Tue. Jan 18th, 2022

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Credit Suisse disputes SoftBank founder Masayoshi Son’s account of a controversial agreement the Japanese group struck with Greensill Capital, as once close ties between the companies became increasingly bitter.

The Swiss bank last month launched legal action in the US of more than $ 440 million owed to its wealthy customers by Katerra, a California construction group backed by SoftBank’s $ 100 billion Vision Fund and also a client of the supply chain financing group Greensill.

The dispute is about an emergency cash injection that SoftBank agreed in late 2020 to give to Greensill, who was borrowing struggling Katerra money, which he originally borrowed from Credit Suisse customers.

As part of the deal, Greensill agreed to write off Katerra’s debt in exchange for a small stake in the construction group, which filed for bankruptcy last June. The Financial Times revealed last year that SoftBank’s $ 440 million in cash had never reached the Swiss bank’s customers.

Thank you for reading FirstFT Asia and here’s the rest of today’s news – Emily

1. US and Russia agree to expand talks on Ukraine crisis Russia has warned that it will step down from diplomatic efforts to end the crisis in Ukraine if the West continues to ignore demands for security guarantees, but has agreed to expand discussions this week.

2. New Oriental burns 60 percent of workers Chinese online tutor company New Oriental has 60,000 employees laid off since Beijing banned the $ 100 billion-a-year private education industry from making a profit, the group’s founder said. New Oriental has lost 90 percent of its market value, in common with other U.S.-listed Chinese online education companies, since the ban.

3. China Technology Stocks Rally Chinese tech stocks rose yesterday after starting the year with a week of sharp declines. Hong Kong’s Hang Seng Tech Index Rose 2.2 percent, with Alibaba Health Information Technology rising nearly 11 percent and short video platform Kuaishou’s Hong Kong-listed shares advancing more than 10 percent. The Star 50 index of Shanghai-listed technology stocks climbed about 1 percent.

Line chart showing Nasdaq Composite falls 10% from November peak

4. LG Energy Solution prepares IPO LG Energy Solution, the world’s second largest battery maker for electric vehicles, prepares to raise $ 11 billion one of South Korea’s largest lists while it fights Chinese competitors to dominate the market.

5. Aung San Suu Kyi sentenced to four years Aung San Suu Kyi has been sentenced by a military-controlled court in Myanmar to four years in prison after she was convicted in three criminal cases, including for the illegal importation and possession of walkie-talkies.

Coronavirus consumed

  • Novak Djokovic won his appeal against deportation of Australia over its Covid-19 vaccine release.

  • Pro-Beijing news organizations and politicians in Hong Kong have called for sanctions against Cathay Pacific to his crew violated quarantine rules and started an Omicron outbreak.

  • China is intensifying pandemic control in Tianjin, a city of 14m discover the first community transmitted cases of the Omicron coronavirus variant.

  • Re-infections rises among people who caught Covid-19 in the pandemic earlier than the Omicron variant spread.

  • Novartis will search speedy approval for Ensovibep, a Covid-19 drug developed with biotechnology group Molecular Partners, after strong trial results showed it could help treat the disease.

The day ahead

World Economic Forum publishes Global Risks Report Bubbling markets and asset prices are among those that are expected to appears in the report. Rising crypto prices are also something to keep an eye on. (Forbes)

Australia retail sales figures Australian Bureau of Statistics will release December report on retail sales figures today. Economists expect another strong month of results that will build on October’s 4.9 percent increase. (Australian Associated Press)

What else are we reading

Within private equity’s race to become public Most of the industry was enriched during the pandemic – but a select group had a particularly good time. Eleven listed private equity firms collectively acquired nearly $ 240 billion in market value in 2021. Now a growing number of private buyout groups are rushing to join them in the public markets.

N26 co-founder: we were wrong about global expansion and crypto Max Tayenthal told FT’s Olaf Storbeck that the € 7.8 billion fintech should have prioritized expanding its services over “flags” in more countries. It missed the cryptocurrency boom, while struggling to justify its status as one of Europe’s most valued fintechs. For more industry news, sign up for us FintechFT newsletter Delivered on Mondays.

What happens when the Web3 bubble appears? Web3 builds on Web 2.0, which has been all about social media and user-driven content, taking it to the next level of either utility or hype, depending on your point of view. Rana Foroohar argues that investors should pay less attention to the metaverse and more to those who use capital to expand the hard assets of the future.


© Matt Kenyon

Explain: Fed prepares to shrink $ 9tn balance sheet Markets are on a lead as the Federal Reserve tries to reduce bond holdings that have risen over the past two years. Here is our guide about how the Fed can manage the process of shrinking its portfolio of securities, and why it matters to markets.

The EU against the City of London As the UK celebrates the anniversary of its internal market divorce, bankers and officials are confirming a broader picture: rather than a big bang-shifting financial business to the EU, the City is endure a slow puncture which can take decades to play out.

Your feedback

Last week, we asked whether nations should pursue a “zero-covid” policy. Here’s what our readers had to say:

“Pursuing a zero-covid policy is essentially a futile and fragile strategy. Indeed, a country needs to open up and when that does happen, there will be Covid transfer, so ultimately it is a flawed approach that renders the extreme measures that preceded it meaningless. We sometimes praise countries for their supposedly successful suppression of the virus, but at what cost to their society? A more measured balance must be adopted.

It also seems to me that those countries that pursue zero Covid shamelessly let other countries suffer the pain as they develop the medical and social approaches to overcoming Covid, while themselves trying to reap the benefits of those gains. A Zero Covid approach only works provided other countries are not sealed and do not adopt the same approach (we only need to look at the supply chain challenges to understand this). The ultimate free ride perhaps? ” – AM, Hong Kong

“Unfortunately, even the fact that we can discuss zero Covid means that it is a policy, and therefore political. Concerns about public health are certainly contained in it, but the main driving force of zero Covid for the Beijing party leaders is to emphasize the success of their earlier restriction and continued supply of substandard vaccines. It’s hard to blame their lock-in strategy, but Covid has proven that more than brutal force is needed to stem the combined health and economic damage of the pandemic. Truly impressive leadership must accept that policies need to change with evolving realities, even if these realities acknowledge scientific errors. ” – Spencer Dodington, Islington, London

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