A historic break-up brews at HSBC

One scoop to start: Two of Roman Abramovich’s longstanding associates — Chelsea’s chair Bruce Buck and director Marina Granovskaia — are set to keep their jobs running the football club if the leading bidder, a consortium led by US financier Todd Boehly, prevails.

Chelsea chair Bruce Buck and director Marina Granovskaia have longstanding ties to Roman Abramovich © Chris Brunskill/Fantasista/Getty Images

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HSBC/Ping An: nothing personal?

Noel Quinn has been all-in on Asia from the very beginning.

After his predecessor John Flint was sacked several years ago when the board decided his own turnround plan lacked ambition, the HSBC boss pulled off one of the largest overhauls in the 157-year-old bank’s history to expand its Asia business.

Then, when tensions over Beijing’s national security law sparked a quiet exodus of bankers from Hong Kong, Quinn dug his feet in.

But despite the chief’s ambitions to pivot key operations to Hong Kong and mainland China, HSBC’s biggest shareholder Ping An has other plans.

The Chinese insurer has countered Quinn’s sweeping restructuring with calls for a radical shake-up that would lead the bank to split its Asian and western operations.

A decade ago HSBC was Ping An’s biggest shareholder. “Now the tables have turned,” said an adviser to the bank in Hong Kong.

HSBC has been walking a geopolitical tightrope to maintain the support of Beijing after deploying more than $100bn of fresh capital into the region. The bank stayed put even as China’s extreme pandemic restrictions sent rivals — and a portion of HSBC’s wealth management client base — in search of greener pastures.

Ping An isn’t the first HSBC shareholder to call for a split, but it’s by far the most significant, the FT’s Tabby Kinder and Stephen Morris write.

Since HSBC helped revive the insurer in 2012, their fortunes have reversed course. Ping An is now China’s most valuable publicly listed insurance company.

The break-up plan appears to have blindsided Quinn and HSBC’s chair Mark Tucker.

Despite the growing competition between the two companies, Tucker had drawn on his 20-year personal relationship with Ping An’s founder and chair Peter Ma to foster discussions between the two groups, a person familiar with the matter told the FT.

“It is slightly ironic that the person Tucker brought in as the key shareholder has turned on him,” the person said.

Montage of HSBC chair Mark Tucker and Ping An logo
HSBC chair Mark Tucker © FT montage/AFP/Getty

Executives tell the FT it’s more political than personal. “For a long time, the Chinese have claimed that HSBC has shifted resources overseas and had an unfair advantage as they control all of the money supply in Hong Kong,” said one banking boss. “This [break up] puts China in the driving seat.”

Others reject that Ping An, which is not state-owned, is privy to Beijing’s agenda.

In addition to HSBC’s sliding shares, the Bank of England’s move to halt dividends early in the pandemic caused the Chinese insurer to miss out on crucial payments.

The curious debt-paying methods that landed Gupta in a private equity lawsuit

It’s been more than a year since the collapse of his main lender, Greensill Capital, but industrialist Sanjeev Gupta is still looking to refinance the core parts of his sprawling metals empire.

While some progress has been made, French prosecutors’ and the UK Serious Fraud Office’s ongoing investigations into alleged money laundering at Gupta’s GFG Alliance have hindered his efforts.

Gupta is also fighting a legal battle in London to reclaim control of Europe’s largest aluminium smelter at Dunkirk in northern France. US private equity firm American Industrial Partners, which was previously a creditor to the plant, took it over last year.

Montage of Sanjeev Gupta and company logos
Documents appear to confirm that money flowed from Sanjeev Gupta’s eastern European steel business to a UK company that then sought to repay AIP

The lawsuit, however, is prompting further scrutiny of the workings of Gupta’s empire and the role of his eastern European steelworks.

GFG transferred money from two plants in an attempt to settle a debt with AIP in relation to the Dunkirk smelter, DD’s Rob Smith and the FT’s Sylvia Pfeifer revealed.

GFG last year said the buyout group’s refusal to accept a $180mn transfer to repay a debt was made in “bad faith” in an effort to “appropriate” the smelter.

AIP has rejected the allegation, arguing that accepting the payment might have constituted a “benefit from criminal conduct”, after it claimed the French government told it “there were grounds to believe” the funds had been “misappropriated” from a steel mill in eastern Europe.

