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Credit Suisse cuts goals

CREDIT SUISSE Group AG cut its main profitability target for this year and next as trade tensions and negative interest rates cloud the outlook after a three-year restructuring.

Switzerland’s second-largest lender now sees return on tangible equity — a key profitability metric — of higher than 8% this year, compared with previous guidance of between 10% and 11%. The Zurich-based firm also cut its forecast for next year and signaled it may take longer than previously expected to reach its ambitions, while indicating that the investment bank is set to make a loss this year.

Chief Executive Officer Tidjane Thiam emerged from a three-year restructuring with improved returns from a streamlined and less volatile bank with a greater focus on wealth management. Gains earlier this year have been canceled out by slumping markets, a drop in dealmaking and the ongoing uncertainty caused by global trade tensions.

More positively, it joined lenders including Deutsche Bank AG and JPMorgan Chase & Co. in saying that the fourth-quarter performance so far is an improvement on last year.

Thiam is not alone as banks across Europe struggle to reach targets, with interest rates likely to stay negative for the forseeable future. Deutsche Bank AG on Tuesday warned that its mid-term profitability goal now appears to be “more ambitious,” and it will need to rely on more volatile investment banking revenue to reach its goals.

Credit Suisse shares have gained about 20% this year, but they are still are down 44% since Thiam joined as he revamped the bank and asked shareholders for cash to shore up its capital buffers.

Thiam six weeks ago gave a more downbeat outlook even as trading income surged, saying the US-China trade dispute will lead to more cautious spending and investment decisions.

The bank on Wednesday is holding an investor day in London and had been expected by analysts at Citigroup, Inc. to curtail its targets for this year and next because of lower rates, a weak level of transactions in the Asia-Pacific region and at the investment bank.

The bank is pinning its wealth management growth on a strategy of cross-selling investment banking services to ultra-high net worth clients while making better use of technology for more modestly rich customers. Philipp Wehle, who took over after Iqbal Khan’s acrimonious split from the lender this year, is carving out a new entity to serve the lower tier of the wealthy.

Slumping revenue at the investment banking and capital markets unit has become a growing issue for Thiam in recent quarters, while global markets trading — a long-time straggler — has made surprise profit gains.

Credit Suisse said it seeing pressure from negative rates at the Swiss Universal Bank, the lender’s largest unit by profit. With negative interest rates of 0.75% on deposits in Switzerland, the bank has begun to pass on the costs to its wealthy clients, while it is also selling real estate to mitigate the effects.

The bank said its dealmaking division will be loss-making in 2019. Credit Suisse lost out this year as a string of deals collapsed or didn’t get off the ground, including Chevron Corp.’s abandoned bid for Anadarko Petroleum Corp. Still, the bank has managed to retain it’s global top 10 spot for mergers and acquisitions. — Bloomberg

Top chefs pick favorite cities around the world for great restaurants

By Richard Vines, Bloomberg

EVERYONE KNOWS you can enjoy wonderful meals in cities such as Paris, New York, London, and Tokyo. But what of other dining destinations, with fabulous dishes that are more likely to be found in casual bars or bistros than in fancy restaurants?

We asked some of the world’s leading chefs about their favorite food cities, from the markets of Ghana in West Africa through the crowded and noisy streets of Kolkata to a tiny island off Auckland, in New Zealand.

Here are their recommendations.

BUENOS AIRES, ARGENTINA
Mauro Colagreco is the holder of the title of World’s Best Restaurant at Mirazur, in the south of France. But he still misses the food of his native Argentina. “The country and cuisine are both incredibly close to my heart,” he says. “I often return to La Plata and Buenos Aires to see family and spend time there. In Buenos Aires, I always recommend Parrilla Don Julio, it offers the best Argentinian meat cooked with unparalleled expertise. For brunch or a relaxed lunch, Narda Comedor is comfort food with fresh ingredients.”

MELBOURNE, AUSTRALIA
British-born Ashley Palmer-Watts is the executive chef of Dinner by Heston Blumenthal in London and Melbourne, where he has fallen in love with the dining scene. “Melbourne is great because of the range of types of restaurants,” he says. “They are just so approachable, with good tasty food. My go-to restaurants are Cutler & Co. and MoVida. I love sitting at the bar. Also Marion wine bar, which is run by Andrew McConnell of Cutler. You can have great food, great wine, great service. It is just so easy and diverse.”

ACCRA, GHANA
“There is amazing street food in Accra,” says chef Selassie Atadika, where she celebrates Africa’s culinary heritage at Midunu. “There is everything from bofrot (donuts) and hausa koko (spiced millet porridge) and waakye (rice and beans) to afternoon snacks of fried yam stick with shito (preserved chili sauce with dried shrimp). Then there is kenkey (fermented corn) in the Osu night market and an ice-cold akpeteshie (a spirit made from palm wine or sugar cane juice) cocktail with live music at the Republic bar.”

