Credit Suisse is disputing SoftBank founder Masayoshi Son’s account of a controversial deal the Japanese group struck with Greensill Capital, as once-close ties between the companies turn increasingly bitter.
The Swiss bank last month launched legal action in the US over $440m owed to its wealthy clients by Katerra, a Californian construction group that was backed by SoftBank’s $100bn Vision Fund and also a client of supply chain finance group Greensill.
The dispute centres on an emergency cash injection that SoftBank agreed in late 2020 to give Greensill, which lent struggling Katerra money that it had originally borrowed from Credit Suisse clients.
As part of the deal, Greensill agreed to write off Katerra’s debt in return for a small stake in the construction group, which went on to file for bankruptcy last June. The Financial Times revealed last year that the $440m cash from SoftBank never reached the Swiss bank’s customers.
Thanks for reading FirstFT Asia and here’s the rest of today’s news — Emily
Five more stories in the news
1. US and Russia agree to extend talks over Ukraine crisis Russia warned that it would walk away from diplomatic efforts to end the crisis over Ukraine if the west continued to ignore demands over security guarantees, but agreed to extend talks into this week.
2. New Oriental fires 60 per cent of workers Chinese online tutoring company New Oriental has fired 60,000 employees since Beijing banned the $100bn-a-year private education industry from making a profit, the group’s founder has said. New Oriental has lost 90 per cent of its market value, in common with other US-listed Chinese online education companies, since the ban.
3. China tech stocks rally Chinese tech stocks rallied yesterday after starting the year with a week of sharp falls. Hong Kong’s Hang Seng Tech index gained 2.2 per cent, with Alibaba Health Information Technology rising nearly 11 per cent and short-video platform Kuaishou’s Hong Kong-listed shares advancing more than 10 per cent. The Star 50 index of Shanghai-listed tech stocks climbed about 1 per cent.
4. LG Energy Solution readies IPO LG Energy Solution, the world’s second-largest electric vehicle battery maker, is preparing to raise $11bn in one of South Korea’s largest listings as it battles Chinese rivals 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 illegally importing and possessing walkie-talkies.
Novak Djokovic has won his appeal against deportation from Australia over his Covid-19 vaccination exemption.
Pro-Beijing news organisations and politicians in Hong Kong have called for punitive action against Cathay Pacific after its crew breached quarantine rules and started an Omicron outbreak.
China is tightening pandemic controls in Tianjin, a city of 14m, after discovering the first community transmitted cases of the Omicron coronavirus variant.
Reinfections are rising among people who caught Covid-19 earlier in the pandemic as the Omicron variant spreads.
Novartis will seek expedited approval for Ensovibep, a Covid-19 drug developed with biotech group Molecular Partners, after strong trial results showed it could help to treat the disease.
The day ahead
World Economic Forum publishes Global Risks Report Bubbly markets and asset prices are among those expected to be featured in the report. Surging crypto prices are also something to keep an eye on. (Forbes)
Australia retail sales figures Australian Bureau of Statistics will release its December report on retail sales figures today. Economists expect another strong month of results that would build on October’s 4.9 per cent increase. (Australian Associated Press)
What else we’re reading
Inside private equity’s race to go public Most of the industry has been enriched during the pandemic — but a select group has had a particularly good time. Eleven listed private equity firms collectively gained nearly $240bn in market value in 2021. Now, a growing number of privately held buyout groups are rushing to join them on the public markets.
N26 co-founder: we got it wrong on global expansion and crypto Max Tayenthal told FT’s Olaf Storbeck that the €7.8bn fintech should have prioritised expanding its services over “putting flags” in more countries. It missed out on the cryptocurrency boom, as it battles to justify its status as one of Europe’s most highly valued fintechs. For more industry news, sign up for our FintechFT newsletter delivered on Mondays.
What happens when the Web3 bubble pops? Web3 builds on Web 2.0, which was 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 are using capital to build out the hard assets of the future.
Explainer: Fed prepares to shrink $9tn balance sheet Markets are on edge as the Federal Reserve looks to trim bond holdings that have ballooned in past two years. Here is our guide to how the Fed might manage the process of reducing its portfolio of securities, and why it matters for markets.
The EU vs the City of London As the UK marks the anniversary of its divorce from the single market, bankers and officials confirm a broader picture: rather than a big-bang shift of financial businesses to the EU, the City is enduring a slow puncture that could take decades to play out.
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 has to open up and when it does there will be Covid transmission so ultimately it is a flawed approach that renders the extreme measures that have gone before as meaningless. We sometimes laud countries for their supposed successful suppression of the virus but at what cost to their society? There needs to be a more measured balance adopted.
It also seems to me that those countries pursuing zero Covid are shamelessly letting other countries suffer the pain as they develop the medical and societal approaches to overcome Covid whilst they themselves will seek 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 need only witness the supply chain challenges to understand this). The ultimate free ride perhaps?” — AM, Hong Kong
“Sadly, even the fact that we can discuss zero Covid means that it is a policy, and thus political. Certainly public health concerns are wrapped up therein, but the main driver of zero Covid for the Beijing Party leaders is to underscore the success of their earlier lockdown and continued provision of substandard vaccines. It is difficult to fault their lockdown strategy, but Covid has proven that more than brute force is necessary to halt the joint health and economic damage of the pandemic. Truly impressive leadership should accept that policy direction must change with evolving realities, even if these realities admit scientific mistakes.” — Spencer Dodington, Islington, London