News - Hong Kong Institute of Certified Public Accountants

NEWS
THE INSTITUTE
Institute publishes new guide to
corporate governance disclosure
Increasingly sophisticated market requires upgraded guidance
The Hong Kong Institute of CPAs last month
announced the publication of A Guide on
Better Corporate Governance Disclosure,
which was developed by a working group
under the Institute’s Professional Accountants
in Business Leadership Panel.
“We’re trying to encourage companies
to provide more meaningful disclosures,”
Wendy Yung, Executive Director and
Company Secretary of Hysan Development
and an Institute member, told a PAIB
forum panel discussion last month held in
connection with the guide’s launch.
“We believe the first step is to appreciate
the spirit underlying the rules,” said Yung,
who is also Deputy Convenor of the working
group that prepared the guide.
The guide is designed to help accountants
at listed companies understand the principles
underlying the disclosure rules, and how they
might be applied
“As the Hong Kong
market becomes in practice, with
model case
increasingly
international,
studies taken
there is an
from winners
expectation
of the Institute’s
of continuous
Best Corporate
improvements
Governance
in standards of
disclosure and
Disclosure
practices.”
Awards.
“We’ve tried to present some useful
examples,” said Yung, adding that these
cases are supplemented with international
examples to reflect the fact that Hong Konglisted companies should benchmark against
global best practices.
Hong Kong’s status as a global financial
centre demands a high level of governance,
Institute members point out. “As the
Hong Kong market becomes increasingly
international, there is an expectation of
continuous improvements in standards of
4
May 2014
disclosure and practices,” said
K.M. Wong, an Institute Council
member and PAIB Leadership
Panel chair.
The guide delves into four
major topics:
• Role of the board
• Internal controls
• Audit committees
• Communications with
shareholders
One part of the guide examines
the role of the board, what it did during
the year and how. The relevant sections
of the Corporate Governance Code under
the Listing Rules are summarized and key
themes underlying the code requirements are
explained.
Kelvin Wong, Chairman of the Hong Kong
Institute of Directors and Executive Director
and Deputy Managing Director of COSCO
Pacific, likened the multiple roles of a board
to the complexities of driving. “It is forward
looking, scanning the road ahead and looking
at strategy and long-term success, and
backward looking, checking in the rear view
mirror at the financial accounts,” he told the
PAIB forum in April.
Independent spirit
Board effectiveness and board evaluation
are also covered. Independence is a key
concern of investors in Hong Kong. “We need
a diversity of thinking on the board,” Pru
Bennett, Director and Head of Asia Pacific
Corporate Governance and Responsible
Investment at BlackRock, told the PAIB forum
from an investor’s point of view.
The guide tries to explain how a company
can disclose useful information while
providing high-level statements that do not
“We’re trying
to encourage
companies to
provide more
meaningful
disclosures.
We believe the
first step is to
appreciate the
spirit underlying
the rules.”
divulge commercially sensitive information.
“We can strike a balance,” said Yung.
The second part stresses that listed
companies have to maintain a sound internal
control system that the board should obtain
assurance from management and both
internal and external auditors and that the
board’s review of the effectiveness of internal
controls should be continuous.
The third part notes the importance of
audit committees. “Audit committees are an
external auditor’s key relationship within
a company,” Derek Broadley, a Partner at
Deloitte and a member of the working group,
told an earlier PAIB forum panel discussion in
February. “When something goes wrong, the
external auditor needs the audit committee
to look at it and act in the best interests of the
company,” he said.
The final part on communications with
shareholders, summarizes the Corporate
Governance Code’s principle that the board
should be responsible for ongoing dialogue
with shareholders and encourage their
effective participation.
“[The corporate governance report is] a
great opportunity you have to get information
out there to your shareholders about who
you are, what you’re doing and how you’re
Disciplinary finding
Fung Wing Yuen, CPA (practising)
Pang Ho Choi, Robin, CPA (practising)
operating,” Gill Meller, Legal Director and
Secretary at MTR Corporation, told the
April forum. “Use it as a sales tool to attract
investors,” she advised.
