CLOs

Volkswagen (VW) said on Wednesday that it was disposing of its ownership stakes in facilities in northwestern China’s Xinjiang region, reports the New York Times (27 November, Bradsher). VW had a joint venture assembly plant in Urumqi, the capital of Xinjiang, as well as two test tracks in the region, maintaining the largest and most visible presence in Xinjiang of any multinational company. That drew condemnation from human rights groups. The United States and a growing number of European countries bar imports from Xinjiang because of evidence of forced labor there. The Chinese government, which denies the accusations of forced labor, has put heavy pressure on global companies to keep doing business in Xinjiang. In September, the Ministry of Commerce began investigating whether PVH, the corporate parent of the Calvin Klein and Tommy Hilfiger clothing brands, had taken “discriminatory measures” by not buying products from Xinjiang. BASF, the German chemicals giant, has tried for a year to obtain Chinese government permission to dispose of its stakes in two manufacturing joint ventures in Xinjiang. For VW, the assembly plant in Urumqi did not just become a political liability. It was also a money loser, because it was designed to make gasoline-powered cars. China has swiftly adopted electric vehicles in the last four years, and half the cars sold in China are now either battery-electric or plug-in hybrid cars. The Urumqi assembly plant has not built cars since 2019. VW and its state-owned joint venture partner SAIC Motor employ 175 workers who do the final preparation of cars at the Urumqi complex for delivery to dealerships in western China. The Shanghai municipal government owns SAIC Motor, which also makes the MG brand of cars and has been rapidly expanding exports. Volkswagen said that ownership of the assembly plant and test tracks was being transferred by the joint venture to the Shanghai Motor Vehicle Inspection Center, which is owned by a different arm of the Shanghai government.

From "VW to Exit China’s Xinjiang Region After 12 Years"
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A federal judge on Wednesday threw out a defamation lawsuit against Fox News by a man who said he received death threats when the network aired false conspiracy theories about his involvement in the Jan. 6, 2021, Capitol insurrection, reports the Associated Press (27 November). Raymond Epps was falsely accused by Fox of being a government agent causing trouble near the Capitol that day so that it would be blamed on Trump supporters. US District Judge Jennifer L. Hall in Delaware granted, without comment, Fox’s motion to dismiss the case. Epps had named Tucker Carlson as being the most active promoter of the conspiracy theory. At the time, Carlson hosted Fox’s most popular show. In a statement, Fox News on Wednesday cited two other defamation lawsuits against the company that were also recently dismissed. They involved former Biden administration disinformation expert Nina Jankowicz and Tony Bobulinski, one of Hunter Biden’s former business partners.

From "Federal Court Dismisses Defamation Lawsuit Against Fox News"
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A Chinese commercial vessel that has been surrounded by European warships in international waters is central to an investigation of suspected sabotage, reports the Wall Street Journal (27 November, Pancevski). Investigators suspect that the crew of the Yi Peng 3 bulk carrier, which is loaded with Russian fertilizer, deliberately severed two critical data cables as its anchor was dragged along the Baltic seabed for over 100 miles. The probe now centers on whether the captain of the Chinese-owned ship, which departed the Russian Baltic port of Ust-Luga on November 15, was induced by Russian intelligence to carry out the sabotage. The ship’s Chinese owner, Ningbo Yipeng Shipping, is cooperating with the investigation and has allowed the vessel to be stopped in international waters, according to people familiar with the probe. The damage to undersea cables occurred in Swedish waters on November 17-18, prompting that country’s authorities to open a sabotage investigation. Investigators have established that the ship dropped anchor but remained under way in Swedish waters on November 17 at around 9 pm local time. The dragging anchor cut the first cable between Sweden and Lithuania shortly afterward, according to two people familiar with the investigation. Investigators say that at around 3 am the following day, having traveled about 111 miles, the Yi Peng 3 cut the second cable between Germany and Finland. The Chinese bulk carrier is now guarded by a small flotilla of North Atlantic Treaty Organization (NATO) ships belonging to Denmark, Germany and Sweden. Under international maritime law, NATO ships can’t force the Yi Peng 3 to sail into one of their ports. Swedish and German authorities are negotiating with the ship’s owner to obtain access to the vessel and question its crew. European authorities must tread carefully because of their commitment to the freedom of navigation and upholding international law that underpins global trade, according to experts. In October last year, a Chinese-registered vessel called Newnew Polar Bear cut the Balticconnector gas pipeline and a telecommunication cable connecting Finland and Estonia with its anchor, according to people familiar with the investigation into the case. Newnew Polar Bear was allowed to proceed toward Arctic Russia because authorities in Sweden, Denmark, and Norway didn’t want to halt the ship without sound legal backing, according to officials. But in the case of Yi Peng 3, the Danish Navy decided to intervene quickly to stop the ship after the second cable was damaged, people familiar with the investigation said.

