Nissan shareholders assail management over deepening crisis
Nissan Motor shareholders vented their frustrations over the carmaker's poor performance at its AGM on Tuesday, with some demanding greater management accountability for the deepening crisis at Japan's third-largest car company.
The meeting was the first for new boss Ivan Espinosa since he replaced Makoto Uchida as CEO in April. It remains to be seen whether Espinosa, a company veteran, will be able to halt the sharp decline at Nissan.
Shares have fallen some 36% over the past year and dividend payments have been suspended. Nissan reported a $4.5bn (R80.2bn) net loss in the last financial year and there is no guarantee it will return to profit this year — so far, it has declined to give a full-year earnings forecast, and has estimated a first-quarter loss of ¥200bn (R24.4bn).
All the same, shareholders voted down a number of proposals that the company had opposed, including an activist-shareholder proposal that would have forced Nissan to take action on listed subsidiary Nissan Shatai.
Espinosa has laid out plans for big cuts, including closing seven plants and shedding a total of 20,000 jobs, or about 15% of Nissan's workforce.
One shareholder accused the board of trying to 'shift its responsibility to front-line workers' by cutting jobs while retaining their own positions. The board should likewise face a shake-up or risk losing the trust of shareholders and company employees, the shareholder said. Another shareholder complained about the cut to the dividend.
Tokyo-based activist shareholder Strategic Capital had pressed Nissan to take action on its listed subsidiary as part of its overhaul.
While that proposal was defeated, the breakdown of the vote won't be known until later.
Japanese companies are under increasing pressure from the Tokyo Stock Exchange and regulators to clear up so-called 'parent-child listings', which are seen as unfair to minority shareholders and a drag on governance.
In one prominent example, Toyota Motor this month unveiled plans to take private its listed subsidiary, Toyota Industries, in a complex, $33bn (R584.25bn) transaction that some shareholders have said undervalues the forklift operator.
Toyota likely took action because 'it felt pressure from shareholders and thought it had to change,' said Tsuyoshi Maruki, the CEO of Strategic Capital, in an interview with Reuters on Monday.
He said he hoped Nissan's management could also give the issue similar consideration.
Nissan owns 50% of Nissan Shatai, which manufactures cars for the carmaker. Strategic Capital owns 3.5% of Nissan Shatai. It has also acquired a small stake in Nissan, allowing it to submit proposals to the general meeting.
It has proposed that Nissan change its articles of incorporation so that it would be required to annually examine its relationship with listed subsidiaries and disclose what action, if any, it planned to take.
Nissan's board has opposed that and said changing its articles of incorporation would hinder its flexibility.
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Daily Maverick
6 hours ago
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MTN faces legal reckoning: Turkcell's $4.2 billion claim exposes alleged corruption and bribery
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The smoking gun Turkcell's legal counsel, New York-based King & Spalding's Cedric Soule, doesn't mince his words. 'MTN sought to obtain illegally what it could not win through honest competition,' he told Daily Maverick. The allegations, which are laid out in filings and interviews, read like an international spy thriller: Bribing foreign officials, including Javid Ghorbanoghli, then Iranian deputy foreign minister for the Africa Bureau, and South Africa's then ambassador to Tehran, Yusuf Saloojee; Trading influence at the United Nations nuclear watchdog, promising to help Iran avoid sanctions; Promising prohibited defence equipment, including Rooivalk attack helicopters and frequency-hopping radios, to sweeten the deal (Turkcell claims it has evidence, as yet undisclosed, that MTN communicated with Denel and Iranian officials). According to Turkcell, all this happened so that MTN could elbow its way into a $31-billion mobile market and walk away with the licence that should have gone to Turkcell. The deal was sealed days after South Africa abstained from a crucial vote related to Iran's nuclear programme at the International Atomic Energy Agency (IAEA) in late 2005. The vote concerned whether to report Iran to the UN Security Council for failing to comply with its IAEA Safeguards Agreement. But the abstention was seen as a deliberate act, motivated by concerns about the procedural fairness of the resolution and a desire to maintain the IAEA's authority. Specifically, South Africa's representative to the IAEA, Abdul Samad Minty, argued that the resolution was flawed and premature, as it bypassed the IAEA board of governors' role in the verification process. Minty said at the time that 'South Africa's commitment is to the IAEA's integrity and impartiality and is reluctant to undermine the agency's authority'. South Africa has also enjoyed good relations with Iran. Crucially, this abstention was not an isolated incident. South Africa also abstained on similar resolutions in 2006, highlighting a consistent stance on the matter. Soule says Turkcell 'won the licence fair and square' and that MTN's conduct undermined the integrity of international business. 