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Fri, 20th January 2017

Anirudh Sethi Report

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Archives of “Corporate crime” Tag

Satyam scam: Ramalinga Raju, 9 others get bail, sentence suspended

In a major relief to Satyam Computers founder B Ramalinga Raju, a Hyderabad court on Monday granted him and nine others bail in the multi-crore rupee accounting fraud and also suspended their sentence.

Earlier on April 9th, the Additional Chief Metropolitan Magistrate Court (ACMM), which tried the Satyam corporate fraud case probed by CBI, had sentenced Raju and others to seven years’ rigorous imprisonment for criminal conspiracy and cheating, among other offences.

Satyam Scam, Ramalinga raju, Satyam Ramalinga raju,

India fails to mitigate graft risk

The top five risks that impact Indian business environment include ‘corruption, bribery and corporate frauds’, ‘information and cyber insecurity’, ‘terrorism and insurgency’, ‘business espionage’ and ‘crime’ in that order according to the ‘New Age Risks 2015’ report released on Fri-day and done jointly by Ficci and Pinkerton Corporate Risk Manage-ment.

In 2015, ten months into the Narendra Modi government, ‘corruption, bribery and corporate frauds’ continue to be ranked as the topmost risk for doing business in India.

This has been further highlighted by the recent corporate espionage case involving some of India’s billionaire industrialists among others.

The rise in ranking of the risk of ‘business espionage’ from ninth position in 2014 to fourth in the current survey validates the stand to bring attention to this shifting concern of business organisations, says the report.

The risk of crime ranked the same at Number 5 in 2015, but the report adds this is supplemented by the growing instances of crime against women in India.

“This has not only come in for severe criticism within the country but has also been a topic of discussion in all international forums, affecting the image of India as a suitable business destination,” the report said.

The change that has happened under the new government is that risks of ‘strikes, closures and unrest’ and ‘political and governance instability’, have dropped from No. 2 and No. 3 positions to No. 6 and No. 11 respectively.

“This is a major shift in the yearly trends primarily due to the positive impact caused by a perceived stable government coming to power at the Centre post the 2014 general elections,” says the report by the Federation of Indian Chambers of Commerce and Industry (Ficci).

High-speed traders face tougher oversight

US regulators have moved to close a loophole that allows some high-frequency trading firms that trade equities away from regulated exchanges to operate with light supervision.

The Securities and Exchange Commission on Wednesday proposed requiring proprietary traders to become members of the Financial Industry Regulatory Authority, a markets regulator.

The change would give authorities greater oversight for the day-to-day operations and record keeping for many high-speed traders and electronic market makers who dominate much of trading on US equity markets.

“Today’s proposed rules would close a regulatory gap by extending oversight to a significant portion of off-exchange trading,” said SEC chair Mary Jo White.

It is the first move by the US regulator to tighten monitoring of high-speed electronic traders, which aim to profit from rapid-fire moves in the market, following intense scrutiny on the industry a year ago. Flash Boys, a book by author Michael Lewis, alleged that high-frequency traders were among the beneficiaries to a market structure that was “rigged”. That led to calls for greater oversight of HFTs and off-exchange trading that had been building as equity trading increasingly moved to venues outside the traditional exchanges.

S&P Ratings Nears $1.4 Billion in Settlements

Standard & Poor’s Ratings Services is expected to pay about $1.4 billion to settle federal and state investigations into how it graded bonds before and after the 2008 financial crisis, according to people familiar with the situation.

The payouts would be the first disciplinary moves taken by regulators against one of the three big ratings firms since the crisis.

The deals, the first of which is expected this week, offer S&P a chance to close its books on an era that cast a pall over the ratings industry over the past decade. Unlike big Wall Street banks, which have paid more than $100 billion since 2008 to settle lawsuits related to crisis-era conduct, the three largest ratings firms have been relatively unscathed despite accusations they issued rosy ratings of mortgage bonds that cost investors billions when they soured.

OECD Says-Big companies pay most bribes; bosses know

Most international bribes are paid by large companies, often with the full knowledge of senior management, the Organisation of Cooperation and Economic Development said in a report.

The OECD study – based on analysis of data emerging from all foreign bribery enforcement actions concluded since the introduction of its own Anti-Bribery Convention in 1999 – also found that most bribes are paid in advanced countries instead of emerging markets.

The OECD report cast doubts over the frequent corporate defense to graft claims that senior executives were unaware of the bungs.

Most international bribes are paid by large companies, usually with the knowledge of senior management.

The report defined a large company as one with more than 250 employees. It added:

AstraZeneca rejects Pfizer’s “final” offer

AstraZeneca’s board has formally rejected Pfizer’s “final” sweetened and enlarged £55-per-share bid tabled over the weekend, arguing that it still undervalues the UK pharma company’s prospects.

