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Domagoso vows more infrastructure, health facilities in Samar

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MANILA MAYOR and presidential bet Francisco “Isko” M. Domagoso, along with his running mate Willie T. Ong, started their campaign in the central part of the Philippines on Tuesday, making Samar their first stop with a promise to build more infrastructure and health facilities on the island.

“When it comes to basic needs, like hospitals… Doc Willie and I, together with our partymates have agreed that we will build 17 10-story fully-airconditioned with equipment public free hospitals,” Mr. Domagoso was quoted as saying in Filipino in a statement released by his campaign team. 

“Doc Willie really wants to have the cancer center built. He also suggested the infectious disease hospital,” he said.  

“Then, you can see the schools here in Samar. You can really see that infrastructure is really needed here because it takes too long to travel to each community and there are many communities, so we will try to do what is needed in those areas,” he added.

Samar used to be among the poorest areas in the country.

As of the first half of 2021, however, the provinces of Samar and Eastern Samar have moved to the second cluster in terms of poverty rate while Northern Samar was already within the third cluster, based on Philippine Statistics Authority data. 

Meanwhile, Aksyon Demokratiko Chairperson Ernest M. Ramel, Jr. said he expects the endorsement of Maguindanao Rep. Esmael “Toto” G. Mangudadatu to convince more people from Mindanao to vote for Mr. Domagoso.

He noted that Mr. Mangudadatu, who previously served as a governor in the province, and his wife Sharifa Akeel have significant influence in the southern islands. 

“They can have a huge sway (of votes), in fact, they even have their local party there that Mayor Isko is campaigning for,” he was quoted as saying in Filipino in a statement.

Mr. Ramel said the Manila Mayor is scheduled to have a campaign sortie in Mindanao. — Jaspearl Emerald G. Tan

Supreme Court associate justice seat opens for applications

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APPLICATION is now open for the Supreme Court associate justice seat that will be vacated by Justice Estela M. Perlas-Bernabe, who will retire in May, the Judicial and Bar Council (JBC) announced on Tuesday.

Under the 2020 Revised Rules of the JBC, members of the High Court must be at least 40 years old and must have at least 15 years of experience practicing law in the Philippines. 

Applications can be submitted through JBC’s online application scheduler not later than March 29.

Ms. Perlas-Bernabe was appointed to the 15-member Supreme Court post on Sept. 16. 2011.

Meanwhile, the High Court said on Tuesday that it is increasing its operational capacity to at least 80% starting Feb. 16 as coronavirus cases decrease in Metro Manila. 

In-person filing of court cases and pleadings will be allowed starting Wednesday. — John Victor D. Ordoñez

Origins of the Filipino First mentality

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(Part 1)

Among the major economic reforms for which the Duterte Administration will be remembered by posterity is the passing of the Public Service Act which dealt a big blow to the “Filipino First” mentality which inflicted much economic harm to the Philippines for several decades after we gained political independence in 1946.

In my crystal ball foreseeing the future, the Philippine’s GDP growth can accelerate to 8-10% if the next Administration will be characterized by good governance and by more openness to Foreign Direct Investments (FDI). In my opinion, growth of 6-7% is achievable whoever is elected President in May 2022 since I expect the next President, whoever she or he is, to continue to benefit from the strong institutions already in place after some 30 years of slow and painful reforms. It is also highly probable, that the next President, whatever her or his weaknesses or limitations may be, will be appointing some of the best people to their Cabinet in the fields of the economy, finance, industry and trade, agriculture, public works, and other critical positions that have to do with sustainable and inclusive development, as we have witnessed over the last 30 years.

To be very candid, the outgoing Administration was led by a person who did not exactly excel in leadership qualities. The proof of the pudding, however, is that under him the economy grew at an average of 6-7% before the pandemic and is bouncing back relatively well after the pandemic.

The next Administration, however, will face a humongous debt burden as a result of the huge borrowings occasioned by the COVID-19 pandemic. By the end of 2021, the National Government recorded P11.73 trillion in outstanding debts. Our debt-to-GDP ratio has gone over 60% (from the previous 30% pre-pandemic) and our fiscal deficit has topped 8% (from a low of 3%). There will be a serious shortage especially of long-term capital to continue the Build, Build, Build program and to rehabilitate the numerous business establishments that suffered from the economic collapse brought about by the pandemic, especially in the transport, travel and tourism, private education, and public utilities sectors. For long-term capital, there is no alternative to attracting bigger doses of FDI, especially in telecommunications, shipping, airlines, airports, trains, subways, expressways, tollways, and canals. All these have to be open to 100% foreign ownership if we are to attract the necessary long-term capital. Fortunately, the President has already signed the Public Service Act allowing 100% foreign ownership of these strategic industries. Those who worked on the bill expect some P299 billion in increased FDIs over the next five years.

