May 5, 2022 | Editor: Martin Wennerström
Credit Suisse sued over risk management failure
A U.S. pension fund is suing former and current Credit Suisse board members and executives, including former Chairman Urs Rohner, over risk management failures related to the collapse of Archegos Capital Management. The lawsuit alleges that the defendants failed to ensure proper risk control systems and processes at Credit Suisse’s prime brokerage unit. This failure allegedly contributed to the USD 5.5 billion loss that the Swiss bank suffered after Archegos’ highly leveraged stock bets imploded in 2021. The lawsuit seeks to claw back compensation from the 20 defendants, as well as a declaration that they breached their fiduciary obligations. Separately, around 60% of votes cast at the 2022 AGM rejected the proposal to shield directors and executives from legal action for FY2020. The FY2020 discharge vote, initially scheduled to take place last year, was delayed due to controversies stemming from the losses the bank suffered following the collapse of Archegos and supply chain finance company Greensill Capital.
Major shareholder pushes for HSBC Holdings break-up
HSBC Holdings' largest shareholder, China’s Ping An, has urged the UK-based bank’s board to spin off its Asian business and separately list it on the Hong Kong stock exchange. Ping An, which holds an 8.3% stake in HSBC, has argued that a separate Asian entity would be more profitable and would benefit from lower capital requirements. Additionally, the unit would be less bound to UK regulations. HSBC shares jumped 2.6% in Hong Kong and went up 0.6% on the London Stock Exchange on the news.
Investor urges shareholders to oust JET’s CFO and board
Buffett builds 9.5% stake in Activision Blizzard
Warren Buffett has announced that Berkshire Hathaway has amassed a 9.5% stake in Activision Blizzard. The stake, worth around USD 6 billion, was mainly built after Microsoft announced plans to acquire the video game publisher. Activision Blizzard’s stock has been trading well below Microsoft’s proposed takeover price of USD 95 a share, closing at USD 78 on May 2. However, the transaction is pending regulatory approval. In March, the U.S. Federal Trade Commission asked the two companies to provide additional data related to the antitrust review of the deal. Activision Blizzard shareholders approved the USD 68.7 billion Microsoft merger in April 2022.
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 – 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.