Bloomberg

(Bloomberg) — Britain’s competition watchdog opened a probe into how some of the nation’s top sports TV broadcasters and production firms including Sky UK Ltd. and BT Group Plc may have colluded to buy freelance services.

The Competition and Markets Authority said in a statement on Wednesday it “has reasonable grounds to suspect one or more breaches of competition law” by firms also including IMG Media Ltd. and ITV Plc.

The investigation looks into the purchase of freelance services which support the production and broadcasting of sports content in the UK, the CMA said.

BT Group said in a statement it’s reviewing the details of the probe but will be “co-operating fully with the CMA.” 

“It is clear that CMA’s investigation is focused very specifically on the purchase of freelance services and not any other aspects of the BT Sport or wider BT Group business,” the company said.

IMG didn’t immediately respond to a request for comment. ITV said in an emailed statement that it’s committed to complying with competition law and is cooperating with the CMA. Sky also said it’s cooperating fully with the authority.

SEE: BT’s Sport TV Deal With Warner Bros. Discovery Gets UK Probe

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — A health-care official has been kicked out of China’s ruling Communist Party for offenses including “long-term addiction to mobile games” following an uproar over a woman who suffered a miscarriage because she was refused care while the city of Xi’an was locked down.

Li Qiang, former head of the Xi’an Medical Emergency Center, will face criminal prosecution for dereliction of duty, embezzlement, and accepting “huge amounts of money and property” as bribes, graft investigators said in a statement late Tuesday.

Li “crossed the bottom line of laws and regulations,” the statement from authorities in the central province of Shaanxi said. “At a critical time in Xi’an’s pandemic prevention and control efforts, his work was seriously irresponsible, which triggered severe negative public opinion on the Internet, leading to bad social impact.”

People across China were outraged earlier this year when two hospitals denied care to a pregnant woman and a man who later died after suffering a heart attack. The incidents prompted Vice Premier Sun Chunlan to say medical facilities across the world’s No. 2 economy “must not turn away patients under any excuse.” The two hospitals were temporarily closed and their medical chiefs fired.

Li was reprimanded in January by Xi’an authorities for “malpractice,” though the government statement didn’t provide details at the time. A person who said she was a relative of the pregnant woman wrote on the Weibo social media platform that ambulance dispatchers at Xi’an Medical Emergency Center didn’t answer phone calls.

Xi’an, a city of 13 million people, was locked down from December last year for about a month, causing shortages of food and medical care.

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — UK financial technology startup Zepz, parent of WorldRemit, has struggled with its accounts and turnover in its senior ranks prior to a potential initial public offering, according to people familiar with the matter. 

Zepz, which helps consumers transfer money around the globe, had been planning an IPO seeking a valuation of as high as $6 billion (5 billion pounds) as soon as the second quarter, people with knowledge of the matter told Bloomberg in February.

The London-based startup struggled to do checks on certain customer accounts in a timely manner, the people said, who asked not to be identified because they were not authorized to speak to the press. The issues caused a delay to IPO preparations, according to two people with direct knowledge of the matter. The problems have since been solved, one of the people said. 

Zepz had a “robust team of individuals who monitor activity globally to ensure that every transaction on the group’s platforms is carried out ethically and accurately in conjunction with our correspondents,” said a spokeswoman, adding that the allegation that the company had accounting issues was “speculative and factually incorrect.”

Founded in 2010 as WorldRemit, Zepz has also suffered from what the former employees describe as a convoluted management structure and high churn among senior-most staff. The company had four executives with the “CEO” title, and has had three chief marketing officers within the last year. WorldRemit’s Chief Technology Officer and Chief Financial Officer both departed since December.

Chief Executive Officer Breon Corcoran outlined plans in February to cut roughly 5% of WorldRemit’s workforce, freeze pay for most employees, downsize the London office and cut the marketing budget by $40 million. Corcoran then departed the firm in June weeks later. A replacement will be announced in the coming weeks. 