Vietnam was able to surpass the Philippines in GDP per capita at the height of the pandemic in 2020 because, among others, it has been a great deal more open to FDIs than the Philippines. For example, from 2015 to 2019, before the pandemic, Vietnam attracted an annual average of $14 billion compared to our annual average of $8.5 billion, despite our having a larger population of 110 million compared to Vietnam’s 95 million. We must do more in the coming years to attain the potential of 8-10% GDP growth during the post-pandemic period.

I am hoping that in the next Administration, there will be further moves to allow more FDI even in what are still considered “public utilities” as well as in such strategic areas as higher education, mass media, and real estate through amendments to certain economic provisions of the 1987 Constitution.

I would like to call attention of those aspiring to be President of the Philippines and to other top positions in our National Government to an article that appeared in the Opinion section of the Philippine Daily Inquirer on Feb. 3. Written by Kaushik Basu, former Chief Economist of the World Bank and Chief Economic Adviser to the Government of India, the article warned emerging markets like the Philippines about the disastrous consequences of ultra-nationalism or what he calls “hyper nationalism” (a.k.a. Filipino First mentality). In an article entitled “The Economic Costs of Closed Minds,” he warned that the world economic recovery from the pandemic will be slow, greatly burdened by huge debts incurred during the pandemic. As he wrote: “… the World Bank forecasts that global economic growth will slow to 4.1% in 2022, from 5.5% last year. With debt burdens rising, supply chain bottlenecks impeding the flow of goods and services, and inflation picking up, governments are losing the capacity to provide further fiscal support. The report warns that the surge in debt caused by countries trying to soften the ‘pandemic-induced global recession’ means that several economies are now ‘at high risk of debt distress.’ Some may need debt relief.”

Dr. Basu strongly warns about the economic harm that can be done by what we call the Filipino First mentality among our policy makers. He stresses that hyper nationalism is usually disastrous for an economy in the long run. This is because strident nationalism leads to bloated egos and blurry thinking. Countries in its grip try to become self-sufficient by raising barriers to trade, capital, and ideas from elsewhere. He gives as an example the case of Argentina, which was among the world’s fastest growing economies in the early decades of the last century and was even expected to overtake the US. Things turned for the worse in the 1930s when a military coup resulted in the installation of the hyper nationalistic Lieutenant General Jose Felix Uriburu as president. Tariffs subsequently rose, together with barriers to immigration. Argentina’s open economy, now closed to the world, soon stagnated and the US surged ahead.

Today, avoiding ultra-nationalism is even more important. In a globalized world, with new ideas and research emerging in all parts of the world, countries that succumb to extremes of nationalism will pull down their economies. It is important for us to understand what is behind the Filipino First mentality and to educate the public about the great harm it can do to sustainable and inclusive growth. In the next article, we shall review the very well-intentioned efforts of Filipino leaders during the Commonwealth under the US and in the first decade or so of Philippine independence to wean the Philippine economy from over dependence on the US economy. We shall also see how, unfortunately, these truly patriotic attempts to gain economic independence evolved into ultra-nationalistic policies that did more harm than good to Filipino workers and consumers.

(To be continued.)

 

Bernardo M. Villegas has a Ph.D. in Economics from Harvard, is professor emeritus at the University of Asia and the Pacific, and a visiting professor at the IESE Business School in Barcelona, Spain. He was a member of the 1986 Constitutional Commission.

bernardo.villegas@uap.asia

Dangerous cyber-terrain for our children

UPKLYAK-FREEPIK

Over two decades ago, a dear friend of mine had a daughter who had a tragic end. It began with what is now termed as “online grooming,” a form of child exploitation done via social media and/or telephony.

“Online grooming” is what abusers do to exploit trust and manipulate expectations of what safe behavior is and “leveraging fear and shame to keep a victim silent” or complacent.

My friend’s daughter was then in her early teens. She disappeared one day after telling my friend, her mom, that she would just be going out for a while to meet up with a friend. The poor child’s lifeless remains were found months later as she fell victim to an unspeakable evil.

Tragically, the case remains unsolved to this date.

Such crimes hit an especially sensitive nerve in my being. As a social science educator and consumer rights and welfare advocate working with the consumer group Bantay Konsyumer, Kuryente at Kalsada (BK3), I note with great anxiety the rise of a contemporary and complex social issue which is an untoward by-product of the increasing digitalization of modern life — the online sexual abuse and exploitation of children or OSAEC.

OSAEC is an issue — a social problem. It requires a social response and not merely individual action.

We must put things in perspective and see OSAEC as citizens of a now-digitally borderless world.

The first step is to be digitally ready, and this entails knowing how to safely interact in online spaces especially for our children.

The COVID-19 pandemic has highlighted the critical role that the internet plays in our professional and personal, everyday lives. Today, an online presence is no longer “nice to have” but a “must have.”

