August 5, 2021 | Editor: Martin Wennerström
Activision Blizzard sued first for discrimination, then for misrepresentation
Activision Blizzard Inc. faces an investor class action lawsuit alleging that it failed to disclose an investigation by the California Department of Fair Employment and Housing (“DFEH”), which ran for two years and culminated in the agency filing a separate civil suit against the company on July 20, 2021. The DFEH suit alleges that the video game publisher is plagued by a “frat boy” culture characterized by pervasive sexual harassment and discrimination against women. According to DFEH, women represent only 20% of Activision Blizzard’s workforce and receive lower pay for “substantially similar work.” A July 21 internal memo from the company’s chief compliance officer reportedly called DFEH’s allegations “factually incorrect, old and out of context,” prompting a demonstration by more than 1,000 employees outside subsidiary Blizzard Entertainment’s Irvine campus. On July 27, Activision Blizzard CEO Robert Kotick apologized for the “tone deaf[ness]” of this initial response, while announcing an external legal review of the company’s policies and procedures. On Aug. 3, Blizzard Entertainment President J. Allen Brack stepped down with immediate effect. The parent company’s stock has dropped by around 10% since DFEH filed suit.
DFEH Lawsuit | DFEH Press Release | Kotick Letter | Brack Announcement | PR Newswire | CNBC | PC Gamer
Softbank reportedly looking to partly offload Uber stake
Softbank is reportedly selling around a third of its stake in Uber Technologies Inc., in part to cover losses incurred from its investment in Chinese ride-hailing group Didi Global Inc. Didi’s shares have dropped around 40% since its recent NYSE IPO, prompted by an investigation by Chinese regulators. SoftBank’s Vision Fund, Didi’s largest shareholder with a 21.5% stake, has lost about USD 4 billion on its Didi position. Softbank has also suffered recent losses from other Chinese investments similarly targeted by Beijing's regulatory crackdown, such as Alibaba and ByteDance.
Just Eat Takeaway slammed for poor investor relations
Cat Rock Capital Management LP, which holds a 4.7% stake in Just Eat Takeaway.com, has recently criticized the company for its “deeply flawed communication” with investors that has allegedly resulted in a 11% share price drop over the past two years. The activist investor alleged that the Amsterdam-based firm has not been transparent in communicating the costs of its investments, has caused confusion by criticizing the potential of businesses it invests in, and failed to address competitor attacks. Cat Rock urged the food delivery firm to sell non-core assets and to “explore strategic combinations.”City AM | Business Wire
Lagardère probed over vote buying and false accounting
France’s National Financial Prosecutor’s Office (”PNF”) is reportedly investigating Lagardère SA over alleged false accounting, vote buying and misuse of corporate assets. The instigating complaint appears to have been filed by activist investor Amber Capital in February, before Lagardère reached an agreement with Amber and other main shareholders for it to convert into a joint-stock company. Amber and Lagardère had been embroiled in a dispute since 2016 over the company’s “partnership limited by shares” corporate form, which allowed Arnaud Lagardère to control it despite holding only 7% of the capital.Lagardère | Le Monde | Reuters | Bloomberg
Governance in Brief – March 23, 2023
SVB Financial Group sued after the collapse of Silicon Valley bank unit SVB Financial Group, the parent company of Silicon Valley Bank, and two of its top executives, CEO Greg Becker and CFO Daniel Beck, are being sued by shareholders following the bank’s collapse. The lawsuit, filed by retail shareholder Chandra Vanipenta on behalf of a group of shareholders, accuses the bank and its two top executives of filing false and misleading financial reports.
Governance in Brief – March 16, 2023
Canada introduces climate reporting framework Canadian regulators have issued new guidance for the country's banks and insurance companies to better manage climate-related risks. The framework, which requires disclosure on governance, strategy, risk management, and metrics related to financial institutions’ greenhouse-gas emissions, was first drafted in 2022.
Governance in Brief – March 9, 2023
The U.S. Congress has passed a resolution repealing a Department of Labor (“DOL”) rule empowering retirement plan managers to consider climate change and ESG factors in their investment decisions. The rule, introduced by the Biden administration, falls under the Employee Retirement Income Security Act (“ERISA”), a federal law which sets protection standards for participants in private pension plans. Biden’s ruling entered into force in January this year, overturning prior Trump-era DOL rules that limited pension fund managers to restrict their investment strategies to “pecuniary factors.”
Governance in Brief – March 2, 2023
Indian regulator proposes enhancement to ESG disclosure rules India’s securities and market regulator SEBI has released a new ESG disclosure framework for public consultation. The proposed regulations impact India’s 1,000 largest companies by market capitalization, ESG funds and ESG ratings providers. For the largest companies, the regulator proposes areas of assurance of ESG disclosures and reporting and assurance of ESG footprint of the supply chain. The proposals expand on the 2021 Business Responsibility and Sustainability Report (“BRSR”) guidelines and propose mandatory assurance of certain KPIs under ESG disclosure. The KPIs contain intensity ratios such as GHG emissions, water consumption, and waste generation. For supply chain, SEBI will introduce a comply-or-explain approach for the top 250 companies starting in 2024, and assurance beginning in 2025. For ESG funds, SEBI proposes that at least 65% of AUM be invested in companies reporting on comprehensive BRSR and provide assurance on BRSR core disclosures. Under the proposed rules, ESG rating providers should also provide a “core ESG rating” based on assured information in addition to their own products.