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India’s PM takes first dose of homegrown coronavirus vaccine

NEW DELHI — Indian Prime Minister (PM) Narendra Modi was inoculated with the first dose of a home-grown coronavirus vaccine on Monday, kicking off an expansion of the country’s immunization campaign that began in mid-January with healthcare workers.

People above 60, and those who are 45 or more and suffering from certain medical conditions, are now eligible for the vaccinations.

India, which has reported the highest number of coronavirus disease 2019 (COVID-19) cases in the world after the United States, has so far vaccinated more than 12 million health and front-line workers.

“Remarkable how our doctors and scientists have worked in quick time to strengthen the global fight against COVID-19,” Mr. Modi said on Twitter, posting a picture of him getting the shot at a government hospital in New Delhi.

“I appeal to all those who are eligible to take the vaccine. Together, let us make India COVID-19 free!”

The government said last week it would let people choose their vaccination centers, effectively letting beneficiaries pick either the home-grown COVAXIN shot or the AstraZeneca vaccine,  unlike earlier.

The inoculation campaign has progressed slower than expected due to a reluctance of health and front-line workers to take COVAXIN, which was approved without late-stage efficacy data. Only about 11% of vaccinated people have opted for the product developed by Bharat Biotech and the state-run Indian Council of Medical Research.

Bharat Biotech has said efficacy data from a late-stage trial on nearly 26,000 volunteers who took COVAXIN will be out soon. The company, along with India’s drug regulator, says COVAXIN is safe and effective, based on early and intermediate studies.

India has reported more than 11 million coronavirus infections and over 157,000 deaths. — Reuters

Scientists find new strains of African Swine Fever virus

CHINESE scientists have discovered new strains of African swine fever  (ASF) that are milder but highly transmissible, complicating efforts to control the disease that’s roiled the world’s biggest pork market.

The new variants were found during a six-month surveillance of seven Chinese provinces last year, the Harbin Veterinary Research Institute said at a statement on Friday.

“The emergence of lower virulent natural mutants brings greater difficulty to early detection and poses new challenges for the control of ASF,” a team of scientists from the Harbin institute wrote in a paper last week.

Fresh outbreaks of African swine fever, coupled with other lethal pig illnesses such as foot-and-mouth disease and porcine epidemic diarrhea, have sparked doubts over the recovery of China’s hog herds. The top pork consumer saw pig numbers slashed by about half and prices of the meat skyrocket after swine fever was first discovered in China in 2018.

With no timeline yet on commercial vaccines against swine fever, controlling the disease still relies on early diagnosis and culling infected animals. The new mutant strains will make it even harder to keep a lid on outbreaks as they will be difficult to detect while the virus is continuously “shed via the oral and rectal routes,” according to the Harbin newspaper.

The team has found and isolated 22 viruses, characterized as genotype II African swine fever, based on 3,660 samples collected from farms and slaughterhouses in the provinces of Heilongjiang, Jilin, Liaoning, Shanxi, Inner Mongolia, Hebei, and Hubei between June to December, 2020. — Bloomberg

Cruises selling out more than a year in advance

AFTER a year of isolation and lockdowns, four months on a ship is looking pretty good to cruise super fans.

The coronavirus disease 2019 (COVID-19) pandemic was raging in July when Viking Ocean Cruises opened reservation books for a 136-day world cruise itinerary. The Christmas 2021 departure sold out in weeks. In December, in the midst of a second wave, the company opened a second cruise for the same period. It, too, quickly sold out.

The company had no trouble filling two of its nearly identical 930-passenger ships, Viking Star and Viking Neptune, even though the borders of many of the two dozen countries the plan to visit remain largely closed to international visitors. The only cabins that went unsold, in fact, were those blocked off for potential quarantine needs. Now the line is scrambling to put together an additional around-the-world itinerary starting in 2023.

“We are looking to open the next opportunity as quickly as we can,” says Richard Marnell, executive vice president of marketing for Viking. “Watch this space!”

In spite of the dire straits of the cruise industry over the past year — or possibly, because of them — the hottest tickets on many cruise lines are pricey, multimonth world tours planned to take place a year or more out.

