Skip to main content

Governance in Brief – March 31, 2022

Posted on March 31, 2022


March 31, 2022 | Editor: Martin Wennerström



Evergrande discloses USD 2.1 billion cash seizure

China Evergrande Group has established an independent committee to investigate a USD 2 billion hole in the accounts of its primary operating subsidiary, Evergrande Property Services. While preparing its FY2021 accounts, the subsidiary discovered that a group of undisclosed banks had seized RMB 13.4 billion (USD 2.1 billion) of its deposits, approximately equivalent to its cash holdings as of June 2021, as security for third-party pledge guarantees. The announcement prompted a suspension of trading in the China Evergrande share on the Hong Kong Stock Exchange. Additionally, the parent company has announced it would delay the publication of the financial results for the year, as it will not be able to complete the audit work on time. Evergrande, once China’s second-largest property developer, has liabilities of over USD 300 billion and saw its market cap drop by 88% over the course of 2021.

Credit Suisse Vice Chair steps down over workload concerns

Credit Suisse board Vice Chair and lead independent director Severin Schwan is not standing for re- election at the coming AGM. Schwan, who is also the CEO of Roche, has faced shareholder criticism over the dual mandate as it reportedly did not allow him sufficient time to fulfill his responsibilities at the Swiss bank. In 2021, Credit Suisse suffered significant loss from the collapse of hedge fund Archegos Capital Management and supply chain finance company Greensill Capital, while in 2022 its former Chairman resigned after repeated violations of COVID-19 quarantine rules.

| Euronews| Swissinfo|

Activist investor pressures RWE to spin off lignite business

Activist investor Enkraft has requested that RWE prepare a spinoff of its brown coal business. Enkraft argues in its motion, which will be put to vote at the April 28 AGM, that the move would add EUR 16 billion in market capitalization. RWE’s supervisory board has recommended opposition to the proposal, arguing that its approval “would not save a single tonne of carbon dioxide” while creating “substantial uncertainty” for the affected employees. If the proposal attains its 75% requisite majority, RWE’s management board would be compelled to prepare a spinoff plan and to submit this plan to shareholder vote by the next AGM.

RWE (1)
| RWE (2)| Bloomberg|Nasdaq


Toshiba shareholders reject both reorganization proposals

Toshiba’s shareholders rejected both the management’s plan to break up the firm into two parts and an opposing shareholder proposal requesting the company consider alternatives such as a going-private transaction. Toshiba’s restructuring plan, which included the separation of the company’s core devices business into a new listed company, was supported by only by 39.5% of votes. The proposal had faced opposition from top shareholders, including Effissimo Capital Management and 3D Investment Partners. 3D’s proposal to reconsider alternative options also failed to attain its requisite majority, being backed by only 44.6% of votes.

Toshiba (1)
| Toshiba (2)| Yahoo |MW |BB|



Recent Content

governance in brief

Governance in Brief – June 15, 2023

Exxon and Chevron AGMs reject climate proposals The AGMs of Exxon Mobil and Chevron have rejected a slew of climate-themed shareholder proposals, signaling a setback for activists pushing for more aggressive emission reduction targets.

governance in brief

Governance in Brief – June 8, 2023

European Parliament approves CSDDD The European Parliament has approved the “Corporate Sustainability Due Diligence Directive.” Under the new rules, companies will be required to identify and address the negative impact of their activities and value chains on human rights and the environment. Additionally, companies will need to implement climate transition plans, and, in the case of companies with more than 1,000 employees, tie directors' variable compensation to target achievement.

governance in brief

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

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.