KOLKATA, INDIA
Chef Asma Khan of Darjeeling Express in London savors the food of her native Kolkata, or Calcutta as it was formerly known. “There is a unique food experience not to be missed if you are in Calcutta over a weekend: Terreti Bazar on Sun Yat Sen Street. It is fascinating, with Chinese and Indian stalls selling breakfast.” Her other recommendations include Arsalan, Park Circus, for biryani and Shiraz for classic mughlai. “And no trip is complete without kati roll (kebab). The original place is Nizam’s behind New Market.” (My personal favorite restaurant in Kolkata is Mocambo, which traces its history to 1956.)

MUMBAI, INDIA
Ravinder Bhogal of Jikoni, in London, loves Mumbai for the food. “It’s a mosaic of old and new and such diversity,” she says. She enjoys the vegetarian dishes at places like Shree Thaker Bhojanalay and Swati Snacks; and Trishna or Mahesh Lunch for Maharashtrian seafood. Then there is Wasabi at the Taj Mahal Palace for Japanese. “What is currently thrilling is young chefs like Thomas Zakaria at Bombay Canteen who have traveled the world and worked at big-name restaurants in London and New York.”

DUBLIN, IRELAND
French chef Pierre Koffmann is a new convert to Dublin after two visits to Ireland from his London base. “I was amazed by the food,” he says. “And the service is even more impressive. The Irish are so friendly and welcoming. They love eating and drinking and they love life. We went to two particularly good places. Aimsir is a long drive, but it is worth it. Everything was fantastic and the welcome was among the best I’ve had in my life. The GreenHouse was more classical and the cooking was very good.”

BARI, ITALY
Chef Francesco Mazzei, of Sartoria in London, is a champion of southern Italian cuisine, and picks the Puglian capital of Bari as a favorite dining destination. “Puglia is very fertile, with amazing produce,” he says. “Go to a restaurant like Giampà and you can taste amazing seafood, as well as the pasta and the olive oil. It’s a great city. The cucina povera of the south (of Italy) is finally gaining the respect it deserves overseas. Another favorite restaurant of mine is Lo Scoglio, right near the airport. They cook with passion.”

URUAPAN, MEXICO
This city in Michoacán state has been in the news for the wrong reasons — killings by drug gangs. But chef Martha Ortiz, with restaurants in Mexico City and London, says: “I am very proud of being Mexican. I don’t think people should be afraid. Uruapan is not touristic but I have eaten the most delicious mole with Cotija cheese and they use beautiful herbs and make wonderful tortillas. The best food is to be found in the homes of traditional cooks, who welcome visitors though they are not formal restaurants.”

AUCKLAND, NEW ZEALAND
Samoan-born chef Monica Galetti, of Mere in London, grew up in New Zealand and picks Auckland as a favorite food city. “Forget the fine dining — you can get that in London,” she says. “It’s a city to go and chill out and enjoy great produce. One place we always eat is called Depot. It’s simple fare and delicious. There’s an open kitchen and you sit at the bar and eat great fish and New Zealand oysters, or simple vegetarian dishes. Or take the ferry to Waiheke island, with all the little cafés near the beach. It is so relaxed.”

LIMA, PERU
Chef Albert Adria of Tickets, in Barcelona, is a big fan of Peruvian cuisine and loves Lima. “You can try so many different styles of Peruvian cooking,” he says. “You can eat very traditional food at cevicherias like Don Fernando, which is unbelievable. Or you can eat sandwiches and very casual food in the markets. But then Lima is also home to some of the very best restaurants in the world, places like Central, Maido and Astrid y Gaston.” (Closer to home in Spain, Adria is also a lover of Cádiz.)

RIYADH, SAUDI ARABIA
Shane Osborn of Arcane, in Hong Kong, was impressed by a recent visit to Riyadh. “People there have a very deep love of food and the hospitality is incredible,” the Australian-born chef says. “I loved kabsa, a local specialty cooked with lamb and rice and cardamom flavors. It’s best to eat with the locals.” His enthusiasm is shared by Italian chef Francesco Mazzei, who recommends the Mama Noura chain. (Not surprisingly, he’s also a fan of his brother’s Italian restaurant, Fiamma.)

LJUBLJANA, SLOVENIA
Ljubljana is the pick of Ana Roš, winner of the title World’s Best Female Chef. She welcomes the emergence of a new generation of younger chefs in the Slovenian capital, a two-hour drive east of her restaurant Hiša Franko. “I used to feel very lonely before, but there is a whole new generation discovering Slovenian produce and bringing back regional food,” she says. She particularly admires Gostišče Grič, in the countryside; and TaBar in the city. For classic, it has to be Restavracija Strelec in Ljubljana Castle.

CÁDIZ, SPAIN
This port in southwest Spain is the pick of Spanish chef Nieves Barragan, of Sabor, in London. She goes there to relax and to enjoy great snacks in small bars and restaurants. “You walk into almost any bar and you can be sure that the food will be tasty,” she says. “You have a glass of sherry and tapas and life is good. I go to Manteca. It is a very old bar and everything is amazing: Sardines, anchovies. You forget the world. Then I go to El Faro. They have amazing seafood and food from the market. It’s heaven.”

