theSun | WEDNESDAY MAY 6 2009 15

business

Asian lender under scrutiny

after capital boost
NUSA DUA (Indonesia): Share-
holders joined independent ac-
tivists yesterday in demanding
greater openness and transpar-
ency from the Asian Develop-
ment Bank as it embarks on a
huge expansion of its lending
activities.
Bank president Haruhiko
Kuroda hailed an agreement last
week to triple the 42-year-old
lender’s capital base to US$165
billion (RM594 billion) as a
“resounding vote of confidence
from our shareholders.”
But almost as resounding
were the warnings from share-
holders and activists alike at the
bank’s annual general meeting
this week that the extra funding
comes with greater scrutiny of
the bank’s activities.
“The general capital increase
brings with it a higher level of
responsibility for the efficient
and effective use of these ad-
ditional funds,” Austria’s rep-
resentative, Marcus Heinz, told
the bank’s board of governors.
“The ADB can achieve
Fiat move on Opel to create auto giant skids
BERLIN: A drive by Italy’s Fiat
to create a global car giant from
the Opel end of General Mo-
tors with Chrysler hit the skids
yesterday as fierce resistance
emerged on both sides of the
Atlantic.
Unions across Europe
expressed fears that Fiat head
Sergio Marchionne would close
plants and slash thousands of
jobs if his “marriage made in
heaven” to form the world’s
second-biggest automaker after
Toyota becomes reality.
Marchionne told the Ger-
man daily Bild that he would
its goal of poverty reduction
through inclusive and sus-
tainable growth only if funds
are managed effectively and
responsibly.”
It was a recurring theme
as the 67 governors met at the
gated beachside hotel complex
of Nusa Dua in Bali to discuss
the ADB’s plans to tackle the
global financial crisis.
A handful of demonstrators
tried to reach the conference
but were blocked many kilome-
tres away by police, and heavily
armed security forces guarded
the gates of the exclusive resort
community.
The bank has warned that 60
million people in poorer Asian
countries could remain trapped
in extreme poverty this year as
a result of the economic crisis,
rising to 160 million next year
without a swift recovery.
But Chinese Finance Minis-
ter Xie Xuren told the meeting
the bank had to clean its own
house before it could succeed
in its mission to “fight poverty”
not close any factories in
Germany, where GM Europe
employs about half of its 56,000
European workers, but a senior
union representative said such
promises were “10 a penny”,
meaning more easily given
than upheld.
In Britain, the head the
country’s main carworkers’
union Unite said he feared that
Vauxhall – part of GM Europe,
employing over 5,000 workers
in Britain – could be “given
away” if Marchionne got his
way.
“Quite frankly this move
across the region.
“To help the developing
members, the ADB should first
promote its own development
through internal reform,” he
said. The funding injection
poses a “higher requirement
on the ADB to make full use
of the new capital, strengthen
management and enhance as-
sistance effectiveness.”
Many governors were pre-
occupied with questions about
the bank’s governance record,
particularly its accountability,
employment policies and moni-
toring to ensure ADB-backed
projects actually work.
“Ensuring that the ADB
exercises its responsibilities in
the best interests of those it is
mandated to help is essential,”
Australian delegation chief
Nicholas Sherry told the
meeting.
The bank must “build on
the initiatives it has already
taken” and “ensure that all staff
and management are subject
to selection processes that are
sends shivers down my spine
... These proposals are not so
much a sale as a giveaway,”
Unite joint general-secretary
Tony Woodley said.
Unions were unhappy too
in Italy, where Fiat is by far the
country’s biggest private sector
employer, paying the wages of
more than 82,000 people includ-
ing 30,000 in its auto division at
five assembly plants.
Any Opel deal “will inevita-
bly lead to restructuring. We are
therefore asking for guarantees
that the Italian plants are not
closed,” Vittorio De Martino,
open, transparent and competi-
tive, and that place merit above
geographic representation,” he
added.
Activists from the NGO Fo-
rum on the ADB, grouping 250
non-governmental organisations
opposed to the way the bank
does business, have slammed
the capital increase as “danger-
ous” and unjustified.
“The bank is proposing a
blinkered, business-as-usual
programme that will not pre-
vent developing countries from
sliding back into poverty but in-
stead is likely to cause environ-
mental destruction and social
dislocation,” forum spokesman
Red Constantino said.
Activists criticised what they
said were the bank’s plans to
work with private equity funds
to promote private sector activ-
ity without proper oversights.
They blasted its “cynical
attempt ... to use the current
crisis to re-promote discred-
ited large-scale infrastructure-
biased development.” – AFP
a delegate of the Fiom-CGIL
union, told AFP.
Fresh from securing a 20%
stake in the bankrupt Chrysler
last week, Marchionne also has
his eye on snapping up GM’s
European business to create
the world’s second biggest
automaker behind Toyota.
GM is expected by analysts
to follow fellow Detroit “Big
Three” behemoth Chrysler
into bankruptcy soon and has
been trying to offload some of
its European operations, based
on Opel and Vauxhall, and their
56,000 employees. – AFP
‘10 big US
banks may
need more
funds’
WASHINGTON: Ten of the country’s 19
biggest banks subject to US government
“stress tests” to measure their financial
stability may need to raise more capital,
Hull the Wall Street Journal said yesterday.
The exact number of banks required to
players raise more funds has not yet been decided,
clash the financial daily said, but those affected
after could include banking giants Wells Fargo,
Bank of America and Citigroup.
Carew The number of banks thought to need
strike more funds had been 14 out of 19 at one
point, the Journal said, citing sources
pg 29 familiar with the matter.
US banking regulators and the Federal
Reserve are set to release results tomor-
row from stress tests of the 19 banks and
estimates for further public aid to help
boost the ailing economy.
The tests will cap a period of suspense
that began when President Barack
Obama’s administration unveiled in Feb-
ruary its overhaul of the bank bailout in
a bid to restore stability to the financial
system of the world’s largest economy.
Fears surrounding Wells Fargo, Bank
of America and Citigroup may have sub-
sided, however, in light of the authorities’
stress test efforts, the Journal said, noting
that the three bank’s stock prices have
tripled since early March.
Wells Fargo stock surged 24% on
Monday, Bank of America jumped 19%
and Citigroup rose 7.7%.
Bank-specific details are set to be un-
veiled tomorrow after Wall Street closes
for the night.
With grim results expected from the
stress tests, the Obama administration “is
giving itself the opportunity to ‘nationalise’
the banks that have the worst balance
sheets and greatest needs for capital,”
said Douglas McIntyre of the financial
website 24/7 Wall Street in advance of
this week’s trading. – AFP

