Tencent treads lightly with China
RECORD FINE: TENCENT TREADING CAREFULLY Regulators in China are remarkably more robust than their counterparts around the world.
It’s hard to imagine what the Competition Commission would have done if any of the market-dominating companies it fined – ArcelorMittal, South African Airways, bread companies, construction companies, Telkom – had turned around and thanked it.
That’s what Alibaba did recently after the Chinese regulator imposed a record fine on it. The global tech group thanked the regulator and went on to say: “Alibaba would not have achieved our growth without sound government regulation and service, and the critical oversight, tolerance and support from all of our constituencies have been crucial to our development.”
The group’s CEO Daniel Zhang made additional conciliatory remarks designed to assure the Chinese government that it knew who was in control.
There was no sign of Alibaba founder Jack Ma amidst all this kowtowing. Ma has only been seen once since last October when he rather famously, and remarkably foolishly, told the world the Chinese banking system operated like pawnshops.
Over at Tencent the much more circumspect Pony Ma is reported to be treading very carefully with expansion and acquisition plans in order not to incur the wrath or even attention of the regulators.
Regulators in China are remarkably more robust than their counterparts not just in South Africa but anywhere in the world. Earlier this year the head of one of the country’s largest asset management companies – and one that had grown aggressively in recent years – was convicted of corruption and promptly executed.
The big question for international investors is what happens when Tencent and the other major tech companies in China are prevented from maintaining their spectacular growth momentum? Is it a bit like an elephant on a bicycle? If it’s not moving extremely fast, will it fall over?
No doubt Glencore executives are very glad the group has nothing as forceful or effective as the Chinese government on its list of shareholders. There are rumblings of discontent about the commodity group’s new remuneration policy, which could see recently appointed CEO Gary Nagle being paid as much as $10.4 million (about R149 million) a year. Proxy advisors are urging shareholders to vote down the proposed remuneration plan.
Unlike the Chinese government, it does seem Glencore shareholders are a fairly docile bunch. How else could you explain the company’s plan to operate its second “Covid AGM” as a closed affair? Last week Glencore reminded shareholders that although they would not be able to attend the AGM, they would have an opportunity for “engagement” ahead of the meeting by way of a live video webcast.
Presumably, the board realises none of the shareholders will make a fuss about not being given the opportunity to attend – even virtually – the single most important event on the shareholder calendar.
The group describes itself as “one of the world’s largest global diversified natural resource companies and a major producer and marketer of more than 60 responsibly-sourced commodities that advance everyday life”.
You have to wonder how it’s possible that a company of that stature cannot manage to arrange an interactive Zoom AGM? Could it be dozy shareholders?