SAN SEBASTIÁN, SPAIN
French chef Helene Darroze, with restaurants in London and Paris, says: “San Sebastián is particular in my heart as I spent my childhood in the Basque Country. San Sebastián is for me the capital of the region’s gastronomy.” She points to the quality of the produce and the range of places to eat, from humble tapas bars to fancy restaurants. Her many favorites include Ganbara, a pintxos (tapas) bar whose signature dish is roasted mushrooms and foie gras, with a confit egg yolk in the middle.

MINNEAPOLIS, USA
New York-based Daniel Boulud of Daniel is a fan of Minneapolis. “It’s always been one of the top cities but now you are seeing the rise of a whole generation of chefs going back home from New York, from Chicago, from L.A. and Europe. They are opening very cool places. People like Ann Kim at Young Joni, and Jamie Malone at Grand Café. And then you have John Kraus, a very, very talented pastry chef with Patisserie 46, which is really special. Boulud also cited Gavin Kaysen of Spoon and Stable as particularly influential. A good city for food is a city with good companies spending on entertaining.” Boulud also cited Gavin Kaysen of Spoon and Stable as particularly influential.

SAN FRANCISCO, USA
San Francisco is where Swiss-born Daniel Humm first lived when he moved to the US in 2003. “It really opened up my eyes,” says Humm, whose Eleven Madison Park in New York is a winner of the title World’s Best Restaurant. “I saw chefs working much more freely and it changed how I look at food. It was liberating.” His favorite spots include Swan Oyster Depot, a counter in a fish market, for the freshest seafood. He also loves Cotogna for rustic Italian cuisine. Humm opens Davies and Brook in London on Dec. 9.

Initial work for Kaliwa dam cleared

CHINA ENERGY Engineering Co. Ltd. has been issued last month a notice to proceed with the preparatory work for the construction of the P12.2-billion Kaliwa dam that is planned to be Metro Manila’s new water source, an official of the Metropolitan Waterworks and Sewerage System (MWSS) said on Wednesday.

“Six months ‘yung detailed engineering design, and then pag na-approve na namin ‘yung detailed engineering design, mag-start na ‘yung construction,” MWSS Deputy Administrator Leonor C. Cleofas said in a chance interview after a hearing at the House of Representatives.

She said the notice was issued to the Chinese firm last Nov. 13.

“We’re doing the acquisition of the ‘free and prior informed consent’ from the indigenous people,” she said, referring to a requirement from the National Commission of Indigenous Peoples (NCIP).

Kaliwa dam is meant to be a medium-term water source for Metro Manila, complementing the main water source Angat dam, which supplies about 96% of the city’s requirement.

The new dam’s target completion year is in 2023, with its cost funded 85% by the Chinese company, and 15% by the MWSS.

Kaliwa dam — or the New Centennial Water Supply Project — will be built along the Kaliwa River in the towns of General Nakar and Infanta, Quezon province. It is expected to provide 600 million liters per day (MLD), adding to the existing supply of 4,132 MLD and enough to meet a demand of a little less than 4,000 by 2020, based on previous estimates.

“ECC (environmental compliance certificate) meron na, nandoon na kami sa last leg, so sa Dec. 14 and 15, we will have a consensus building. In fact sa Rizal, ang ginagawa namin ngayon is the memorandum of agreement,” Ms. Cleofas said.

She added that MWSS sees the need to start the study for Kanan dam for Metro Manila’s water security. The dam will have a capacity of 1,800 MLD.

“Phase one is only 600 MLD, but we are building a tunnel [with a capacity of] 2,400 MLD,” she said. “Phases lang ang ginagawa natin.”

Ms. Cleofas said like Kaliwa dam, the future dam will also be bid out to the private sector. The new dams will be build in an area with a climate pattern different from those of existing dams, thus maximizing the use of rain water. — Victor V. Saulon

Huawei looking to roll out Harmony OS to more products

SHANGHAI/SHENZHEN, CHINA — Chinese tech giant Huawei Technologies plans to equip more of its products with its Harmony operating system (OS) next year, and will promote them at home and abroad, a Huawei spokesman said on Monday.

But there are no plans currently to roll out the OS to its phones, tablets and computers, among Huawei’s most popular products, the spokesman added.

The plans were first reported in the government-backed Shenzhen Special Zone Daily newspaper which cited comments made by Wang Chenglu, president of the Huawei consumer business group’s software division, at a store event held in the city of Shenzhen, where the firm has its headquarters.

Huawei unveiled its proprietary OS in August as a possible alternative to Google’s Android, as it copes with trade restrictions by the United States that threatens to cut its access to technology made by US firms.

A “smart screen,” or connected television product was its first product to use Harmony, called Hongmeng in Chinese, but it said at the time that it would stick to Android for smartphones and gradually roll out Harmony to other devices such as smartwatches, speakers and virtual reality gadgets.

Wang reiterated that stance at the store event and noted the company would still prefer to use Android on its phones, according to the Shenzhen Special Zone Daily newspaper. — Reuters

BoJ expects sizable impact from Abe’s stimulus package

BANK of Japan officials expect some impact from the move. — WIKIPEDIA.ORG

BANK OF JAPAN (BoJ) officials see a sizable impact from government stimulus announced last week, raising the likelihood that the bank will upgrade its economic forecasts for the first time in a year next month, according to people familiar with the matter.