From "Chinese Ship’s Crew Suspected of Deliberately Dragging Anchor for 100 Miles to Cut Baltic Cables"
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October’s core personal consumption expenditures (PCE) price index, which strips out volatile food and energy items, increased 2.8 percent from October last year and 0.3 percent from a month earlier, reports Bloomberg (27 November, Saraiva). According to US Bureau of Economic Analysis data, inflation-adjusted consumer spending edged up 0.1 percent after an upwardly revised 0.5 percent gain in September, consistent with uneven demand over the course of the year. On a three-month annualized basis — a metric economists say paints a more accurate picture of the trajectory of inflation — the core PCE price gauge advanced 2.8 percent. The PCE price index is the US Federal Reserve’s preferred measure of underlying inflation. The figures support recent comments by many Fed officials that there is no rush to cut interest rates so long as the labor market remains healthy and the economy continues to power ahead.

From "Fed’s Favorite Inflation Gauge Picks Up, in Line with Forecasts"
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Uber is facing an investigation by the US Federal Trade Commission (FTC) into its flagship subscription plan, reports BBC News (28 November, da Silva). The consumer watchdog was probing the ride-hailing giant over the enrollment and cancellation procedures of the service. Uber One, which has more than 25 million subscribers around the world, offers fee-paying members discounts on rides and deliveries. Other technology giants, including Adobe and Apple, have faced lawsuits from the FTC over cancellation policies that the regulator deemed overly complicated. Last month, the FTC finalized a ‘click to cancel’ rule, which aims to make it easier for people to end subscriptions. The new regulations, which have been challenged by some business groups, would force companies to make subscription sign-ups and cancellations equally straightforward. A law introduced in the United Kingdom in May also takes aim at so-called subscriptions traps. The Digital Markets, Competition and Consumers Act 2024 requires businesses to provide clear information to consumers before they enter a subscription agreement.

From "Uber Probed by US Regulator over Subscription Plan"
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Brookfield Asset Management has walked away from an acquisition of Spanish health care group Grifols after months of negotiations, reports the Financial Times (27 November, Heal, Smith), sending shares down almost 13 percent. Brookfield’s decision to withdraw from talks after indicating last week that it could submit a €6.45 billion bid for Grifols piles further pressure on the leading maker of medicines derived from blood plasma. The Barcelona-based company has been at the center of one of the biggest corporate controversies in Spain this year, after a report from a short seller in January publicly accused it of artificially manipulating its debt and earnings through transactions with a company related to the company’s founding family. Canadian asset manager Brookfield announced it was exploring a bid for the company in July, in conjunction with certain existing shareholders with links to the Grifols family. But on Wednesday Brookfield said that “in the current circumstances it [was] not in a position to continue with a potential offer.”

From "Grifols Shares Sink After Brookfield Walks Away from €6.45 Billion Offer"
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Authorities in Mali have arrested four senior employees of Canadian mining company Barrick Gold, reports the Associated Press (27 November, Ahmed). Barrick confirmed that four employees at its Loulo-Gounkoto mining complex had been charged and awaited trial after their arrests Monday evening. The same employees also were briefly taken into custody in September. Barrick Gold says it has been seeking to finalize an agreement that would guide its partnership with Mali’s government, including the state’s share of the economic benefits generated by the mining site and the “legal framework under which this would be managed.” In Tuesday’s statement, Barrick Gold CEO Mark Bristow said that “attempts to find a mutually acceptable resolution have so far been unsuccessful, but we remain committed to engage with the government in order to resolve all the claims levied against the company and its employees and secure the early release of our unjustly imprisoned colleagues.” Earlier this month, the CEO of Australian company Resolute Mining and two employees were arrested in Mali. They were released after the company paid US$80 million to Malian authorities to resolve a tax dispute and promised to pay a further US$80 million in the coming months. Last year, Mali’s military authorities carried out an audit of the mining sector before drawing up a new mining code this year. In August, authorities set up a commission to negotiate with mining companies over what the government says they owe according to the audit. Earlier this year, Canadian mining companies B2Gold and Allied Gold accepted the demands, making payments to authorities and agreeing to the new mining code.