The corporate governance report can
be used to engage shareholders, potential
investors, employees and the public about the
company’s evolution during the year, Meller
said. “Address any regulatory requirements
that have come out during the year, such as
board diversity rules,” she urged. “Tell the
story about how your company dealt with
those new requirements.”
Feedback welcomed
The working group sought additional
feedback from a variety of stakeholders. The
guide has taken on board a wide range of
corporate governance perspectives, including
those of preparers, investors, directors,
listed company management, auditors and
consultants.
To keep the guide updated and as a sign
of support for environmental and social
reporting, the Institute has opted to publish it
electronically. It is available on the Institute’s
website.
Mainland tax meeting
scheduled for July
Representatives of the Hong Kong Institute of CPAs, including members of the
Mainland Taxation Subcommittee, hold
annual liaison meetings with Chinese
tax authorities. The agencies concerned
include the State Administration of Taxation, the Guangdong Provincial Local
Taxation Bureau and the Guangdong
Provincial Office of the State Administration of Taxation. They will discuss
and exchange views on cross-border
tax issues. This year’s meetings will be
held in July. Members have been invited
to propose and submit questions to be
raised during the State Administration of
Taxation meeting.
Quality assurance unit
highlights year’s work
The Institute has published a quality
assurance report for 2013. The report
summarizes the work of the Quality
Assurance Department in practice review
and professional standards monitoring
programmes in the past year.
Institute’s compliance operations
summarized in annual report
The Institute has published a compliance
operations report summarizing the work
and responsibilities of its Compliance
Department in 2013.
Compliance with the Institute’s
professional standards is a requirement of
membership. Complaint and disciplinary
processes are key mechanisms by which
the Institute regulates the conduct of its
members with sanctions being imposed for
serious breaches.
The department carries out the Institute’s function of regulating the ethical
and professional conduct of its members,
member practices and registered students.
Integrated within are systems for continuous assessment and improvement supported
by an independent process review.
Complaints: Failure or neglect to observe, maintain or otherwise apply the
Fundamental Principles set out in section 100.5 and as elaborated in section
130 “Professional Competence and Due
Care” and section 150 “Professional Behaviour” of the Code of Ethics for Professional Accountants.
The respondents are the practising
directors of Fung & Pang C.P.A. Limited.
The Institute received information from
the Official Receiver’s Office that they
had committed serious misconduct as
joint and several liquidators of a private company and that in May 2012 the
Court of First Instance removed them as
liquidators of the company. The respondents failed to comply with a number of
provisions in the Companies Ordinance
and the Companies (Winding-up) Rules
for eight years, and they did not respond
to the Official Receiver’s requests for information and action. After considering
the information available, the Institute
lodged a complaint against the respondents under section 34(1A) of the Professional Accountants Ordinance.
Decision and reasons: The practising
certificates issued to Fung and Pang are
to be cancelled with effect from 3 May
and shall not be reissued to them for 12
months. The committee also ordered
each of them to pay the Institute a penalty
of HK$50,000. In addition, they were ordered to pay the costs of the disciplinary
proceedings of HK$23,441. When making its decision, the Disciplinary Committee took into consideration the seriousness and continuance of the breaches
and the respondents’ neglect of the Official Receiver’s requests. The committee
took the view that financial penalty in
itself is insufficient in this case.
Details of the disciplinary findings are
available at the Institute’s website:
www.hkicpa.org.hk.
May 2014
5
NEWS
ACCOUNTING
Big Six audits still have shortcomings
Global survey by IFIAR echoes U.S. worries over persistent flaws
The world’s six biggest accounting
networks continue to produce
audits with deficiencies,
according to an international
“More must
be done to
improve the
reliability of
audit work
performed
globally.”
LEWIS FERGUSON,
IFIAR CHAIRMAN
survey released last month.
The results indicate that the
experience of the United
States, where regulators found
shortcomings in more than a
third of audits that they have
inspected in recent years, is a
global phenomenon.
While the latest survey,
commissioned by the International
Forum of Independent Audit
Regulators, a group of national
audit-oversight agencies, does
not quantify the prevalence of
flawed audits, the results indicate
what IFIAR calls a “persistence”
of audit deficiencies and “a basis
for ongoing concerns with audit
quality.”