The possibility of higher growth projections would likely strengthen a building view among economists that the BoJ will stand pat on key policy measures at its meeting next week and for some time to come, barring unexpected developments in US-China trade talks, markets or economic data.

The BoJ doesn’t revise its growth projections until January, when it next issues quarterly forecasts.

The package announced last week by Prime Minister Shinzo Abe includes 13.2 trillion yen ($121 billion) of fiscal measures to support an economy facing an export slowdown, typhoon damage and the fallout from a recent sales tax hike. While the economy grew in the first three quarters with the support of domestic demand, it is forecast to shrink 2.6% in the last three months of the year.

Officials at the BoJ expect the government’s stimulus to boost growth from the next fiscal year starting in April, the people said. The central bank’s projections are likely to be largely in line with the government’s view, according to some of the people.

The government said its fiscal measures will boost growth by 1.4 percentage point over time, but hasn’t made clear the specific impact for the next fiscal year.

Economists have cast doubt on the government’s figure for boosting growth, but they largely agree that the package makes it easier for the BoJ to hold off on extra stimulus. Analysts at banks including Barclays Plc and JPMorgan Chase & Co. are telling clients they should no longer expect the BoJ to ease anytime next year.

When the Abe administration introduced economic stimulus measures in 2016, the BoJ raised its growth forecast for the following fiscal year to 1.3% from 0.1%. — Bloomberg

First, Burger King. Now fancy tasting menus are ditching meat

FROM Burger King’s Impossible whoppers to Dunkin’ Beyond Meat sausage breakfast sandwiches, fast food may drive the conversation when it comes to a meatless future. But a quieter revolution is happening at the highest ends of the restaurant world: The number of courses that highlight beef, pork, lamb, and poultry are dwindling at places where a $200 tasting menu is a bargain.

The reasons vary from political to personal. New York’s recent foie gras ban, and a similar one upheld by the Supreme Court of California, are leading to the disappearance of the luxurious goose and duck liver — a fine dining fixture and lightning rod for animal welfare advocates — from cities with a high concentration of tasting menus. Also, chefs are eating more healthfully and thoughtfully and don’t want their customers to be crushed with heavy proteins at the end of a meal. (Seafood, perceived to be less environmentally damaging than cows and pigs, is still in play for most elite chefs.)

The American public’s inexorable move away from traditional meat and dairy is happening at all ends of the dining spectrum. In a 2018 survey by Johns Hopkins Center for a Livable Future, two-thirds of Americans report cutting back on meat. From April 2017 to July 2019, plant-based food sales grew approximately 31%, to $4.5 billion. They’re projected to increase to $6.5 billion by 2023. In 2018, 51% of chefs in the US said they’d added vegan items to their menus.

Consider this movement the “trickle-up” effect. At fine dining restaurants, where meats such as imported Japanese beef and game like antelope and boar were invariably the drum-rolled entree, diners might now find well-dressed mushrooms and roots. New values are changing what’s considered a luxury when it comes to dining.

ENTER THE MICHELIN STAR CHEFS
In November, Dominique Crenn announced that her three Bay Area restaurants would be meat-free, as would her upcoming café Boutique Crenn. The chef, who describes herself as “not a vegetarian, but a climate change activist,” isn’t a fake meat fan. Instead, at her three-star Atelier Crenn she offers such plates as sole with oyster bearnaise in tasting menus that start at $345 per person. The more laid-back Petit Crenn features the French sausage boudin, made not with pork but with squid ink to give the dish a dark, briny taste.

“People are shifting. The biggest dairy company [Dean Foods Co.] just filed for bankruptcy. Ten years ago, people wouldn’t have heard me. Now no one even asks for meat,” she says.

Seafood has also become the focus of William Bradley’s 10-course, $270 tasting menu at the Addison in San Diego. The chef saw an opportunity to make the menu reflect his own healthier, more environmentally thoughtful eating habits when his restaurant was awarded a Michelin star in June. He replaced an entree of côte de boeuf and braised short ribs with a caramelized cod dressed with miso, bonito butter, and a caviar garnish.

“Multicourse tasting menus can have 2,500 calories that you consume in three hours,” Bradley says. “I wanted to lighten that up.”

The chef’s seasonal menu currently includes a barbecued pigeon course — and the option of a wagyu beef — but neither is the dish his audience is most excited about. “People freak out more about the wild cod than they do about anything else,” he says.

CLASSICS GO VEGETARIAN
At Maude, in Beverly Hills, executive chef Chris Flint reimagines classics like Australian meat pies through a vegetarian lens with the offerings on his menu, which changes quarterly.

“This trend [toward vegetarianism] has developed among a broader audience due to increased awareness about the environmental impact of commodity proteins,” he says. Although he includes one or two meat courses, Flint leans into produce, crafting terrines from carrots and tossing pasta with a ragu made from fermented vegetables rather than beef.

Jean-Georges Vongerichten was a plant-based food advocate long before he opened the destination vegan spot ABCV in downtown New York in 2016. In mid-July he added a vegetarian menu at his eponymous restaurant, responding to demand from customers.