“Zepz leadership internally shared a strategy to reduce our cost base and seek a stronger degree of financial independence, to ensure that we can service our millions of customers around the world sustainably and independent of further external funding,” said the spokesperson, adding that the company hadn’t announced a timeline for an initial public offering. 

WorldRemit was founded by Ismail Ahmed — who arrived in the UK as a refugee from Somalia’s breakaway region of Somaliland — after he grew frustrated with the high transaction fees charged by other services to send money to his family in East Africa. The company raised nearly $300 million in funding at a $5 billion valuation in August from investors including Farallon Capital, Leapfrog, TCV and Accel, making it one of the most valuable UK startups.

About eight months ago, Zepz hired outsiders from consultancy Grayce to help the company with its accounting, according to a person familiar with the matter. 

“Grayce analysts were onboarded to support on reconciliation work,” a Grayce representative said.

The focus for Zepz now is reaching profitability, given sagging investor confidence in loss-making tech startups and IPOs, the people said. Publicly-traded peers such as Wise Plc and Remitly Global Inc have seen their shares tumble roughly 70% since late September as analysts question their exposure to consumer spending and place in an increasingly competitive market.

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — Stocks in Taiwan rallied after authorities pledged to prop up domestic shares for the first time since the early days of the pandemic in 2020.

The benchmark Taiwan Stock Exchange Weighted Index closed 2.7% higher on Wednesday, the biggest jump in nearly four months. The National Financial Stabilization Fund received authorization to support local equities after its committee concluded an extraordinary meeting a day earlier, according to the Ministry of Finance.

The intervention underscores the many challenges confronting Taiwan’s tech-reliant market, which has been buffeted by a weaker outlook for the sector and rising fears of a US recession. Shares fell into a bear market earlier this month as foreign selling exerted pressure. Global funds have withdrawn nearly $35 billion since the start of the year.

“The news that the stabilization fund will support the market should be able to stop stocks from declining further and boost investor confidence in the short-term,” said Harris Liao, chief investment officer at Concord Securities Co. “But whether Taiwan stocks can bottom out depends on the stabilization of US 10-year government bond, US inflation number and US tech stocks. There are still many uncertainties.”

All but one of the 28 sub-gauges of the benchmark stock index rose Wednesday. Chip giant Taiwan Semiconductor Manufacturing Co., which accounts for more than a quarter of the index’s weighting, jumped 4.7%. The firm is expected to report results on Thursday.

The last time the stabilization fund stepped in to support the market was back in March 2020 when global markets reeled from the then nascent Covid-19 outbreak. President Futures Co. said authorities had spent about NT$760 million ($25 million) through October that year to put a floor under prices.

Tuesday’s decision will be the eighth time authorities have chosen to step into the market since the stabilization fund was established in 2000. Historically, the support has generally heralded rallies for weeks and sometimes even months after announcements. On Monday, the fund had originally decided not to intervene, which triggered a selloff. 

Some analysts remain cautious about the outlook, however. Credit Suisse Group AG has lowered its year-end target for Taiwan’s equity benchmark to 15,000 from 17,500, citing further risks of earnings downgrades.

“There are still negatives to the global stock markets, such as US inflation and US Fed rate hike, so the risks remain,” said Boryi Chien, an assistant vice president at Cathay Securities Corp. “In the short-term, the fund’s support should boost the market and attract buyers. In the mid to long term, the effects remain to be seen.”

(Updates numbers to show market close in second and fourth paragraph; An earlier version corrected the number of components in the fifth paragraph)

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — Bitcoin settled into a holding pattern on Wednesday ahead of US inflation figures that could inject fresh volatility.

The largest cryptocurrency held at about $19,500 in Asian trading, little changed on the day but nursing a drop of 11% since the end of last week. Global markets were also becalmed as investors took a deep collective breath in the countdown to the inflation data.

A print that tops expectations of 8.8% could harden bets on Federal Reserve monetary tightening, roiling speculative investments like cryptocurrencies anew. But a weaker reading has the potential to enliven the market mood.

Headline inflation below 8.5% could lead to a scenario where the dollar “drops universally” and “crypto goes up 5%+,” Chris Weston, head of research at Pepperstone Group, wrote in a note.

