Rate rigging: ANZ, NAB confirm US class action over alleged BBSW manipulation

| Thu Aug 18, 2016 7:12pm EDT Short-sellers smell blood as Japan Inc wounded by accounting scandals The logos of Japan's robot venture company Cyberdyne are seen on the Lower Limb Model HAL (Hybrid Assistive Limb) for welfare use at the Cyberdyne studio in Tsukuba, north of Tokyo July 22, 2014. REUTERS/Yuya Shino By Umesh Desai and Michelle Price | HONG KONG Short-sellers who made their names and fortunes wiping billions off Chinese and Southeast Asian companies are setting their sights on Japan after a series of accounting scandals amplified concerns about weak corporate governance there. Until recently, corporate managers in Japan have enjoyed relatively limited scrutiny of their governance standards and accounting rigor, and a cosy tradition of cross-holdings between companies has relegated the status of minority shareholders and the importance of adequate disclosure. But as the government of Prime Minister Shinzo Abe has tried to clean up corporate culture and activist investors have begun to kick the tires of Japan Inc, short sellers are finding fertile ground for profit. On Tuesday, prominent U.S.-based short-seller Citron Research launched an attack on Japanese robotics company Cyberdyne (7779.T), claiming it was "the most ridiculously priced stock in the world" and had misled retail investors over its technology assets. Cyberdyne, which closed down 7 percent on Tuesday, dismissed the report as an attempt to push its stock price down. It is not known whether Citron holds a short position in Cyberdyne. It is the second attack on a Japanese company in less than a month and the sixth since December 2015, when Well Investments Research challenged trading firm Marubeni (8002.T), the first such campaign in Japan tracked by Activist Shorts Research. According to Activist Shorts, the six Japan campaigns, half of them directed at Cyberdyne, have generated average losses of 23 percent, which means profit for short-sellers, who sell borrowed stocks and buy them back more cheaply. It said that is among the top half of the 46 activist short-sellers to have launched campaigns in the past year and is more than double the year-to-date return of Asia's main benchmark .MIAPJ0000PUS. The phenomenon of short-sell attacks took hold between 2009 and 2011, with investment and research firms such as Muddy Waters Research and Alfred Little attracting international attention for their campaigns against overseas-listed Chinese companies including Sino-Forest and Silvercorp (SVM.TO). HIGHER STANDARDS Short-sellers and analysts said they expected more attacks on Japanese companies as regulators in China and Hong Kong fight back against short-sellers, and Abe's campaign flushes out deficiencies. “As Japanese markets embrace the values of Abenomics, investors of all types, shareholders, short-sellers will insist that listed companies hold themselves to higher standards of transparency, accountability and corporate governance," said Soren Aandahl, director of research at Glaucus Research. "That in turn makes short investment opinions more impactful," he added. Glaucus itself sent shares in trading firm Itochu Corp (8001.T) tumbling 10 percent last month by claiming it had inflated profits through creative accounting, the biggest attack on a Japanese company by market value so far. Itochu denied the claims. Aandahl declined to say if Glaucus was preparing more Japan campaigns but confirmed it was conducting research on other Japanese companies. Revelations last year that Toshiba (6502.T), the laptops-to-nuclear conglomerate, had overstated profits by $1.3 billion over several years sparked a public debate over Japan's inward-looking corporate culture, in which boards have typically held investors at arms' length. The Toshiba investigation identified a corporate culture in which the management could not be challenged and didn't always heed its external auditors. The scandal led the Japan Financial Services Agency to step up scrutiny of auditors, while the Japan Institute of Certified Public Accountants has conducted several quality-control inspections of its members. In June 2015 the government also implemented a new corporate governance code in a bid to stimulate foreign investment. "Right now, there's an interesting mix of factors at play in Japan. The Toshiba scandal could be seen as a blow to investor confidence, but that and Abe's moves also created the opportunity for short-sellers to spark a conversation on overvalued companies," said Claire Stovall, research analyst at Activist Shorts. Also In Business News Wall St. inches up with energy gain, Wal-Mart Exclusive: Viacom board expected to meet tonight to discuss settlement with