Unfortunately, the exponential rise of online activities has created a borderless hunting ground for online criminals such as those who engage in OSAEC. These miscreants who prey on internet users were a problem even before the pandemic; the COVID-driven lockdowns only magnified their prevalence and reach. In fact, the government revealed last year that transaction reports related to online sexual exploitation rose from 19,000 in 2019 to 47,937 in 2020 when mobility restrictions were imposed to halt the pandemic. Notably, the median age of those involved in these transactions is 11.

We must act decisively and swiftly on this issue.

In the past few years, the once-lamentable internet situation here in our country, specifically in terms of speed, has been improving. There have also been mounting calls for the government to work closely with the private sector in building digital infrastructure. These are all encouraging developments. But these are in no way the end-all and be-all of our efforts at digital readiness.

A July 2021 UNICEF study showed that free online connectivity and the widespread use of cellphones, coupled with the irresponsible use of technology and insufficient computer literacy of children and their parents, pose threats of exposure to OSAEC-related activities. Our country is an OSAEC hotspot.

Indeed, there are existing laws that punish cybercriminals. Still, OSAEC-pertinent policies in the country continue to be weak because of conflicting provisions that make it easy for cybercriminals to escape arrest. We need prompt action and thorough implementation of the legal tools available to ensure that more young Filipinos do not fall prey to unscrupulous online elements.

Each OSAEC case that arises takes a lot from our society and weakens it in profound ways even across generations.

As an educator and student of the social sciences, for over two decades now, I am well aware of the natural scientific and social fact that the negative effects of maltreatment, including what we now term as the OSAEC, can stay with a child, even beyond the years that they were exposed to these dangerous acts.

So, what, in concrete terms, can we do?

In broad strokes, what was mentioned earlier as acting collectively against OSAEC means first, encourage interventions from the private sector which promote digital citizenship, online safety, and the responsible use of technology.

Secondly, the government needs to collaborate with the private sector including civil society organizations in educating and empowering Filipinos to protect themselves online, and to set in motion an optimal strategy to address the OSAEC problem.

At the level of the individual, we must remain vigilant netizens as the threat of online criminal activity is only bound to grow more menacing. To be more direct, each of us has the duty to report suspicious sites or online activities that instigate and encourage irresponsible, if not criminal, behavior.

At the level of policy (and the 2021 UNICEF study on OSAEC bears these as key recommendations), we need rules that would exempt OSAEC cases from the Anti-Wiretapping Act, or else sinister minds would be able to continue their dark deeds unhampered, and even protected by the law. Moreover, the country’s laws also need to require financial institutions and remittance centers to act on OSAEC-related transactions.

With all these, we can do something to prevent these cyberspace predators from harming our people, especially our children.

 

Louie C. Montemar is a professor of Sociology and Political Science, and a fellow for Education at the Stratbase ADR Institute.

The four secrets of how to be a bad boss

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THE OTHER DAY I was sorting my bookshelves while listening to yet another news broadcast about Boris Johnson’s imploding premiership when I came across a slim volume on How to Be a Bad Emperor, a selection of Suetonius’s Lives of the Caesars repurposed by Princeton University Press as a self-help book — or, rather, as an anti-self-help book.

Suetonius was the best chronicler of Roman leaders from Caesar to Domitian because he dispensed with conventional hagiography and instead provided warts-and-all portraits that focused more on the warts than the all. As an Eton- and Oxford-educated classical scholar, Johnson will be familiar with his writings. The Princeton edition cleverly reproduces the choicest bits of Suetonius’s writings — and they are very choice indeed — under several anti-self-help headings. Ignore bad omens … and your wife. (Julius Caesar scoffed at the warning to “beware the Ides of March” as well as ignoring his wife’s advice.) Spend all your time at your resort. (Tiberius indulged himself in his holiday resort in Capri in ways that would make Silvio Berlusconi blush.) Make your horse a consul (Caligula). Fiddle while Rome burns (Nero).

Reading Suetonius, I was struck not only by the differences between the Ancient World and the Modern one but also by the remarkable similarities. Democracy has imposed constraints on the powerful: Donald Trump’s drive to subordinate the Republican Party in his image didn’t extend to stabling a horse in the Senate. But at the same time technology has liberated leaders to dream of colonizing Mars and creating a virtual universe. The elementary flaws in human nature — narcissism, and naiveté, greed and selfishness — find ways of expressing themselves however much the world thinks that it is progressing.

What would a modern version of How to Be a Bad Emperor look like? Here are four rules on how to be a bad boss in today’s political and corporate world:

RUN YOUR ORGANIZATION LIKE A COURT. Asked what he wanted to do when he grew up, the five-year-old Boris Johnson declared that he wanted to be “king of the world.” His current problems all stem from his predilection to run Downing Street like a court rather than an executive office. He appoints favorites to important jobs, plays factions off against each other, and frequently defers to his wife, who is informally known as “Carrie Antoinette.” The various “Partygate” photographs display a king humoring his courtiers and the courtiers flattering the king.

