November 04, 2021 | Editor: Henry Hofman
Volvo Cars stock soars in Stockholm debut
Volvo Cars shares jumped as much as 22% in the first day of their trading on Nasdaq Stockholm as the company raised SEK 20 billion (USD 2.3 billion) in an IPO which valued the company at SEK 158 billion. The successful debut came after Volvo Cars cut the size of the offering by a fifth and priced it at the bottom of the initial range, in response to investors’ concerns over how much control China’s Zhejiang Geely Holding Group Co (“Geely”) would retain. Moreover, Geely agreed to convert its common shares of class A, carrying 10 votes per share, into a corresponding number of common class B shares, which are entitled to one vote per share. Prior to agreeing to convert the shares the enhanced voting rights would have given Geely 98% voting power despite its stake in the company dropping to around 84%. Additionally, Geely decided not to exercise an upsize option that would have allowed it to increase the offering by 20%. The amended offering could result in a free float of 16% to 17.9% depending on whether an overallotment option is exercised. Volvo Cars shares closed at SEK 57.99 on November 2, up from the SEK 53 listing price.
Volvo (1) | Volvo (2) | Yahoo Finance (1) | Yahoo Finance (2)
Citigroup to conduct racial equity audit
Citigroup announced it will conduct an independent racial equity audit to evaluate the bank’s efforts towards helping to close the racial wealth gap in the United States, an initiative for which it had committed, in September 2020, to dedicate USD 1 billion. The audit will include input from a range of stakeholders, including employees and civil rights organizations. The announcement comes six months after a shareholder proposal requesting a racial equity audit analyzing the company’s adverse impacts on nonwhite stakeholders and communities of color was backed by nearly 40% of the votes cast at the 2021 AGM. At that time, Citigroup had recommended a vote against the resolution.
Citi Group | Fortune | Financial Advisor IQ | Banking Dive| SEC
Kuaishou Technology announces leadership reshuffle
Kuaishou | SCMP | Yahoo Finance | CNBC
Activist investor pressures Shell
to split its businesses
New York-based hedge fund Third Point LLC announced that it has engaged with Royal Dutch Shell regarding a possible separation of the company’s legacy fossil fuel and energy transition (liquified natural gas, renewables, marketing) businesses. In a quarterly letter addressed to investors, Third Point CEO, Daniel Loeb, argued that Shell’s competing shareholders and the management’s “do it all” attitude resulted in an incoherent strategy and unhappy shareholders. According to Loeb, the spin- off of the energy transition business would likely lead to reduced CO2 emissions and increased returns for shareholders. Shell’s CEO, Ben van Beurden, pushed back against Loeb and said that Shell needs the legacy business to finance investments in renewables.
Third Point | Reuters (1) | Reuters (2) | Forbes
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.