Redstone Fed's Williams says September rate hike makes sense Labor market firming; factories still struggling "In a country where Well Investments has described an acceptance of poor disclosure, partly built on corporate relationships and a laissez-faire trust in management, investors and regulators will likely be sensitive to negative research." OPPORTUNITIES Analysts and short-sellers said they saw ripe shorting opportunities among Japan's commodities trading companies, which could be prone to aggressive accounting tactics following the global commodities slowdown. GMT Research, which analyses company accounts for hedge funds, said earlier this year that the book values of Japanese trading companies were overstated by as much as two thirds in some cases. "Companies reclassify their investments and affiliates all the time. In this case, it is probably the pervasiveness and the magnitude that warrant closer scrutiny on the practice," said trader and short-selling specialist Laurent Bernut. Short-sellers burnished their credentials from 2010 onwards by exploiting concerns over poor corporate governance and accounting practices at more than 100 Chinese companies, in some cases exposing outright frauds at the likes of Sino-Forest and China Metals Recycling. But a crackdown by authorities in Hong Kong, the main market for offshore Chinese stocks, has made such attacks riskier, while investors are increasingly pricing in doubts over Chinese companies, making such attacks less lucrative. Citron Research's head Andrew Left is currently awaiting a Hong Kong tribunal ruling over allegations by the Securities and Futures Commission he manipulated the market when he targeted Chinese property developer Evergrande (3333.HK) in 2012. Left, whose influence has grown following his campaign against U.S.-listed Valeant, did not respond to a request for comment but has said he does not plan to target more Hong Kong companies, while market conditions in Japan were attractive. (Additional reporting by Emi Emoto in Tokyo; Editing by Will Waterman) ====================================== Facebook Twitter More Rate rigging: ANZ, NAB confirm US class action over alleged BBSW manipulation By business reporters Thuy Ong Posted about an hour ago The four big banks' logos PHOTO: All four major banks are expected to eventually be caught up in ASIC's action. (AAP) RELATED STORY: Three big banks are accused of rigging rates. Here's how it affects you MAP: Australia ANZ and NAB have both confirmed they are among 17 banks and two international broking houses named in a class action relating to the alleged rigging of the bank bill swap rate (BBSW) and bank trading in the United States. The complaint was launched by two US-based investment funds and a derivatives trader, and the case has commenced in the United States District Court for the Southern District of New York. "The action names a number of defendants, including NAB, and references the proceedings brought by the Australian Securities and Investments Commission (ASIC) in relation to BBSW," NAB said in a statement. "As we have stated previously, NAB does not agree with the claims by ASIC in relation to BBSW." ANZ said it would be "vigorously defending the US class action complaint". "ANZ notes there has been no allegation by ASIC of collusion between it and other institutions," the bank said in a statement. BBSW is the rate set in a five minute window everyday that determines what banks charge to lend to each other. For banks, small differences in the rate that is set can equal many millions of dollars in profits or losses. For the average consumer, the BBSW is a benchmark rate on many corporate loans, and can affect business loans, mortgages and credit cards. ASIC in June said it would take three of Australia's major banks - NAB, ANZ and Westpac - to the Federal Court over the alleged rigging, with the corporate regulator describing some of the banks as being involved in "unconscionable conduct and market manipulation". Macquarie, HSBC among those in class action Among the Australian and international banks being sued are ANZ, NAB, Westpac, Macquarie, Deutsche Bank, HSBC, JP Morgan, and Citi according to court filings. Westpac has flagged it has not been formally served with any proceedings, but said it was aware of the class action filed in New York. The bank said it denies the "allegations in this claim and, if served with the claim, will defend those allegations vigorously". One source with knowledge of the matter told the ABC that the lawsuit was speculative in nature and was based on ASIC's civil case against ANZ, NAB and Westpac for alleged manipulation of the BBSW. The Commonwealth Bank is also expected to be included in ASIC's case. ASIC has already accepted