This pattern will be wearily familiar to Americans who saw Donald Trump bring the same style to American government. Oddly enough, a political revolution made in the name of the people against the elite has produced quasi-monarchical leaders on both sides of the Atlantic. And it is causing the same long-term problems in Britain that it did in the US: inappropriate behavior; faction-fighting; a decline in the quality of personnel; a poor record of delivery; and a mounting cycle of scandals.

UNTETHER YOURSELF FROM REALITY. The more successful businesspeople become, the more they abandon “the reality-based community” for a parallel world of their own making. They surround themselves with toadies and “yes men,” socialize exclusively with people like themselves and succumb to weird fantasies and obsessions. Brad Stone, the author of a book on Jeff Bezos, put it nicely in an interview with the New York Times: The world’s richest man “doesn’t really live among us anymore.”

Despite Bezos’s best efforts, the best example of untethering is still provided by Henry Ford, who was arguably both the greatest businessman of the 20th century and the worst boss. Ford owed his success to his focus on the needs of regular Americans: the people he hung around with as equals in the first 40 years of his life before he founded the Ford Motor Company. Then success divorced him not only from the common man but from common sense. His refusal to acknowledge that cars were consumer goods as well as devices for getting you from “A” to “B” opened the door to General Motors. He pontificated on every subject under the sun, from the abhorrent (Hitler’s Mein Kampf singled out Ford’s anti-Semitism for special praise) to the merely cranky such as reincarnation. For any of his underlings who dared to criticize him he had the same answer: “You’re fired.”

The most common form of untethering, though, is not megalomania but ideological groupthink. Today’s corporate captains, at least in the West, all sing from the same hymn sheet about sustainability, diversity, equity, globalization, and social responsibility, as if all these things are not only obvious goods, but also cost-free goods (“win-wins” as the cliché has it). Yet these bland phrases jar with the world that an enormous number of people inhabit, one in which energy prices are surging, nationalism is strengthening, and ethnic groups are fighting over the fruits of a stagnant economy.

SUCCUMB TO THE LATEST MANAGEMENT FAD. The 1990s was the high-water mark of management fads when great fad factories, from business schools to consultancies to business publishers, produced a never-ending cycle of fads that told companies first that they had to focus on quality (TQM) and then that they had to sack half their workers (re-engineering).

But even if the velocity of fad-circulation has declined, the problem can still be serious, if not terminal. The most conspicuous example of the dangers of faddism is Unilever Plc. During his long reign as CEO (2009-19), Paul Polman tried to inject faddish ideas about “purpose” and “social responsibility” into the heart of everything that the consumer products giant did. Though Polman boasts that Unilever delivered a 300% shareholder return during his time, his claims about doing well by doing good are hard to reconcile, first, with the better performance by Procter & Gamble Co. and Nestlé SA during those years and, second, with the trouble that the company currently faces.

Alan Jope, his chosen successor and co-devotee of the cult of purpose, is on the ropes. The fund manager Terry Smith has mocked the idea that Hellmann’s mayonnaise has to have a purpose other than garnishing salad. The activist investor Nelson Peltz is building a stake in the company. In the wake of its ill-conceived bid for GlaxoSmithKline Plc’s consumer-health division, the company obliged 1,500 employees to seek their purpose elsewhere by sacking them. “It would make an interesting bet,” one leading banker told The Times, “who will go first, Jope or Boris Johnson.”

DRINK THE SILICON VALLEY KOOL-AID. Jim Jones’s Peoples Temple cult was based in San Francisco before its devotees moved to Guyana and committed collective suicide by drinking poisoned Kool-Aid in 1978. Today San Francisco and its environs are the center of a new cult, of the deliberately obnoxious boss — less fatal to be sure, but troubling if not dangerous.

There is the jerk boss. Steve Jobs mistreated everyone around him but nevertheless changed the world. There is the crazy genius. Elon Musk spent half the earnings from his first startup on a race car — and when he crashed it with Peter Thiel in the passenger seat, his response was to laugh maniacally about his failure to insure it. There is the twerp boss. Mark Zuckerberg posted an Instagram of himself hydro-foiling while waving an American flag and listening to John Denver’s “Take Me Home, Country Roads” (!). There is the bro boss: Travis Kalanick was famous for his wild partying when he ran Uber and Shervin Pishevar, one of Uber’s leading investors, was accused of sexual harassment. There is the fabulist boss: WeWork, Inc. was in the rather humdrum business of selling short-term office space in cities but Adam Neumann, the 6’ 5”-inch former Israeli naval officer who ran it, managed to persuade investors, notably Masayoshi Son, that he was really selling “the future or work,” or a “physical social network” or even a “capitalist kibbutz,” as if such a thing might be desirable.

