BANKING
Banamex to forfeit US$97m
Banamex, the Mexican affiliate of US giant Citigroup, is to forfeit US$97.4 million after admitting to having a weak anti-money laundering program, the US Department of Justice announced on Monday. The penalty resolves a criminal probe at Banamex USA after investigators found that from 2007 through 2012, Banamex conducted fewer than 10 investigations on more than 18,000 alerts involving more than US$142 million in potentially suspicious transactions totaling more than US$142 million, the department said. The department signed a non-prosecution agreement with Banamex USA after it agreed to invest in remediation and cooperated with the criminal probe, the agency said. The penalty is on top of US$140 million in civil fines Banamex paid to US and California agencies over a separate bank secrecy act probe. In October, Citigroup announced it was renaming its Mexican unit Citibanamex and pumping US$1 billion into the business. In February 2014, Citigroup announced a one-time charge of US$235 million after uncovering fraud involving a client that borrowed US$583 million from a Banamex unit.
MANUFACTURING
Arconic board to expand
Elliott Management is to add three members to the board at Arconic Inc, with one to have a say in naming the firm’s next CEO. Elliott owns more than 13 percent in Arconic and has pushed for management changes, complaining of underperformance at the New York-based maker of aluminum parts for the aviation and automotive industries. Arconic was created after Alcoa Inc was split in two last year. As part of the agreement announced on Monday, one of Elliott’s board members will also be added to the CEO search committee. Elliott’s replacement choice — former Spirit AeroSystems CEO Larry Lawson — will be considered. Former CEO Klaus Kleinfeld resigned abruptly last month after he sent a letter containing veiled threats to Elliott founder Paul Singer. Arconic also said on Monday that three of its own nominees will be added to the board.
MORTGAGES
Paragon profit falls
British buy-to-let mortgage lender Paragon Group of Companies PLC reported a marginal fall in first-half profit, but said its buy-to-let pipeline had more than doubled, pointing to full-year lending volumes topping its expectations. Paragon, which has been diversifying its business from its core market, made a pretax profit of £69.4 million (US$90.1 million) in the six months to the end of March, down from £69.5 million the year before. The company is paying an interim dividend of £0.47 per share, up 9.3 percent.
STOCK MARKETS
Exchange nears deal
Singapore Exchange Ltd is nearing a deal with the city-state’s technology regulator to develop a system designed to encourage local start-ups to list on the bourse, people familiar with the matter said. According to the agreement, the bourse operator would help pair technology companies with investors with the aim of securing their listing in the city-state, the people said. SGX and Infocomm firm Media Development Authority are close to finalizing the accord, said the people, who asked not to be identified because the talks are private. SGX’s tie-up with the regulator will deepen the exchange’s so-called sector approach, with four industries, including technology, the focus of its listings strategy.
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure