October182011
* Olympus case takes shine off recent steps to improve
governanceBy Nathan LayneTOKYO, Oct 18 (Reuters) - The scandal at Olympus Corp
triggered by accusations of improper payments has put a
spotlight on what critics say is a key weakness of
Japanese-style management: the lack of strong independent
oversight on most boards.Japanese boards are typically stacked with insiders, and
Olympus, a camera and medical equipment maker whose chief
executive was abruptly dismissed last week, is no exception.Twelve of Olympus’ 15 board members are company executives,
and one of its three outside directors failed to pass
a test of independence set by top proxy voting firms.This structure, while common among Japanese companies,
appears to have left the Olympus board vulnerable to groupthink
when dissension and rigorous debate were needed most.”You have so many insiders, very few independent members and
none of them is really in a position to challenge the
decision-making of long-standing members of the board,” said
Robert McCormick, chief policy officer at proxy advisory firm
Glass Lewis & Co. “I think the CEO kind of came into that.”A spokesman for Olympus said its board of directors was
functioning well.Former Olympus CEO Michael Woodford has told media he
believes he was sacked for questioning about $680 million in
payments to financial advisers in the purchase of Britain’s
medical equipment firm Gyrus in 2008, or one-third of the
transaction price, and $600 million in goodwill impairment after
other small acquisitions in Japan.Olympus says that Woodford was dismissed because of a clash
of management styles and that it has carried out proper
accounting and disclosure for the acquisitions.SHARES PLUNGEBut the relentless slide in the share price — it has lost
43 percent in the past three sessions — suggests investors are
not satisfied with the company’s explanation and generally lack
confidence in management.Chairman Tsuyoshi Kikukawa, who replaced Woodford as CEO,
told the Nikkei newspaper on Tuesday that the Gyrus-related
payment was closer to 30 billion yen ($391 million) and said
losses at the domestic companies it acquired represented lapses
in judgment on his part.But to some critics Kikukawa’s comments may only reinforce
the notion that there have been few checks on his authority and
may not silence criticism of the payments, which at 30 billion
yen were still unusually high for an acquisition of that size.The lack of independent directors supervising management is
one of the key factors behind Japan’s No. 36 ranking out of 39
countries on corporate governance in the latest survey by
research firm GMI .Other propagators of poor governance include
cross-shareholdings with business partners and a tendency for
executives to hang on wielding influence in advisory posts even
after they’ve retired from the board.The Olympus case may give the impression that governance is
moving backwards, despite a series of steps aimed at improving
the situation in recent years, including the Tokyo Stock
Exchange’s requirement from this year that all companies have at
least one independent director or auditor.”This is a negative step for corporate governance in Japan,”
said Jamie Allen, secretary general of the Asian Corporate
Governance Association based in Hong Kong.”There had been some hope that Japanese companies would take
on not just outside directors but outside managers and that
corporate cultures in Japan would be more open and
international.”
October172011
The ratings on New South Wales reflect the strong
institutional framework benefiting state governments in
Australia, as well as New South Wales’ strong economy, positive
financial management, and excellent liquidity position. These
strengths are partly offset by New South Wales’ limited
budgetary flexibility due to the concentration of taxing powers
at the Federal level of government, similar to all Australian
states; and the need to deliver a large capital-expenditure
program.The stable outlook reflects Standard & Poor’s opinion that
the New South Wales government will maintain a sound financial
position by balancing its focus on infrastructure investment
with cost savings and potentially with asset sales. We expect
further revenue and expenditure measures, as well as more
capital investments and funding sources to be announced in the
government’s year ending June 30, 2013 budget. We will continue
to monitor the success, or otherwise, of the government’s
delivery of its savings measures.”The ratings on the state are likely to come under pressure
if there is weakening in the state’s budgetary performance,
particularly if the state’s after-capital account deficit
exceeds 10% of its operating revenues or its gross
interest-burden exceeds 5% of operating revenues over
two-to-three years,” said Standard & Poor’s credit analyst Anna
Hughes.Downward rating pressure could also emerge if New South
Wales’s net financial liabilities (net debt and unfunded
superannuation) to operating revenues exceeds 120%-130%. In our
view, a material increase in the state’s contingent liabilities,
for example through the support of Reliance Rail Finance Pty
Ltd.’s liabilities, would also create downward pressure on the
rating. The Reliance Rail consortium was granted a 30-year
concession to manufacture, commission, and maintain 78 commuter
trains for the Sydney rail network.