From "Mali Arrests Four Senior Employees of Canadian Mining Company"
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Vivendi SE said investor CIAM has filed with the Paris Commercial Court to postpone its shareholder meeting scheduled for next month and delay its plan to break up the company, reports Bloomberg (27 November, Connelly). Vivendi shareholders are due to vote December 9 on whether to separately list its pay-TV arm Canal+, advertising agency Havas and publisher Louis Hachette Group. A hearing on CIAM’s request for an injunction is scheduled for December 4, Vivendi said t. The project to split up the company is being led by billionaire Vincent Bollore, Vivendi’s largest shareholder through Bollore SE with a 29 percent stake. Vivendi says the spinoff plan will create value for investors by reducing the conglomerate discount that has weighed on its valuation for years, while allowing the separate businesses to develop faster. The small investor, which holds 0.025 percent of the company, is seeking postponement until rulings are issued on two other actions it has initiated, Vivendi said. One, before the same court, challenges the validity of the proposed split. The other, before the Paris Court of Appeal, seeks to overturn a November 13 decision by the stock market regulator that Bollore doesn’t have to make a buyout offer for Vivendi in connection with the spinoff.

From "Vivendi Says a Small Investor Is Seeking to Delay Vote on Split"
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BlackRock, State Street, and Vanguard have been sued by Texas and 10 other US states, reports Reuters (27 November, Stempel, Godoy). The states say the large asset managers violated antitrust law through climate activism that resulted in reduced coal production and higher energy prices. Wednesday’s complaint filed in the federal court in Tyler, Texas, is among the highest profile lawsuits targeting efforts to promote environmental, social, and governance (ESG) goals. The defendants were accused of exploiting their status as shareholders to pressure coal companies to reduce output. They were also challenged over their membership in the Net Zero Asset Managers Initiative, which Vanguard has left, and BlackRock and State Street’s involvement in Climate Action 100+, from which they have withdrawn. BlackRock was also accused of “actively deceiving” investors about its non-ESG funds by representing they would be dedicated solely to enhance shareholder value, when it allegedly used all its holdings to advance its climate goals.

From "BlackRock, State Street, Vanguard Sued by States over Climate Accords"
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Chrysler-parent Stellantis on Sunday announced that CEO Carlos Tavares is stepping down, effective immediately, after the automaker’s sales and profit sharply declined this year, reports the Wall Street Journal (2 December, Felton). A special board committee has already begun the process to find a new chief executive, and it expects to name a new leader during the first or second quarter of 2025. Until then, an interim executive committee, spearheaded by Stellantis Chair John Elkann, will handle Tavares’ duties and responsibilities. Tavares was under a five-year contract that was scheduled to expire in 2026. His job became more precarious after an executive shake-up in early October, which saw the ouster of Stellantis’ CFO and other top decision makers.

