CLOs

US employers expect to increase their compensation budgets by 3.3 percent for merit increases and 3.7 percent for total salary hikes for non-union workers in the new year, according to a new Mercer study cited by HR Dive (2 January, Christ). That mirrors the actual merit and total salary increases awarded in 2024, which were 3.3 percent and 3.6 percent, respectively. The technology sector expects above-average compensation budgets: increases of 3.5 percent for merit and 3.8 percent for total compensation. However, the healthcare services industry reported below-average increases: three percent for merit and 3.5 percent for total compensation.

From "US Compensation Budgets to Remain Above Historical Trends"
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China on Thursday singled out dozens of companies from the United States, including Raytheon, Boeing, and Lockheed Martin, in a series of punitive trade measures, reports the New York Times (2 January, Stevenson). China’s Ministry of Commerce said it added 28 companies to an export control list to “safeguard national security and interests.” It also banned the export of "dual-use items," which have both civilian and military applications, to those companies. And it placed 10 companies on what it calls an “unreliable entities list” related to the sale of arms to Taiwan, preventing them from doing any business in China and prohibiting their executives from entering or living in the country.

From "China Hits Dozens of US Companies with Trade Controls"
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Net neutrality rules, which disallow broadband providers from manipulating Internet speeds depending on the website, were struck down Thursday by the US Court of Appeals for the Sixth Circuit, reports Bloomberg Law (2 January, Heisig). Under federal law, broadband must be classified as an “information service” and not the more heavily-regulated “telecommunications service” the Federal Communications Commission (FCC) said it was, the court ruled. “It is true, in one sense, that a telephone user retrieves information from a third-party in a phone conversation with a friend or customer-service agent,” Judge Richard Allen Griffin wrote. “But that is not the sense meant by the statute.” The judges also rejected a similar FCC classification affecting mobile broadband providers.

From "Net Neutrality Rules Struck Down by Sixth Circuit"
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Apple agreed to pay US$95 million in cash to settle a proposed class action lawsuit claiming that its voice-activated Siri assistant violated users’ privacy, reports Reuters (2 January, Stempel). A preliminary settlement was filed on Tuesday night in the Oakland, California, federal court, and requires approval by US District Judge Jeffrey White. Mobile device owners complained that Apple routinely recorded their private conversations after they activated Siri unintentionally, and disclosed these conversations to third parties such as advertisers. Two plaintiffs said their mentions of Air Jordan sneakers and Olive Garden restaurants triggered ads for those products. Another said he got ads for a brand name surgical treatment after discussing it, he thought privately, with his doctor. Class members, estimated in the tens of millions, may receive up to US$20 per Siri-enabled device, such as iPhones and Apple Watches.

From "Apple to Pay US$95 Million to Settle Siri Privacy Lawsuit"
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IBM and GlobalFoundries have settled dueling lawsuits claiming that the latter breached a contract with the former and that the former misused the latter’s trade secrets, reports Reuters (2 January, Brittain). The companies said in a Thursday joint statement that the terms of the settlement were confidential and would allow them to “explore new opportunities for collaboration.” GlobalFoundries bought IBM’s semiconductor plants in 2015. IBM sued the company in New York state court in 2021 for allegedly breaking a US$1.5 billion contract to make high-performance chips for IBM. GlobalFoundries, which is majority owned by Abu Dhabi’s sovereign wealth fund Mubadala, separately sued IBM in New York federal court in 2023 for allegedly misappropriating its chipmaking trade secrets and sharing them with Intel and Japanese consortium Rapidus during partnerships with the two companies.

From "IBM, GlobalFoundries Settle Lawsuits over Contract, Trade Secrets"
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Turkey’s banking regulator has drawn up a plan to restrict the tenures of banking executives, reports Bloomberg (2 January, Finkel, Karakaya), a proposal that comes after high-profile accusations of a ponzi scheme at a bank with one of the nation’s longest-serving chief executive officers. According to the proposal, CEOs would be permitted to serve in that position at the same bank for at most 10 years. Deputy general managers would also be allowed up to 10 years, but that could be extended for as much as five years with approval from regulators. The number of deputy general managers won’t exceed 15 per lender, according to the draft. The move was triggered by an alleged fraud targeting footballers including former players for FC Barcelona and Inter Milan. Last year, Secil Erzan, a bank manager at Emirates NBD PJSC’s Turkish unit Denizbank AS, was accused of orchestrating the US$44 million ponzi scheme. Lured by the promise of a 250 percent return on their dollar investments, dozens of investors, including the former athletes, handed over cash to Erzan. In November, prosecutors also indicted Denizbank CEO Hakan Ates for his alleged role in the scheme. However, the court returned the indictment to prosecutors, citing lack of information including the victims of the alleged fraud and how much the suspects profited. Ates resigned from his post in December. The new regulation also aims to limit branch managers’ tenures to four years at the same bank. If passed, institutions would have to comply with the regulations by June 30.

