Company news in brief

Moody’s: Eskom urgently needs turnaround planSouth Africa's state power utility Eskom urgently needs a turnaround plan as its capital structure is unsustainable, credit ratings agency Moody's said on Tuesday in a report which sent the rand to a two-month low.A week ago Eskom reported a mammoth R20.7 billion annual loss, and its outgoing chief executive said the firm needs to change its outdated business model to escape a "death spiral"."The company's operational and financial performance has deteriorated, indicating the extent of the challenges facing Eskom in meeting its debt obligations absent government support," Moody's said in a note.Moody's said the cash injections from the state were credit positive for Eskom but would do no more than stabilise the company's debt burden, and a long-term solution would still be needed.Eskom is regularly cited by ratings agencies as one of the main threats to South Africa's creditworthiness and economic growth. – Nampa/ReutersSA regulator punishes Bank of BarodaA South African regulator has imposed a reduced penalty of R400 000 on the local unit of India's Bank of Baroda for non-compliance with certain provisions of the Financial Intelligence Centre Act (FIC).The Prudential Authority (PA) said the penalty follows an on-site inspection in 2014 that found deficiencies relating to compliance, as well as weaknesses in controls to counter potential money laundering and terrorist financing.In 2016, the PA conducted a follow-up inspection, which found that some deficiencies in controls remained.Following that, the Bank of Baroda was slapped with administrative sanctions, including a combined financial penalty of R11 million for non-compliance with the FIC Act and deficiencies in respect of money laundering controls, the PA said.Baroda's South African division was thrust into the spotlight three years ago when it started working with the Indian-born Guptas after corporate South Africa, including all four major banks, turned its back on the family's businesses due to reputational risks. – Nampa/ReutersGlencore to halt production at MutandaGlencore Plc will halt production at Mutanda mine, the world's largest cobalt mine, from the end of this year after a slump in prices for cobalt, Financial Times reported on Tuesday.The company will shut the mine in the Democratic Republic of Congo because it is "no longer economically viable", the FT said, citing a letter to employees of the mine.Glencore declined to comment on the report.Glencore said last week it faced a US$350 million hit after cobalt prices halved and has begun an overhaul of its under-performing Africa business. – Nampa/ReutersHSBC agrees to settlement of Belgian tax fraudHSBC's Swiss private banking arm has agreed to pay nearly 300 million euro (US$336 million) to settle a tax fraud case in Belgium, Belgian prosecutors said on Tuesday, the latest blow for the Alpine state's banking sector from the EU.The settlement comes after a French court in February ordered UBS, another Swiss lender, to pay 4.5 billion euro in penalties for illegally soliciting clients and laundering the proceeds of tax evasion. UBS, which is under investigation in Belgium for a similar case, denies the charges.Swiss banks have been exposed to such legal challenges since 2004, when Bern agreed to apply a European Union tax on the savings income of its lenders' EU clients.The Belgian prosecutors said in a statement that HSBC was "charged by a prosecutor in 2014 for serious and organised tax fraud, forgery and falsification of records, money-laundering and illegal use of financial intermediaries."They alleged that HSBC helped and encouraged the avoidance of the EU savings tax by creating off-shore companies in Panama and other tax havens in the Caribbean for wealthy Belgian clients "with no other purpose but to hide money". A spokesman for HSBC declined to comment. – Nampa/ReutersDelhi rejects AB InBev plea to lift banAuthorities in New Delhi have rejected a plea by Anheuser-Busch InBev to temporarily lift a 3-year ban while it hears the global brewer's appeal, a senior government source told Reuters.AB InBev, the world's largest brewer, has been barred from selling its products in the critical New Delhi market for allegedly evading local taxes, Reuters reported last week. The company has denied the allegations.A three-year investigation by authorities in India's capital found that SABMiller - acquired by AB InBev in 2016 for around US$100 billion - used duplicate barcodes on beer bottles supplied to retailers that year, allowing it to pay lower levies.AB InBev has appealed against the ban to the Commissioner of Excise in the Delhi city government, two government sources with direct knowledge said. The ban order was passed by a deputy commissioner of the division.AB InBev, which counts popular beer brands such as Budweiser, Hoegaarden and Stella Artois in its portfolio, said the city's allegations dated back to 2016 before its takeover of SABMiller and it looked forward to receiving a "fair hearing". – Nampa/Reuters

Company news in brief

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