“Ten courses of protein, it’s a lot,” he says. Vongerichten makes elegant kebabs of oven-dried fruit and Brussels sprouts, and caramelizes mushrooms with honey and coconut butter. In January he’ll add juice pairings, such as celery with green peppercorn, that amplify the menu’s vegetable forwardness; kombucha will also be available. Since he introduced the meatless option, Vongerichten has seen demand for his vegetable tasting menu increase from 15% to about 35% at dinner; at lunch, 40%-45% of diners order the non-meat menu.

PORK PLACE EMBRACES VEG
Meat is also in retreat at places where it was foundational. At the Publican, a renowned gastropub in Chicago with pictures of pigs hung around the dining room, pork was the perennial star — but no longer.

“When we opened the Publican, it was all about pork, beer, and oysters. But over the course of the last decade, we cut back on meat,” says co-owner Paul Kahan. At brunch, the meat-free Greens and Grains has become a surprise bestseller.

“The trend for us seems to be that people still want to eat meat, but they want more vegetable options to balance out their meal,” adds Kim Leali, the group’s culinary operations director.

NO MEAT IS A MISS
Still, not all elite restaurants turned their back on meat. Laurent Gras, chef at the elite Saison in San Francisco, has cut back on land-based protein since taking over the kitchen in 2018, replacing quail with a Santa Barbara spot prawn. But he still serves a venison course on the $298 tasting menu; he has no plans to go meat-free like Crenn has.

“Not to have meat on a long menu is a miss. It’s a limitation of the whole experience,” he says. Gras’s audience backs that up. He says about 50% of his guests order the $60 wagyu supplement. — Bloomberg

PAL’s Board of Directors appoints new vice chair

CARMEN K. TAN, spouse of billionaire Lucio C. Tan, Sr., is the new vice chairperson of the Board of Directors of the Philippine Airlines, Inc. (PAL).

In a disclosure to the stock exchange on Wednesday, PAL Holdings, Inc., the parent company of PAL, said the members of the Board of Directors of PAL have appointed Ms. Tan as their vice chairperson.

The Board has also “approved and confirmed” the resignation of lawyer Estelito P. Mendoza.

In a phone message to BusinessWorld, PAL Spokesperson Cielo C. Villaluna said Ms. Tan replaces Lucio “Bong” K. Tan, Jr., her son, who passed away on Nov. 11.

On Friday last week, PAL Holdings first confirmed that former central bank governor Amando M. Tetangco, Jr. and Mr. Mendoza have submitted their resignations.

It said the resignations of Messrs. Tetangco and Mendoza would then be taken up in a board meeting.

PAL Holdings did not cite any reasons for the resignations of both officials.

PAL reported in October that its board accepted the resignations of Angelito A. Alvarez as the airline’s senior vice-president for planning and commercial group, and Siegfred B. Mison as senior vice-president for legal and general counsel.

On Oct. 28, three months after his appointment, Gilbert Gabriel F. Santa Maria resigned as PAL Holdings’s president. He remains president and chief operating officer of the operating company, PAL.

Mr. Santa Maria was replaced by Mr. Tan, Jr.

In the nine months to September, PAL’s attributable net loss widened 116.2% to P8.5 billion from P3.92 billion a year earlier, as expenses and financing charges increased.

Revenue rose 5.6% to P117.92 billion, primarily as passenger and ancillary revenue increased due to additional frequencies and new routes which contributed to the growth in passenger volume.

Shares in PAL Holdings went down 12 centavos or 1.57% to P7.50 apiece on Wednesday. — Arjay L. Balinbin

Tencent-backed iDreamSky in talks to buy rival gaming firm Leyou

IDREAMSKY Technology Holdings Ltd. is in exclusive talks to buy rival gaming firm Leyou Technologies Holdings Ltd. for about $1.4 billion, according to people familiar with the matter.

iDreamSky, which counts Tencent Holdings Ltd. among its shareholders, is seeking co-investors to help finance the transaction, the people said, asking not to be identified because the deliberations are private. Potential partners could include private equity firms as well as other gaming companies, the people said. The Shenzhen-based firm is working with Credit Suisse Group AG on the deal, they said.

Leyou has risen about 16% this year, giving it a valuation of around HK$7.8 billion ($996 million). Shares of iDreamSky have plunged more than 30% since its debut last year, valuing the company at about HK$5.8 billion.

There hasn’t been any final decisions as talks are ongoing and the companies could still decide against a transaction, the people said. Representatives for iDreamSky and Credit Suisse declined to comment, while a representative for Leyou didn’t immediately respond to requests for comment.

Leyou, listed in Hong Kong in 2011, has developed the free shooting games Warframe and Dirty Bomb. It’s also working with Amazon.com Inc. to co-produce a video game based on the popular fantasy series “The Lord of the Rings.” Other upcoming games are Civilization Online and Transformers.

In September, Leyou said that it was holding preliminary talks with potential investors on possible transactions, which may lead to a public takeover. Bain Capital, CVC Capital Partners and KKR & Co. as well as other gaming companies were among bidders for Leyou, Bloomberg News reported last month.

Last week, Leyou updated the progress in a filing that its controlling shareholder Charles Yuk had entered into a memorandum of understanding to sell about 69.2% stake to an unidentified potential buyer. The company granted a 21-day exclusivity period to the potential purchaser to conduct due diligence and try to reach a formal agreement.

