Quoteworthy: “Maybe the WHO will reform and maybe they won’t.” – US president Donald Trump, blaming the World Health Organisation for “causing so much death”. US’ decision to halt funding to the UN agency has led to widespread global condemnation.
US returns US$300 mil Jho Low-linked funds to Malaysia
The US returned to Malaysia another US$300 million ($424 million) that was recovered as part of the Justice Department’s forfeiture lawsuits targeting assets that fugitive financier Low Taek Jho and his associates bought with funds allegedly stolen from the country’s 1MDB investment fund.
With the latest repatriation, the US has sent US$600 million back to Malaysia as part of the continuing effort to seize and liquidate the assets, including real estate, business investments, artwork and jewellery, that Low, his family and his cronies acquired with the money they are accused of siphoning from the state fund after it was set up in 2009.
While Low — commonly known as Jho Low — has denied wrongdoing, he and his family last year dropped their defence of the forfeiture lawsuits that have been pending in federal court in Los Angeles, which has allowed the government to seize more than US$700 million in assets. Some of the real estate, including luxury condominiums in New York and mansions in Beverly Hills, have been put on the market.
The 1MDB global corruption scandal toppled the previous Malaysian government of Najib Razak, ensnared a Wall Street powerhouse and set off investigations across the globe. In February, a political upheaval led parties that had backed Najib to return to power, placing the local probe and efforts to recover 1MDB funds in question.
New Prime Minister Muhyiddin Yassin has since pledged to keep fighting corruption and thanked the US and Malaysian authorities for the return of the funds. The government will continue working with jurisdictions across the world to bring back more 1MDB-linked assets, he said in a statement on April 15.
The US has helped to recover more than US$1 billion in assets linked with the 1MDB money laundering and bribery scheme, making it the Justice Department’s largest-ever civil forfeiture, according to a statement Tuesday by the US attorney’s office in Los Angeles. — Bloomberg
Banks owed US$3 billion by beleaguered Hin Leong
HSBC Holdings, along with a clutch of other banks, have a combined exposure of at least US$3 billion ($4.3 billion) to Singapore’s Hin Leong Trading, and are in talks with the privately-held oil trader over shoring up its finances, according to people with knowledge of the matter.
A group of about 10 lenders including HSBC, Singapore’s three largest banks, Standard Chartered, and Deutsche Bank held a virtual meeting with the oil trader and its advisers on April 14, the people said, asking not to be identified because they are not authorised to speak publicly. HSBC has the biggest exposure to Hin Leong at about US$600 million, they added.
Singapore’s closely-knit oil trading community is gripped by speculation over the predicament of one of its biggest players and the potentially far-reaching impact its difficulties could have on the market and trading partners. Before crude’s spectacular crash due to the coronavirus crisis, it would have been almost unfathomable that a company of Hin Leong’s status could be in such a position.
Bloomberg reported on April 9 that some banks would not issue new letters of credit to the trader because of concern over its ability to repay the short-term debt. Nobody responded to calls or emails to the company seeking comment.
DBS Group Holdings has an exposure of about US$300 million to Hin Leong, while its local competitors Oversea-Chinese Banking Corp and United Overseas Bank are owed at least US$100 million each, according to the people. Representatives for HSBC, Standard Chartered, Deutsche Bank and the three Singapore lenders declined to comment.
Among the measures discussed at the April 14 meeting were debt reduction, extending loan maturities and some form of moratorium on repayments, according to one of the people.
The banks are planning to come back early next week on possible solutions, and will likely appoint an adviser to help them in their negotiations, another person said.
Founded by legendary self-made Chinese tycoon Lim Oon Kuin, Hin Leong could be the latest casualty of the collapse in oil prices and a heightened caution among lenders to finance commodity trades.
The company was established in 1963 and has grown into one of Asia’s largest suppliers of ship fuel, or bunkers. OK Lim, as the founder is known, built the company from a one-man-one-truck oil dealer to a regional powerhouse with assets including 130 vessels and businesses across oil trading, terminal and storage, bunker supply and lubricants manufacturing, according to its website.
