Ben & Jerry's talks with Unilever over Israeli dispute break down

NEW YORK, Aug 2 ― Ben & Jerry's and its parent Unilever Plc said talks had broken down to resolve their dispute over the sale of the ice cream maker's Israeli business, which would allow its products in the occupied West Bank.

In a letter yesterday to US District Judge Andrew Carter in Manhattan, a lawyer for Ben & Jerry's said two weeks of mediation to settle out of court proved unsuccessful.

He asked Carter to restore Ben & Jerry's request for a preliminary injunction to block Unilever from selling the Israeli ice cream business to local licensee Avi Zinger.

Unilever has said the sale closed on June 29 and cannot be undone. A lawyer for Unilever said in a separate letter to Carter that the company is prepared for a hearing on the proposed injunction.

Reuters reported last week that the talks had broken down.

A Ben & Jerry's spokesman declined to comment. Unilever did not immediately respond to requests for comment.

Ben & Jerry's had sued Unilever, which has owned the Burlington, Vermont-based company since 2000, on July 5.

It claimed that by selling the Israeli business, Unilever reneged on its promise to let the maker of Half Baked, Cherry Garcia and Chunky Monkey protect its brand.

Ben & Jerry's had in July 2021 said it would end ice cream sales in Israeli-occupied Palestinian territories because it was “inconsistent” with its values.

Israel condemned the move, and some investors sold their Unilever stocks and bonds.

Most countries consider Israeli settlements in the occupied West Bank illegal.

Reuters reported last week that the mediation failed because Ben & Jerry's did not want to “cave” on its social mission.

Unilever has said Ben & Jerry's had the right to make its own decisions about that mission.

The battle tests how far Unilever will give its brands freedom to have social missions.

Unilever has more than 400 brands including Dove soap, Hellmann's mayonnaise, Knorr soup and Vaseline skin lotion. ― Reuters

Source: Malay Mail

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Report: Sanctions have huge toll on Russian economy

WASHINGTON, Aug 2 ― The Russian economy has been deeply damaged by sanctions and the exit of international business since the country invaded Ukraine, according to a new report by Yale University business experts and economists.

Even though Moscow has been able to pull in billions of dollars from continued energy sales at elevated prices, largely unpublished data shows that much of its domestic economic activity has stalled since the February 24 invasion, according to the report released in late July.

“The findings of our comprehensive economic analysis of Russia are powerful and indisputable: Not only have sanctions and the business retreat worked, they have thoroughly crippled the Russian economy at every level,” said the report from the Yale School of Management.

“Russian domestic production has come to a complete standstill with no capacity to replace lost businesses, products and talent,” the 118-page report said.

The report was produced by Jeffrey Sonnenfeld, president of the Yale Chief Executive Leadership Institute, and other members of the institute, a mix of economists and business management experts.

With Moscow having halted or pared the release of official economic statistics, including crucial trade figures, Sonnenfeld's group tapped into data held by companies, banks, consultants, Russian trading partners and others to build a picture of Russian economic performance.

They also said they obtained unreleased data from experts on the Russian economy, and data in other languages which supported their conclusions.

Even if Russia is able to earn more foreign exchange on gas and oil exports, that has not offset the impact of Western sanctions.

And, they argue, the country's dependence on Europe to buy 83 per cent of its energy exports leaves it under a greater medium-term threat.

“Russia is far more dependent on Europe than Europe is on Russia,” they said.

Car industry crashes

Russia largely survived Western economic sanctions after Moscow's 2014 seizure of the Ukraine region of Crimea.

President Vladimir Putin pushed a programme of replacing some imports with domestic products and built up a cushion of financial reserves.

But the country's industry remained heavily driven by foreign capital investment and the import of higher-tech inputs that Russia had not mastered, like semiconductors.

The barrage of deeper sanctions after the invasion took aim at both of those vulnerabilities, the report said.

Some 1,000 foreign companies halted their activities in the country, potentially impacting up to five million jobs, according to the report.

Industrial output plunged, and Russian retail sales and consumer spending have fallen at an annual rate of 15-20 per cent.

Imports have plunged across the board, the report said; crucial imports from China fell by more than half.

A key example of Russian problems, according to the report, is the automobile sector.

Car sales went from 100,000 a month to 27,000 a month, and output has stalled due to a lack of parts and machinery.

Without access to imported components, Russian producers are putting out cars without airbags or modern anti-lock brakes, and only with manual transmissions.