'This case is about accountability,' he says. 'And it belongs in a South African courtroom.' A strong rebuttal MTN, for its part, has always dismissed Turkcell's claims as 'a fabric of lies' and a 'frivolous shakedown'. Its legal team, speaking about background exclusively to Daily Maverick, continues to lean heavily on the Hoffmann Report – a 2013 internal investigation led by British judge Lord Leonard Hoffmann. This report found 'no conspiracy,' labelled Turkcell's key witness a 'fantasist' and said MTN executives were in the clear. It even found that although a $400,000 payment had been made to an Iranian intermediary, the money's purpose couldn't be determined – and was irrelevant to Turkcell's central claims. MTN also argues that Turkcell failed to comply with Iranian laws after a shift in government policy. 'They failed to adjust their shareholding in time,' MTN argues, 'and were lawfully excluded from the process.' As for the most salacious allegations – military gear and political favours – MTN says it would be impossible for its actions to have altered Iranian legislation or international diplomacy. The Hoffmann Report indicates that a general election took place in Iran on 20 February 2004, which resulted in a new parliament taking office in May 2004. This new Iranian parliament was overwhelmingly dominated by conservatives who opposed the government's policy of privatisation and foreign inward investment, particularly in relation to the cellphone service. The Single Article Act, designed to strengthen financial discipline, stemmed from this shift in parliamentary power. Snookered in ownership Following the Single Article Act, the parliament passed another significant piece of legislation in February 2005, known as the Irancell Act. This act imposed further conditions, requiring that 51% of the shares in the operating company be held by Iranian entities and that all board decisions require the approval of at least 50% of the shareholders. This was understood to be due to concerns about foreign entities becoming heavily involved in what was considered critical infrastructure in Iran. These legislative changes created significant obstacles for Turkcell, which had initially won the tender with a plan to control 70% of the shares. 'Turkcell was given multiple opportunities to negotiate with its existing partners to reach a compliant deal, but they didn't do that or they were not able to do that,' MTN's legal team argues. 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The Turkish company has criticised the investigation, claiming: Conflicts of interest: Lord Hoffmann's daughter, Jennifer, worked for MTN Mobile Money during the relevant 2004-2006 period and also in the MTN Banking joint venture with Standard Bank, which was involved in the financial transfers. 'Lord Hoffmann had a huge conflict of interest,' Soule argues. Lack of independence: The committee was composed of MTN non-executive directors and used MTN's own external lawyers (Freshfields Bruckhaus Deringer) instead of independent counsel. The committee even thanked the Islamic Republic of Iran for support – problematic given Iran's alleged involvement in the wrongdoing. Insufficient rigour: The committee didn't actually interview key witnesses like former MTN director in Iran Chris Kilowan, then commercial director Irene Charnley (to whom Jenny Hoffmann reported) or former MTN CEO Phuthuma Nhleko to determine credibility, relying only on written statements prepared with lawyers' help. 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The Citizen
a day ago
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Industry leaders launch market surveillance code as Steinhoff fallout lingers
Aims to uphold integrity and prevent abuse, anti-competitive behaviour, and insider trading. FSCA investigators spend about 20% of their time assisting foreign regulators, including gathering trading records and financial data. Picture: Moneyweb The Financial Sector Conduct Authority (FSCA) has had to manage some of the most complex market abuse cases in the past eight years, including Steinhoff, regarded as the country's biggest corporate scandal to date. 'It's really been challenging,' says Alex Pascoe, head of market abuse at the FSCA. 'From December 2017, when Steinhoff announced accounting irregularities and its CEO Markus Jooste resigned, everything spiralled.' Pascoe was speaking at the launch of the South African Market Surveillance Code of Conduct in Cape Town on Tuesday, where he gave an account of the regulator's most prominent cases. The newly launched code of conduct is a joint initiative by South Africa's key financial institutions and regulators to align the country's market practices with global best standards. It aims to uphold market integrity and prevent abuse, anti-competitive behaviour, and insider trading. Although it does not replace existing regulations, it reinforces accountability from all market participants. ALSO READ: FSCA juggling high-profile cases with limited resources Case load Pascoe notes that the FSCA receives roughly 42 to 45 market abuse cases per year, but finalised 78 cases in its last financial year by implementing a World Bank-recommended case selection framework. Pascoe reflected on how the fallout from Steinhoff forced the FSCA to re-evaluate how it allocates investigative capacity. 