From "Turkey Floats Limit on Bank CEO Tenures After Ponzi Scandal"
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Singapore Post said on Thursday that it is open to discussions with the Securities Investors Association Singapore (SIAS) about its decision to fire three top executives, reports Channel News Asia (2 January, Chan), after the retail investor watchdog called for an independent professional inquiry. SingPost in December dismissed CEO Vincent Phang, CFO Vincent Yik, and the head of its international business unit, Li Yu, over the mishandling of whistleblowing reports. “The sudden dismissal of three senior executives from SingPost, coupled with their vigorous denial of the allegations against them, has raised critical questions in the minds of shareholders, investors and the market,” SIAS president and CEO David Gerald said in a statement on Thursday.

From "SingPost Says Open to Discussions About Sacking of Three Top Executives"
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A new Barclays report showed that a record number of activist shareholders mounted campaigns at global companies last year, reports Reuters (2 January, Herbst-Bayliss), as their pressure tactics produced strong returns, and further growth is likely this year. In 2024, 160 investors such as hedge funds pushed companies to make moves like improving strategy and operations or firing chief executives, including 45 who deployed the strategy for the first time, Barclays said. That’s up more than 18 percent from 135 investors in 2023, which included 31 first timers. The number of campaigns launched last year, 243, surpassed 229 in 2023 but was slightly below the record of 249 in 2018.

From "Record Number of Activist Investors Joined Shareholder Rebellion in 2024"
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Tencent’s WeChat and ByteDance’s TikTok have secured approval to continue the operation of their popular apps in Malaysia, reports the Wall Street Journal (2 January, Wong), becoming the first companies to fulfill new license requirements meant to enhance online safety in the nation. The Malaysian Communications and Multimedia Commission said Wednesday that the two Chinese technology companies had each obtained licenses under requirements for internet- messaging and social-media companies unveiled last year. Telegram, it said, is expected to secure a license soon, while Meta Platforms, the owner of Facebook, Instagram and WhatsApp, has begun the process of obtaining a license. The commission said neither X nor YouTube operator Google had submitted license applications. The communications regulator said it is reviewing an assertion by X that the platform’s user base in Malaysia hadn’t yet reached the threshold that would require it to apply for a license. It said Google had raised issues about the video-sharing features of YouTube and its classification under the new licensing framework. Malaysia in July rolled out new rules requiring social media and messaging platforms with more than eight million users in the country to obtain licenses, part of what it described as government efforts to strengthen online safety, particularly for children and vulnerable groups. It warned of possible legal action against companies that hadn’t obtained licenses by January 1.

From "WeChat, TikTok First to Secure Licenses Under Malaysia’s New Social-media Rules"
Abstract News © 2025 SmithBucklin

South Korean police raided the offices of Jeju Air and the operator of Muan International Airport Thursday, according to a report published by France 24 (2 January), following the fatal crash of a Boeing 737-800 that killed 179 people. Authorities carried out search and seizure operations at Muan airport where flight 2216 crashed, a regional aviation office in the southwestern city, and Jeju Air’s office in the capital Seoul, police said. Jeju Air’s Chief Executive Kim E-bae, meanwhile, has been banned from leaving the country as the investigation continues, police said separately.

