January 07, 2021 | Editor: Martin Wennerström
Following confusion, NYSE delists three Chinese companies
The New York Stock Exchange (“NYSE”) has announced the January 11 delisting of the American depositary receipts (“ADRs”) of three Chinese telecommunications companies. The concerned companies are China Mobile, China Telecom, and China Unicom Hong Kong, all controlled by the Chinese state and also listed on the Hong Kong Stock Exchange. The announcement is the exchange’s second reversal on this matter in about a week, and was reportedly prompted by the issuance of “new specific guidance” by the U.S. Department of the Treasury.
The delisting is ultimately rooted in a Nov. 12 executive order from the Trump administration prohibiting transactions involving publicly traded securities of companies linked to the Chinese military. However, this executive order did not specifically address whether an outright delisting of such companies would be required, hence the NYSE’s apparent indecisiveness. Meanwhile, in December 2020, the U.S. Congress passed a bill requiring all foreign US-listed companies to comply with the US Securities and Exchange Commission (“SEC”) accounting policies and prohibiting listings of companies that do not allow the review of their financial audits.
SCMP | DW (1) | DW (2) | Whitehouse | BBC | Reuters | Fortune | ICE
Alibaba shares slide as regulatory pressure mounts
Shares of e-commerce giant Alibaba Group Holding Ltd. (“Alibaba”) have fallen around 9% after Chinese regulators opened an antitrust investigation into the company’s operations at the end of last month. Chinese regulators accuse Alibaba of forcing merchants to exclusively sell their products on the company’s platform. The announcement comes after regulators suspended the IPO in Shanghai and Hong Kong of Alibaba’s payments arm Ant Group over regulatory and disclosure concerns. Amid regulatory concerns, Alibaba also announced that it will increase its share repurchase authority from USD 6 billion to USD 10 billion, effective over a two-year period.
Fiat and Peugeot merger gets shareholder approval
On January 4, shareholders of automakers Fiat Chrysler Automobiles (“Fiat”) and Peugeot’s parent PSA Peugeot-Citroen approved with more than 99% of votes in favor of the USD 52 billion merger of the two companies. The combined entity, which will be called Stellantis and would be the world’s fourth largest in vehicle sales, is expected to bring around USD 165 billion in revenues. The shares of the new company will be listed in Paris, Milan, and New York. PSA CEO Carlos Tavares will retain the CEO role in Stellantis, while Fiat Chairman John Elkann will hold the chairmanship. The merger is pending certain regulatory approvals.
Following Brexit, EasyJet and Ryanair suspend voting rights
Low-cost carriers easyJet Plc and Ryanair Holdings Plc (“Ryanair”) announced that they will restrict the voting rights of non-EU shareholders in order to comply with the European Union (“EU”) ownership rules. European airlines must be majority owned and controlled by EU nationals to have carrier rights within the region. Following Brexit, UK shareholders are no longer able to buy shares in Ryanair or vote, while easyJet will suspend non-EU voting rights on a on a “last in, first out” basis to assure a non-EU ownership below 49.5%. easyJet has warned of forced sales of shares to EU nationals if its EU ownership remains below this threshold.
Ryanair (1) | Ryanair (2) | Reuters (1) | Reuters (2) | Yahoo
Governance in Brief – June 1, 2023
Citigroup to IPO Banamex after Mexican gov’t interventions hamper sales deal Citigroup has announced a plan to spin off its Mexican business, Banamex, after a failure to sell the unit to conglomerate Grupo Mexico. Citigroup had been in talks with German Larrea, CEO and Chairman of Grupo Mexico, for over a year in an attempt to orchestrate the sale of the bank, which was first announced at the start of 2022.
Governance in Brief – May 25, 2023
Activist investor pushes for leadership and strategy changes at NRG Energy Activist investor Elliott Investment Management has disclosed a 13% stake in the US-based NRG Energy and called for leadership and operational changes at the company to remedy its “meaningful underperformance.” The investor urged NRG to add independent directors with experience in the power and energy sector to its board, noting that it has already identified five executives to guide the operational and strategic changes.
Governance in Brief – May 19, 2023
EU court sides with Ryanair on Lufthansa’s 2020 bailout. The EU General Court, the second-highest court in the EU, has annulled the European Commission’s decision on the approval of state bailout for Deutsche Lufthansa prompted by the 2020 pandemic. The judgment found the EC erroneously considered that Lufthansa could not obtain financing on the markets and failed to ask for the implementation of an incentive mechanism for the airline to buy back the German Government’s stake.
Governance in Brief – May 11, 2023
JPMorgan Chase takes over failed First Republic Bank JPMorgan Chase has acquired the assets and deposits of First Republic Bank after California authorities seized and auctioned the troubled lender. The Federal Deposit Insurance Corporation (“FDIC”), an independent governmental agency established to maintain financial stability through the insurance of banks’ deposits, took possession of First Republic Bank after the lender suffered a severe liquidity crisis following the failure of SVB and Signature Bank earlier in March.