'Everybody knew Jooste was Steinhoff, and Steinhoff was Jooste,' he says. 'From there on it spiralled – Viceroy and Tongaat [another accounting scandal], a mini-Steinhoff followed. It took a lot of resources to manage those cases, especially since they involved cross-border transactions.' (The Viceroy case refers to the FSCA's investigation into the US-based short-selling firm Viceroy Research, which was fined R50 million for publishing false and misleading statements about Capitec. The Tongaat accounting scandal involved the manipulation of financial statements by senior executives at sugar producer Tongaat Hulett to overstate the company's assets and profits.) ALSO READ: Secrecy surrounded Jooste's big FSCA fine and arrest warrant Jooste a 'brilliant' schemer The Steinhoff investigation is far from over. 'Last year we issued fines to Markus Jooste [of] R495 million. We are looking at his deceased estate and assets around the world,' said Pascoe. 'We won't just leave it at that. Ill-gotten gains – be [he] dead or alive – that's how serious we are. We are seeing this right through.' (Jooste, who faced multiple charges of fraud and racketeering and hefty fines from the JSE and the FSCA for financial misconduct, fatally shot himself in Hermanus in March 2024.) The South African Reserve Bank has already attached R1.4 billion in assets belonging to Jooste, but the global search continues. 'Most of his funds were hidden overseas,' says Pascoe. He adds that a second investigative report into Steinhoff is underway and has been shared with the commercial crimes court. 'Once preliminary findings are in, they [respondents] could make submissions.' Reflecting on lessons learned from Steinhoff, Pascoe says be on the lookout for a dominant CEO. The way Jooste set up the schemes was brilliant. ALSO READ: FSCA fines Markus Jooste R475 million, refers case to Hawks 'Only certain individuals knew what he wanted them to know. Nobody had the full picture.' He adds that Jooste's devices were wiped every two weeks, and hardly anything was documented. Steinhoff's complex global structure, multiple acquisitions, and lack of transparency made it difficult for stakeholders to understand the company's financial position. 'It was difficult to keep up and understand how everything fitted in,' says Pascoe. He also points to poor internal controls and captured auditors in Europe as contributing factors. 'The audits were not up to standard. And then, the culture of not questioning management.' FSCA investigators spend about 20% of their time assisting foreign regulators, including gathering trading records and financial data. 'We're getting requests from all over the world – Sweden, Belgium, even Pakistan,' said Pascoe. 'A lot of suspicious transactions are from overseas, and no longer from the JSE.' ALSO READ: Who will pay Markus Jooste's R510 million penalties now? Shadow trading The need for international collaboration was echoed by Tony Sio, head of regulatory strategy and innovation at Nasdaq's Anti-Financial Crime division, who also spoke at Tuesday's event. Sio shared developments in market abuse investigations, including a growing focus on shadow trading – a form of misconduct that remains largely unprosecuted but which are increasingly on the radar of regulators. 'Shadow trading is where insider traders don't trade in the companies themselves, but in economically-linked securities,' Sio explains. Although the practice started as a hypothetical scenario in an academic journal published in 2020, it is now being observed in market data. 'We found increases in volumes of linked securities before acquisitions.' He cites the 2021 case where the executive of a pharmaceutical company learned of an imminent takeover and used the information to buy options in a rival company likely to benefit from the news. 'His options doubled in value in one day. He thought he was smart by not buying in the company itself – but he was found liable.' ALSO READ: We can't afford another Jooste from Steinhoff Robust market surveillance attracts global investment Happy Shihau, head of compliance at Investec Corporate and Institutional Banking, who facilitated discussions at the launch event, stresses that the newly launched market surveillance conduct code complements – rather than replaces – regulatory rules and directives. Shihau says robust market surveillance is essential to attracting global investment. 'Investors worldwide seek to engage with trusted financial markets, and robust market surveillance is essential for upholding that trust.' She adds that the new code will help reinforce the regulatory environment and promote responsible behaviour across the industry. This article was republished from Moneyweb. Read the original here.