The antics of the tech titans and their imitators are sometimes so outrageous that they seem as if they come straight from the pages of Suetonius. Indeed, Zuckerberg is so infatuated with the Emperor Augustus that he spent his honeymoon in Rome (“all the photos are of different statues of Augustus”) and named his second daughter August. “Through a really harsh approach,” he told the New Yorker, “he established 200 years of world peace.” Zuckerberg loved Latin at school (“very much like coding or math”). His sister, Donna, earned a Ph.D. in classics from Princeton, and wrote a book on how misogynistic “alt-right” groups on the internet invoke classical history. A braver project would be an account of the lives of the tech emperors.

I have no doubt that these tech emperors have done more good than harm: You can’t change the world without being a bit odd. But the trouble is that too many people think that all you need to do is to imitate the peccadilloes of the successful — act the jerk like Steve Jobs or grow a Rasputin-style beard like Jack Dorsey — and you will be a business genius. Innumerable metrics suggest that the problem of bad bosses is a big one. A Gallup survey in 2019 showed that half of US workers had left their job in order to escape from a bad boss. (The Great Resignation would not have been so great if bosses had been better.) Numerous studies show that having a bad boss increases your chances of having a heart attack by 50%. The last thing we need is for more managers to make the problem worse by modelling themselves on Zack or Elon or Jack. In 99 cases out of 100, a jerk is just a jerk and a prat is just a prat.

BLOOMBERG OPINION

Issues with the Certificate Authorizing Registration in Tax-Free Exchanges

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Many businesses resorted to corporate reorganizations due to the COVID-19 pandemic. Corporations typically reorganize their corporate structure to increase efficiency in their operations, to increase revenue, and to attract more investors. These reorganizations usually involve acquisition of property in exchange for shares of stock which may be considered as tax-free exchanges (TFE).

TFEs shall not be subject to VAT (value-added tax) and DST (documentary stamp tax) while any gain or loss shall be deferred and recognized only when the properties or the shares are subsequently transferred. For original issuance of shares, a minimal tax shall be imposed. A Bureau of Internal Revenue (BIR) confirmation or tax ruling shall not be required for purposes of availing of the tax exemption of TFEs.

Corporations pursuing reorganizations must still apply for the issuance of a Certificate Authorizing Registration (CAR) of the properties subject of the TFE to effect the transfer of the properties in the names of their respective transferees.

Recently, the BIR issued Revenue Memorandum Circular 19-2022 (RMC 19-22) providing clarifications and guidelines for TFE transactions. RMC 19-22 reiterated existing rules on TFEs and provided the process and documentary requirements in applying for issuance of a CAR.

However, RMC 19-22 added several issues which require further clarification.

First, RMC 19-22 now mandates that the application for CARs of transactions involving multiple transfer of properties and share of stocks covered by different Revenue District Offices (RDO) shall be processed with the RDO having jurisdiction over the place where the transferee corporation is located. The use of the word “shall” indicates the mandatory character of the provision.

While this provision aims to simplify the process by mandating the application to be filed in one RDO, it appears to have created confusion as problems may arise since some of the documentary requirements will be secured from regions far from the RDO of the transferee corporation which will cause a delay in the processing of the application.

Second, in relation to the first item, RMC 19-22 did not address whether the applications for CARs to be filed in the RDO of the transferee corporation may be split to be filed per property or by batch, or if all properties must be included in a single application.

This is a problem when the transferee corporation has numerous real properties in different regions of the Philippines. This is typical in reorganization of conglomerates, banks, holding companies, or property developers.

The parties may encounter problems in securing requirements from the LGUs and registry of deeds (RD) where real properties subject of the TFE are located.

If the BIR will require the filing of a single CAR application for all the properties to be received by the transferee corporation, documentary requirements for some of the properties may be delayed which may affect the application and issuance of the CAR for properties which already have complete requirements.

Third, RMC 19-22 requires the submission to the RDO of the new TCT/CCT (Transfer Certificate of Title/Condominium Certificate of Title) of real properties subject of the TFE, within 90 days from the date of receipt of the CAR. Otherwise, the RDO shall refer the docket to the Legal Division for appropriate action.

Due to voluminous applications, enforcement of reduced workforce, closure of offices due to lockdowns, and other issues, the RDs might encounter delays in the issuance of the new TCT/CCT with the required annotation which may prevent the parties to the reorganization in complying with the 90-day requirement in RMC 19-22. The BIR might consider entering into a joint agreement with the Land Registration Authority (LRA) to further streamline the process.

While the BIR is commendable for finally issuing RMC 19-22, this author hopes that it will further clarify and improve the processes for the application and issuance of CAR for qualified TFE transactions as these corporate reorganizations are vital in the recovery of businesses, as well as our economy, from the effects of the pandemic.