As part of any potential deal, Yuk would acquire the company’s interests in certain offices in the iconic Lippo Centre in Hong Kong and enter into an agreement to provide financing to help develop certain games, according to the filing.

iDreamSky, listed in Hong Kong about a year ago, had 57 games including 16 role-playing games on its platform as of June 30, according to its interim report. It has exclusive publishing rights in China for popular titles including Subway Surfers and Temple Run.

Michael Chen, its co-founder and chief executive officer, is iDreamSky’s largest shareholder with a 25.92% stake, according to data compiled by Bloomberg. Tencent Mobility, a unit of the Chinese technology giant Tencent, owns about 18.6% as the second-largest holder. — Bloomberg

HSBC agrees to pay $192M to resolve decade-long probe

HSBC HOLDINGS Plc admitted that it helped hundreds of American clients hide more than $1 billion in assets from the Internal Revenue Service and agreed to pay $192.4 million to resolve a decade-long US tax investigation.

Prosecutors filed a charge of conspiracy to defraud the US against a unit of the bank, HSBC Private Bank (Suisse) SA, but agreed to drop it in three years if it abides by a deal submitted Tuesday in federal court in Fort Lauderdale, Florida.

From at least 2000 through 2010, HSBC Switzerland “assisted US persons in concealing their offshore assets and income from US tax authorities, evading their US tax obligations and filing false federal tax returns with the IRS,” according to the conspiracy charge.

The settlement follows years of Justice department and IRS battles against Swiss banks, taxpayers and enablers over undeclared accounts, which led to settlements with dozens of banks. It also caps a decade in which HSBC, an Asia-focused lender, entered into two other deferred-prosecution agreements with the US and spent heavily on improving internal controls. For the past two years, the Bank of England has warned HSBC that it hasn’t done enough to tackle concerns about handling risks including financial crime and staff conduct.

“HSBC Switzerland conspired with US account holders to conceal assets abroad and evade taxes that every American must pay,” said Stuart M. Goldberg, the acting deputy assistant attorney general in the Justice department’s Tax Division.

In a “statement of facts,” HSBC Switzerland admitted that it helped 720 US clients hide $825 million in assets from the IRS. The amount of undeclared assets rose to $1.26 billion in 2007, before dropping by half three years later. HSBC Switzerland offered a variety of traditional Swiss banking services that helped clients cheat the IRS, including advising clients to withdraw less than $10,000 to avoid reporting requirements, and providing credit, debit and travel cards to access funds.

Many banks have made similar admissions. UBS Group AG said in 2009 that it helped thousands of clients cheat the IRS and paid $780 million, and Credit Suisse Group AG reached a $2.6 billion deal in 2014. Another 80 Swiss banks avoided prosecution by agreeing to pay $1.37 billion in penalties and voluntarily disclosing their wrongdoing as part of a Justice department program.

HSBC has been caught up in other scandals as well. In 2012, the bank paid $1.9 billion in penalties, admitting that it failed to prevent Latin American drug cartels from laundering money and violated US sanctions against Iran. Within a year, its reform efforts met resistance from leaders of HSBC’s US investment-banking unit — some of whom mounted a campaign of bullying, foot-dragging and discrediting in-house watchdogs, according to a court-appointed monitor.

Soon after that deal expired, the bank agreed in early 2018 to pay about $100 million to resolve an investigation into rigging of currency rates. Later that year, the bank agreed to pay $765 million to settle allegations that it sold defective residential mortgage-backed securities.

In the tax case, HSBC bankers told clients not to receive bank statements in the US mail or carry them back from Switzerland. The bank used wholly owned or affiliated companies to offer people in tax-haven countries to serve as trustees or directors of shell companies that helped hide the true owners of accounts. From 2005 to 2007, at least four bankers on the North American desk traveled to the US to advise existing client and troll for new ones at events like Design Miami.

On numerous occasions from 2002 through 2006, bankers used an HSBC Switzerland account to purchase art at auction for a client, known as Client 1, according to the statement of facts. On another occasion, bankers used it to pay for a luxury vacation package provider.

In 2008, as the US crackdown on offshore tax evasion took root, the bank began forcing US clients with undeclared accounts to close accounts. But bankers helped clients close accounts “in a manner that continued to conceal their offshore assets,” according to the bank’s admissions.

HSBC has undertaken “substantial remedial measures and extensively cooperated” with the Justice department, according to the agreement. It contacted the Justice department in December 2008, conducted an internal investigation, and reported its misconduct.

“We are pleased to resolve this legacy matter,” said Alex Classen, the chief executive officer of HSBC Private Bank (Suisse), who attended the Tuesday hearing. “Over the past decade we have strengthened our compliance function, enhanced our control framework and put in place a comprehensive client tax transparency policy.”

In recent years, the bank quintupled the number of employees assigned to spot suspicious activity to 5,000, upgraded its technology and, in 2016, hired Jennifer Calvery, the US Treasury department’s top anti-money-laundering official, to oversee its efforts.