2PM
Blog Guy, it’s been TWO WEEKS since you’ve shown us fresh pictures of Paris Hilton! Are there no cameras left for her to stand in front of? Is something wrong? Should we prepare for bad news?
Calm down, she’s still posing. Here she is at the opening of a shopping center this week, in Poland.
Excuse me? She’s at that level now, going to Polish strip mall openings? What’s that about?
As I understand it, she was supposed to cut the ribbon on the new meat department at a Piggly Wiggly down in Baton Rouge, but that fell through, so she needed something to do.
Ah, that makes sense. I notice in her arrival shot she doesn’t even have an elevator to ride. Is this her choice?
Yes, she prefers to arrive this way. Her contract has an escalator clause…
That was a pretty long setup for one stupid line, Blog Guy.
Hey, thanks! Coming soon, Kim Kardashian appears at a milkshake bar opening in Dubai.
Join the Oddly Enough blog network
Follow this blog on Twitter at rbasler
Top: Paris Hilton smiles as she attends an opening ceremony of a shopping center in Katowice, southern Poland October 12, 2011.
Left: Hilton arrives at the opening ceremony of the shopping center.
REUTERS photos by Bartlomiej Barczyk/Agencja Gazeta
More stuff from Oddly Enough
October132011
Oct 13 (Reuters) - Research In Motion’s BlackBerry
services have improved significantly across Europe, the Middle
East, Africa and India, the company said on Thursday, after a
three-day global service outage hit millions of its customers.”Service levels are also progressing well in the U.S.,
Canada and Latin America and we are seeing increased traffic
throughput on most services, although there are still some
delays and services levels may still vary amongst customers,”
RIM said in an update on its website.The company, however, said it cannot give an estimated time
for the full recovery of services around the world.On Wednesday, the company said it would eventually deliver
all delayed email and instant messages to customers in five
continents affected by the outage, but later told some of its
corporate clients that it may not clear the huge backlog of
messages until Thursday morning on the U.S. East Coast.It apologized to customers in a statement on its Website and
on its Facebook page.The outage, the worst in about two years, adds to RIM’s
mounting problems, which include rising dissatisfaction with its
co-chief executives and the company’s inability to catch up with
nimbler rivals like Apple .
October122011
“We expect both Chi-X and ASX will adjust their pricing from
time to time depending on their success at winning and retaining
business,” Citigroup analyst Nigel Pittaway said.An ASX spokesman could not be reached immediately for
comment. ASX has earlier said it is well prepared to meet
competition. The exchange has had ample time to prepare for the
end of its two-decade monopoly.Chi-X on Wednesday told brokers it would charge fees of 0.06
basis point for providing liquidity and 0.12bp for removing
liquidity compared with ASX’s 0.15 basis point fees.Analysts said if ASX were to match the fees its earnings
could fall by just around 1 percent as cash transaction forms
around 5 percent of total revenue.Chi-X has relied on competitive fees to claim market share
from incumbents in Europe, Canada and Japan. Analysts expect
Chi-X to focus on institutional investors for volumes.
11AM
Borrower Bank Nederlandse Gemeenten (BNG)Issue Amount 75 million SterlingMaturity Date December 10, 2013Coupon 2.625 pctReoffer price 102.736Spread 70 basis pointsUnderlying govt bond Over the 4.50 pct March 2013 GiltPayment Date October 19, 2011Lead Manager(s) Nomura International PLC & RBC CapitalRatings Aaa (Moody’s), AAA (S&P),AAA (Fitch)Listing AmsterdamFull fees UndisclosedDenoms (K) 1Governing Law DutchNotes Launched under issuer’s EMTN programmeThe issue size will total 1.375 sterlingwhen fungibleParent ISIN XS0472751055Security details and RIC, when available, will beonCustomers can right-click on the code forperformance analysis of this new issueFor ratings information, double click onFor all bonds data, double click onFor Top international bonds newsFor news about this issuer, double click on the issuer RIC,where assigned, and hit the newskey (F9 on Reuters terminals)Data supplied by International Insider.
