Company news in brief

07 January 2019 | Sakenuus
AB Inbev's Zim unit scraps hard currency payment

Zimbabwe's largest brewing company Delta Beverages, part-owned by Anheuser-Busch Inbev, said it has abandoned a plan to only accept hard currency payments to cope with a crippling shortage of US dollars, after the government intervened.

Delta Beverages announced on Wednesday that it would only take payments in US currency and would no longer accept electronic dollars known as "Zollars", or a quasi-currency known as "bond notes", amid a severe shortage of hard currency in Zimbabwe.

However, the country's commerce minister said on Thursday that the government opposed the plan and Delta, 40% owned by Anheuser-Busch Inbev, scrapped the plan following a meeting with senior politicians and reserve bank officials.

Delta said Friday shortages of its products, particularly soft drinks, would persist while the arrangement gets underway.

Companies such as Delta have been left struggling because they have to spend US dollars overseas, but their takings consist of Zollars or 'bond notes', which are worth far less. – Nampa/Reuters

Credit Suisse bankers arrested over Mozambique loans

Three former Credit Suisse Group AG bankers were arrested in London on Thursday on US charges that they took part in a fraud scheme involving US$2 billion in loans to state-owned companies in Mozambique, a spokesman for US prosecutors said.

Andrew Pearse, 49; Surjan Singh, 44; and Detelina Subeva, 37were charged in an indictment in Brooklyn, New York federalcourt with conspiring to violate US anti-bribery law and to commit money laundering and securities fraud, according to spokesman John Marzulli. They have been released on bail in London while the United States seeks extradition.

The arrests came five days after former Mozambique finance minister Manuel Chang was arrested in South Africa as part of the same criminal case.

A fifth man, Jean Boustani, was arrested on Wednesday at New York's John F. Kennedy Airport, Marzulli said. Boustani was a Lebanese citizen who worked for an Abu Dhabi-based contractor of the Mozambican companies, according to the indictment.

Lawyers for the defendants could not immediately be reached for comment after business hours in New York and London.

"The indictment alleges that the former employees worked to defeat the bank’s internal controls, acted out of a motive of personal profit, and sought to hide these activities from the bank," Credit Suisse said in a statement. It added that the bank will continue to cooperate with authorities. – Nampa/Reuters

Google shifted billions to tax haven Bermuda

Google moved 19.9 billion euro (US$22.7 billion) through a Dutch shell company to Bermuda in 2017, as part of an arrangement that allows it to reduce its foreign tax bill, according to documents filed at the Dutch Chamber of Commerce.

The amount channelled through Google Netherlands Holdings BV was around 4 billion euro more than in 2016, the documents, filed on Dec. 21, showed.

"We pay all of the taxes due and comply with the tax laws in every country we operate in around the world," Google said in a statement.

"Google, like other multinational companies, pays the vast majority of its corporate income tax in its home country, and we have paid a global effective tax rate of 26% over the last ten years."

For more than a decade the arrangement has allowed Google owner Alphabet to enjoy an effective tax rate in the single digits on its non-US profits, around a quarter the average tax rate in its overseas markets.

The subsidiary in the Netherlands is used to shift revenue from royalties earned outside the United States to Google Ireland Holdings, an affiliate based in Bermuda, where companies pay no income tax. The tax strategy, known as the "Double Irish, Dutch Sandwich", is legal and allows Google to avoid triggering US income taxes or European withholding taxes on the funds, which represent the bulk of its overseas profits. – Nampa/Reuters

Truckmaker Volvo to take US$778 mln emissions hit

Sweden's Volvo is setting aside 7 billion Swedish crowns (US$778 million) to cover costs related to its admission in October that its truck and bus engines could be exceeding limits for nitrogen oxide emissions.

The company, which makes trucks, construction equipment and buses, said on Thursday the estimated costs were based on factors including vehicle testing and statistical analysis, and were made in dialogue with relevant authorities.

Volvo said in October its truck and bus engines might be exceeding limits for toxic nitrogen oxides because an emissions control component it uses was degrading.

"The Volvo Group will continuously assess the size of the provision as the matter develops," it said in a statement.

Volvo said the provision would impact operating income in the fourth quarter of 2018, while the negative cash flow effect would start in 2019 and gradually ramp up in the coming years. – Nampa/Reuters

Nestle welcomes Indian court ruling in Maggi case

Food group Nestle said on Thursday a ruling by India's Supreme Court marked a partial victory in its row with the government over Maggi noodles.

Maggi, Nestle India's single-largest revenue earner, was banned in June 2015 for six months across the country following allegations it contained chemicals beyond prescribed limits.

The company had to recall and destroy 38 000 tonnes of Maggi noodles from millions of retail shelves. The ban was relaxed in November 2015.

In Thursday's ruling, the Supreme Court backed Nestle's stance that analysis of Maggi noodles already conducted by the Central Food Technological Research Institute (CFTRI) sufficed to help decide a lawsuit filed by the ministry of consumer affairs, the company said.

That analysis showed that samples met standards for lead and other parameters, Nestle added. – Nampa/Reuters

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