enforceable undertakings from UBS, BNP Paribas and the Royal Bank of Scotland in relation to the BBSW fixing scandal. BBSW is the rate set in a five minute window everyday that determines what banks charge to lend to each other. For banks, small differences in the rate that is set can equal many millions of dollars in profits or losses. For the average consumer, the BBSW is a benchmark rate on many corporate loans, and can affect business loans, mortgages and credit cards. ASIC in June said it would take three of Australia's major banks - NAB, ANZ and Westpac - to the Federal Court over the alleged rigging, with the corporate regulator describing some of the banks as being involved in "unconscionable conduct and market manipulation". From other news sites: From other news sites: Australian Financial Review: Big four banks sued by US hedge funds over BBSW

Hong Kong billionaire Joseph Lau sets 2 records in 24 hours: diamonds, property

Hong Kong apartment sells for record $76.7 mn AFP AFP – Fri, Dec 25, 2015 6:40 AM AEDT . Property prices in Hong Kong, famous for its sky-high rent and super-rich tycoons, have more than doubled in 6 years due to record low interest rates and a flood of wealthy buyers from mainland China A luxury apartment in Hong Kong sold for a record HK$594.7 million ($76.7 million), days before Christmas, making it the most expensive flat in the city and possibly in Asia, reports said Friday. An unidentified buyer paid more than HK$103,700 per-square-foot for the 5,732 square-foot (532 square-metre) unit at the luxury 39 Conduit Road apartment tower in the southern Chinese city's upmarket Mid-Levels residential area, The Apple Daily and The Standard reported. The condominium, on the 46th floor with a view of the iconic Victoria Harbour and a 1,754 square-feet rooftop, had a list price of HK$646.48 million on developer Henderson Land Properties' website. The price beats the previous record HK$470 million paid for a luxury unit which takes up the entire eighth floor of the Opus Hong Kong, a 12-storey residential building designed by Pritzker Prize-winning architect Frank Gehry, in 2012. Henderson Land was not available for comment Friday, a public holiday. This comes as analysts said a US interest rate hike could put an end to the housing boom in the Chinese city which maintains a decades old peg with the US dollar. Hong Kong-based brokerage CLSA warned the residential market was at a "turning point", with prices possibly dropping 17 percent by 2017, while other firms have tipped falls of up to 30 percent. Hong Kong's de facto central bank last Thursday raised its base interest rate by 25 points to 0.75 percent after the US Federal Reserve announced its first rate increase in more than nine years. But chief analyst for Midland Realty Buggle Lau said the record-breaking purchase does not reflect the bigger picture of the overall property market in the city. "The super-rich, I don't think the small increase in the interest rates have any impact on their purchasing power," Lau said. "This is exceptional, it can't reflect the whole market," which he described overall as "sluggish". Property prices in Hong Kong, famous for its sky-high rent and super-rich tycoons, have more than doubled in six years due to record low interest rates and a flood of wealthy buyers from mainland China. Many residents complain they can no longer afford decent accommodation in the city of seven million people, and analysts say property ownership is out of reach even for the upper middle class. =================================================================================== Date November 13, 2015 Read later Frederik Balfour Joseph Lau, 64, made his fortune in real estate. Photo: Gcmt Pure coincidence or impeccable timing? Either way, Hong Kong billionaire Joseph Lau has just pulled off a twofer for the history books. On Wednesday night he paid 48.6 million Swiss francs ($67.92 million) at Sotheby's in Geneva for a 12.03-carat blue diamond, the most ever spent on a gem at auction. Then, less than 24 hours later, his company Chinese Estates Holdings Ltd sold an office tower in Hong Kong for $HK12.5 billion ($2.25 billion), more than twice the previous record for a commercial sale. Mr Lau, 64, who made his fortune in real estate, has been on a buying spree, collecting paintings from blue-chip artists as well as jewellery. He also generated headlines last year when he was convicted in Macau for bribery and money laundering in a trial he didn't attend. He's appealing the conviction. Mr Lau's company sold the 26-storey Mass Mutual Tower in Hong Kong's Wan Chai district to Chinese developer Evergrande Real Estate Group Ltd. Chinese Estates paid HK$460 million for the tower when it bought part of it in 1987 