This week in Business
In its search for a new chief executive Uber at last settled on Dara Khosrowshahi, who ran Expedia for 12 years. He takes up the reins at the ridehailing firm after a run of bad publicity that led to the ousting of Travis Kalanick, Uber’s cofounder. Mr Khosrowshahi’s in-tray gets only fuller. It was reported this week that Uber is under investigation for allegedly contravening the Foreign Corrupt Practices Act. And in an address to staff, Mr Khosrowshahi said that an initial public offering could come in the next 18-36 months.
Using a new fund that allows the state to intervene in failing banks, Russia’s central bank stepped in to rescue Otkritie, the country’s largest private lender, after a run on its deposits. It is the first time that one of the country’s financial institutions deemed “too big to fail” has needed a bailout.
A dubious distinction: The first fine was imposed on a bank in the euro zone under the European Central Bank’s Single Supervisory Mechanism. Permanent TSB, an Irish lender, is to pay 2.5m ($3m) for breaching liquidity rules in 2015 and 2016. Created in 2014, the SSM is the “first pillar” of the euro zone’s nascent banking union, overseeing the stability of its biggest banks.
America’s economic growth rate in the second quarter was revised to 3% on an annualised basis, up from the 2.6% that was reported in an initial estimate. Stronger investment and consumer spending explained the more vigorous figure.
In South Korea, Lee Jae- yong, the de facto head of Samsung, lodged an appeal against his conviction and five-year prison sentence for bribery. The verdict in the case, which is related to a scandal that brought down the country’s previous president, did not have a big impact on the company’s share price. But if his conviction is upheld, Mr Lee is unlikely to be given a presidential pardon. Public anger with the chaebol, South Korea’s conglomerates, makes such special treatment improbable.
Gilead Sciences struck a deal to buy Kite Pharma for $11.9bn. Kite is one of several companies developing a pioneering treatment for fighting cancer known as CAR-T, which re-engineers a patient’s white blood cells. The Food and Drug Administration this week gave its approval to a similar therapy from Novartis that will cost $475,000 (cheaper than had been thought) for a course of treatment, marking the first time the FDA has made a gene therapy available in America.
Fleece me in St Louis: Workers in St Louis saw the $10-an-hour minimum wage they secured in May cut back to $7.70, as a state law came into effect barring local governments from paying more than Missouri’s minimum rate. Other states have laws that prevent their cities from paying above an official benchmark, but St Louis is the biggest place where the minimum has been rolled back. Business groups lobbied for the cut, arguing that large wage raises hurt jobs.
India’s central bank reported that 99% of the banknotes that were suddenly taken out of circulation last year under a demonetisation programme had been cashed in at banks for new tender. That somewhat undermined the government’s claim that the scheme would leave forgers and tax dodgers holding piles of useless rupees.
CBS agreed to buy Ten Network, one of Australia’s three main commercial stations (and broadcaster of “Neighbours”, a long-running soap opera). The American media giant is Ten’s biggest creditor through a licensing deal for its blockbuster TV dramas.
Toshiba missed a deadline to seal a deal to sell its chip business to Western Digital, its American partner in the unit. The troubled Japanese conglomerate is continuing talks with other parties, including Bain Capital, a private-equity firm, which has reportedly added Apple to the consortium it is heading.
In the latest push by carmakers into electric vehicles, Renault-Nissan announced that it would build a battery-powered car in China with Dongfeng Motor, its partner in the country for many years. Aston Martin, meanwhile, promised that all its vehicles would be able to run on batteries or would be “mild” hybrids (which use an engine but can also travel on battery power) by the mid-2020s.
Less dosh for posh nosh: Amazon struck fear into established supermarket retailers when it launched a price war on the day it took official ownership of Whole Foods Market. Prices for delicacies such as “responsibly farmed” salmon were cut by a third, and “animal-welfare-related” ground beef by 29%. Share prices in some of the biggest grocery chains swooned in response, but many think the industry is ripe for a round of price slashing.
New CEO of Uber, Dara Khosrowshahi.