September 9, 2021 | Editor: Martin Wennerstrom
Key Lagardere shareholder exits holding company
Bernard Arnault’s Financière Agache has announced that it is trading all of its shares in Arnaud Lagardère’s personal holding company in exchange for Lagardère SA shares. In connection with the restructuring, the acting-in-concert agreement between Arnaud Lagardère and Financière Agache will terminate. The shareholder accord was instituted in 2020 and enabled the French media publisher to fend off a proxy battle with its largest shareholders, Vivendi and Amber Capital. The investors had sought representation on the board in an effort to “stabilize” the group, after having long criticized it for its “Byzantine” limited partnership structure that allowed Arnaud Lagardère to effectively retain full control of the company despite his relatively modest 7% stake. Lagardère has since abolished this structure, having completed its conversion into a joint-stock company with a board of directors on June 30, 2021. The change formally elevates Arnaud Lagardère from CEO to combined Chairman and CEO for a six-year term, albeit without his former veto over major corporate decisions.
Reuters (1) | Reuters (2) | Reuters (3) | Financial Post | Lagardère (1) | Lagardère (2)
China Huarong releases long-delayed FY2020 results
On August 29, 2021, Chinese state-owned asset manager China Huarong Asset Management Co posted a USD 16 billion loss for FY2020 and said its capital adequacy and leverage ratios had failed to meet minimum regulatory requirements. The firm had delayed the release of its FY 2020 annual results by nearly five months, finally publishing them on the same day as the H1 FY2021 results, for which a USD 24.5 million profit was posted. The company attributed the losses to, inter alia, its former Chairman Lai Xiaomin, who was executed in January 2021 following his conviction on charges of bribery, corruption and bigamy.
Reuters | Reuters (2) | CH (1) | CH (2) | DW
BHP appoints KPMG boss as board member
Anglo-Australian miner BHP has announced that KPMG’s UK Audit Chair Michelle Hinchliffe will, effective March 1, 2022, join its board as an independent director and a member of the Audit and Risk Committee. Hinchliffe is set to retire in February 2022 from KPMG UK, where she recently served on the Executive Committee as Head of Audit. The mining giant was audited by KPMG between 1996 and 2019, paying nearly USD 250 million in total fees to KPMG or its affiliated firms for services provided between FY2010 and FY2019 alone. The announcement has prompted concerns over Hinchliffe’s independence from BHP, given her relationship with KPMG.BHP (1) | BHP (2) | BHP (3) | AT
GRAIL’s acquisition by Illumina spurs regulatory debate
U.S. lawmakers have raised concerns over the Federal Trade Commission’s (“FTC”) efforts to block genomic firm Illumina’s acquisition of GRAIL, citing “questions about [its] interference in the case.” The FTC alleges that the merger would “substantially lessen competition” in the U.S. multi-cancer early detection market. Notably, Illumina is a supplier of next generation sequencing (“NGS”) systems, while GRAIL - a company it spun off in 2016 - develops cancer detection tests that rely on NGS systems. The EU Commission has opened a similar probe into whether the acquisition may reduce competition and innovation.
Illumina | FTC | Forbes | Reuters (1) | Reuters (2) | Crowell | Jones Day
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.