Documents seen by the FT appear to confirm that money flowed from Gupta’s eastern European steel business to a UK company that then sought to repay AIP, showing just how freely Gupta shifted funds between the unrelated entities that make up his metals empire.

Crisis managing the House of Mouse

Kristina Schake is well versed in navigating contentious social issues.

The public relations veteran fought against childhood obesity as head of communications for the former first lady Michelle Obama and faced off against the Trump campaign’s PR machine as Hillary Clinton’s publicist during her failed 2016 presidential run.

But her biggest challenge yet may await in The Happiest Place on Earth.

The California native has just landed one of the hottest seats in corporate PR at Disney. It’s also one of the most daunting.

Her predecessor Geoff Morrell, who joined in January from BP, lasted just three months at the entertainment giant before leaving in a cloud of controversy after overseeing Disney’s messy handling of Florida’s so-called “Don’t Say Gay” law, which prompted sharp criticism from employees and provoked a fight with Florida’s Republican governor, Ron DeSantis.

Walt Disney’s Mickey Mouse at an event
Walt Disney’s Mickey Mouse, pictured. Geoff Morrell’s brief tenure at the company was marked by its chaotic response to Florida’s legislation © AFP via Getty Images

Schake has her work cut out. Employees are still angry about Disney’s handling of the polarising bill and its aftermath. Criticism has also been directed at the chief executive Bob Chapek for waiting too long to issue a public statement condemning the bill, which was enacted into law last month.

Moreover, DeSantis signed a bill last month to revoke the entertainment group’s decades-old ability to govern the 25,000 acres around the Walt Disney World theme park, a move widely seen as retaliation over the company’s criticism of his LGBTQ+ policies. So far, Disney hasn’t said publicly how it plans to fight back.

Disney’s LGBTQ+ employees could view Schake’s arrival as a welcome change given her past advocacy work. Chapek, meanwhile, will probably lean on Schake’s decades of experience navigating power circles in Hollywood and Washington to leverage power in both.

Getting employees and upper management to embrace each other is another thing.

“Disney likely has more LGBTQ employees than several corporations combined” who would continue to hold his feet to the fire, Benjamin Siemon, a TV writer who has been a fierce critic of the company’s response tweeted this week.

Job moves

  • Biogen chief executive Michel Vounatsos will step down following the disastrous launch of the company’s Alzheimer’s drug Aduhelm.

  • Clayton, Dubilier & Rice has hired Nadav Tomer as an operating adviser to CD&R funds, focused on healthcare investing. He was global president of Johnson & Johnson’s DePuy Synthes Spine franchise.

  • Willkie Farr & Gallagher has hired Caleb Vesey as a private equity partner in its Los Angeles office. He joins from Kirkland & Ellis.

  • Clifford Chance has hired William Sturman and Kelly Labritz as partners in its funds and investment management practice, based in New York. They join from Covington & Burling.

  • The US Securities and Exchange Commission has added 20 new positions to its Crypto Assets and Cyber Unit, nearly doubling the size of the division.

Smart reads 

Crypto Casino The message at the Crypto Bahamas summit was clear: those who fail to embrace digital currencies will be left behind. The FT’s Joshua Oliver ponders whether the billionaires, celebrities and politicians in attendance will stick around when returns begin to dry up.

Diamonds in the rough As Spacs become increasingly taboo on Wall Street and many trade at a discount, the lucrative hunt for rare blank-cheque companies boasting real cash flow is under way, Bloomberg reports.

And here’s a smart video: The railroad industry has long been a dusty corner of dealmaking, until two major operators’ battle for their smaller rival spiralled into the fiercest takeover battle of 2021. DD’s Arash Massoudi breaks down the fight here.

News round-up 

Tiger Global slumps more than 40% in first four months of 2022 (FT)

Elliott/ Western Digital: private equity megafunds leave tech laggards vulnerable (Lex)

Ditching Rosneft makes BP a smaller but slicker play for income investors (Lex)

Morrisons takeover set for approval from regulator (FT)

BNP Paribas benefits from trading surge as profits jump (FT)

CIA chief met Saudi Crown Prince last month in push to mend ties (Wall Street Journal)

China’s Xiaomi shares dip after Indian authorities seize almost $730mn (FT)

ProSieben chief makes light of German media consolidation talk’ (FT)

Mercedes and BMW offload car-sharing venture to Stellantis (FT)

Rocky ride ahead for Norway’s $1.2tn wealth fund (Reuters)

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