From "Carlos Tavares Steps Down as CEO of Stellantis"
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Bernard Arnault, the head of French luxury goods giant LVMH, denied any role in an alleged espionage scheme targeting left-wing French parliamentarian and potential presidential candidate François Ruffin in court on Thursday, reports Politico Europe (28 November, Goury-Laffont). Ruffin, a former journalist and filmmaker, gained national recognition in 2016 with his documentary “Merci Patron!” (Thanks, Boss!). The satirical film follows two former employees of an Arnault-owned factory who lost their jobs after production was offshored to Poland. Ruffin was elected to the lower house of the French legislature, the National Assembly, on the heels of the movie’s success. Arnault found himself in court after being called to the witness stand during the trial of Bernard Squarcini, the former head of the General Directorate for Internal Security (DGSI) — France’s domestic security agency. Prosecutors allege that Squarcini illegally spied on domestic targets on behalf of LVMH — including Ruffin. In 2013, LVMH allegedly hired Squarcini to infiltrate Fakir, a satirical quarterly run by Ruffin, during the production of “Merci Patron!” The operation lasted three years and cost the publicly traded group over €2 million, prosecutors claimed. The trial, which began earlier this month, seeks to establish if state resources were used to pursue the private interests of LVMH. Ruffin, who is a party to the case, requested that Arnault be called to testify as a witness. Arnault himself is not on trial. He has consistently denied knowledge of his company’s alleged spying activities, attributing them to former LVMH Vice President Pierre Godé, who passed away in 2018. Investigators interviewed Arnault in 2019 in relation to the case, but no charges were brought against him. In 2021, a judge approved a settlement between LVMH and the Paris prosecutor’s office that closed the criminal investigation and saw the company pay a €10 million fine. Arnault stressed in court on Thursday that the settlement did not include a recognition of guilt and was reached to avoid protracted legal proceedings.

From "Europe’s Richest Man Denies Involvement in Alleged Scheme to Spy on French MP"
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The Competition Bureau of Canada is taking legal action against Google, reports the Financial Post (29 November, Gowling), following an investigation into its anti-competitive practices in the digital ad space. “The Bureau’s investigation found that, in Canada, Google is the largest provider across the ad tech stack for web advertising and has abused its dominant position through conduct intended to ensure that it would maintain and entrench its market power,” read a release. The watchdog argues Google locks market participants into using its own advertising tech tools and gives its tools preferential access to ad inventory, while also making it harder for its customers to use rival products. “Google’s conduct has prevented rivals from being able to compete on the merits of what they have to offer, to the detriment of Canadian advertisers, publishers, and consumers,” said Matthew Boswell, commissioner of the Competition Bureau. “We are taking our case to the Tribunal to stop this conduct and its harmful effects in Canada.” The competition watchdog has referred the case to the Competition Tribunal, which adjudicates cases regarding laws under the Competition Act. The watchdog is seeking an order that would make Google sell two of its ad tech tools and direct Google to pay a penalty. Earlier this fall, Canada’s competition watchdog indicated it would be bringing forth more cases under the newly amended Competition Act, with Boswell warning corporations to “buckle up” for a new era of competition enforcement in Canada.

From "Canada’s Competition Watchdog Sues Google"
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Disney agreed to a US$43.3 million settlement over allegations that it systematically paid female middle managers less than men in similar roles over the course of a decade, reports the Wall Street Journal (26 November, Whelan). The settlement agreement, which was filed Monday in a California state court, still requires approval by a judge. It represents a major step toward resolving a legal tussle that began in 2019, when LaRonda Rasmussen, a product manager who still works at Disney, sued the company. Lawyers for the nine female plaintiffs in the suit, which was granted class certification last December, had argued that Disney paid women at least US$151 million less than men in comparable positions across several divisions of the company, in violation of California workplace sex discrimination laws.

From "Disney Agrees to US$43.3 Million Settlement in Suit Alleging It Paid Women Less Than Men"
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Restaurant Business (26 November, Maze) reports that Subway CEO John Chidsey is stepping down at the end of December. He will be succeeded by Carrie Walsh, president of Subway in Europe, the Middle East and Africa, on an interim basis until a permanent replacement is named. To ensure a seamless transition, Chidsey will transition to a consulting role and will focus on guiding the restaurant operator's international growth strategy and master franchisee relationships.

From "John Chidsey to Retire as Subway CEO"
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Stellantis, the owner of British car company Vauxhall, has announced plans to close its van-making factory in Luton, report BBC News (26 November, Leggett, Race), putting about 1,100 jobs at risk. Stellantis said it would combine its electric van production at its other UK plant in Ellesmere Port in Cheshire. Rules imposed to speed up the transition to electric vehicles (EV) in the UK partly drove the decision, the firm said. There are growing concerns among car manufacturers over EV sales targets, with many, including Stellantis, calling for the government to do more to boost consumer demand. Following the Luton plant announcement and intense pressure from industry leaders, Business Secretary Jonathan Reynolds said the government would consult on changes to EV sales rules, which is officially called the zero-emission vehicles mandate, because it is not working as intended.