From "South Korean Police Raid Jeju Air; CEO Banned from Leaving Country"
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US President Joe Biden has decided to officially block Nippon Steel’s proposed purchase of US Steel, reports the Washington Post (2 January, Stein, Lynch). An official White House announcement of the decision is planned as soon as Friday. Biden opted to kill the deal despite intense efforts by some of his senior advisers to sway him in recent days, who warned that rejecting a sizable investment from a top Japanese corporation could damage US relations with Japan. Nippon Steel and US Steel have vowed to pursue legal action against the government, claiming it failed to follow proper procedures during its consideration of the acquisition. The president’s action comes after a Dec. 23 report by the interagency committee responsible for reviewing foreign investments in the United States for potential national security concerns. The Committee on Foreign Investment in the United States (CFIUS) said it was unable to reach a consensus on the risks of the Nippon Steel deal, leaving the final verdict with the White House. In its final evaluation of the transaction, the CFIUS warned that after buying US Steel, Nippon Steel could reduce domestic steel output and pose “risks to the national security of the United States.” Among the industries hardest hit in that case would be the transportation and energy sectors, said the panel, chaired by Treasury Secretary Janet L. Yellen. The CFIUS also said Nippon Steel’s global operations meant that it might not support future US government trade actions against low-cost steel imports, leaving “the US economy more exposed to dumping and unfair subsidization of steel.”

From "Biden to Block US Steel Sale to Japanese Buyer"
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Several Chinese companies have commenced public offerings in Hong Kong, reports the Wall Street Journal (31 December, Qu), part of a flurry of end-year activity with investor demand for listings picking up in the Asian financial hub. Chinese toy maker Bloks Group on Tuesday said it will market shares at a range of 55.65 Hong Kong dollars to HK$60.35 to raise net proceeds of about HK$1.29 billion, equivalent to US$166.1 million, ahead of a January 10 debut, while fine chemical materials supplier Anhui Conch Material Technology set a price range of HK$3.00 to HK$3.30 for its Jan. 9 listing, seeking net proceeds of around HK$417.6 million. Beijing Saimo Technology, which focuses on simulation technology, said it will market shares at between HK$12.00 and HK$18.00, raising net proceeds of about HK$427.9 million ahead of a January 15 debut. Recreational vehicle maker New Gonow, targeting a January 13 debut, set a HK$1.24-HK$1.64 target range to raise net proceeds of around HK$292.6 million. And Chinese environmental solution provider ContiOcean Environment Tech said it will market shares at HK$31.80-HK$39.80, raising net proceeds of around HK$312 million and beginning trade on January 9. Other companies, including health technology platform We Doctor and traditional Chinese medicine specialist Beijing Tong Ren Tang Healthcare Investment filed preliminary listing documents on Tuesday, a day after four other companies did the same. Hong Kong is expected to have recorded 69 IPOs raising approximately HK$87.6 billion this year, according to a report by Deloitte earlier this month. That would mark an 89 percent increase in proceeds from HK$46.3 billion in 2023, it said. This year’s biggest Hong Kong listing was Chinese appliance maker Midea, whose offering in September raised the equivalent of more than US$4 billion.

From "Hong Kong Sees Flurry of Year-End Listing Plans"
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China’s factory activity expanded at a slower pace in December, reports the Associated Press (31 December), despite recent stimulus measures and in the face of growing trade risks. The Purchasing Managers’ Index dipped to 50.1 last month from 50.3 in November, according to the National Bureau of Statistics. This marked the third consecutive monthly reading above 50, a level that indicates an expansion of manufacturing activity. The slowdown in factory activity was because of a “decline in the output component,” according to a note by Capital Economics’ Gabriel Ng.

From "China’s Manufacturing Activity Slows in December as Trade Risks Grow"
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The shares of Turkish brewer Anadolu Efes were set for their biggest two-day loss since 2001 after Russia’s President Vladimir Putin handed management of the firm’s joint venture (JV) with Anheuser-Busch InBev to a local company, reports Bloomberg (31 December, Ozsoy). AB InBev Efes Russia, the tie-up between the Belgian brewing giant and Anadolu Efes, is now under the temporary management of the Vmeste group of companies, the Russian decree said, without giving any details on Vmeste. The move followed a revised agreement between the partners in October that would’ve made the Turkish brewer the sole owner of the Russian business. Previously, Russia has taken international companies’ assets into temporary management after their owners announced deals to sell out when the Kremlin had alternative bidders in mind. As such, Carlsberg A/S’s unit was seized and handed to a Putin ally shortly after the brewer announced plans to sell the business, only to regain control ahead of a deal with an approved buyer. The Kremlin has previously applied the temporary management plan even when assets were jointly owned by investors from Western countries and jurisdictions that Russia considers friendly. A year ago, Putin ordered the transfer of rights to manage Russia’s second-busiest airport Pulkovo from foreign shareholders that included Germany’s Fraport AG and the Qatari wealth fund. The airport’s shares were released back to the owner when Fraport agreed to sell its stake to a firm from Oman.