These bookings, which can cost from about $50,000 per couple in standard rooms to hundreds of thousands of dollars in top-tier suites, represent a rare glimmer of hope for an industry that’s taken more than $30 billion in losses and continues to be saddled with uncertainty. The US Centers for Disease Control and Prevention currently considers cruises a “very high level” of COVID-19 risk and recommends that travelers avoid them worldwide; to date, most lines have canceled sailings until June, and even that timeline seems optimistic.

Viking isn’t the only line with big plans for the fairly distant future. On Jan. 27, Oceania Cruises opened sales to the public for its 2023 “Around the World in 180 Days” cruise, which will hit five continents, including Antarctica. The upscale line sold out a 684-passenger ship in one day.

Ultraluxury line Seabourn, for its part, has sold out all top-level suites on two world sailings on the 450-passenger Seabourn Sojourn, with couples paying up to a half-million dollars for five-month cruises starting in 2022 and 2023. There’s so much demand, the company recently opened waitlists.

WHY NOW?
Many factors are driving this trend, from cabin fever to favorable deals and the promise of vaccinations for cruising’s famously older core demographic.

World cruises don’t necessarily circle the globe, their name notwithstanding. But cruisers who have been stuck at home since March 2020 are apparently bullish on seeing as much of the world as possible in one fell swoop — including such hard-to-reach destinations as Easter Island, Bora Bora, or the Seychelles. Take Silversea’s latest itinerary: When it sets sail in 2022, the first-ever “expedition world cruise” will spend 167 days journeying from Ushuaia, Argentina to Tromso, Norway — nearly pole to pole.

Pent-up demand and “reprioritization of life goals” are at play here, says Matthew D. Upchurch, chairman and chief executive officer of Virtuoso, a luxury travel adviser network. In addition to world cruises, which typically take place over the winter into the spring, he says longer sailings of several weeks or months are attracting more interest than before the pandemic.

“There’s a longing for the missed opportunities over the past year, and a strong desire to take advantage of seeing the world while they can,” Mr. Upchurch says. “By taking something away, you highlight the true value and appreciation for it.”

Other value propositions may also be at play. For cruisers who had to cancel one or several voyages in 2020, these once-in-a-lifetime itineraries are emerging as a good way to cash in on credits they have. Through the last 12 months, cruise lines have encouraged travelers not to seek refunds by offering 10% to 25% added value in the form of “bonus credits,” which on some lines need to be redeemed by April 2022.

Cruise lines are also ramping up the VIP freebies they offer long-term guests, such as free dry cleaning, Wi-Fi, and visa services. To help lock in ship occupancies for an extended period and guarantee income on their bright-red balance sheets, they are adding lavish pre-departure parties, business class airfare, and thousands of dollars in onboard spending credits.

Among folks raring to get back to sea are Linda Weissman and her husband Marty, a retired orthopedic surgeon. The pair has escaped the cold temperatures in Michigan and “wintered” on Cunard world cruises 14 times — always staying in a top Queen’s Grill suite and spending millions of dollars in the process. They plan to do further four-month world outing on Queen Mary 2 in 2022.

“I miss the people, the service, being waited on and taken care of like royalty 24/7,” Linda says. “It’s like, ‘Do you want escargot tonight?’”

After the pandemic, passengers will have to grapple with some serious concerns, including the frequency of outbreaks on ships that had promised buttoned-up Covid protocols last summer and fall. Despite those headlines, Viking’s Mr. Marnell says world cruisers will benefit from a safe, “constant environment” in which travelers can feel comfortable hanging out for a long period of time. Like other lines, his company’s ships have been outfitted with labs for frequent PCR testing and new air purification systems, among other measures.

The safety of shore visits, however, remains a looming question mark — particularly in countries where vaccinations have not yet begun to roll out in any substantial way. While cruise companies are generally working on plans to ensure safety at these ports of call, the fast-changing nature of travel recommendations and long lead times before itineraries can resume mean that those details have not yet been broadly released.

FAR FROM GUARANTEED
For cruise companies to carry off these plans, many things will need to break their way. The Viking cruise in December 2021 is set to sail to 56 ports in 27 countries, including spots in Central America, Hawaii, Australia and New Zealand, Asia, the Middle East, and the Mediterranean — with fares from $53,000 to $166,000 per person.

The company, like others offering world cruises, will have to navigate the complexity of constantly changing entry requirements and quarantine rules in a world that may not reach herd immunity for years.

The unknowns surrounding government regulations will make it difficult for cruise lines to plan itineraries, says Virtuoso’s Mr. Upchurch. “Having to change course once a voyage is underway is not practical. It’s costly, and it does nothing for restoring consumer confidence,” he says.

Cruise lines are hoping that by the time these distant itineraries set sail, Covid won’t be an issue; should border closures persist for longer than expected, these itineraries may need to be postponed, just like the rest of the cruise calendar.

What nobody wants is a repeat of last winter. As Covid-19 spread, world cruises had to be scrapped midway through, with passengers sent home on hastily arranged flights or stranded on ships. One result, though, is that travelers have come to understand that “nothing is guaranteed,” Mr. Upchurch says.

That goes for the Weissmans of Michigan. They had to pack their 10 bags (eight for Linda) and fly home from Perth when their world cruise on the Queen Mary 2 was cut short last March. They’re hoping for the best in 2022.

“Every day on Facebook it pops up where we were on this day [last year],” Linda says. “Today, it popped up we were in Bali, drinking Bloody Marys. I mean, come on.” — Bloomberg

Women directors at UK finance firms earn 66% less than men — study

LONDON — Female directors at Britain’s biggest financial services firms earn 66% less than their male counterparts on average, research showed on Monday, despite a rise in the number of women on company boards in recent years.

Women board members made 247,100 pounds ($349,720) on average per year while men earned 722,300 pounds, said the study by law firm Fox & Partners, which examined pay gaps in financial firms that are among the nation’s 350 largest listed companies.

“Despite having greater levels of diversity at more junior levels, financial services firms are still struggling to reflect that shift at the senior executive level,” said Catriona Watt, partner at Fox & Partners.

“In order to see long-term change, firms must be committed to taking steps that will lead to more women progressing through the ranks, getting into senior executive positions and closing the pay gap,” she said in a statement.

The number of women on FTSE 350 company boards has jumped by 50% in the last five years, reaching 1,026 in 2020, according to the Hampton-Alexander Review, an independent body aiming to boost gender diversity on FTSE boards.

More than a third of board positions are now held by women too, the Review said last week, hitting a target that it had set for the end of 2020.

Yet disparities exist, even at the top. The Fox & Partners study said female directors in FTSE 350 financial services firms were mostly in non-executive roles, which meant they were paid less and had fewer responsibilities than men.

“These shocking figures prove the gender pay gap is thriving,” said Felicia Willow, head of women’s rights group the Fawcett Society, which was not involved with the report.

“There are not enough women in top roles and those who have made it are all too often paid less than men.”

A year ago, Britain suspended the need for companies to report on the gender pay gap in their workforces due to the coronavirus pandemic, a step the government said would not derail attempts to pay men and women fairly.

Since 2017 the government has required employers with more than 250 employees to submit gender pay gap figures every year in a bid to reduce pay disparities.

The gap narrowed last year, with men earning 15.5% more than women on average, down from 17.4% in 2019, according to official data.

Companies will now have until Oct. 5 to report on pay gaps, according to the Equality and Human Rights Commission. — Thomson Reuters Foundation

Cariaso: Alaska Aces moving on and preparing to compete

By Michael Angelo S. Murillo, Senior Reporter

FOLLOWING weeks of much discussion involving one of their key players who has since been traded, the Alaska Aces are now moving on and focusing on preparing to compete in the next season of the Philippine Basketball Association (PBA).

Speaking on the Power & Play with Noli Eala program on Saturday, Alaska coach Jeff Cariaso shared that with want-away player Vic Manuel shipped out to a new team, they have now stepped up their preparation and are excited for what lies ahead.

“The last six weeks were about lengthy conversations with teams interested in Vic. It was challenging, but we think we got a fair deal. We are now getting the ball rolling as far as preparations,” said Mr. Cariaso.

Mr. Manuel in January asked Alaska to trade him over what he felt was Aces’ lack of interest in re-signing him after his contract lapsed last year.

But Alaska said the player was part of their plans and intent on signing him.

Discussions ensued after with both parties eventually agreeing that going their separate ways was the best option.