The frequency and severity
of audit problems represent
“a wake-up call to firms and
regulators alike,” Lewis
Ferguson, IFIAR’s Chairman and
a member of the Public Company
Accounting Oversight Board,
the U.S. government’s audit
regulator, said in a statement.
“More must be done to improve
the reliability of audit work
performed globally.”
The audit-deficiency survey
was based on inspections of the
audits of almost 1,000 publicly
listed companies and nearly 100
financial institutions around
the world conducted by member
firms of the BDO, Deloitte,
EY, Grant Thornton, KPMG
and PricewaterhouseCoopers
networks.
The three inspection
themes for public interest
entities with the highest
number of issues:
Fair value
measurement
Internal
control
testing
Adequacy
of financial
statements and
disclosures
Citigroup vows to do
better after Fed test
GT wins FTSE 350 client
under new tender rule
Citigroup executives pledged to improve
auditing and anti-money laundering
processes as well as revenue and loss
forecasts after the bank failed a “stress test”
set by the Federal Reserve Board in the
United States.
The Financial Times reported that the
stress test lapses have increased tension
among the bank’s management, some of
whom perceive Chief Executive Mike Corbat
as “overconfident” in dealings with regulators.
Five banks failed the stress tests and two
more were forced to scale back their plans
for dividends and share buybacks. Bankers
and investors lashed out at what they called
an “opaque” process. Regulators, they
argued, were undermining confidence in
the financial system by hitting banks with
unexpected demands.
The British unit of Grant Thornton has won
a FTSE 350 audit client under a new regime
that requires the United Kingdom’s largest
listed companies to retender their audit
contracts more regularly.
Interserve, a support services group,
appointed Grant Thornton as its auditor from
this month, in place of Deloitte, the Financial
Times reported. The retender follows
pressure from regulators worried that Big
Four firms dominate the audit market.
6
May 2014
Europe OKs rotation
As expected, the European Parliament last
month voted in favour of new mandatory
auditor rotation rules that force European
companies to hire new auditors at intervals of between 10 and 24 years.
The rules require European-listed companies, banks and financial institutions
to appoint a new auditor every 10 years,
though this can be extended if companies
put their audit contract up for bid at the
decade mark or appoint another audit
firm to do a joint audit.
U.K. AUDIT CLIENT RANKINGS
Source: Adviser Rankings
YEARS
The minimum interval at
which listed companies in
Europe must change audit
firm under new rules
Rank
Auditor
Clients
1
KPMG
379
2
PwC
367
3
Deloitte
278
4
EY
259
5
BDO
226
Michael Woodford,
ex-CEO of Olympus
Olympus sued by six banks over false financial statements
Six banks seeking compensation over false
financial statements are suing Olympus, the
Japanese manufacturer of cameras and other
precision optical equipment.
The financial institutions, including
Master Trust Bank of Japan, Mitsubishi
UFJ Trust and Banking, Nomura Trust and
State Street Trust, are seeking a total of
¥28 billion in compensation for accounting
fraud perpetrated at the Tokyo-based
company from 2000 to 2011.
In October 2011 then-Chief Executive
Officer Michael Woodford revealed
investment losses that had been hidden for
NQ Mobile shares plunge after
allegations of revenue inflation
Shares of Chinese mobileservices provider NQ Mobile
plunged 21 percent on 11 April, a
day after the company reported
weaker-than-forecast earnings.
The decline left NQ Mobile
down 44 percent since shortseller Muddy Waters first stated
publicly in October 2013 that the
company is inflating its revenue.
Some buyers, including
Oberweis Asset Management
and Toro Investment Partners,
had returned to the stock,
pushing it as high as US$21.39 on
speculation that the allegations
by Carson Block, founder of
Muddy Waters, would prove
false. NQ Mobile has denied the
allegations.
Investor concern was rekindled
when reported first-quarter
earnings fell 31 percent short of
analysts’ estimates.
Mainland tax system too complex,
Deloitte survey indicates
China’s taxation system has not
kept pace with the demands of its
fast-changing economy, according
to a recent survey by Deloitte.
Companies rate the country’s
tax system as one of the most
complex, unpredictable and
inconsistent in Asia Pacific,
according to the firm’s 2014 AsiaPacific Tax Complexity Survey.