From "Vauxhall Owner to Close Luton Factory"
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Switzerland’s Roche will acquire US biopharma firm Poseida Therapeutics in a cash deal worth up to US$1.5 billion, reports Reuters (26 November Graham). Poseida and its employees will join Roche as part of the Swiss firm’s pharmaceuticals division, Poseida said. The acquisition will establish a new capability for Roche in allogeneic cell therapy.

From "Roche to Acquire US Firm Poseida Therapeutics in US$1.5 Billion Deal"
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Gina Rinehart, Australia’s richest person, has won community backing to open a coal mine in Canada, reports the Financial Times (27 November Gridneff, Smyth), following a five-year battle punctuated by allegations that the fossil fuel lobby secretly supported citizens’ groups ahead of a vote in the local town. Rinehart spent millions of dollars over five years promoting the project as an economic boom for the coal-mining region, despite a ruling by local regulators in 2021 that the project was “not in the public interest.” On Monday, nearly half of the 6,000 residents of Crowsnest Pass, in a scenic rocky patch of Alberta’s south-west, voted in a non-binding plebiscite in favor of restarting a metallurgical coal mine at Grassy Mountain. The final count found that 72 percent were in favor of Rinehart’s Northback Holdings’ proposal to restart the mine, which closed in 1983. But opposition to the nearly 1,521 hectare open pit mine remains in spite of the successful vote. The neighboring municipality of Ranchland fears the project would harm the environment without providing an economic benefit.

From "Australia’s Richest Woman Wins Vote for Canadian Coal Mine"
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Japan’s Fair Trade Commission (JFTC) raided Amazon Japan’s Tokyo headquarters Tuesday on suspicions it violated antitrust laws by forcing unreasonable price cuts on sellers using its e-commerce platform, reports the Japan Times (26 November). According to sources, Amazon Japan allegedly pressured sellers to lower prices of their products in exchange for advantageous placement on their “Buy Box” system, which highlights one seller’s product as the preferred choice on a product page, though no specific target amounts were set. Shoppers must navigate to separate pages to view offerings from other sellers. Amazon is said to have demanded “competitive pricing” compared to other e-commerce platforms as a condition for inclusion on their Buy Box system. Additionally, sellers were allegedly required to use Amazon’s in-house services, such as logistics and payment collection, to qualify for Buy Box promotion.

From "Antitrust Watchdog Raids Amazon Japan over Alleged Price-fixing"
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Carrefour SA has issued a public apology to Brazil to settle a crisis with its government and farmers, reports France 24 (26 November), after having said the company would not sell South American meat at its French stores. “We apologize” if the domestic French retail ban announced last week “created confusion,” Carrefour CEO Alexandre Bompard said in a letter to Brazil’s Agriculture Minister Carlos Favaro. Meat suppliers in Brazil have since last Friday halted deliveries to Carrefour stores, in a campaign termed a “boycott” by Brazilian media that on Monday earned vocal support from Favaro. Responding to Bompard’s letter on Tuesday, Favaro said “the incident is closed.” The disagreement spoke to rising tensions over a long-negotiated trade deal between the European Union and the Mercosur bloc grouping Brazil, Argentina, Uruguay, and Paraguay. France is opposed to the EU signing off on the deal, which protesting French farmers fear would usher in unfair competition undercutting their livelihoods. Brazil is hoping the pact will be finalized by the end of next month. EU countries Germany and Spain also want it swiftly completed.

From "Carrefour Attempts Damage Control Against Brazil Meat Boycott"
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Dye & Durham Ltd. CEO Matt Proud is stepping down, reports the Toronto Globe and Mail (26 November, Silcoff). The Canadian legal software company said it would begin a CEO succession process that would see Proud stay on for another three months as it begins a search for his replacement. Whether Proud stays on that long is in question, as the company heads to a contested annual meeting on December 17 at which Engine Capital LP has proposed a six-person slate to run against the company’s nominees for seven positions. If Engine prevails, the new board is expected to bring in sweeping changes to senior management.

From "Dye & Durham CEO Matt Proud Steps Down"
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