The company’s bunkering arm, Ocean Bunkering Services, was ranked the third-largest shipping fuel supplier in Singapore last year, according to the city-state’s Maritime and Port Authority. Singapore is the world’s biggest shipping fuel bunkering hub. — Bloomberg
G20 agrees debt relief for low income nations
G20 nations have agreed to freeze bilateral government loan repayments for low-income countries until the end of the year, amid the worsening Covid-19 outbreak that has hurt economies. The grouping of developed and developing nations are also calling private creditors “to participate in the initiative on comparable terms”. G20 is also asking the likes of the International Monetary Fund and World Bank to further explore the options for the suspension of debt service payments over the suspension period.
“We support a time-bound suspension of debt service payments for the poorest countries that request forbearance,” the G20 said in a statement after finance ministers held an online meeting on April 15. “We agreed on a coordinated approach with a common term sheet providing the key features for this debt service suspension initiative.”
According to Mohammed al-Jadaan, finance minister of Saudi Arabia, the current chair of G20, the debt assistance involved could be worth more than US$20 billion ($28.6 billion). “Considering the speed, the spread and the severity of Covid-19... this requires a very strong, bold and significant action by the G20 and by the world,” he said. The moratorium on government-to government debt repayments will take effect on May 1, and will be applicable to 76 countries.
Google to cut back on hiring and trim costs
Alphabet, the parent company of Google, which added 20,000 new workers last year, plans to “significantly slow down the pace of hiring”, as the business pressure from the Covid-19 fallout is felt even by the internet giant. It will also trim spending in other areas such as data centres.
“We believe now is the time to significantly slow down the pace of hiring, while maintaining momentum in a small number of strategic areas where users and businesses rely on Google for ongoing support, and where our growth is critical to their success,” says CEO Sundar Pichai in a memo to the company.
“Beyond hiring, we continue to invest, but will be recalibrating the focus and pace of our investments in areas like data centres and machines, and non-business essential marketing and travel,” he adds.
Alphabet has not disclosed any effects of the pandemic nor publicly made any statements about the financial effects nor other potential problems.
South Korean leader’s party wins big in election during pandemic
South Korean President Moon Jae-in’s ruling party scored a landslide victory in parliamentary elections held in the throes of the pandemic, signalling to global leaders a strong response to the virus can translate into votes.
Moon’s Democratic Party of Korea and its satellite party could win at least 180 places in the 300-seat National Assembly, according to election results and projections compiled by Yonhap News Agency, which said it amounted to the biggest win since democratic elections began in 1987. Voter turnout was at about 66%, the highest in 28 years and the projected outcome indicates a show of support for Moon’s handling of the crisis.
The results point to a super-majority for Moon and his progressive camp, giving them power to quickly push through a supplementary budget and reshape an economy reeling from the pandemic. It will add momentum to their key goals to reduce income inequality by prioritising wages, reforming chaebol conglomerates and tightening rules on expensive housing development.
“This is a reminder that people respond to steady, trustworthy leadership in times of crisis,” said Mintaro Oba, a former American diplomat who worked on Korean Peninsula issues. “Moon Jae-in showed you can win elections on a cult of competence instead of a cult of personality.”
Moon, like many leaders, stumbled in his early response to the pandemic, having predicted that the virus would be terminated “before long” only to see cases spike days later. But the government’s focus on mass testing and isolation of the sick to corral coronavirus clusters has been credited with a sharp slowdown in the spread, with new cases now at their lowest levels since February.
His approval rating shot up to 56% from 42% during the crisis as South Korea won global praise for its response to the outbreak. The initial results indicate that holding an election during the pandemic is not only possible but can be beneficial for politicians seen as managing the crisis well.
South Korea was initially one of the world’s hardest-hit countries and developed tactics including drive-through testing that have been copied by others. New infection rates in the country have fallen this month to their lowest levels since February and per capita deaths from Covid-19 are some of the lowest among major economies. – Bloomberg