“China has not been very
successful in reforming its
tax regime in tandem with its
economy,” Danny Po, Asia-Pacific
and China National Leader in
Mergers and Acquisitions Tax
at Deloitte, told the South China
Morning Post.
Deloitte polled 888 tax
executives in 20 Asia-Pacific
jurisdictions and found slightly
more than 100 respondents
saying Chinese officials were
unfair in conducting tax audits,
the second highest level of
dissatisfaction after India.
many years.
The board dismissed Woodford,
prompting an investigation that revealed a
cover-up of losses dating back to the 1990s.
Olympus lost almost 80 percent of its
market capitalization in the aftermath of the
revelations.
Management accountants
demand in China soars
China will require more
sored by the Institute of Managecomprehensive management
ment Accountants. “Increased
accounting to
wealth will come
adapt successfully
by being more
to its economic
productive, which
“Increased
restructuring,
will need managewealth will come
experts said at a
ment accounting
by being more
conference held
information,” he
productive,
in Beijing last
said.
which will need
month.
The confermanagement
China is
ence
marked
accounting
moving from an
the launch of a
information.”
export economy
research instituGARY COKINS, CEO, tion, cofounded
to consumer
ANALYTICS-BASED
PERFORMANCE
economy and the middle
by IMA and the
MANAGEMENT
class needs more wealth,
University of
Gary Cokins, Chief Executive
International Business and EcoOfficer of Analytics-Based Pernomics, which will be dedicated
formance Management, told the to developing China’s manageconference, which was cospon- ment accounting.
PwC completes Booz & Co. deal after
OK from regulators, partners
PricewaterhouseCoopers
completed its acquisition of
management consultants Booz &
Co. last month and renamed the
unit Strategy&.
Booz partners approved
the deal in December, and “a
significant majority” of them
have joined PwC, Chief Executive
Officer Dennis Nally told The Wall
Street Journal.
The deal also has all necessary
regulatory approvals. Financial
terms were not disclosed.
May 2014
7
NEWS
BUSINESS
China to overtake U.S. as world’s largest economy
World Bank overhauls list, promoting India as Japan languishes
China is expected to edge out
the United States for the title of
the world’s largest economy this
year, according to the purchasing power parity standard.
This is sooner than expected,
according to the world’s leading
statistical agencies.
The U.S. has been the largest
economic power since 1872,
when it overtook the United
Kingdom. Most economists
expected China to take the top
further in poorer
countries than it
previously thought,
prompting it to
increase the relative
The year economists expect China
size of emerging
to overtake the U.S. as the world’s
market economies
biggest economy
in a survey released
spot no earlier than 2019.
on 30 April.
However, an update of the
The figures, drawn from
World Bank-hosted Interna2011 data, revolutionize the
tional Comparison Programme
picture of the world’s economic
concluded that money goes
landscape, the Financial Times
U.K. economy grows
by 0.8 percent in Q1
British Chancellor of the Exchequer George
Osborne said last month that the latest gross
domestic product data confirmed that the
United Kingdom’s economic recovery was
well under way.
The Office for National Statistics released
figures on 29 April that GDP expanded by 0.8
percent in the first quarter of 2014 after 0.7
percent growth in the final three months of
last year. The year-on-year growth rate was
3.1 percent, the fastest in six years.
The services sector grew by 0.9 percent
on the quarter, while the construction sector
expanded by 0.3 percent. Manufacturing
increased by 1.3 percent, with industrial
production overall up by 0.8 percent.
noted. India becomes the
third-largest economy having
previously been in 10th place,
while Russia, Brazil, Indonesia
and Mexico make the top 12 in
the global table.
In contrast, high costs and
lower growth push the U.K.
and Japan further behind the
U.S. than in the 2005 tables
while Germany improved its
relative position a little and Italy
remained the same.
Worker import scheme
complicates trade deal
The Beijing government is demanding that
Chinese investors be allowed to import Mainland workers into Australia to work on projects under a proposed free trade agreement.
The Australian Financial Review reported
last month that the Australian government
is resisting the demand, fearing domestic
opposition to the plan.