Fed rate hikes, the Terra ecosystem meltdown and the collapse of crypto hedge fund Three Arrows Capital have all contributed to a 58% drop in Bitcoin in 2022.

Total crypto market value was at about $906 billion on Wednesday, according to CoinGecko, down from more than $3 trillion in November. 

Technical analyst Katie Stockton, co-founder of Fairlead Strategies, earlier this week said “from a long-term perspective, downside momentum is growing” and that Bitcoin could test the $18,300 to $19,500 price range.

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — Asian stocks and US equity futures edged up Wednesday in cautious trading dominated by a dimming economic outlook and an anxious wait for data that may show US inflation at a fresh four-decade high.

MSCI Inc.’s regional share gauge added about 0.5%, bolstered by a rebound in Chinese technology shares. S&P 500 and Nasdaq 100 futures were in the green, but European contracts dipped.

Steadier Covid trends in Shanghai and the possibility of looser Hong Kong quarantine rules may have aided Asian sentiment. Taiwan rallied after authorities made a rare pledge to prop up domestic shares.

Treasuries were steady and a key part of the yield curve remains inverted, a potential signal of recession ahead. The 10-year yield at one point Tuesday was 12.4 basis points below the 2-year rate, a level unseen since 2007.

Oil stabilized at about $96 a barrel after a tumble. The dollar hovered near the highest levels since March 2020. The euro remained in sight of parity with the greenback. Bitcoin slipped toward $19,000.

Rapidly tightening monetary policy in the US and elsewhere to fight price pressures is fueling worries about growth and leaving markets nervous. South Korea and New Zealand became the latest to hike interest rates further.

Economists project US inflation likely hit a pandemic peak in June that will keep the Federal Reserve geared for another big rate increase. The consumer-price index probably rose 8.8% from a year earlier, the largest jump since 1981, according to a Bloomberg survey ahead of the release Wednesday.

“This is widely expected to be a really strong print,” Lauren Goodwin, economist and portfolio strategist at New York Life Investments, said on Bloomberg Television. “Even if it is not, I don’t think that changes the Fed’s perspective in a couple of weeks. We won’t have enough evidence that inflation is convincingly turning over.”

The International Monetary Fund cut its growth projections for the US economy and warned that a broad-based surge in inflation poses “systemic risks” to both the country and the global economy.

Traders are also on tenterhooks for the latest corporate earnings and monitoring for a brewing energy crisis in Europe if Russia cuts off gas supplies in the fallout from its invasion of Ukraine. 

What to watch this week:

• Earnings due from JPMorgan, Morgan Stanley, Citigroup, Wells Fargo
• US CPI data, Wednesday
• Federal Reserve Beige Book, Wednesday
• US PPI, jobless claims, Thursday
• China GDP, Friday
• US business inventories, industrial production, University of Michigan consumer sentiment, Empire manufacturing, retail sales, Friday
• G-20 finance ministers, central bankers meet in Bali, from Friday
• Atlanta Fed President Raphael Bostic speaks, Friday

Will the eurozone avoid a recession or a debt crisis? How will the euro and stocks perform in the next six months? Share your views and participate in the latest MLIV Pulse survey. It only takes a minute, so please click here anonymously.

Some of the main moves in markets:

Stocks

• S&P 500 futures rose 0.2% of 12:52 p.m. in Tokyo. The S&P 500 fell 0.9%
• Nasdaq 100 futures added 0.3%. The Nasdaq 100 fell 1%
• Japan’s Topix index rose 0.3%
• South Korea’s Kospi index rose 0.7%
• Australia’s S&P/ASX 200 Index was steady
• China’s Shanghai Composite index climbed 0.4%
• Hong Kong’s Hang Seng index added 0.8%
• Euro Stoxx 50 futures lost 0.3%

Currencies

• The Bloomberg Dollar Spot Index was steady
• The euro was at $1.0035
• The Japanese yen was at 137.15 per dollar, down 0.2%
• The offshore yuan was at 6.7343 per dollar

Bonds

• The yield on 10-year Treasuries rose one basis point to 2.98%
• Australia’s 10-year bond yield fell three basis points to 3.39%

Commodities

• West Texas Intermediate crude was at $95.90 a barrel
• Gold was at $1,727.12 an ounce

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — Tianqi Lithium Corp. fell as much as 11% in Hong Kong, following the largest share sale in the Asian financial hub this year.

