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1MDB
Najib's trial pushed back
A Malaysian court last Monday postponed
for a week the biggest of five trials linked to a
multi-billion dollar scam at state fund 1MDB and
allegedly involving former prime minister Najib
Razak.
Najib, who lost a general election last year, has
been hit with 42 criminal charges of graft and
money laundering at 1MDB and other state
entities.
He has pleaded not guilty and says the charges
are politically motivated.
The hearing will now begin on Monday to allow
time for the completion of a previous trial
that revolves around former 1MDB unit SRC
International, a Kuala Lumpur High Court judge
said.
“If you need more time, I can stand down or
adjourn ... but for now we will proceed on
Monday and check again on (this) on Thursday,”
Judge Collin Lawrence Sequerah said.
1MDB, founded by Najib in 2009, is being
investigated in at least six countries. The US
Department of Justice says about US$4.5bn was
misappropriated from the fund.
In the trial in Kuala Lumpur, Najib will have to
fight 21 charges of money laundering and four
of abuse of power for receiving illegal transfers
of about M$2.3bn (US$550.8m) between 2011
and 2014.
ANZ
New Zealand profits may be ring-fenced
AUSTRALIA AND NEW ZEALAND BANKING GROUP said
it may need to hold on to a higher proportion of
earnings at its New Zealand unit after Australia
moved to restrict the level of banks’ overseas
exposure.
The announcement follows the confirmation of
plans by the Australian Prudential Regulation
Authority to lower the level of exposure that
the country’s banks can have to offshore units
to 25% of core capital from 50%, ANZ said last
Tuesday.
ANZ sources over a fifth of its profits from
New Zealand, where it is the largest lender,
benefiting from dividend distributions to the
parent worth almost all of the unit’s profits.
Australia’s new rules would introduce
restrictions on ANZ’s ability to inject capital into
ANZ New Zealand and a need for the unit to
build capital organically, ANZ said.
The extent of the impact would depend on the
Reserve Bank of New Zealand’s decision on
capital requirements, ANZ said.
The changes, which APRA said affects a small
number of unnamed banks, will come into effect
from January 2021.
Australia’s big four lenders have large
operations in New Zealand, where they
dominate almost 90% of the banking system.
“Today’s announcement increases the likelihood
of NZ subsidiaries repricing (loans) in order to raise
organic capital, particularly for ANZ,” Citigroup
analyst Brendan Sproules said in a note to clients.
“As the largest player in NZ, it is likely that if
ANZ reprices, the other banks will follow.”Sebi
More research needed on higher free floatThe SECURITIES AND EXCHANGE BOARD OF INDIA needs
to do more research before implementing the
government’s proposal to increase the minimum
public shareholding requirement in listed
companies to 35% from 25%, Sebi Chairman
Ajay Tyagi said.
“On its own the higher level is always good and
there are no disputes about the liquidity and
other positive points. But what levels should be
mandated should be done after consultation,
and considering the level globally followed,”
Tyagi said.
He pointed out that 45% of listed state-owned
companies have yet to meet the current
minimum requirement and said that both the
short and long-term implications of the move
need to be evaluated. “Also, the IPO market
is not doing very well. All these things need
consideration and examination.”
Finance Minister Nirmala Sitharaman
proposed the higher free float in the first
budget of Narendra Modi’s second term in
office.
Analysts said that based on the latest data
available, 1,174 listed companies have founder
shareholdings above 65% and at current prices
would need to raise approximately Rs3.87trn
(US$54bn) to meet the requirement.
Among the companies that would need to
raise their public shareholding levels are Tata
Consultancy, Wipro, Coal India, HDFC Life
Insurance, Avenue Supermarts, SBI Life Insurance,
Bandhan Bank, Interglobe Aviation, ICICI
Prudential Life Insurance, Bosch and Siemens.Separately, Sebi at its board meeting eased
the regulatory and compliance framework for
foreign portfolio investors by broadening their
classification and simplifying their registration,
entry and know-your-customer norms in a bid to
boost investment.
Sebi said it had combined 57 circulars and 183
FAQs on FPIs into a single circular.
It will now categorise FPIs in two groups, down
from three in the past.
Sebi used to classify FPIs in three categories –
Category I (comprising sovereign funds) with
the easiest set of compliance norms, Category
II (funds with some regulations) and Category-
III (highly regulated funds) – but has removed
Category III. FPIs were classified based on the
way they were regulated in their home markets
and the number of investors in the funds.
Sebi is trying to win back the favour of FPIs,
which became net sellers of Indian shares
after the budget in July introduced higher tax
surcharges on the super-rich. FPIs registered as
trusts in India are taxed at individual tax rates.Asset Management Association of China
Global funds to expand into retailChina signalled further opening up of its
financial services sector, saying it would let
global asset managers apply for retail mutual-
fund businesses through private fund units
operating in the country.
Currently, 21 overseas financial institutions,
among them Fidelity International, BlackRock
and UBS Asset Management, have set up wholly
owned subsidiaries in China. But they can sell
only to high-net-worth and institutional clients.
Mutual fund businesses can only be conducted
through joint ventures.
The ASSET MANAGEMENT ASSOCIATION OF CHINA, an
industry body supervised by China’s securities
regulator, said in a statement on August 9 that
it welcomes foreign private fund managers to
apply for retail mutual fund businesses.
AMAC said the move is part of an effort by
the China Securities Regulatory Commission
to open up the country’s capital markets. The
association did not say when foreign asset
managers can start submitting applications.
The AMAC statement came days after JP
Morgan’s asset management unit increased its
stake in its China mutual fund venture to 51%.
Once the deal gets regulatory approval, JP
Morgan would become the first foreign company
to hold a majority stake in a Chinese mutual
fund business.