The demand could prove problematic as
Australia and China negotiate a bilateral free
trade deal, the paper noted.
Australian Prime Minister Tony Abbott
has already changed his previous opposition
to Chinese state-owned businesses investing
in Australia by seeking to raise the investment threshold for projects that require
Foreign Investment Review Board approval
“Today’s figures
from A$250 million to A$1 billion.
show that Britain
The Australian government wants
is coming back. We
have to carry on
Chinese companies to develop new agriculworking through
tural projects and build new infrastructure,
our long-term
particularly in the state of Queensland and
economic plan.”
GEORGE OSBORNE,
the Northern Territory, the Sydney Morning
BRITISH CHANCELLOR
OF THE EXCHEQUER
Herald reported.
The amount in yuan that the Chinese
government fell short of its target in its
latest one-year bond auction
Low demand for 1-year
bonds amid slowdown
The Chinese government was unable to
sell all the bonds offered at an auction
last month, its first such failure in nearly
a year.
The auction raised further concerns
about China’s slowing economic growth,
given that even the government will have
to pay a higher cost for funding as banks
focus more on investment risks.
The Ministry of Finance hoped to sell 28
billion yuan of one-year bonds. However, it
ended up selling just 20.7 billion yuan, the
first time since June 2013 that a government debt sale failed to reach its target.
The Financial Times noted that there
was still strong demand for Chinese
government bonds, but only at rates
above what the finance ministry was
willing to pay.
May 2014
9
NEWS
AFP
BUSINESS
A train on Line 4 of
the Beijing subway
China officials seek to encourage PPP model for local projects
The Chinese government wants to refine a
funding approach known as public-private
partnerships to build new infrastructure.
The PPP model is an alternative to the
usual local government build-transfer model,
which often saddles municipal governments
with large debts.
The Cities Development Initiative for
Asia, an international partnership that
provides assistance on urban investment
projects, has been holding PPP training
sessions in Beijing, Harbin and Luoyang,
Xinhua reported last month.
“It’s a signal the government wants to
push forward with the PPP model,” Wang
Shouqing, a professor at Tsinghua University’s Department of Construction Management, told the business magazine Caixin.
Number of years that Japan
has experienced deflation
Japanese inflation surges after tax
threatens “Abenomics” programme
Higher than expected inflation
– caused by companies raising
prices beyond the 3 percent sales
tax increase introduced this
year – threatens public support
for Japanese Prime Minister
Shinzo Abe’s bid to end 15 years
of deflation.
According to Bloomberg, any
jump in inflation that’s perceived
as excessive by a population
more used to falling prices could
worsen consumer confidence and
make it harder to boost growth.
Food and beverage prices,
including those of coffee and
fast food, have soared by up to 8
percent, according to economists
polled by Bloomberg, suggesting
that the April inflation rate could
exceed 3.5 percent.
Suntory Beverage and Food
and Yoshinoya Holdings are
among companies that have
raised prices by more than the 3
percentage point.
Singapore passes London to claim
second place in global yuan market
Singapore has overtaken London
as the world’s second-largest
clearing centre for the yuan,
behind Hong Kong, it was
announced last month.
SWIFT, a global transaction
services company, said yuan
payments value in Singapore
increased by 375 percent
between March 2013 and March
this year, accounting for 6.8
percent of overall payments in
the Chinese currency.
Hong Kong remains the
leading offshore yuan centre.
with 72.4 percent, while London,
which saw payments value
rise 203 percent in the same 12
months, fell to third with 5.9
percent, SWIFT said.
The CDIA, which is cooperating with the
Ministry of Finance, will hold more sessions
this year.
The PPP model has successfully been
used in China.
The Beijing city government partnered
with three private businesses to build and
operate Line 4 of the capital’s underground
railway from 2004.
Optimistic Greeks to issue more
bonds after €3 billion sale
Greece will issue more bonds
after April’s successful five-year
debt sale, the country’s debt management authority announced.
Greece raised €3 billion at
interest of less than 5 percent on
8 April.
“The bond sale was just the
first step,” Stelios Papadopoulos,
General Director of the Public
Debt Management Agency told
the Athens daily Kathimerini.
Visiting German Chancellor
Angela Merkel said the country’s return to the international
bond markets showed “renewed
confidence.”