Still, the tax case was left unresolved for at least eight years. In 2011, the IRS went to court to seek information about Americans with accounts at HSBC India from 2002 to 2010. Through 2010, about 9,000 US residents had nonresident Indian accounts of $100,000 or more, and only 1,391 disclosed them to the US in 2009, the IRS said in court filings. The clients had deposits of almost $400 million.

In 2013, a New Jersey businessman who cooperated with prosecutors avoided prison after admitting he conspired with five HSBC bankers to hide Indian bank accounts from the IRS. Several other HSBC clients were convicted of tax crimes.

HSBC Switzerland has effectively exited the US market, and now has fewer than 5,000 accounts in total, a decrease of more than 85% since the late 2000s, according to the agreement. — Bloomberg

Panda Express opens its first branch in Manila

AN ASIAN-AMERICAN brand has crossed the oceans to bring American-Chinese food to the Philippines. Panda Express opens its first branch in the Philippines, today, Dec. 12, in SM Megamall.

The arrival of Panda Express in the Philippines was brought about by a 50/50 joint venture between the Panda Restaurant Group (PRG) and Jollibee Foods Corp. (JFC), forming JBPX Foods. Co-founders and co-CEOs of PRG, Andrew and Peggy Cherng, were present at the inauguration earlier this week, as well as JFC founder and Chair Tony Tan-Caktiong.

“The story of how this came together started from a simple yet meaningful friendship,” said Mr. Tan-Caktiong during a speech. “A friendship between Andrew and Peggy has blossomed into a business partnership founded on mutual trust and respect. We realized that we are alike in so many ways,” he said, sharing, for example, that both their fathers had been chefs. “Both companies come from small beginnings.”

Both companies trace their origins to the 1970s: Panda Express was a fast food iteration in the 1980s of an earlier venture called Panda Inn. Jollibee, meanwhile, began as a Magnolia ice cream parlor in Quezon City, which started to serve hot meals that superseded the popularity of the ice cream. “It’s amazing how two companies can be so similar despite having been founded thousands of miles apart,” said Mr. Tan-Caktiong.

Mr. Cherng in his speech, meanwhile, said: “We are going to earn the trust of every consumer one at a time.”

As we’ve noted above, Panda Express is not simply Chinese cuisine, but an interpretation of Chinese cuisine for American palates: their flagship product, Orange Chicken, for example, is a rendition of sweet and sour dishes popular in China.

BusinessWorld had a taste of the offerings of Panda Express during the inauguration, noting that the Kung Pao chicken was a clear favorite (we liked the nuts and the vegetables). The Orange Chicken tasted a bit familiar, but we really liked the String Bean Beef and its chicken version. One thing we can say is that everything tasted quite clean: there’s none of the greasiness and the MSG that some people dislike (or really like) in Chinese restaurants (Panda Express, in its website, says that they do not add MSG to their products, nor do they “purchase products from suppliers who add MSG”). If you’re familiar with the sensation of how Chinese fast food can taste really good when you’re drunk, this is it — except you’re sober the whole time.

During a roundtable interview with Mr. Cherng, BusinessWorld asked about bringing in an interpretation of Chinese food to a place with a rich Chinese influence. “I don’t really know what the Chinese heritage is like here. However, I think the world is changing. Our concept has really done very well with the food that we serve in America. It’s been very well-received. So why not here?”

He also added that the second-largest group employed under Panda Express are of Filipino descent, and that the company does really well in Hawaii — itself home to a large number of Filipino-American families (a 2007 article from the Honolulu Star Bulletin said that its Ala Moana location brings in $4 million annually). “I believe there is going to be an acceptance. People accept us in the Filipino community, so I think we’ll do well here.”

Asked about how many stores the joint venture plans to open, he said, “I’d be thrilled if Panda could be half as successful as Jollibee here.” (As of May this year, Jollibee operates over 1,150 fastfood restaurants in the Philippines. It has 234 in foreign markets.)

He also remarked that the partnership was forged over a period of “three or four years.” Asked about the group’s interest in the Philippines, he fixed his gaze on the crowd outside the restaurant. “I am now seeing a mall as busy as the one here. I don’t think you can find a mall in America, on a Monday, with that many people. Obviously, it’s a great market.”

At present, JFC owns the chains Chowking, Greenwich Pizza, Red Ribbon, and Mang Inasal; the franchise for Burger King in the country, the master franchise for Tim Ho Wan in the Asia Pacific region, and the Coffee Bean & Tea Leaf chain. On the other hand, PRG has a presence in the following countries: Canada, Guatemala, Japan, Mexico, El Salvador, South Korea, Russia, and the United Arab Emirates.

“Our objective is to build one really, really successful store in 100 countries,” said Mr. Cherng in the interview. “One of the possibilities is that Jollibee will be able to take the concept to neighboring places. They already have a network of partners, and perhaps we can leverage that,” he said. Jollibee, meanwhile, already has a visible presence in the US. About this, Mr. Cherng said, “I don’t know if they need our help. But if they do, we’ll be very happy to do whatever we can.”