This article is for general informational and educational purposes only and not offered as and does not constitute legal advice or legal opinion.

 

Rufino Gerard G. Moreno is an associate of the Tax Department of the Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW).

ggmoreno@accralaw.com

(632) 8830-8000

Sea’s $16-B wipeout portends trouble beyond India shutout

SEA LTD. lost more than $16 billion of value in its biggest daily market drop after India abruptly banned its most popular mobile gaming title. Investors are growing concerned the ban may just be the start of the company’s troubles.

Singapore-based Sea went public in 2017 and quickly became the most valuable company in Southeast Asia, based on its potential to expand its offering of gaming, e-commerce and financial services beyond its home turf. New Delhi’s decision to ban Free Fire — a lucrative title for the company — highlighted Sea’s challenges from geopolitical tensions as well as mounting competition from rivals like Alibaba Group Holding Ltd.’s Lazada.

India has banned hundreds of Chinese apps over the past two years, but the expansion of that policy to Sea took management and investors by surprise. The startup was founded by Forrest Li, who was born in China but is now a Singaporean citizen. Its biggest shareholder is Tencent Holdings Ltd., the Chinese social media giant.

Investors worry that India could potentially also ban Shopee, the second pillar of Sea’s business, where it had about 300 employees and 20,000 local sellers as of December. On Monday, Mr. Li reassured shareholders at its annual general meeting that the company had a grip on the situation. He didn’t comment on the Free Fire ban in India.

The markets didn’t buy it. Sea’s New York stock plunged more than 18% overnight as analysts scrambled to parse India’s reasoning and reassess Sea’s growth prospects. Shares have lost almost two-thirds of their value since October.

“Sea is a Singaporean company and we aim to partner in India’s digital economy mission,” the company said in a statement in response to queries from Bloomberg News. “We are committed to protecting the privacy and security of our users in India and globally, we comply with Indian laws and regulations, and we do not transfer to or store any data of our Indian users in China.”

The Free Fire game was the highest grossing mobile game in India in the third quarter of 2021, according to industry tracker App Annie. JPMorgan analyst Ranjan Sharma slashed his price target by about 40% to $250, citing heightened nervousness around Sea’s gaming franchise.

Sea remains one of Southeast Asia’s biggest success stories, an online retail and entertainment empire that generates almost $10 billion of annual revenue. Some 32 of 33 analysts still maintain buy or overweight ratings on the stock. Its stable of global backers include Cathie Wood’s Ark Investment Management. The superstar fund manager bought more than 145,000 shares on Monday, according to Ark data compiled by Bloomberg.

The most immediate question is whether Sea can appeal India’s decision and reverse it — or, if it fails, whether that ban will extend to its other businesses in the world’s fastest-growing internet economy.

On the face of it, Delhi has little justification for going after the company. Sea is officially a Singaporean enterprise — it’s registered there and most of its workforce, including Mr. Li and his lieutenants, operate out of the city state. Executives have openly championed programs to aid employment and education in Singapore, among other things.

But its links to the world’s No. 2 economy remain strong. Founded in 2009 by Li, Gang Ye and David Chen, a majority of its senior executives either hail from or have strong links with China.

Tencent, Sea’s long-time backer, is undergoing a national security review in the US. Last month, the internet giant divulged plans to sell $3 billion of Sea stock to reduce its holding to 18.7% from more than 20%, while eventually taking its voting interest down to less than a tenth.

Some analysts viewed that move as an effort to clear up questions about Sea’s origins and who calls the shots at the company. But apart from any attempt to assuage those concerns, Tencent’s gradual retreat is in itself a potentially significant blow to the company.

While Tencent is Sea’s largest shareholder, it’s adopted much the same hands-off approach it takes with other investees in China. But its backing was instrumental in Sea’s ascendancy especially in past years, when it ranked among the world’s best-performing stocks.

Leveraging Tencent’s enormous global distribution platform and business model, Free Fire rapidly garnered more than a billion downloads on Google Play, ranking it among the most popular titles in the world. Li has been candid about relying on Tencent’s expertise, particularly in Sea’s early days, and his attempt to emulate its business practices.

It’s unclear how Tencent’s sell-down would affect that relationship. Both sides have affirmed they will continue to work together. But Tencent itself is now embarking on an overseas expansion after Chinese regulators launched a crackdown on the gaming sector at home — meaning it will inevitably vie with Sea for some of the same gaming audiences — just not in India. — Bloomberg

Bird flu spreads to Kentucky, Virginia after discovery last week

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A STRAIN of influenza deadly to chickens and other fowl has spread to poultry flocks in Kentucky and Virginia, less than a week after an outbreak in Indiana prompted some countries to limit shipments from the state.