Its shares dropped to as low as HK$72.65 in early trade on Wednesday, before trimming losses. The supplier of the key material used in batteries, already listed in Shenzhen, sold the stock at HK$82 a piece in a secondary listing in Hong Kong. That was the top of a marketed range in an offering that raised about HK$13.5 billion ($1.7 billion).

The slump suggests investors remain wary of putting money into newly listed stocks in Hong Kong. Three other companies that debuted in the city on Wednesday also dropped. The negative start casts a shadow over a pipeline of large offerings in the city, including that of China Tourism Group Duty Free Corp., the world’s largest travel retailer that is planning a share sale of as much as $3 billion.

Tianqi’s Hong Kong listing, nevertheless, caps a major turnaround for the firm after a debt crisis just two years ago forced it to sell stakes in prize assets, and raised questions for management. The company’s revival was aided by an eye-popping gain of more than 1,000% for lithium prices since mid-2020.

Tianqi mines lithium in Australia and produces compounds and derivatives in China. The Chinese producer first brought up a secondary listing in 2018, but shelved the plan amid falling lithium prices and liquidity problems. In 2020, the Chinese company sold a stake in Australia’s Greenbushes, one of the world’s most coveted lithium mines, to Perth-based IGO Ltd. for $1.4 billion to help repay debt.

A fresh global push for electrified transport is fueling a demand boom for lithium — a key material used in EV batteries. According to BloombergNEF, lithium prices could stay elevated amid a tight market this year. 

Tianqi is planning to more than double its lithium refining capacity in the next three years to about 110,000 tons, from about 45,000 tons now, Chief Executive Officer Frank Ha said in an interview with Bloomberg Television on Wednesday. “The continued rampup of revenues and prices is something that we can foresee,” Ha said.

Tianqi’s Hong Kong share sale has attracted seven cornerstone investors including LG Chem Ltd. and battery maker CALB Co., the prospectus shows. In another sign of a brighter outlook for Tianqi, its lithium refinery in Australia’s Kwinana — a venture between the company and IGO — delivered its first batch of battery-grade lithium hydroxide in May.

Most companies that debuted in Hong Kong this year fell on their first day of trade, data compiled by Bloomberg show. Retailer Miniso Group Holding, wealth management company Noah Holdings Ltd. and piped natural gas distributor Huzhou Gas Co. slumped as much as 4.9%, 7.3% and 9.5%, respectively, on their first day of trade on Wednesday. 

Big offerings have dwindled this year amid rising inflation, hawkish central banks and a jump in volatility that has led the Hang Seng Index to retreat more than 10% this year.

Strong appetite for listings in the city has yet to return, according to Ke Yan, head of research at DZT Research. “Everyone is still working hard to find deal to profit from,” he said.

Tianqi’s shares plunged in Shenzhen on Monday after the wife of one prominent investor raised concerns about the firm’s valuation ahead of the secondary listing. The shares on the mainland touched an all-time high last week. 

Morgan Stanley, China International Capital Corp. and CMB International Capital Ltd. are joint sponsors of the Hong Kong offering. 

(Updates price in second paragraph and adds quotes from CEO)

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — A luxury cruise firm, a disputed family inheritance, and a Monaco-based tycoon fighting to protect his fortune.

It sounds like the summary of the latest must-watch streaming drama, but it’s in fact a clash that’s been playing out for real over more than two decades. It’s centered on two Italian brothers, billionaire Manfredi Lefebvre d’Ovidio and his history professor brother Francesco, over the ownership of the business their father founded.

Francesco, a university professor, claims he’s the rightful owner of 52% of a family holding company, according to court documents. That company owned Silversea Cruises, which under Manfredi’s watch became a leading brand in ultra-luxury cruises. Royal Caribbean Cruises Ltd. bought a majority stake in 2018, valuing it at $2 billion.

Read more: Royal Caribbean Bets on Luxury With Silversea Stake

After years of court hearings and rulings, the case may finally be moving toward its endgame. It’s due to go to an appeal trial in Bologna, which should mark the final decision under Italian law.

A decision in Francesco’s favor might not just threaten Manfredi’s fortune, but also an investment strategy that’s seen him pump money into multiple businesses.

Since the sale of Silversea, Manfredi took over travel group Abercrombie & Kent with its founder, backed firms including a software encryption company, and funded companies controlled by controversial German financier Lars Windhorst. Last month, A&K bought two ships in a sale resulting from the collapse of Crystal Cruises.

The brothers declined to comment for this story, as did Francesco’s legal team. Manfredi’s lawyers say the case is “groundless.”

Roman Brothers

The siblings grew up in Rome, but while Francesco, born in 1951, pursued an academic career to become a professor of international history, Manfredi, two year his junior, dropped out of university to work with their father Antonio, who died in 2011, at the growing family shipping businesses. 

The dispute between the brothers began more than 20 years ago when, according to claims made in court documents, Antonio decided to put the siblings’ holdings into a family trust. 

The brothers were in disagreement, but in 2001 they found a compromise: Francesco would get properties in Rome and receive a holding company controlling some shipping assets, while Manfredi would keep the cruise business — with a stake held by their sister Elvira. 

Seven years later, however, Francesco went to court against the rest of the family arguing that the delivery of the shares of the holding company didn’t go through as planned. Manfredi claims the deal was completed as agreed. 

Francesco has previously failed in his bid to seize Silversea assets in Greece and Germany, but the main effort has been through Italian courts. He’s claiming half of the Silversea shares, or damages equivalent to 52% of the value of the company, estimated at about 800 million euros ($803 million), according to court documents. 

French Family

The Lefebvres have a storied history, coming from a French family that settled in Naples at the time of the Napoleonic wars. Their ancestor Charles Lefebvre became one of the most notable entrepreneurs and bankers in Southern Italy, partnering up with the Rothschilds. He even joined the ranks of the local nobility before the unification of the country in 1860. 

The family fortunes dwindled in the years before the second world war until Antonio, a lawyer specializing in maritime law, set up a shipping company that helped European migrants to move to Australia. Gradually, the firm shifted away from the passenger sector to focus on the cruise industry, leading to the founding of Silversea in the 1990s.

The 2018 sale, and the transfer of the remaining stake to Royal Caribbean in 2020, turned Manfredi Lefebvre into a billionaire with a pile of cash ready for investment through the family holding, Heritage Group. 

Heritage Group

Heritage, chaired by Manfredi, took over UK travel agency Abercrombie & Kent, which specializes in luxury vacations such as $20,000 safari trips. It’s also participating in a new blank check company to buy renewable energy companies with a former Barclays Plc banker and Telecom Italia chief executive officer. 

Read more: Italian Billionaire-Backed Firm Buys Crystal Cruises Ships 

Some investments have run into trouble: Arqit Quantum Inc., the UK encryption company Heritage bought via a SPAC launched with Centricus Asset Management, fell more than 80% from its peak in November.

Heritage also sued Windhorst in a London court last year as the German financier failed to pay obligations on transactions linked to the shares of his companies, even after they had reached a settlement. 

‘Totally Groundless’

The Italian part of the brothers’ legal battle has gone through several stages over the last decade, but it just entered its final chapter after the Supreme Court found issues with a decision in favor of Manfredi in 2018.

A preliminary hearing for the new trial was held on June 14 and adjourned to December.

Francesco’s lawyer in the Italian appeal trial, Salvatore Patti, declined to comment on the case. 

“The Court of Appeal will have to reject Francesco’s demands because Manfredi fully complied with the terms of the deal with his brother,” according to Manfredi’s Italian lawyers, Giovanni Frau, Elena Lucertini and Francesca Poiatti of law firm Frau Ruffino Verna. “The request to transfer shares and assets against legal entities, which aren’t part of the ongoing trial, and the request for damages are totally groundless.”

Meanwhile, Francesco also sued Royal Caribbean in Miami in May as he seeks to get back the Silversea shares. In the filing, he accuses the cruise company of “unjust enrichment, conversion, and aiding and abetting conversion.” He claims the 2018 sale, agreed shortly after the Supreme Court ruling, hindered his ability to recover Silversea’s stock and assets.

In June, Royal Caribbean asked the judge to dismiss the case, claiming the suit is “an attempt to circumvent the Italian legal system.” The company didn’t respond to a request for comment.

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) —

Global financial regulators are calling for tighter oversight of the stablecoins after a market meltdown in the past few weeks highlighted vulnerabilities that could contaminate the price of other assets.

Jon Cunliffe, a Bank of England deputy governor and chair of the Bank for International Settlements’ Committee on Payments and Market Infrastructures, set out guidance on the use of stablecoins that authorities hope will be adopted into national legislation around the world.

Cunliffe set out the proposals in an op-ed column for Bloomberg Opinion, writing with Ashley Alder, chair of the board of the International Organization of Securities Commissions, who will take over as chair of the UK’s Financial Conduct Authority in January.

The two said that although the crash in the value of cryptoassets such as Terra and Tether wasn’t a risk to the broader financial system, future episodes could be more problematic.

The sell off is “a lesson for the future,” Cunliffe and Alder wrote. “It underlined the speed with which confidence can be eroded and the potential volatility of stablecoins, and cryptos more generally.”

They said the “strong growth” in the value of money circulating in crypto markets makes links between those assets and the banking system a risk regulators shouldn’t ignore. 

The op-ed said that the joint guidance will aim to reinforce the principles that:

• “Stablecoins intended to function as money and used in systemically important arrangements should ensure users will be able to convert their claims at par into other liquid forms of money”
• “Stablecoin arrangements should have clear and direct lines of responsibility and accountability, for instance, by making clear what the responsible legal entity is (and who the people responsible for operating that entity are).”

“It is important that the lessons are learnt and these standards are reflected in national legislation quickly, before stablecoins become systemic,” the op-ed said.

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — Australia & New Zealand Banking Group Ltd. is in talks with KKR & Co.-backed MYOB Group Ltd. about an acquisition of the Australian accounting software business.

ANZ and KKR “are yet to reach agreement in relation to the acquisition and there is no certainty it will proceed,” the bank said in a statement Wednesday. That followed an earlier Bloomberg News report that the parties were in advanced discussions for a deal that could value MYOB at more than A$4 billion ($2.7 billion).

An acquisition could give the smallest of Australia’s so-called big four lenders a deeper relationship with hundreds of thousands of small businesses in the country where MYOB has been a ubiquitous bookkeeping tool. Customer growth has become a fresh focus for Australia’s major banks and their shareholders.

“MYOB is one of Australia’s leading providers of business management, financial and accounting solutions for SMEs, Enterprise and Accounting Practice customers,” the Australian bank said in the statement. A representative for KKR declined to comment.

Shares of ANZ fell as much as 1.1% in Sydney trading as of 11:29 a.m. local time. KKR slipped 1.3% in New York on Tuesday.

ANZ has been building up on its balance sheet, partly because the bank is keen to capture new opportunities, its Chief Executive Officer Shayne Elliott said in an interview with Bloomberg Television in May. Last week, ANZ announced it would sell its A$715 million investment lending portfolio to Bendigo & Adelaide Bank Ltd., while Bloomberg also reported the bank has started exploring a sale of its stake in PT Bank Pan Indonesia.

Founded in 1991, MYOB provides accounting and management systems with clients in Australia, Hong Kong, New Zealand, Singapore, Malaysia and other Asian countries, its website shows. It serves more than 1 million customers and over 10,000 accounting professionals in Asia Pacific. In 2019, KKR took MYOB private in a deal that valued the Australian firm at about A$2 billion.

(Updates ANZ shares in fifth paragraph.)

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.