Papadopoulos said the successful sale will lower the cost of
treasury bills, which have been
Greece’s staple choice of debt
issue for the past four years.
Ban on bitcoin “out of the
question,” says PBoC chief
Zhou Xiaochuan, Governor of the stamps,” he said.
People’s Bank of China, said last
“It is out of the question to
month that Mainban bitcoins, as it was
land officials had no
not started by central
plans to ban bitcoin,
bank,” he told the
the struggling virtual
annual Boao Forum for
currency.
Asia, a Chinese-governZhou said last
ment-run international
month that the bank
economic conference.
did not view bitcoin
The Wall Street Jouras a currency. It
nal described Zhou’s
is “more a kind of tradable
comments as “vaguely supportand collectible asset, such as
ive” of the virtual currency.
May 2014
11
NEWS
COMPANIES
Consortium pays US$5.85 billion for Peru mine
Deal with Glencore Xstrata propels MMG into copper’s big leagues
announced. “Our view is fairly
positive,” Matthew Whittall,
Equity Analyst at Investec in Hong
Kong, told FinanceAsia. “What
drives that view is MMG’s access
to low-cost debt.”
The acquisition propels MMG
into the world’s top-15 copper
mining companies, a Barclays
research paper noted. The Lima
daily El Comercio noted that
Chinese companies account for
30 percent of investments in the
country’s resources sector.
The price is at the upper end of
the range that most industry analysts had expected, the Financial
Times noted. “Our willingness to
sell reflects the level of the offer
Total value of China M&A deals in
Q1 2014, in billions of U.S. dollars
Outbound M&A hits
record high in Q1
Outbound mergers and acquisitions by
Chinese companies have reached a record
high for the year. The flurry of activity took
the number of China outbound deals to
a record 110 on 31 March, according to
London-based data provider Dealogic.
Volumes of US$27.3 billion for the
period – up on the US$12 billion recorded
for the same period last year – beat the
previous high recorded in 2008.
The deals come as China announced
plans to ease the permit process for
acquisitions of less than US$1 billion in
an overseas company, media reported.
12
May 2014
and our conviction that we can
utilize the sale proceeds to create
additional shareholder value,”
Glencore Xstrata Chief Executive Officer Ivan Glasenberg said
in a statement.
The Peruvian deal comes
almost a year after Glencore
bought Xstrata, the mining
group that started to develop the
mine.
The sale of Las Bambas was
one of the conditions the Chinese authorities laid out to allow
Glencore’s merger with Xstrata.
As such, the market expectation
is that Las Bambas would go to
a Chinese bidder, assuming it
made a reasonable offer.
Chinese
mining
investment
in peruvian
provinces
Citic Securities buys
stake in brokerage
Walmart suggests
label improvements
Citic Securities, the Mainland’s largest brokerage, has acquired a stake in a trading firm
in the United States.
The Chinese company purchased the
stake in BTIG through its CLSA unit, its Hong
Kong-based business bought from Crédit
Agricole for more than US$1 billion.
New York-based BTIG, which has more
than 450 employees, will continue operating
independently, the South China Morning Post
reported, quoting a Citic Securities statement. Financial terms and stake size were not
disclosed.
BTIG’s main business is trading big blocks
of stock for hedge funds and other institutional clients.
The investment is the latest step in Citic’s
international expansion as it seeks to compete
with rivals such as Goldman Sachs.
The world’s biggest retailer, Walmart, has
asked the Chinese government to rewrite
food labelling rules to make manufacturers
and suppliers more accountable, instead of
placing the burden on retailers.
The Daily Telegraph in London reported
that Walmart executives met China’s Food
and Drug Administration officials after the
company was fined dozens of times for minor
breaches, including a 2,400 yuan penalty
for selling food with English letters printed
larger than the Chinese characters. In March,
it was fined 4,177 yuan for missing edible rice
paper wrapper off an ingredients list.
Source: Instituto Geológico Minero Metalúrgico, Lima
A Chinese consortium led by
Hong Kong-listed MMG agreed
last month to buy the Las Bambas
copper project in Peru from Glencore Xstrata for US$5.85 billion
in cash.