From "Turkish Brewer Anadolu Efes Extends Slump After Russia JV Decree"
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Indonesian President Prabowo Subianto on Tuesday said a planned increase in value-added tax (VAT) rate by one percentage point to 12 percent, which goes into effect on January 1, will apply only to luxury goods and services, reports Reuters (31 December, Suroyo). The decision reversed a December announcement by Finance Ministry officials, who said the VAT hike would apply across the board except for cooking oil sold under a government program, sugar for industry, and wheat flour, which would still be subject to an 11 percent VAT rate. Prabowo said the government will still move forward with planned support measures intended to soften the blow from the VAT hike, worth 38.6 trillion rupiah (US$2.40 billion), which include electricity discounts and other tax breaks.

From "Indonesian President Says VAT Hike to Apply Only on Luxury Goods"
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Reuters (31 December, Srivastava, Mishra, Meenaktshi) reports that Citigroup and Bank of America (BofA) are exiting the Net-Zero Banking Alliance (NZBA), a group of global banks that have pledged to curb greenhouse gas emissions. They follow Goldman Sachs and Wells Fargo, which both exited the alliance last month. Citi reports that it had made progress toward its own net-zero goals and opted to leave the NZBA. BofA, in an emailed statement to Reuters, wrote: “We will continue to work with clients on this issue and meet their needs."

From "Citigroup, BofA Join US Lenders in Exiting Net-Zero Banking Alliance"
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Residents of the state of New York are now entitled to at least 20 hours of paid leave to attend prenatal medical appointments, reports the Associated Press (1 January). New York thus becomes the first state in the nation to offer paid leave for prenatal care, with all pregnant workers in the private sector eligible for the paid time off.

From "New York Employers Must Now Offer Paid Medical Leave During Pregnancy"
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GeneDx has hired Heidi Chen as chief legal officer and corporate secretary, reports Governance Intelligence (31 December, Maiden). Chen has joined GeneDx from Zoetis, where she was general counsel and corporate secretary for almost 12 years, a role she took on following the company’s spinoff from Pfizer in 2013. Before the spinoff, Chen held leadership positions on Pfizer’s legal team, including as chief counsel for animal health, and worked across the compliance, litigation, licensing, and risk-management functions.

From "GeneDx Appoints Former Zoetis General Counsel as Legal Chief"
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Nippon Steel continues to push for presidential support of its proposed US$14.9 billion purchase of US Steel, reports the Washington Post (31 December, Lynch, Stein), and is now negotiating directly with the White House to save the imperiled takeover. The Japanese steelmaker is making a last-ditch effort to secure President Biden’s approval for the takeover before he leaves office. Nippon has offered a 10-year guarantee to not reduce production capacity at US Steel’s mills in six states without approval from the federal agencies that vet foreign transactions for national security.

From "Japanese Buyer Sends Biden New US Steel Proposal in Final Bid for Support"
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A US judge reset the bidding process for the parent company of Citgo Petroleum Corp. late Tuesday, reports Bloomberg (1 January, Feeley, Yapur, Itriago), a move that is poised to create competition for Elliott Investment Management’s pursuit of the oil refiner. Judge Leonard Stark ordered the bidding for the company to be reopened, allowing for new offers to be submitted. Any proposal would have to top the US$7.3 billion bid made by an affiliate of Elliott earlier this year. Stark, who heard arguments on the matter on December 13 in Wilmington, Delaware, has now cleared the way for other creditors — including Gold Reserve, Crystallex International Corp. and Red Tree Investments LLC. The decision puts a new twist on a years-long legal battle over control of the parent of Citgo, a Venezuela-owned foreign asset that operates three refineries in the United States, pipelines, terminals, and fuel distribution channels. The proceeds of the sale will pay back a long list of creditors that are collectively owed around US$20 billion by the Venezuelan government and its state-owned oil company, Petroleos de Venezuela SA, over asset seizures in the country. Crystallex, which saw its Venezuelan gold mines seized by the late President Hugo Chávez, is first in line for a slice of the proceeds. Others include Exxon Mobil Corp., ConocoPhillips Co., and Siemens AG.

From "US Judge Resets Bidding for Oil Refiner Citgo, Creating Competition for Elliott"
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