and the rest in 1991, yielding a 27-fold return. Advertisement It was the company's third property sale to Evergrande this year, said Chinese Estates spokeswoman Eunice Yeung. In July, it sold a residential, commercial and hotel complex in the western Chinese city of Chengdu for HK$6.5 billion. The company sold another property in nearby Chongqing for HK$1.75 billion. The previous most-expensive transaction for an office tower in Hong Kong was the HK$5.4 billion paid by Citigroup Inc. to a unit of Wheelock & Co. in 2014. Lichtenstein painting Mr Lau has also been busy on the auction circuit this year. On May 12 he picked up Roy Lichtenstein's painting "The Ring (Engagement)" at Sotheby's New York auction for $41.7 million, just a day after purchasing Pablo Picasso's "Buste de femme" across town at Christie's for $67.4 million. Unlike Liu Yiqian, a Chinese billionaire collector who this week bought an Amedeo Modigliani nude for $170.4 million and pays for his purchases using his AMEX card, Mr Lau wired the money to the two auction houses in New York, according to copies of receipts obtained by Bloomberg. Mr Lau's diamond purchase on Nov. 11 came a day after he paid 28.7 million Swiss francs for a 16.08-carat pink diamond at a sale by Christie's in Geneva. Both purchases were made for his seven-year-old daughter Josephine, his office said. Known as the "Blue Moon," the record-breaking gem had a pre-sale estimate of 34.2 million francs to 53.7 million francs, according to Sotheby's website, and has the highest possible colour grade of fancy vivid blue. Mr Lau renamed it "The Blue Moon of Josephine" and christened the pink diamond "Sweet Josephine." Bribery conviction Last year he bought pieces of jewellery for another daughter, 13-year-old Zoe: the 9.75-carat "Zoe Diamond" for $32.6 million at Sotheby's New York, and the "Zoe Red" ruby for HK$65 million ($8.4 million) at Christie's Hong Kong. Not all headline news about Mr Lau has been good. In March 2014 he stepped down as chairman of Chinese Estates after he was convicted in Macau for bribery and money laundering in connection with land secured for a luxury housing project. Mr Lau, who did not attend the trial, was sentenced to five years and three months in prison. As Hong Kong and Macau do not have an extradition treaty, he remains free. Read more: http://www.smh.com.au/business/world-business/hong-kong-billionaire-joseph-lau-sets-2-records-in-24-hours-diamonds-property-20151112-gkxy1f.html#ixzz3vQjhISwW Follow us: @smh on Twitter | sydneymorningherald on Facebook ===================================================== Tallest Seattle Tower Said to Sell for Over $700 Million by empty text Hui-yong Yu empty text June 4, 2015 A group led by Gaw Capital Partners agreed to buy Columbia Center, Seattle’s tallest tower, for more than $700 million, said two people with knowledge of the deal. The price would be a record for an individual office building in the city. Gaw Capital, the Hong Kong-based property investment company led by Goodwin Gaw, is joining with other Asian investors to buy the 76-story building, said the people, who asked not to be identified because the sale is private. The seller is Boston-based Beacon Capital Partners, which in 2007 paid $621 million for the tower, at the time the highest price paid for a single Seattle office building, according to property-research firm Real Capital Analytics Inc. Columbia Center is the second-tallest U.S. building west of Chicago, after U.S. Bank Tower in downtown Los Angeles. Brokerage Eastdil Secured LLC is representing Beacon in the sale. Foreign investors are flocking to U.S. real estate for returns that exceed yields on fixed-income assets with a similar moderate-risk profile. Seattle’s large base of technology jobs has helped make the city one of the top U.S. markets for property investors. Sylvia Lee, a Gaw Capital spokeswoman, said she had no immediate comment. Andy Wattula, the Beacon executive who oversees asset management and acquisitions in the Pacific Northwest, declined to comment. Gaw Capital’s planned purchase was cited in a May 29 report by CBRE Group Inc., the world’s biggest commercial-property broker. Columbia Center, at 701 Fifth Ave., has about 1.5 million square feet (139,400 square meters). There’s an observatory on the 73rd floor and a private club on the top two floors. Occupancy at the property, built in 1985, is about 87 percent. Amazon.com Inc. had been the main tenant in Columbia Center before it left for a new headquarters campus starting in 2010. Its departure coupled with the financial crisis left the building more than a third empty. Beacon renegotiated the debt, added amenities and signed new tenants including Dropbox Inc., a Web service for sharing files.