Melbourne-based MMG,
which has mines in Australia
and the Democratic Republic
of Congo and is controlled by
state-owned China Minmetals,
has a 62.5 percent stake in the
consortium. Guoxin International
Investment holds 22.5 percent
and Citic Metal has the remaining
15 percent.
The deal sent MMG’s share
price nearly 9 percent higher on
14 April, the day the deal was
PHOTO : TITAN AEROSPACE
Solar-powered
drone aircraft
Google acquires maker of solar-powered drone aircraft
Google last month bought Titan Aerospace,
a start-up based in the United States that
specializes in solar-powered drone aircraft.
The technology giant followed the path
set by Facebook, which bought a British
drone company earlier last month.
The Financial Times described the Google
and Facebook deals as part of a race between
the two technology giants to acquire the next
crucial technology platform.
Google said it had bought Titan to work
closely with its Project Loon, which is building high-altitude balloons to send Internet
signals to earth.
The U.S. technology website TechCrunch
noted that Facebook took an initial interest in
Titan before settling on a US$20 million deal
to buy drone maker Ascenta, based in Som-
Number
of bitcoins
that went
missing from
Mt. Gox
Mt. Gox founder refuses to attend
Dallas bitcoin bankruptcy hearing
Mark Karpelès, the founder of
the failed Tokyo-based bitcoin
exchange Mt. Gox, said he would
not come to the United States to
answer questions in a bankruptcy
court hearing.
The Wall Street Journal quoted
Mt. Gox’s bankruptcy lawyers as
saying that Karpelès is “not willing to travel to the U.S.,” despite
an order from Bankruptcy Judge
Stacey Jernigan for him to an-
swer questions under oath from
lawyers who represent customers
with frozen bitcoin accounts.
The court is situated in Dallas,
while Karpelès lives in Japan,
where administrators for the
company’s Japanese bankruptcy
case are looking for 550,000
bitcoins that disappeared from
the company earlier this year.
He has not been charged with
any crimes.
Tobacco companies facing Korea
lawsuit over health treatment costs
South Korea’s National Health
Insurance Service is suing multinational corporations British
American Tobacco, Philip Morris
and domestic KT&G Corporation for at least 53.7 billion won
in compensation for the costs of
healthcare linked to smokingrelated diseases.
The Korean Supreme Court
ruled earlier this month that there
was no causal link between cigarettes and cancer.
NHIS said in its court statement that it would show the two
are linked and that it planned to
increase its compensation claim
during the legal process.
erset in southwestern England. Both drone
companies have about 20 employees.
The terms of Google’s deal with Titan
were not disclosed but the Los Angeles Times
reported that Facebook had offered the company US$60 million.
Both Ascenta and Titan are in the business
of high-altitude drones, which cruise near the
edge of the earth’s atmosphere.
Japanese insurance group takes on
first Myanmar project risk in 12 years
Japan’s Nippon Export and
Investment Insurance will
underwrite trade insurance for
major infrastructure projects in
Myanmar, making it the first Japanese insurer to do so in 12 years,
Nikkei Asian Weekly reported.
It will insure J&M Steel
Solutions, a joint venture between
JFE Engineering and Myanmar’s
Ministry of Construction, against
terrorist attack or natural disaster.
Tesco plans second tilt
at elusive U.S. market
Britain’s Tesco will make a second attempt to gain a foothold
in the American retail market,
a year after it was forced to
abandon its loss-making Fresh
& Easy chain of convenience
stores in California.
The supermarket giant, the
world’s third-largest retailer, will
team up with Retail Group of
America, which runs the American Accessorize and Monsoon
franchises, to introduce its F&F
range of clothes to American
shoppers.
Seven F&F stores will open
on the east coast of the United States this year, the Daily
Telegraph reported, beginning
in Boston this month. Other
locations planned include New
York, Philadelphia and Virginia.
Last year, Tesco announced
standalone F&F stores would
open in the Middle East, Armenia, Azerbaijan and Kazakhstan.
In September 2013, Tesco
handed Fresh & Easy to billionaire Ron Burkle’s Yucaipa
investment company, marking
the end of a six-year attempt to
crack the United States.
May 2014
13

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