Maxis to invest Initial investment

briefs
StanChart reports
record profit
LONDON: Standard Chartered,
a British bank focused on
emerging markets, reported
record income and profit dur-
ing the first quarter in a trading
update published yesterday
that did not provide exact
figures.
“The group has had a
strong first quarter, delivering
record levels of income and
profit,” Standard Chartered
said in a statement to the
London Stock Exchange.
“Despite the challenging
macroeconomic environment
and the continuing difficulties in
the financial markets, the group
remains in very good shape and
we are selectively growing the
business,” it added.
Following the update,
Standard Chartered’s share
price rallied to stand almost
9% higher at 1,155 pence
on London’s FTSE 100 index,
which was up about 2.5% in
late morning trade. – AFP
RM1.6bil on
network upgrade
KUALA LUMUR: Maxis Com-
munication Bhd is investing
nearly RM1.6 billion this
year on its network upgrade
and expansion, said chief
marketing officer Matthew
Willsher.
“Over the coming
months, we will continue
a comprehensive upgrade
and expansion programme
that will further enhance
coverage and performance,
including the high speed 3G
data network,” he said in a
statement yesterday.
He said Maxis custom-
ers of BlackBerry Storm
will benefit from its reliable
high-speed networks for
rich internet browsing and
multimedia applications.
Willsher said Maxis
delivered the first units of
the BlackBerry Storm smart-
phone to about 300 postpaid
customers yesterday.
“They were among the
many subscribers who pre-
booked their BlackBerry
Storm online from April 6 to
24,” he said. – Bernama
in Liberia is over
two years: Sime
KUALA LUMPUR: Sime Darby
Plantation Sdn Bhd’s initial
investment of RM70 million
in Liberia is over a two-year
period, Sime Darby Bhd presi-
dent and group chief execu-
tive Datuk Seri Ahmad Zubir
Murshid said yesterday.
Sime Darby Plantation’s
unit Sime Darby Plantation
Liberia Ltd has sealed a 63-
year concession deal for about
220,000ha of land and will start
work initially on 10,000ha.
On news reports the total in-
vestment in the concession will
eventually balloon to US$800
million, Ahmad Zubir said:
“Depending on which angle
you are looking at, 63 years that
will probably be the investment
that will be involved.”
At a media briefing here,
he said the company has
calculated the risk factor in
the country.
The company, he added,
has also been approached
by other African countries
like Sudan and Congo for
similar plantation activities.
– Bernama