Mexico is among countries that have banned or limited poultry imports from Indiana after the virus was detected there, and the wider spread raises the possibility of additional curbs.

The US Agriculture Department’s Animal and Plant Health Inspection Service said in a statement Monday that tests show the virus present in a flock of commercial broiler chickens in Fulton County, Kentucky, and a backyard flock of mixed species birds in Fauquier County, Virginia.

Birds in the two flocks have been quarantined and will be killed, APHIS said in the statement. No human cases of the virus have been detected in the US, the agency said. According to the US Centers for Disease Control and Prevention, these avian influenza detections do not present an immediate public health concern, the USDA said.

The Kentucky farm is one of the thousands that raise chickens for Tyson Foods Inc., the company said in a statement.

While the situation is not expected to impact its overall chicken production levels, Tyson Foods is taking steps to prevent the spread of the virus, including boosting biosecurity measures at other farms in the region, placing additional restrictions on visitors and continuing to test all flocks before birds leave the farms, it said.

“Tyson Foods’ chicken products remain safe: the USDA confirms that avian influenza does not pose a food safety risk to consumers in poultry that is properly prepared and cooked,” according to the statement.

The US said last week it’s expanding surveillance of avian influenza to all four of its major bird flyways after the Indiana outbreak resulted in the death of thousands of turkeys.

A highly pathogenic strain was first discovered in January in the US in a wild American wigeon in South Carolina and then detected in wild birds in North Carolina before being found last week in a commercial turkey farm in Dubois County, Indiana, where 29,000 turkeys were culled.

A serious US outbreak of bird flu in 2014-2015 led to the death of more than 50 million chickens and turkeys and cost the US economy about $3.3 billion in losses, according to a USDA assessment. Eighteen countries — including China, Russia, and South Korea — banned trade of poultry and poultry products from the US Consumers paid higher prices for eggs, with wholesale egg prices at one point doubling from the prior three-year average. — Bloomberg

Taiwan says Chinese plane flew close to remote island

REUTERS

TAIPEI  — A small Chinese civilian aircraft flew very close to a remote Taiwanese-controlled island next to China’s coast earlier this month, Taiwan’s defense ministry said on Tuesday, adding China may be trying a new strategy to test its reactions.

Taiwan has complained for the last two years of repeated Chinese military activity near it, mostly China’s air force flying into Taiwan’s air defense zone off its southwestern and southern coasts though relatively far away from Taiwan itself.

Taiwan, which China claims as its own territory and on which it has upped pressure to accept its sovereignty, has termed this “grey zone warfare” designed to wear out the island’s air force and test its abilities.

The ministry said the aircraft flew very near to Dongyin, part of the Matsu archipelago off the coast of China’s Fujian province, on Feb. 5.

Having previously not identified the aircraft, the ministry said they had confirmed it was a Chinese civilian Y-12, a light twin-engine aircraft.

“On the Dongyin incident, of course we have made a preliminary judgment, and we cannot rule out that they are using civilian aircraft to test the responses of our military,” ministry spokesman Shih Shun-wen told reporters.

“The military will definitely take corresponding actions, but it will take various contingency actions without there being a minor incident which sets off a war.”

The ministry said the aircraft entered its “defense reaction zone” but did not enter its territory in Matsu, which Taiwan defines as waters and air space extending six km (about 4 miles) out from the coastline. China does not officially recognize any claims of sovereignty by Taiwan.

Shih declined to give details on how Taiwan’s forces reacted to the incident, citing military confidentiality.

China’s defense ministry did not immediately respond to a request for comment.

Taiwanese media have carried footage of the aircraft flying right next to Dongyin, and said residents could see and hear it clearly.

The Matsu islands have been controlled by Taiwan since the defeated Republic of China government fled to Taipei in 1949 after losing a civil war with the Communists.

The Matsu islands are not as heavily defended as they were until the late 1970s when China often shelled them, but Taiwan still maintains military forces there.

Taiwan also controls the much larger Kinmen island and a few close by islets further down the Fujian coast across from China’s Xiamen city, and the Pratas Islands at the northern end of the South China Sea.

Shih denied Taiwanese media reports that Chinese military aircraft last week entered Pratas airspace. China could be trying to “create chaos” by circulating false information online, he said. — Reuters

Snowboarding: Gasser wins Big Air gold, Sadowski-Synnott takes silver

BEIJING — Anna Gasser knew she needed something special on her last run to win the Beijing Games Big Air event on Tuesday and the Austrian did just that, landing one of the hardest tricks in women’s snowboarding to pip New Zealand’s Zoi Sadowski-Synnott for gold.

It was a case of déjà vu for Gasser, who also had to pull something big out of the bag in Pyeongchang four years ago to win the event on its Olympic debut.