Threat to gas revenues

The report challenged the belief that the Russian economy was surviving thanks to the tens of billions of dollars the country reaps each month from oil and gas exports.

Last week the IMF said the Russian economy, though contracting, was doing better than expected due to its energy and commodity export income.

The Yale report said data indicates energy revenues have been falling for the last three months.

If Western Europe succeeds in cutting itself off from Russian natural gas, Moscow faces an “unsolvable” situation with a lack of a market for its output, according to the report.

“Any decrease in oil and gas revenues or oil and gas export volumes would immediately put a strain on the Kremlin's budget,” it said. ― AFP

Source: Malay Mail

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Stellantis unit sentenced in US diesel emissions probe, will pay US$300m

WASHINGTON, Aug 2 ― The US business of Fiat Chrysler Automobiles was sentenced yesterday after pleading guilty in June to criminal conspiracy and will pay nearly US$300 million (RM1.33 billion) to resolve a multi-year US Justice Department diesel-emissions fraud probe.

FCA US LLC, formerly Chrysler Group LLC, previously struck a plea agreement with the Justice Department and agreed to pay a US$96.1 million fine and forfeit US$203.6 million. FCA US, now a unit of Stellantis NV, was also sentenced to a three-year term of organisational probation.

The company had been charged with making false representations about diesel emissions in more than 100,000 U. 2014-2016 Jeep Grand Cherokee and Ram 1500 diesel vehicles.

The Justice Department said FCA had conspired to cheat US emissions tests.

The US$300 million criminal penalty “is the result of an exhaustive three-year investigation,” said Assistant Attorney General Todd Kim.

“This resolution shows that the Department of Justice is committed to holding corporate wrongdoers accountable for misleading regulators.”

The government noted FCA US had previously paid a US$311 million civil penalty and more US$183 million in compensation to over 63,000 people as part of a class-action diesel lawsuit.

The automaker must conduct an initial review of its compliance with the Clean Air Act and inspection and testing procedures, submit a report and prepare at least two follow-up reports. Reuters first reported the planned settlement in May.

The Justice Department said FCA US installed deceptive software features intended to avoid regulatory scrutiny and fraudulently help the diesel vehicles meet required emissions standards.

Stellantis said earlier it had accrued €266 million to account for the settlement. FCA merged with French Peugeot maker PSA in 2021 to form Stellantis.

Three FCA US employees have been indicted for conspiracy to defraud the United States and violate the Clean Air Act and are awaiting trial.

The plea deal comes five years after Volkswagen pleaded guilty to criminal charges to resolve its own emissions crisis affecting nearly US 600,000 vehicles in a scandal that became known as “Dieselgate.”

VW has paid more than US$30 billion in connection with the scandal. ― Reuters

Source: Malay Mail

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Asia shares off to sluggish start, China data soft

SYDNEY, Aug 1 — Asian share markets got off to a slow start today as disappointing Chinese economic data fed doubts last week’s rally on Wall Street could be sustained in the face of determined policy tightening by global central banks.

China’s factory activity actually contracted in July as fresh virus flare-ups weighed on demand. The official manufacturing purchasing managers’ Index (PMI) fell to 49.0 in July, missing forecasts for 50.4.

That did not bode well for the raft of PMIs due this week, including the influential US ISM survey, while the July payrolls report on Friday should also show a further slowdown.

At the same time US data out Friday showed stubbornly high inflation and wages growth, while central banks in the UK, Australia and India are all expected to hike again this week.

“We expect the Band of England to step up monetary tightening with a 50bp hike at its August meeting. The increase in energy prices is likely to be the main driver,” warned analysts at Barclays.

“Central banks focus on the still strong inflation momentum and tight labour markets rather than signals of slowing growth. This could upset markets’ recent ‘bad news is good news’ view.” The caution was evident as MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS eased 0.1 per cent in sluggish early trade.

Japan’s Nikkei dithered either side of flat, while South Korea dipped 0.1 per cent. S&P 500 futures slipped 0.4 per cent and Nasdaq futures 0.3 per cent.

While US corporate earnings have mostly beaten lowered forecasts, analysts at BofA cautioned that only 60 per cent of the consumer discretionary sector had reported and it was under the most pressure given inflation concerns for consumers.

