Business news in brief
Cement multinational CEO resigns after Syria deals
The top executive of LafargeHolcim announced he will resign, citing “strong tensions” facing the SwissFrench cement maker since its admission last month that it had struck deals with armed groups in Syria – allegedly including Islamic State. The world's largest cement maker said an internal investigation has concluded that chief executive Eric Olsen was not responsible for or aware of any wrongdoing linked to now-discontinued Syria operations. Lafarge announced the internal probe last month as it acknowledged having funnelled money to armed groups in 2013 and 2014 to guarantee safe passage for employees and supply its multimillion-dollar plant there. Lafarge said the review turned up failings in its internal compliance program and other controls, and said its board has mandated Olsen and his team to “implement remedial measures” before he leaves on 15 July.
The company's activities with the armed groups came despite international sanctions against the Islamic State group and the al-Qaida-linked Nusra Front, which have been designated as terror groups by the UN.
The company has refused to specify the “local armed groups” it funded other than to say it involved “sanctioned” groups. However, French NGO Sherpa has filed a complaint accusing the company of doing business with Islamic State. The resignation suggested the company continues to be dealing with the fallout from its decisions to do business with the armed groups.
PA
Goals Soccer Centres in preliminary merger talks
Five-a-side football business Goals Soccer Centres has confirmed that it is in preliminary discussions with rival Powerleague over a potential merger. The company said a tie-up was one of a number of “strategic opportunities” being assessed by the board. In a statement the firm said: “The board of Goals notes the recent press speculation concerning discussions with Powerleague and the possibility of combining the two businesses. ”The preliminary discussions with Powerleague are but one of the strategic opportunities currently being assessed by the Goals board. “Furthermore, at this stage, no commercial or financial terms have been agreed and no decision on any course of action has been made by the board. There is therefore no certainty that any transaction will proceed.”
Goals returned to profit last year after posting a loss in 2015 and has been boosted by a new strategy under boss Mark Jones. Part of his five-year plan includes a refurbishment programme, which has seen upgraded ProTurf pitches, new LED lighting systems and renewed stadia boards at pitches across its estate.
PA
HSBC wins mandate on $100bn Saudi Aramco IPO
HSBC has been formally mandated as an adviser on the initial public offering of Saudi Arabia's national oil giant Aramco, expected to be the world's largest ever IPO, HSBC's chief executive said. Europe's biggest bank joins peers including JPMorgan and Morgan Stanley in the deal, which is expected to raise some $100bn (£78bn) and is the centrepiece of the Saudi government's ambitious strategy to diversify away from oil.
HSBC's chief executive Stuart Gulliver announced the bank's appointment on the deal at a shareholders' meeting in Hong Kong, confirming a report in February that the bank was close to being mandated on the hottest investment banking ticket in the world. Mr Gulliver also said HSBC is confident it can maintain dividend payouts in the foreseeable future and expects to exceed risk-weighted asset and cost-saving targets.
Reuters
IBM says chief executive’s pay is $33m
When IBM shareholders gather today, they’ll be asked to sign off on a $33m (£25.8m) pay package for chief executive Ginni Rometty. It’s a hefty sum for any chief executive, let alone one who’s overseen five years of falling revenue and left shareholders with a total return of less than 0.1 per cent. And the truth is, that figure might understate her actual compensation by perhaps 50 per cent or more, because of the way IBM values her stock options.
According to proxy adviser Institutional Shareholder Services, Ms Rometty’s 2016 package may actually exceed $50m, based on its own estimate for the value of her options at the time they were granted. Independent calculations by Bloomberg also suggest that at current values – which take into account the rise in IBM’s share price since the grant – her compensation is now worth $65m, or almost twice as much as her reported pay.
Bloomberg
Qatar Air expands to San Francisco
Qatar Airways announced plans to add San Francisco to its network of US destinations, plotting expansion just days after rival Emirates moved to reduce flights to the country citing Donald Trump’s travel restrictions. The Doha-based carrier will serve the California city starting in 2018, the company at a press conference in Dubai. The Persian Gulf airline will use Boeing 777-300 aircraft on the route, which will become its 15th US destination.
Qatar Airways has remained bullish on the US even after Mr Trump’s administration targeted travellers in the region with an attempt to block travel from six predominantly Muslim nations and a ban on carrying on laptop and tablet computers on flights from Middle East airports, including the carrier’s Doha hub. Dubai-based Emirates last week cited weaker demand caused by the restrictions as the cause for scaling back flights on five of its 12 US routes.
Bloomberg
Grant Thornton fined £2.3m over AssetCo audits
Britain's accounting watchdog has fined Grant Thornton £2.3m for failing to challenge “fictitious revenues” at listed fire and rescue services firm AssetCo. The Financial Reporting Council said the accounting firm and one of its now retired partners, Robert Napper, have admitted misconduct and agreed to fines and other sanctions. “The respondents have admitted that their failings arose as a result of the significant and widespread lack of professional competence and due care in the performance of the audits,” the FRC said in a statement. It follows an investigation by the FRC into audits of AssetCo's financial statements for the financial years that ended in March 2009 and March 2010.
Reuters
PPG sweetens offer for Dulux maker Akzo Nobel
PPG Industries raised its unsolicited bid for Dulux paint maker, Akzo Nobel, to €26.9bn (£22.8bn), making “one last invitation” for Europe’s largest coatings company to negotiate a deal. PPG is offering Akzo holders cash and stock valued at €96.75 a share including a dividend that Akzo plans to pay, Pittsburgh-based PPG said in a statement. PPG’s previous, sweetened bid valued Amsterdam-based Akzo at €90 a share with the dividend. Akzo rejected it on 22 March, saying it was too low and not in the interests of shareholders, customers or employees.
With the higher bid, Akzo chief executive Ton Buechner will face growing pressure to negotiate with PPG. The chief executive announced a plan last week to split the company in two and reward shareholders with a higher dividend, saying it offered more value than PPG’s offer. The bidder said its new offer is superior to that plan.
Bloomberg
Nikon files patent case over lithography technology
Nikon said it has initiated legal action against ASML and Carl Zeiss, saying the Dutch and Germany companies used its lithography technology without its permission. Nikon, the world's eighth-largest chip equipment maker, said it had filed patent infringement cases in the Netherlands, Germany and Japan against ASML, which makes semiconductor lithography machines, and Carl Zeiss, ASML's optical supplier. “ASML and Zeiss employ Nikon's patented technology in ASML's lithography systems, which are used globally to manufacture semiconductors, without Nikon's permission, thereby infringing Nikon's patents,” Nikon said in a statement.
Reuters