Under increasing pressure about the serial management mishaps at Facebook, Mark Zuckerberg said he would not relinquish his title as chairman and that investors who wanted him to step down from the position and focus on being chief executive were misguided. (As the controlling shareholder he cannot be forced from the job.) He also stood by Sheryl Sandberg, Facebook’s beleaguered chief operating officer. The latest scandal to envelop the social network centres on its contract with a consultancy to dig up dirt on its detractors. Mr Zuckerberg and Ms Sandberg both say they were unaware of Facebook’s relationship with the firm. See article.
Fasten your seat belts
The global car industry reacted with shock to the arrest of Carlos Ghosn in Tokyo. Mr Ghosn forged, and heads, the alliance between Nissan and Renault that was later joined by Mitsubishi. He is being detained at the behest of Japanese prosecutors after Nissan alleged that he had understated his earnings and misused company assets. Before his arrest Mr Ghosn’s push for deeper integration between Nissan and Renault had reportedly met some stiff resistance from Nissan’s board. See article.
Israel’s minister for tourism warned that he would seek to impose a punitive tax on Airbnb’s operations in the country, after the firm delisted properties located in Israeli settlements in the West Bank. The home-rental platform acted in response to a campaign by activists to scrub the settlements from its website.
A campaign to attain severance pay for staff at Toys “R” Us who lost their jobs when the company declared bankruptcy resulted in the creation of a $20m hardship fund by Bain Capital and KKR, two private-equity firms. Both were involved in the buy-out of the retailer in 2005, and have been blamed by workers’ groups for its demise. Other firms have been asked to contribute. The workers say the fund needs to reach $75m to cover payments promised to them.
Boston Scientific agreed to buy btg for £3.3bn ($4.2bn). The deal enhances Boston Scientific’s business in interventional medicine. BTG, for instance, produces small glass microspheres that deliver radiation directly to liver tumours. BTG started life as a research division of the British government. It also has a pharmaceutical arm that focuses on antidotes; its bestselling product is a treatment for rattlesnake bites.
Pfizer announced price increases for around 10% of its drugs, starting in the new year. In July it had pledged to postpone price rises in response to Donald Trump’s rebuke of the pharmaceutical industry for alleged price-gouging. A drug-pricing plan that the president introduced in May remains largely unaccomplished.
A sovereign-wealth fund in Abu Dhabi launched a lawsuit against Goldman Sachs for losses it incurred linked to the 1MDB scandal in Malaysia. America’s Justice Department recently laid charges against two former employees of the bank. Goldman insists it knew nothing about their activities, but has acknowledged that it may face severe penalties.
American regulators fined Société Générale more than $1.3bn for facilitating dollar transactions with several countries between 2003 and 2013 in violation of sanctions. It is the second-largest penalty to be levied on a bank for breaching American sanctions, behind the $8.9bn imposed on BNP Paribas, another French bank, in 2015.
Following a nine-hour meeting of its board, the Reserve Bank of India reached a compromise with the government and said it was willing to review both its transfer of surpluses to the public coffers and the rules that restrict lending at distressed state-controlled banks. This came after a month of politicking in which the government, facing an election next year, had put pressure on the central bank to intervene in the economy.
The FAANGs lose their bite
Stockmarkets had another choppy week as the broad sell-off in technology shares gathered steam, pushing the NASDAQ and S&P 500 indices closer to their lowest points of the year. Apple’s market value has fallen dramatically since early August, when it broke the $1trn mark for the first time. It is now worth around $840bn. See article.
Cryptocurrencies also took a hammering, fuelled by speculation that regulators are preparing to clamp down on the digital-currency market. Bitcoin shed 10% in a day. It is now 80% below the peak of $19,800 it hit last December.
Britain’s best-paid chief executive just got richer. Denise Coates, who turned her family’s betting firm in her home town of Stoke-on-Trent into Bet365, a private online gambling giant, is thought to have received £265m ($352m) in total annual compensation, last year according to the firm’s accounts. That amounts to around 40% of the entire budget for Stoke city council.
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