In­vestors wipe $3B off ZTE as U.S. penal­ties hit

The Daily Star (Lebanon) - - BUSINESS -

HONG KONG: In­vestors wiped about $3 bil­lion off em­bat­tled Chi­nese telecom­mu­ni­ca­tions gi­ant ZTE Corp.’s mar­ket value as it re­sumed trade Wed­nes­day af­ter agree­ing to pay up to $1.4 bil­lion in penal­ties to the U.S. gov­ern­ment. China’s No. 2 telecom­mu­ni­ca­tions equip­ment maker was crip­pled when the United States im­posed a seven-year sup­plier ban on the com­pany in April af­ter it broke an agree­ment to dis­ci­pline ex­ec­u­tives who con­spired to evade U.S. sanc­tions on Iran and North Korea. The ban, which has pre­vented ZTE from buy­ing the U.S. com­po­nents it re­lies on to make smart­phones and other de­vices, will not be lifted un­til ZTE pays a fine and places $400 mil­lion more in an es­crow ac­count in a U.S.-ap­proved bank. It was also or­dered to rad­i­cally over­haul its man­age­ment. “While the night­mare is now over, ZTE will likely have to deal with many changes,” Jef­fries said in a re­search re­port, adding it ex­pects sig­nif­i­cant near-term sell­ing pres­sure on the com­pany’s shares. Con­firm­ing de­tails of the U.S. deal, ZTE said late Tues­day it would re­place its board of di­rec­tors, and that of its im­port-ex­port sub­sidiary ZTE Kangxun, within 30 days of the June 8 or­der be­ing signed by the U.S. –

Toy­ota pumps $1B in Grab in ride-hail­ing bet

SIN­GA­PORE: Toy­ota Mo­tor Corp has agreed to buy a $1 bil­lion stake in South­east Asia’s Grab in the big­gest in­vest­ment by a car­maker into a ride-hail­ing firm, at a time when tra­di­tional au­tomak­ers are rac­ing to team up with dis­rup­tive tech com­pa­nies. The value of sixyear-old Grab will be just over $10 bil­lion af­ter the in­vest­ment, said a per­son fa­mil­iar with the mat­ter. The deal comes as the auto in­dus­try faces a spike in the need for tech­no­log­i­cal prow­ess with the ad­vent of fea­tures such as au­ton­o­mous driv­ing, while app mak­ers of­fer pas­sen­gers the op­tion to forgo car pur­chases by con­nect­ing them with driv­ers. Some au­tomak­ers have re­sponded by part­ner­ing with mak­ers of ride-hail­ing apps which dom­i­nate the fast-growing field of mo­bil­ity ser­vices, in an­tic­i­pa­tion of a fu­ture of re­duced car own­er­ship. Gen­eral Mo­tors Co has in­vested in U.S. ride ser­vices firm Lyft, whose ri­val Uber Tech­nolo­gies Inc is also backed by Toy­ota. Mean­while Japan’s SoftBank Group Corp – also an in­vestor in Grab and Uber – last month said it would in­vest $2.25 bil­lion in GM’s au­ton­o­mous ve­hi­cle unit Cruise. Toy­ota’s trad­ing arm in­vested an undis­closed sum in Grab last year. This time, the au­tomaker is lead in­vestor in a fi­nanc­ing round launched af­ter Grab ac­quired Uber’s oper­a­tions in South­east Asia, a re­gion of 640 mil­lion peo­ple. –

U.K. in­fla­tion sug­gests de­lay in in­ter­est rate hike

LON­DON: Of­fi­cial fig­ures show in­fla­tion in Bri­tain re­mained at an an­nual rate of 2.4 per­cent in May, sug­gest­ing the cen­tral bank may de­lay an ex­pected rate in­crease. Com­ing af­ter other mixed eco­nomic fig­ures, Wed­nes­day’s in­fla­tion data mean the Bank of Eng­land could put off in­creas­ing its key in­ter­est rate this sum­mer, as was pre­vi­ously be­lieved. The Bank of Eng­land wants in­fla­tion near 2 per­cent and some thought it might soon raise its main rate by a quar­ter point to 0.75 per­cent to do so. Samuel Tombs, econ­o­mist at Pan­theon Macroe­co­nomics, pre­dicts in­fla­tion will grad­u­ally ease in com­ing months any­way, and the econ­omy “is still sub­dued by past stan­dards.” Wages are ris­ing 2.8 per­cent on the year, but im­prove­ment in liv­ing stan­dards “lacks any real mo­men­tum.” –

Guess chair­man re­signs af­ter im­proper con­duct

Guess Inc (GES.N) said Tues­day its co-founder, Paul Mar­ciano, had re­signed as the com­pany’s ex­ec­u­tive chair­man af­ter a spe­cial com­mit­tee com­pleted an in­ves­ti­ga­tion into al­le­ga­tions of im­proper con­duct. Mar­ciano gave up his day-to-day re­spon­si­bil­i­ties at the firm on an un­paid ba­sis in Fe­bru­ary, days af­ter model and ac­tress Kate Up­ton tweeted, ac­cus­ing Mar­ciano of us­ing his power to ha­rass women. The fash­ion re­tailer said Tues­day many of the al­le­ga­tions, which in­cluded in­ap­pro­pri­ate com­ments and texts and un­wanted ad­vances, could not be cor­rob­o­rated. But Guess said its in­ves­ti­ga­tion found Mar­ciano on cer­tain oc­ca­sions ex­er­cised poor judg­ment in his com­mu­ni­ca­tions with mod­els and pho­tog­ra­phers. Guess and Mar­ciano en­tered into non­con­fi­den­tial set­tle­ment agree­ments to­tal­ing $500,000 that re­solve claims by five in­di­vid­u­als aris­ing out of al­le­ga­tions of in­ap­pro­pri­ate con­duct, the com­pany said in a reg­u­la­tory fil­ing. Guess ap­pointed his brother, Mau­rice Mar­ciano, as board chair­man. Paul Mar­ciano will re­main on the board, it said. –

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