“Our bull market signposts also indicate it’s premature to call a bottom: historical market bottoms were accompanied by over 80 per cent of these indicators being triggered vs just 30 per cent currently,” BofA said in a note.

“Moreover, bear markets always ended after the Federal Reserve cut, which likely is at least six months away — BofA house view is for a first cut in 3Q23.”

A, not-so, dovish pivot

Bond markets have also been rallying hard, with US 10-year yields falling 35 basis points last month for the biggest decline since the start of the pandemic. Yields were last at 2.670 per cent, a long way from the June top of 3.498 per cent.

The yield curve remains sharply inverted suggesting bond investors are more pessimistic on the economy than their equity brethren.

The reversal in yields has taken some heat out of the dollar, which lost ground for a second week last week to stand at 106.010 on a basket of currencies, compared to its recent peak of 109.290.

The biggest decline came against the yen where speculators had been massively short and found themselves squeezed out by the sudden turnaround. The dollar was last down at ¥132.85, having shed a sharp 2.1 per cent last week.

The dollar fared better on the euro, which has a European energy crisis to contend with, and made hardly any headway last week. The euro was last at US$1.0221 (RM5.43), and short of stiff resistance around US$1.0278.

Jonas Goltermann, a senior markets economist at Capital Economics, was puzzled by the market’s dovish reading of last week’s 75-basis-point Fed hike.

“Our sense is that the risk-on response to the Fed is largely down to a combination of wishful thinking and stretched positioning,” he argued.

“In our view, there was little in Chair Powell’s remarks to suggest policymakers will abandon aggressive rate hikes while inflation remains so far above target,” he added.

“If we are right that markets have misread the Fed’s intention, the dollar will probably resume its rally before too long.”

For now, the drop in the dollar and yields has been a relief for gold which is up at US$1,762 an ounce after bouncing 2.2 per cent last week.

Oil prices drifted back as the market waited to see if this week’s meeting of Opec+ produced an increase in supply, even if only minor.

US crude eased 87 cents to US$97.75 per barrel, while Brent lost 77 cents to US$103.20. — Reuters

Source: Malay Mail

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Tax Matters – Refunds, refunds ... when will you come?

THE government owes taxpayers hundreds of millions ringgit or more in tax refunds. Why the delay in refunds when both the Inland Revenue Board (IRB) and the Royal Malaysian Customs Department are prompt in collecting the taxes? The pendulum should swing both ways.

Generally, we understand that the smaller refunds in straightforward cases are made quickly within a few months automatically or upon an application. The moral of the story is: the bigger the refund, the longer it takes to get it.

How do refunds arise?

In income tax matters, individuals end up overpaying their taxes when their monthly deduction of tax is overdeducted by the employer, when the employer has treated certain exempt benefits as taxable benefits, or when an individual is taxed as a non-resident and thereafter changes his status to a tax resident, or when they refile their earlier returns.

Companies and other business enterprises could also end up overpaying taxes. The most common reason is usually the overpayment of advance taxes for the current year.

Other reasons could be restatement of prior year tax position, or a revision of the prior years’ tax returns to correct the past errors. Tax refunds also arise when businesses overpay taxes during tax audits and investigations and thereafter there is a reduction upon final settlement.

What happens if you do not pay your taxes?

If you do not settle your IRB assessments within 30 days, automatically a 10% penalty will be imposed. In the case of Customs, a bill of demand must be settled within 14 days, otherwise legal action will commence shortly thereafter. Both authorities are now more diligent and quicker in taking action to recover outstanding taxes, which include sending reminders to taxpayers to settle their taxes, issuing travel stoppage orders against company directors, taking the matter to court and obtaining summary judgments, and thereafter leading to the winding up of the business enterprise/company. Be warned that all actions can happen within six to 12 months.

There is nothing wrong with both tax authorities pursuing the taxpayers to collect the taxes as it is the duty of the taxpayers to pay the taxes on time. Good taxpayers should not be subsidising delinquent taxpayers.

Should refunds be delayed?

Although the tax authorities should be saluted for their efficiency in collecting taxes, sadly when it comes to refunds, we cannot say the same. In a tax system that is fair and efficient, refunds should not be delayed unless there are exceptional grounds for suspecting the refunds are not genuine. A reasonable time of, say, three to four months could be given to the authorities to process the claim and meet their internal protocols.

Seeking refunds in some instances leads to audits resulting in further delays of the refund. This should not be the case in a self-assessment system. Tax audits should not be triggered because there is a refund. It should be separated from the refund mechanism based on the premise that majority of the taxpayers are sincere and honest.

