons was legal counsel for the listing process.
“Today’s secondary listing of existing units from Canada was met with very strong demand, which has validated the need for an additional offering to satisfy the demand from regional investors,” said Zachary Cefaratti, CEO of Dalma Capital, declining to say when that could be.
Pye acknowledged that China’s recent crackdown on mining cryptocurrencies has hit digital currency prices, but he said the timing of that move would help those who bought into the Dubai listing.
“We’re very excited because when we hit an all-time high, our investors and our clients and our friends will have doubled their money,” Pye added.


Backing grows for new IMF COVID and climate fund

Backing grows for new IMF COVID and climate fund
Updated 24 June 2021

Backing grows for new IMF COVID and climate fund

Backing grows for new IMF COVID and climate fund
  • The COVID crisis is expected to leave 47 of the 82 vulnerable countries with gross debt already above levels deemed sustainable.

PARIS: Plans for a new IMF “Resilience and Sustainability” fund that would expand its support to dozens more vulnerable countries gained key international backing on Thursday ahead of crucial meetings.
IMF chief Kristalina Georgieva this month proposed the new trust to allow rich countries to channel some of their new IMF reserves to poor and middle-income counterparts ravaged by COVID or climate change.
“This is something we certainly support” said Lars Jensen, a senior economist on the United Nations Development Programme (UNDP) and the author of a new report on how the IMF’s new funding should be directed.
The UNDP estimates the IMF’s Poverty Reduction and Growth Trust (PRGT), which is also expected to play a key role in a voluntary redistribution of new ‘Special Drawing Rights’ (SDRs) money, is only open to 55 of the world’s 82 most debt-vulnerable developing economies.
The Group of Seven (G7) wealthy nations alone will receive $283 billion of the overall $650 billion SDR allocation. All “high-income” countries will get $438 billion, whereas 75 of the poorest countries will get $62 billion among them.
The COVID crisis is expected to leave 47 of the 82 vulnerable countries with gross debt already above levels deemed sustainable.
Additionally, nine of the 10 most climate-change vulnerable countries are also highly debt-vulnerable developing economies.
“As a possible development objective of an SDR channelling to vulnerable countries, it would be natural to target climate due to its global implications,” Jensen said, adding that the fund could even bulked up by leveraging it in borrowing markets.
G7 leaders have already signaled their backing to redistribute $100 billion of the new SDR money. Georgieva has said that China has expressed interest in participating and that she expected other major emerging economies to do the same.
The IMF’s executive board will meet on Friday on the next steps and finance officials from the Group of 20 major economies will discuss the SDR reallocation issue when they meet in Venice in July.
Scott Morris of the Center for Global Development said funding for the proposed new IMF trust was already earmarked in the US Treasury’s recent budget request to Congress, underscoring Washington’s support.
The US Treasury is working closely with the IMF to explore options and design mechanisms for channelling SDRs to vulnerable countries, one US Treasury official told Reuters on condition of anonymity because of the sensitivity of the matter.
“The IMF’s proposed Resilience and Sustainability Trust is one of the options under discussion,” the official said, without elaborating on other options.
Jensen said he hoped the new fund would also give debt-strained countries who have so far resisted restructuring their debt for fear of losing access to borrowing markets, a safety net to take that step.


Arab share of India’s oil imports hits 25-month low

Arab share of India’s oil imports hits 25-month low
Updated 24 June 2021

Arab share of India’s oil imports hits 25-month low

Arab share of India’s oil imports hits 25-month low
  • To replace Middle Eastern oil, refiners hiked imports from Latin America, the United States and the Mediterranean

NEW DELHI: The share of Middle Eastern crude in India’s oil imports fell to a 25-month low in May, tanker data provided by trade sources showed, as refiners tapped alternatives in response to the government’s call to diversify supplies.
India, the world’s third biggest oil importer, in March directed refiners to diversify crude sources after the Organization of the Petroleum Exporting Countries (OPEC) and its allies, led by top exporter Saudi Arabia, ignored New Delhi’s call to ease supply curbs.
Asia’s third-largest economy imported about 4.2 million barrels per day (bpd) of oil in May, just below the previous month but about 31.5 percent higher than a year earlier, the data showed.
The Middle East’s share dropped to 52.7 percent, the lowest since April 2019 and down from 67.9 percent in April, the data showed.
Imports from Saudi Arabia, India’s second-largest supplier after Iraq, slipped by about a quarter from a year earlier, while supplies from the United Arab Emirates, which dropped to No. 7 position from No. 3 in April, fell by 39 percent, the data showed.
This comes after Indian state refiners nominated to lift less oil from Saudi Arabia in May.
Lower purchases of oil from the Middle East dragged OPEC’s share of Indian oil imports to a record low.
To replace Middle Eastern oil, refiners hiked imports from Latin America, the United States and the Mediterranean.
Indian refiners bought higher volumes of gasoline-rich US oil in March, expecting a recovery in local gasoline demand to continue in the months ahead, said Ehsan Ul-Haq, lead analyst for Oil Research and Forecasts at Refinitiv.
Strong demand for light crude saw Nigeria improving its ranking by two notches to become the No. 3 supplier to India in May.
Private Indian refiners Reliance Industries and Nayara Energy, however, boosted purchases of Canadian heavy oil to a record 244,000 bpd, equivalent to about 6 percent of India’s overall imports.
“Indians bought Kazakhstan’s CPC blend and Canadian oil due to attractive discounts in comparison to dated Brent and WTI, respectively,” Ul-Haq said.
Tanker arrival data showed higher imports in contrast to preliminary government data, as cyclones along India’s coast line last month delayed discharge of cargoes.