Pfizer this weekend insisted that it would not make a hostile bid and would only proceed with the offer with the recommendation of AstraZeneca’s board, but has urged shareholders to put pressure on the UK company’s directors to enter negotations.

Pfizer’s revised bid was both upped from £50 a share – now representing a 45 per cent premium to the share price on the last trading day before the US company’s interest became known – and sweetened with a bigger cash component

Leif Johansson, Chairman of AstraZeneca said the offer was only a “minor improvement” that still fell short of the board’s view of the UK company’s value: Read More 

AT&T Buys DirecTV In $67 Billion Deal; Pfizer Makes “Final Proposal” To Buy AstraZeneca, Boosts Offer To $119 Billion

In what is setting up to be a scorching merger Monday, moments ago we got confirmation of news that had been leaked days in advance, namely that both the boards of AT&T and DirecTV had agreed to a transaction whereby AT&T would buy DirecTV in the latest chapter of what we dubbed several months ago the “M&A bubble”, for $95/share in a $67.1 billion transaction including debt, consisting of $95/share in stock, $28.50/share in cash. According to the public announcement, the DirecTV purchase represents a 7.7x multiple of its 2014E EBITDA.

The terms of the transaction from the press release:

  DIRECTV shareholders will receive $95.00 per share under the terms of the merger, comprised of $28.50 per share in cash and $66.50 per share in AT&T stock. The stock portion will be subject to a collar such that DIRECTV shareholders will receive 1.905 AT&T shares if AT&T stock price is below $34.90 at closing and 1.724 AT&T shares if AT&T stock price is above $38.58 at closing. If AT&T stock price at closing is between $34.90 and $38.58, DIRECTV shareholders will receive a number of shares between 1.724 and 1.905, equal to $66.50 in value.

 

This purchase price implies a total equity value of $48.5 billion and a total transaction value of $67.1 billion, including DIRECTV’s net debt. This transaction implies an adjusted enterprise value multiple of 7.7 times DIRECTV’s 2014 estimated EBITDA. Post-transaction, DIRECTV shareholders will own between 14.5% and 15.8% of AT&T shares on a fully-diluted basis based on the number of AT&T shares outstanding today.

 

AT&T intends to finance the cash portion of the transaction through a combination of cash on hand, sale of non-core assets, committed financing facilities and opportunistic debt market transactions. Read More 

Pfizer endorse benefits of AstraZeneca combo

Pfizer’s charm offensive towards AstraZeneca’s shareholders continues, as the US pharma giant attempts to woo support for its hostile £60bn plus bid.

The US company released another batch of videos today to further tout the benefits of a combination, and to assuage concerns over the potential gutting of the UK research industry.

The interviews with Mikael Dolsten, president of worldwide research and development at Pfizer, were posted on the company’s website today. Some of the highlights are below.

When I look at this transaction, of a potential combination of AZ and us, I get real excited thinking about what we could accomplish in accelerating the advance of science and medicine to the benefit of patients worldwide…..

…. I am really impressed with the golden triangle characterized by London, Oxford, and Cambridge. And to see a combined company having a R&D presence with physical facilities and reaching out in biomedical networks to key investigators across many diseases in this U.K. area of biomedicine would be really inspiring, and I think it would create a very strong bridge to our global R&D activities and our strengths in biomedical hubs in U.S Read More 

AstraZeneca rejects Pfizer’s £50 per share offer

AstraZeneca has rejected Pfizer’s improved £50 per share offer to create the world’s largest drugs company, saying the sweetened proposal still “substantially” undervalues the UK company and doesn’t provide a basis to engage.

US-based Pfizer confirmed the higher offer earlier on Friday, as it simultaneously sought to address political opposition to the deal by outlining a list of steps it would take to maintain the combined company’s commitment to the UK.

From AstraZeneca moments ago: Read More 

Pfizer’s David Cameron letter on AstraZeneca : Full Text

Pfizer on Friday released a letter it has written to UK Prime Minister David Cameron, as it bids to win political backing for a blockbuster merger with the UK’s AstraZeneca.

The US drugs giant sweetened its offer for its British rival on Friday, increasing its bid to £50 per share as it works to win over skeptical shareholders.

But heading off any political opposition is equally important, in an environment where senior figures have already raised concerns over potential job losses in the UK and US control over an industry stalwart.

Here’s the text of Pfizer’s letter to Cameron in full:

Rt Hon David Cameron MP

10 Downing Street

London SW1A 2AA

Dear Prime Minister,

I am writing to you to address the concerns of the UK Government and science community and your desire to have firm and enduring assurances from us about our commitment to the UK and its life sciences agenda. Read More