We also understand that the delay in the refunds is beyond the control of both tax authorities because of the amount of funds allocated to the tax authorities may be insufficient to settle all the refunds. If the refunds run into millions, the chances are your refunds will be broken up into many payments over perhaps more than a year. This is a matter for the Finance Ministry to resolve.

Suggestion

The refund mechanism must be segregated from the audit process. The refund is part of the compliance process while audit is an enforcement mechanism. Refunds ideally must be made within six months. The longer the refunds are delayed, the image of the tax authorities will be tarnished in the eyes of taxpayers, and it will not help the current push towards increasing taxpayers’ compliance.

This article is contributed by Thannees Tax Consulting Services Sdn Bhd managing director
SM Thanneermalai (www.thannees.com).

Source: The Sun Daily

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Asia Media in good position to exit PN17 status

PETALING JAYA: Asia Media Group Bhd is confident of exiting PN17 status by the end of the current financial year ending March 31, 2023 (FY23) mainly by securing new contracts for its online advertising and digital marketing business.

“We have completed a full financial year in the black, with all quarters being profitable. The last financial year in which we recorded profits was in 2014. This puts us in a good position to exit PN17. We expect to be officially out of the PN17 before our next financial year,” COO Chan Voon Jhin told SunBiz in an interview.

Chan is optimistic that Asia Media will be a strong established media player in three years’ time, with advertising assets in 2,000 elevators and 1,000 LED panels at governmental, residential and commercial buildings.

“The new management team that came in June last year has taken the company in a different direction. The focus now is on branding, and marketing, especially digital marketing. If you’re familiar with the Vertical Tower in Bangsar South, Equatorial Plaza, and Berjaya Times Square, you will see our lift protectors, LIFT-UP, there,” Chan said.

The group acquired these new digital advertising assets with the RM8.6 million proceeds from its private placement last November. Making its debut in Malaysia, the elevator projection advertising system is a collaboration between Asia Media and Mitsubishi Elevators Malaysia.

“With a total of 9,200 units of elevators all over Malaysia and Brunei under the care of Mitsubishi, we can gradually offer the service to all existing Mitsubishi clientele, helping them to generate new revenue, and uplift the image of the buildings.

“Our order book for this calendar year is RM15 million to date. Initiatives in the past year have borne fruit, with shareholders, investors and business partners increasingly confident of the company’s potential,” Chan said.

Asia Media’s regularisation plan covers four key initiatives: capital reduction, 20% private placement, rights issue, and acquisition of LookHere, a company that specialises in digital signature advertising on residential buildings.

“On the 20% private placement, we now have 311 million shares, so we will be issuing another 62 million shares. On the rights issue pending Bursa approval, for every four shares, we will issue each shareholder three rights and one warrant. And we already have an agreement in place to acquire 51% of LookHere, just awaiting approval,” Chan explained.

The LookHere acquisition represents an investment for the group to enhance its competitiveness in the provision of digital out-of-home (OOH) media. Upon completion of the Lookhere acquisition, the enlarged group will be principally involved in a more comprehensive range of digital OOH media products and Lookhere will form part and parcel of the core business of Asia Media, which is expected to provide future growth earnings and cashflow and an opportunity to the group to restore its financial and operational viability.

For FY22, Asia Media returned to the black with a net profit of RM6.86 million from a net loss of RM1.72 million a year ago attributed to the shift of revenue from static advertisement to digital and online marketing and advertising.

Asia Media used to be the largest transit TV network in Malaysia back in 2008. It slipped into PN17 status in October 2019 after its shareholders’ equity fell to less than 25% of its issued capital. In August last year, its external auditor Messrs CAS Malaysia PLT highlighted a material uncertainty related to concern in its financial statements for the financial year ended March 31, 2021.

Asia Media’s previous CEO, Ricky Wong Shee Kai, had furnished a false statement relating to the company’s revenue of RM11.13 million to Bursa Malaysia, the Securities Commission Malaysia said in November 2021. He is still at large. The group filed a legal suit against Wong over account discrepancies earlier this year.

“Wong is no longer part of the company nor is he a shareholder. During the 2019 EGM, he was removed from the board and the company. As this is an ongoing court case, we cannot comment in detail,” Chan remarked.

