Standard & Poor’s (S&P) said its president is stepping down, capping two weeks of controversy following the rating agency’s downgrade of US government debt on Aug. 5 that sparked a row with the US Department of the Treasury.
S&P’s parent, McGraw-Hill Companies Inc, said yesterday Deven Sharma, who has served as S&P president since 2007, will be succeeded on Sept. 12 by Citibank chief operating officer Douglas Peterson.
“S&P will continue to produce ratings that are comparable, forward looking and transparent,” McGraw-Hill said in a statement, adding that Sharma would work on a strategic portfolio review for the group until leaving at year-end.
The one-notch downgrade of US government debt from “AAA,” which has not been matched by other major rating agencies, led to the biggest sell-off in global stock markets in three years and was criticized by US treasury officials and the administration of US President Barack Obama over some of the methodology used by S&P.
The US Department of Justice is also investigating the ratings agency over its actions in assigning high ratings to complex mortgage securities leading up to the 2008-2009 financial crisis, a source familiar with the matter said last week.
S&P management has been criticized for its handling of the downgrade, although some advocates said it was acting responsibly in light of mounting debt and Washington’s political inability to devise a long-term solution to the issue.
The Financial Times, which first reported Sharma’s resignation, quoted unnamed sources yesterday saying his departure was unrelated to the downgrade or the justice department investigation.
Executives and directors of McGraw-Hill are under increasing pressure from shareholders to restructure the publishing company and possibly spin off the profitable S&P ratings business.
At a board meeting on Monday, directors decided to replace Sharma and discussed an ongoing strategic review, the Financial Times said.
Directors and executives met with Jana Partners, a hedge fund, and the Ontario Teachers’ Pension Fund to hear their arguments on why the publishing company should be broken up.
Those shareholders, who publicly called for a possible restructuring of McGraw-Hill on Aug. 1, own 5.6 percent of the company, a bigger stake than that of chief executive Harold “Terry” McGraw III, the great-grandson of the company’s founder.
The activist shareholders urged directors on Monday to unwind the conglomerate and to appoint “an independent oversight figure” to help Standard & Poor’s navigate potential new regulation and public attention.
They said the recent controversy and political scrutiny highlight the drawbacks of having the S&P Ratings business coupled with McGraw-Hill’s unrelated operations.
S&P’s primary competitor, Moody’s Investors Service, was separated about 10 years ago from a mini-conglomerate then known as Dun & Bradstreet.
Some McGraw-Hill investors say the same should happen to S&P, in part because it would allow the agency to operate with virtually no debt and the freedom to issue critical ratings without undue fear of losing assignments from corporate issuers who pay for ratings.
CEO Terry McGraw, who turns 63 this month, has recently retreated from defending the company’s diverse portfolio of brands and made several executive changes.
Last month, he vowed to take “significant” actions to restructure the company and sources say he may spin off or sell the company’s textbook division.
In June, McGraw vowed to sell the company’s handful of television stations, a move long promoted by many stock analysts. In November last year, he replaced the head of the textbook division and in 2009, he agreed to sell BusinessWeek, a flagship media brand that was losing money.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained