Foreign firms' executives entangled in Chinese probes
Below are some other recent examples:
- A Beijing court this week sentenced a Japanese employee of Astellas Pharma (4503.T), opens new tab to 3-1/2 years in prison. The man had been detained since March 2023 on suspicion of spying and had been indicted about a year ago.
- In March, Chinese authorities released employees of U.S. corporate due diligence firm Mintz Group detained in Beijing two years ago. Five of the firm's local staff were detained in a raid that turned out to be the beginning of a sweeping crackdown on consultancy and due diligence firms, including Bain & Company's office in Shanghai. A Singaporean executive at Mintz was also prevented from leaving China, sources told Reuters. China fined Mintz about $1.5 million in July 2024 for doing "unapproved statistical work".
- Anglo-Swedish pharmaceutical firm AstraZeneca (AZN.L), opens new tab saw its China president Leon Wang detained and placed under investigation in 2024, with little information about what the probe was about.
Wang, who grew up in China, was a high-profile executive often quoted in the Chinese business press. AstraZeneca's CEO said in February that the company was not permitted to speak with Wang, who has been placed under extended leave since December. Chinese media had reported that AstraZeneca was under probe since 2021, suspected of fabricating genetic testing results related to the firm's lung cancer drug Tagrisso and of insurance fraud.
- A senior Nomura Holdings (8604.T), opens new tab banker overseeing the Japanese firm's investment banking operations in China was ordered not to leave the mainland, sources told Reuters in late 2023. The exit ban was lifted the following year allowing Charles Wang Zhonghe, China investment banking chairman at Nomura, to return to Hong Kong, where he was previously based, according to the Financial Times.
- Michael Chan, a senior executive at U.S. risk advisory firm Kroll, was barred from leaving the Chinese mainland, the Wall Street Journal reported in September 2023. The Hong Kong passport holder was assisting in an investigation dating back a few years, the newspaper reported, citing people familiar with the matter. Neither Kroll nor Chan was the target of the investigation, according to the newspaper.
- A Singapore-based UBS (UBSG.S), opens new tab wealth manager was prevented from leaving China in 2018. The executive was asked to remain in the country to meet with local authorities, Reuters reported at that time. The uncertainty surrounding the exit ban on the wealth manager had led the Swiss bank and several of its rivals to require their private banking staff to carefully consider trips to China.
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Reuters
2 hours ago
- Reuters
Exclusive: Tesla signs $4.3 billion LGES battery deal, source says, reducing China reliance
SEOUL, July 30 (Reuters) - South Korea's LG Energy Solution (LGES) ( opens new tab has signed a $4.3 billion deal to supply Tesla (TSLA.O), opens new tab with energy storage system batteries, said a person familiar with the matter, as the U.S. company looks to reduce reliance on Chinese imports due to tariffs. The lithium iron phosphate (LFP) batteries will be supplied from LGES's U.S. factory in Michigan, the person said on condition of anonymity because the details were not public. LGES announced earlier on Wednesday that it had signed a $4.3 billion contract to supply LFP batteries over three years globally, without identifying the customer or saying if they would be used in vehicles or energy storage systems. The South Korean company said last week it would try to offset sluggish electric vehicle demand by increasing sales of storage batteries thanks to a global surge in demand for power driven by data centres to train artificial intelligence. "In accordance with our agreement, we are unable to disclose the customer's identity due to confidentiality obligations," LGES told Reuters. Tesla did not immediately respond to a request for comment. Tesla Chief Financial Officer Vaibhav Taneja said in April that U.S. tariffs had an "outsized" impact on its energy business, since it sources LFP batteries from China. "We will also be working on securing additional supply chain from non-China-based suppliers, but it will take time," he said. Tesla this week also announced a $16.5 billion deal to buy chips from Samsung Electronics' ( opens new tab factory in Texas as South Korean companies expand their U.S. presence to meet local demand. Three South Korean cabinet-level officials met U.S. Commerce Secretary Howard Lutnick in Washington in a push to close a trade deal ahead of an August 1 deadline for 25% tariffs on U.S. imports from South Korea to kick in, Seoul said on Wednesday. LGES is one of the few U.S. producers of LFP batteries, a battery chemistry long dominated by Chinese rivals that have little presence in the U.S. market. It started production of LFP batteries at its Michigan factory in May. The company said it was considering converting some electric vehicle battery production lines in the United States to cater to energy storage systems in response to slowing EV demand. LGES said the contract would last from August 2027 to July 2030 and included an option to extend the deal period by up to seven years and to increase supply volumes depending on discussions with its customer. "Other players, including South Korean firms like Samsung SDI and SK On, have yet to enter the U.S. LFP market, allowing LGES to enjoy a first-mover advantage," said Cho Hyun-ryul, a senior analyst at Samsung Securities. "While rivals have announced plans, LGES remains the only one actively producing at scale." Tesla's energy storage and generation business accounts for just over 10% of its revenue but it has been a bright spot for the company as it struggles with slowing car sales and upcoming cuts to U.S. government support for EVs. "Energy is growing really well despite headwinds from tariffs and various supply chain challenges," Tesla CEO Elon Musk said on an earnings call last week. "I think not that many people appreciate just how gigantic the scale of battery demand is." Tesla has said its first LFP cell manufacturing facility will be online by the end of the year, but the in-house factory in Nevada will likely account for a small portion of its demand.
Reuters
6 hours ago
- Reuters
UPS profit lower than expected as US trade policy shifts
July 29 (Reuters) - United Parcel Service (UPS.N), opens new tab posted quarterly profit marginally below estimates on Tuesday and again declined to issue annual revenue and margin forecasts, deepening concerns that changing U.S. trade policy is weighing on the delivery giant. Shares in the world's largest parcel delivery firm fell more than 9% to $92.16 in early trading, after executives also said UPS will accelerate its plan to deliver fewer packages for (AMZN.O), opens new tab, its largest customer. UPS and rival FedEx (FDX.N), opens new tab are seen as bellwethers for the health of the global economy as they serve clients across industries and geographies. "Changes in trade policies are impacting global trade and demand. It will likely all settle down at some point, but for now, it is a very volatile environment," CEO Carol Tome said on the earnings call. Tariffs on China and the elimination of duty-free treatment on purchases from China-linked e-retailers like Temu (PDD.O), opens new tab and Shein contributed to the 34.8% drop in average daily volume during May and June. The China to U.S. trade lane is UPS' most profitable. Still-uncertain U.S. trade policy has frozen corporate decision making and driven consumer sentiment to new lows, hurting the small package delivery business that UPS dominates. UPS is now accepting retailer plans for its peak winter holiday shipping season when its daily volumes can easily double. In those plans, retailers signal expectations for consumer spending that underpins the nation's economic activity. Customers often submit preliminary peak season shipping plans by the end of August and final plans at the end of September, Tome said. Tome expects retailers to delay preliminary plans until September, "which is an indication that they too are having difficulty in forecasting demand for the holiday selling season." UPS reported an adjusted consolidated operating margin of 8.8% for the latest quarter, while that margin was 7% for its largest domestic segment - below the 10%-plus analysts and investors had come to expect. The company did not provide closely watched revenue and margin forecasts, citing ongoing macroeconomic uncertainty. In January, UPS projected 2025 revenue of $89 billion. In a hit to demand, the White House in May began collecting tariffs on shipments under $800 from China that were previously duty-free, though the "de minimis" levies were later reduced to 54% from 120% as part of a trade truce. Analysts at J.P. Morgan have previously noted that negative impact from the removal of the de minimis exemption seems to impact UPS more than FedEx. Atlanta-based UPS reported consolidated revenues of $21.2 billion, above Wall Street estimates of $20.86 billion, helped by strength in its international segment, as importers likely frontloaded finished goods ahead of expected tariff changes. However, revenue in its U.S. segment fell to $14.08 billion from $14.20 billion, pressured by a sluggish recovery in retail sales and industrial activity. Adjusted net income was $1.55 per share for the quarter ended June 30, below estimates of $1.56 per share, according to data compiled by LSEG. UPS has been shuttering hundreds of facilities and slashing thousands of jobs as part of a sweeping overhaul, its largest ever, aimed at slashing $3.5 billion in costs in 2025. In April, the company announced plans to cut 20,000 jobs tied to plans to shed half its shipping volume from In July UPS offered voluntary buyouts to its unionized full-time drivers for the first time. As many as 85% of UPS drivers are at the top end of the UPS pay scale, with 25 to 40 years of service, executives said.
Daily Mail
10 hours ago
- Daily Mail
We are very American now, says Astra boss: Soriot fuels fears of switch to New York
Astrazeneca's boss said it is a 'very American company' as he refused to rule out moving its main stock market listing to the US. Speaking from the British pharma giant's offices in New York, Pascal Soriot said it was 'global', but it was 'very much rooted and present in the US'. He added that continuing to view it as a British company was 'old-fashioned'. The comments fuelled speculation that the FTSE 100 group could switch its main stock market listing from London to New York, and even move its headquarters to the US. That would be a devastating blow to Britain and the London Stock Exchange as AstraZeneca is the largest listed firm on the Footsie, valued at £167billion. 'I love America and its focus on innovation,' Soriot said, highlighting that the firm expected to make over half of its sales in the US by 2030 and has 'thousands of employees' in the country. 'We are a very American company. We are global, but we are very much rooted and present in the US,' he added. Soriot insisted he would not comment on 'rumours' it was considering shifting its listing across the Atlantic. AstraZeneca posted profits of £4.9billion for the first half of the year, a 26 per cent increase on 2024, while sales rose 9 per cent to £21billion. The figures were boosted by record revenues in the three months to June, which grew 12 per cent to £11billion. Soriot said the surge in profits was down to the firm's 'broad and diverse pipeline' with sales of cancer medicines increasing by 15 per cent to nearly £9billion in the first half of the year. Meanwhile, the company's crucial US market continued to expand, with sales in the country rising 12 per cent to £9billion. Last week, the company unveiled plans to invest £37billion in the US, which included the construction of a drug factory in Virginia. But the move fuelled fears that AstraZeneca is preparing to shift its stock market listing to Wall Street, a move Soriot is said to privately support. Pharma companies are seeking to avoid any hit from Donald Trump's tariff measures, with the president threatening to impose levies of up to 200 per cent on the industry. Sheena Berry, healthcare analyst at wealth manager Quilter Cheviot, said: 'This is a delicate situation for AstraZeneca. It will want to stay on the right side of Trump and his administration as much as possible.' Soriot said the firm has met 'many members' of the Trump administration, including Commerce Secretary Howard Lutnick, to discuss its contribution to the US economy. While he insisted the firm remained 'committed to the UK', Soriot said European countries were falling behind their rivals and called for governments to boost investment into developing new drugs and bringing them to market. He said the UK should increase investments in pharma research to 0.6 per cent of gross domestic product, equivalent to £15.2billion, up from 0.3 per cent now, noting that the US spends 0.8 per cent of its GDP on drug development, equivalent to £166billion. 'We love being in the UK [but] we need to see a reason to invest,' Soriot said. AstraZeneca's drive towards the US is also an embarrassing snub to the Government, with pharmaceuticals considered a key industry in Keir Starmer's drive to revive economic growth. Shares rose 3.4 per cent yesterday.