Source: The Sun Daily

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Ukraine’s Zelensky says harvest could be halved by war

ODESA, Aug 1 — Ukraine’s president said yesterday that the country’s harvest could be half its usual amount this year due to the Russian invasion of Ukraine.

“Ukrainian harvest this year is under the threat to be twice less,” suggesting half as much as usual, President Volodymyr Zelensky wrote in English on Twitter.

“Our main goal — to prevent global food crisis caused by Russian invasion. Still grains find a way to be delivered alternatively,” he added.

Ukraine, a key global supplier of grains, has struggled to get its product to buyers due to a Russian naval blockade of Ukraine’s Black Sea ports.

An agreement signed under the stewardship of the UN and Turkey on July 22 provides for safe passage for ships carrying grain out of three southern Ukrainian ports.

Speaking in one of those ports on Friday, Ukraine’s infrastructure minister said Ukraine was ready to start shipping grain, and that he was hopeful the first ships would leave by the end of the week. — Reuters

Source: Malay Mail

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Pakistan imports fall sharply in July, to help rupee stabilise, says finance minister

ISLAMABAD, Aug 1 — Pakistan imports fell by more than a third in July after a ban on non-essentials, the finance minister said yesterday, adding the improved trade situation will reduce pressure on the struggling rupee.

July imports fell to US$5 billion (RM22.2 billion), down 35 per cent from June’s record monthly high of US$7.7 billion, Miftah Ismail told a news conference in Islamabad.

The central bank and Pakistan statistics bureau is yet to post its July data.

“This is very welcoming,” Ismail said, adding it was the result of his government’s ban on all non-essential imports. “It will remove pressure on rupee,” he said.

The rupee traded up slightly at 239.37 to the dollar on Friday, after shedding about 5 per cent last week and more than a quarter of its value this year.

The ban on the import of non-essential goods was lifted last week, except for automobiles, cell phones and home appliances.

Ismail said his government has resolved to bring down the current account deficit significantly and to post a surplus in a year or two.

The South Asian nation has fast-depleting foreign reserves and is struggling to finance a widening current account deficit, which saw a US$2.3 billion surge in June, mainly due to rise in oil imports.

The deficit for the financial year ending June 30 stood at US$17.4 billion against US$2.8 billion the previous year.

Earlier in July, Pakistan reached a staff level agreement with the IMF for the disbursement of US$1.17 billion under a resumed payment of a bailout package. — Reuters

Source: Malay Mail

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Opec secretary general says Russia’s membership in Opec+ is vital for success of agreement

NEW YORK, Aug 1 — Opec’s new secretary general said that Russia’s membership in Opec+ is vital for the success of the agreement, Kuwait’s Alrai newspaper reported yesterday, quoting an exclusive interview with Haitham al-Ghais.

He said Opec is not in competition with Russia, calling it “a big, main and highly influential player in the world energy map”, Alrai reported.

Opec+ is an alliance of the Organisation of the Petroleum Exporting Countries (Opec) and allies led by Russia.

Al-Ghais, Kuwait’s former Opec governor, will head his first Opec+ meeting on August 3, in which the group will consider keeping oil output unchanged for September, despite calls from the United States for more supply.

Although, a modest output increase is also likely to be discussed, eight sources told Reuters last week.

AL-Ghais told Alrai that “Opec doesn’t control oil prices, but it practices what is called tuning the markets in terms of supply and demand,” describing the current state of the oil market as “very volatile and turbulent.”

He added of the recent hikes in oil prices: “As for me, I still stress that the recent rise in oil prices is not only related to the developments between Russia and Ukraine.

“All the data confirm that prices began to rise gradually and cumulatively, and before the outbreak of the Russian-Ukrainian developments, due to the prevailing perception in the markets that there is a shortage of spare production capacity, which has become confined to a few and limited countries,” al-Ghais said.

Oil has soared in 2022 to its highest since 2008, climbing above US$139 (RM618.62) a barrel in March, after the United States and Europe imposed sanctions on Russia over its invasion of Ukraine. Prices have since eased to around US$108, as soaring inflation and higher interest rates raise fears of a recession that would erode demand.

Replying to a question about the factors that will affect oil prices by the end of the year, al-Ghais said: “In my view, the most important factor will be the continued lack of investments in the field of drilling, exploration and production.” “This will push prices in an upward direction, but we cannot determine the level they will reach.” — Reuters

Source: Malay Mail

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