March 23, 2023 | Editor: Martin Wennerström
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. According to the filing, SVB’s financial documents did not fully account for warnings from the Federal Reserve about interest rate hikes. The defendants are accused of failing to disclose how rising interest rates would undermine its business model “and leave it worse off than banks with different client bases.” The lawsuit seeks class action status for shares purchased between June 2016 and March 2023. On March 17, SVB Financial Group submitted a regulatory filing informing that it had filed for bankruptcy.
Rio Tinto appoints new board
Anglo-Australian miner Rio Tinto has announced that two new board members, Dean Della Valle and Susan Lloyd-Hurwitz, have been appointed to join the company’s board effective June 1. The appointments follow Chairman Dominic Barton’s calls for more members with mining and renewable energy experience. Dean Della Valle served as an executive with BHP Group, and was recently appointed Chair of Hysata, a hydrogen electolyzer technology company. Susan Lloyd-Hurwitz served as CEO of real estate group Mirvac for more than a decade. While the two directors will join the board in June, it is expected that shareholders will vote on their election at the 2024 AGM.
Eli Lilly to face DEI shareholder
The SEC has announced that Eli Lilly cannot exclude a shareholder proposal on diversity, equality and inclusion from its proxy materials for the 2023 AGM. The proposal, submitted by advocacy group “As You Sow,” asks the company to report on the efficacy of its DEI efforts by providing metrics on hiring, retention and promotion of employees, including gender, race and ethnicity data. Eli Lilly argued that the company is already reporting its progress in publicly available documents and added that the proposal concerns the company’s “ordinary business operations” managed by executives and the board of directors.
Mazda reshuffles top management
Japanese car maker Mazda Motor Corp has announced the nomination of company veteran Masahiro Moro as the company’s president and CEO. Moro, who currently serves as a director and senior managing executive officer, has previously served as head of the company’s North American operations. In addition, the company announced the nomination of current head of North American operations Jeff Guyton as CFO. Both nominations are subject to board and shareholder approval at the June 2023 AGM. In November 2022 the company announced a USD 11.2 billion spending plan to increase electrification of vehicles.
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.