Panda Express stands today as the largest Asian-American restaurant chain in the US, with, at Mr. Cherng’s count, 2,200 branches. “We’ve always believed that having a nice place, where people are friendly, and they serve [something] different — you’ll win. Or you’ll do well,” said Mr. Cherng when asked about their success. — Joseph L. Garcia

Axelum on track to hit profit goal as end-Sept. total up

AXELUM RESOURCES Corp. said it is on track to hit or even exceed its profit target by the end of 2019 as it posted a 28% growth in net income in the nine-month period ending September.

In a statement Wednesday, the newly-listed coconut products manufacturer said its net income in the January to September period stood at P609 million, up from last year’s P476 million, positioning it for an increase in whole-year financials.

“Our financial results for the first nine months of 2019 have grown nearly two-fold compared to our full year performance in 2018. At this rate, we are on track to meet or even surpass our own profit expectations,” Axelum President and Chief Operating Officer Henry J. Raperoga said in the statement.

The company is allocating between P500 million to P600 million for capital expenditures in 2020, which it will use to “further strengthen its production capabilities and at the same time broaden geographic reach.”

It said it will be acquiring new equipment to improve its operational efficiency and increase its manufacturing output. It is also looking to enter new markets next year by opening distribution hubs in regional locations and tapping distribution partners overseas.

“We have yet to maximize our presence in the global scale. As such, we are looking to aggressively widen our footprint particularly in the United States West Coast, Eastern Europe and Asia,” Mr. Raperoga said.

After raising P4 billion from selling 700 million primary common shares and 100 million shares when it held its initial public offering in October, Axelum said it initially allocated P800 million from its proceeds to settle short-term loans.

Heading into 2020, the company said it expects its coconut water and coconut milk powder to drive the growth of its revenues. It said it is currently renewing its coconut water supply contract with an anchor client.

“As early as now, we believe that our well-defined objectives and strategies will put us in a strong position to grow our bottom line by at least double-digit next year,” Axelum Chairman and Chief Executive Officer Romeo I. Chan was quoted as saying.

Shares in Axelum climbed 14 centavos or 5.38% to P2.74 each on Wednesday. — Denise A. Valdez

YouTube to FTC: don’t assume only kids are watching kids videos

GOOGLE asked the government to eliminate rules that categorize anyone watching “child-directed” content online as under 13 while regulators revamp privacy regulations that could have a sweeping impact on the company’s YouTube video service.

The Alphabet Inc. unit filed comments with the Federal Trade Commission (FTC) on Monday as the agency considers changing its rules under the Children’s Online Privacy Protection Act, or COPPA, which regulates how internet companies collect data on young people.

In September, Google agreed to pay $170 million to the FTC to resolve claims that YouTube violated COPPA by serving targeted advertisements to children under 13. In response, YouTube agreed to end personalized ads on any videos deemed “made for kids” starting in January, a potential hit to sales for the company and its thousands of video creators. The FTC settlement also holds creators on the site responsible for future violations, which has sparked panic among some producers on YouTube’s sprawling network.

In its comments, the company argued against FTC rules that automatically identify viewers younger than 13 based on the content of videos.

“This does not match what we see on YouTube, where adults watch favorite cartoons from their childhood or teachers look for content to share with their students,” YouTube wrote in its public comments. “This is why we support allowing platforms to treat adults as adults if there are measures in place to help confirm that the user is an adult viewing kids content.”

One critic of YouTube said the company’s response was inadequate.

“This is a COPPA cop-out by Google,” Jeff Chester, executive director of the Center for Digital Democracy, one of the groups that complained to the FTC about YouTube. “They should be telling creators that they apologize for involving them in their massive multiyear violation of the US law.”

The popularity of kids’ programming has put YouTube in an uncomfortable position. The company has maintained that the site isn’t for children, and doesn’t allow viewers under the age of 13. It created a separate app for kids, but its audience is tiny compared to the full site.

After the FTC settlement, YouTube told creators that they would have to identify when videos are aimed at children under 13. When that happens, YouTube now turns off ads that rely on web browsing behavior and other targeting data, which earn more for YouTube and creators.

On Monday, YouTube also asked the FTC for “balanced and clear guidelines” to help creators comply with COPPA. The company said that content not intended for kids can sometimes involve a traditional kids activity, such as gaming and art. “Are these videos ‘made for kids,’ even if they don’t intend to target kids? This lack of clarity creates uncertainty for creators,” YouTube said.

YouTube doesn’t disclose its sales or break out what portion of the videos on its service are “child-directed.” Indeed, the company likely can’t automatically make such nuanced judgments on the millions of videos it runs online, despite having some of the world’s best technology for identifying and categorizing images and clips.

In recent weeks, some YouTube creators launched a campaign to tell the FTC that rewriting the COPPA rules and the settlement could hurt them financially and reduce the quality of programs. The agency has received thousands of comments on what has previously been a sleepy area of law.

The FTC has issued guidance under COPPA for what constitutes videos “directed to children.” YouTubers have expressed frustration that the definitions are still too vague.

The FTC also allows sites that aren’t aimed at kids to put in place an age screening for viewers. That way, if kids do end up there, the site’s operators can reduce data collection, although children often lie about their age online. Some creators, including one of those who helped launch the petition to the FTC, have urged YouTube to adopt a comparable solution. YouTube didn’t address that on Monday in its blog. — Bloomberg

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