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The Morning Risk Report: Hurdles Hamper China's Efforts to Lure Back Tech Firms |
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Xiaomi Corp. founder, chairman and chief executive Lei Jun hits a gong at the company's initial public offering launch on the Hong Kong Stock Exchange in Hong Kong on July 9. PHOTO: ISAAC LAWRENCE/AFP/Getty
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Chinese regulators and companies are blaming each other for problems with the country's languishing plan to bring home big technology companies, WSJ's Chao Deng, Liza Lin and Julie Steinberg report. A weaker stock market also is a factor.
With new securities known as Chinese depositary receipts, Beijing had aimed to reverse a trend of overseas listings by marquee names—such as Alibaba Group Holding Ltd., Tencent Holdings and Baidu Inc., which have a combined market value of more than $1 trillion.
The plan was supposed to show exchanges in mainland China can compete with rivals in Hong Kong, New York and elsewhere.
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People close to the companies said the securities regulator has cooled on a quick rollout, while people close to the regulator said companies are dragging their feet on applying. At least two--Alibaba and JD.com Inc.--have suspended issuance plans.
People close to the companies said the regulator has become less eager about asking for supporting documents. Officials worry the weak equity market--Shanghai’s benchmark stock index is down 13% this year--couldn’t absorb such large share offerings, one said.
A lawyer who deals frequently with the China Securities Regulatory Commission said there is a lack of enthusiasm even from its own officials, and not enough support from other government agencies, which have priorities of their own, chiefly stabilizing the economy. The CSRC news department didn’t respond to a request for comment.
Despite all the difficulties, the process isn’t dead and could advance if Chinese stocks rebound, people on both sides said.
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An alleged kickback scheme at the New York Stock Exchange has revived old questions about whether the Big Board’s floor traders are lining their pockets at the expense of investors, WSJ reports. The NYSE’s regulatory arm has accused Kevin Lodewick, a floor broker, of accepting about $2,000 worth of payments over the course of 11 months from an employee of an unnamed brokerage firm, in return for steering that firm millions of dollars’ worth of customer orders. Mr. Lodewick didn’t respond to requests for comment.
CBS Corp. said its board of directors was in the process of selecting an outside law firm to handle an independent investigation into allegations Chief Executive Leslie Moonves sexually harassed women, WSJ reports. No other actions were taken on the matter at the Monday board meeting.
Prosecutors indicted China’s former top internet regulator on charges that he took bribes and abused his power, WSJ reports, advancing a case portrayed as a sign of President Xi Jinping’s continuing commitment to his far-reaching anticorruption campaign.
Sixteen prestigious U.S. universities argued in a court filing that any prohibition on considering race in admissions decisions would be an “extraordinary intrusion” by the federal government, WSJ reports, as the schools expressed support for Harvard University in a closely watched affirmative-action lawsuit. The case is scheduled to go to trial in October.
Cryptocurrency exchange Coinbase has hired finance executive Jeff Horowitz in its new role of chief compliance officer, Reuters reports.
Stuart Scott, the former head of currency trading at HSBC Holdings PLC, won a last-ditch battle to block his extradition to the U.S., Bloomberg Reports. He would face wire-fraud charges upon his arrival.
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U.K. mobile phone retailer Dixons Carphone said about 10 million records containing personal data of customers may have been obtained in a cyber attack in 2017, much higher than its earlier estimates, Reuters reports. It said personal information, names, addresses and email addresses may have been accessed last year, BBC reports.
The Department of Homeland Security will announce on Tuesday the creation of a new center aimed at guarding the nation’s banks, energy companies and other industries from major cyberattacks that could cripple critical infrastructure, agency officials said to WSJ. The center’s creation was motivated by a growing recognition in government that sophisticated cyberattacks, particularly those deployed by foreign adversaries, can not only harm a company or industry but can cause systemic failure across society, Chris Krebs, DHS’s top cyber official, said in an interview.
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For more than a decade, American Express Co.’s foreign-exchange unit recruited business clients with offers of low currency-conversion rates before quietly raising their prices, according to people familiar with the matter who spoke to WSJ. AmEx’s foreign-exchange international payments department routinely increased conversion rates without notifying customers in a bid to boost revenue and employee commissions, the people said. The practice, widespread within the forex department, was occurring until early this year and dates back to at least 2004, the people said.
China’s business activities faltered in July in the first official data to reflect the impact of U.S. tariffs, WSJ reports, adding to signs that trade tensions have started to pinch economic growth. Official surveys of factories and service providers pointed to sluggish domestic demand. Standard Chartered PLC, however, sees some positives in the U.S.-China trade spat, WSJ reports. Tyson Foods Inc.’s outlook was hit by the tariffs, but Caterpillar Inc. was able to absorb them.
Law firms stand out in a corporate landscape where rainmakers accused of bad behavior often receive second and third chances, according to interviews by WSJ with dozens of lawyers, legal recruiters, consultants and leaders at some of the country’s largest firms.
The construction business is having trouble attracting young job seekers, WSJ reports. While there’s no single reason why younger folks are losing interest in a job that is generally well-paid and doesn’t require a college education, their indifference is exacerbating a labor shortage that has meant fewer homes being built and rising prices, possibly for years to come.
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A new apartment building housing construction site is seen in Los Angeles on Monday. PHOTO: LUCY NICHOLSON/REUTERS
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Follow the WSJ Risk & Compliance Team on Twitter: @WSJRisk, @srubenfeld, @BenDiPietro1 and @LikelyMara.
Send complaints, comments and kudos to Ben DiPietro at ben.dipietro@wsj.com.
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