On Tuesday, her perfect cab double cork 1260 brought her 95.50, the day’s highest single score, and her 185.50 total from her two best runs lifted her to the top of the podium.

Sadowski-Synnott, who won New Zealand’s first Winter Olympics gold medal in slopestyle in Beijing, missed her landing in her last 1260 trick as she lost control due to her speed.

Her combined score of 177.00 was good enough for silver ahead of Japan’s Kokomo Murase, who scored a combined 171.50 to take bronze in her first Olympics.

Gasser said she had initially planned to perform the cab double cork 1260 in her opening jump but had to change her plans due to wind conditions.

The defending champion said her win as a “surprise.”

“In Pyeongchang, I felt myself that I was the big favorite, I won Big Air leading up and I had tricks no one else had,” she added.

“This time, I was like, it’s going to be hard to get on the podium. This one feels way more unexpected for me.”

Sadowski-Synnott had nothing but praise for the gold medalist.

“Seeing Anna do the cab 12 and defend her medal was a great moment and we’re all stoked for each other,” she said.

Murase, who rushed to hug the other competitors after they attempted the hardest tricks, said there was great spirit among the snowboarders.

“They are not rivals. We’re competing with each other, it’s friendly,” she added. — Reuters

Brazil vs Argentina World Cup qualifier to be replayed after São Paulo farce

THE World Cup qualifier between Brazil and Argentina in September that was suspended after health officials ran onto the pitch will be replayed, world governing body International Federation of Association Football (FIFA) said on Monday.

The match at the NeoQuimica Arena in São Paulo was halted in farcical fashion just five minutes after kickoff when Brazilian health officials entered the pitch to stop Argentina’s England-based players from playing.

The officials claimed the Argentines had breached Brazil’s rules stating travelers who had been in the UK, South Africa or India during the previous two weeks were forbidden from entering the country unless they were Brazilian citizens or had permanent residency.

FIFA also banned Argentine players Emiliano Buendia, Emiliano Martinez, Giovani Lo Celso and Cristian Romero for two matches. The health officials had alleged that the players had misled border officials by declaring they had not been in a red list country during the 14 days before the game.

“After a thorough investigation of the various factual elements and in light of the applicable regulations, the FIFA Disciplinary Committee has decided that the match should be replayed on a date and at a location to be decided by FIFA,” it said in a statement.

“In addition, the FIFA Disciplinary Committee has concluded that the abandonment of the match stemmed from several deficiencies of the parties involved.”

FIFA, based in Switzerland, fined the Brazilian and Argentine football associations 500,000 Swiss francs ($540,000) and 200,000 Swiss francs, respectively, for their failure to ensure “order and safety.” — Reuters

DeMar DeRozan stays hot, leads Bulls over Spurs

DEMAR DeRozan poured in 40 points and continued his historic scoring run as the Chicago Bulls outlasted the visiting San Antonio Spurs 120-109 on Monday to win their fourth straight game.

The Bulls trailed by six points entering the fourth quarter but then DeRozan took charge, scoring 13 of Chicago’s next 15 points to give the Bulls the lead. The Bulls never trailed again, as DeRozan and Nikola Vučević dominated down the stretch.

San Antonio had two huge turnovers on successive possessions down by four points in the final 1:53 to hamper its comeback attempt.

DeRozan has scored 30 or more points in seven consecutive games (improving on a career-high) and established a franchise record with his sixth straight game of at least 35 points, supplanting the mark set by Michael Jordan in the 1996-97 campaign.

Vučević added 25 points and 16 rebounds, with Coby White scoring 24 points and Ayo Dosunmu hitting for 12. Chicago got just 12 points from its bench but shot 52.3% from the floor and earned a 53-33 edge on the boards.

Lonnie Walker IV led San Antonio with 21 points off the bench. Doug McDermott and Dejounte Murray added 19 points each — Murray also had 11 assists — and Keldon Johnson and Jakob Poeltl scored 13 apiece for the Spurs.

The Bulls led 29-27 after a back-and-forth first period as Vučević (12 points) and White (11) combined for all but six of Chicago’s points.

San Antonio swept to the front at 34-29 by scoring the first five points of the second period, after which there were nine lead changes and five tied scores before DeRozan’s two free throws with 48.1 seconds left in the quarter gave the Bulls a 59-57 advantage at the break.

White led all scorers with 16 points in the half with DeRozan and Vučević adding 15 each for Chicago over the first 24 minutes. McDermott paced the Spurs with 14 points while Walker IV had 11 and Murray scored 10 for San Antonio.

The Spurs retook the lead with a 9-2 run in the middle of the third quarter. Chicago tied the game at 79 on a jumper by DeRozan with 4:26 to play and again on a hook shot by Vučević on its ensuing possession but San Antonio rode nine points by Walker and a layup and a dunk by Keita Bates-Diop to end the period up 89-83. — Reuters