The Aces found a trading partner in Phoenix Super LPG, sending last week Mr. Manuel and their first (seventh overall) and second (19th overall) round picks in this year’s rookie draft in exchange for guard Brian Heruela and the Phoenix’s first-round pick (sixth overall) in the March 14 rookie draft.

The Fuel Masters also gave the Aces their second-round pick (16th overall) in this year’s draft and first-round pick for Season 47.

With the deal behind them, Mr. Cariaso said they now turn their attention to having their “rebuilding” team ready for the next PBA season, targeted to begin next month.

“Yeah, we can say we are rebuilding. We have players who are in the middle of their careers and young veterans,” the Alaska coach said.

“There are going to be opportunities and the players are excited. With Vic moving on, our big guys like Rodney (Brondial) and Abu (Tratter) are looking to step up,” he added.

Apart from Mr. Manuel, Alaska also lost veteran big man Sonny Thoss to retirement, with the team deciding to let go of some players as well.

Alaska, however, picked up a couple of free agents in Yousef Taha and Gab Banal, which it hopes to help the team in what it wants to do.

“Yousef gives us added height against teams like San Miguel (with June Mar Fajardo) and Ginebra (with Greg Slaughter), while Gab is a talented player who was just not given the opportunity in the past,” the Alaska coach said.

Mr. Cariaso shared as well that they hope to do well in the draft and add pieces who can deliver for them.

“There are a lot of big names and so many applicants in this year’s draft. The trade of Vic moved us to number six, allowing us to get a quality player. We are looking at six players as a potential pick,” said Mr. Cariaso while also highlighting that they intend to use the first-round pick to get a big man.

They are looking at Santi Santillan (La Salle), Larry Muyang (Letran), and Ben Adamos (Perpetual Help) to help cushion the loss of Messrs. Manuel and Thoss.  

Mr. Cariaso said that moving forward, they will try to form a team able to play on both ends of the court.

“We want to defend with the same passion on offense. That’s the way we can beat the talented teams. We may not be as talented as others, but we want to have grit and to step up together.”

PSL beach volleyball tournament successfully held; Negros team claims title

THE first local volleyball tournament to be held amid the coronavirus pandemic is in the books after the Philippine Superliga (PSL) Beach Volleyball Challenge Cup successfully concluded at the weekend.

A three-day event at the sand courts of the Subic Bay Metropolitan Authority in Zambales, the tournament churned out quality action with Abanse Negrense A emerging as the champion in the eight-team field.

The team of Alexa Polidario and Erjane Magdato defeated Sta. Lucia A (21-15, 21-17) in the finals, capping a dominant showing for the team that saw it not dropping a game or a set throughout the tournament.

The champion squad was crisp with its attacks in the title-clincher, staving off a gallant challenge from Sta. Lucia A’s DM Demontano and Jackie Estoquia.

Along the way, Abanse Negrense A defeated Toby’s Sports in the quarterfinals and Sta. Lucia B in the semifinals.

Abanse Negrense B of Jennifer Cosas and Gelimae Villanueva, meanwhile, took bronze after beating Bang Pineda and Jonah Sabante of Sta. Lucia B (21-13, 22-20) in their battle for third.

The rest of the final results have F2 Logistics finishing fifth, followed by United Auctioneers, Toby’s Sports, and Petro Gazz.

In staging the Beach Volleyball Challenge Cup, originally set for November last year until inclement weather concerns forced its deferment, the PSL had the end view of the tournament paving the way for local volleyball to get back in the swing of things despite the coronavirus still an ongoing concern.

Volleyball tournaments were shut once the pandemic started to make its presence felt in the country in 2020 and lasted for almost a year until PSL was allowed to stage the beach volleyball tournament.

For the Challenge Cup, organizers made sure that they coordinated with all agencies concerned so as to ensure the safe conduct of the event.

Strict health protocols were put up for all players and personnel involved in the tournament to follow, including the needed swab testing.

The PSL is now preparing to have its indoor volleyball season going in the coming months. — Michael Angelo S. Murillo

Caloy Garcia replaced as Rain or Shine head coach

CALOY Garcia’s tenure as coach of the Rain or Shine Elasto Painters in the Philippine Basketball Association (PBA) came to an end on Monday after the team announced that it will be replacing him with assistant Chris Gavina.

In a surprise announcement on the team’s Facebook page, Rain or Shine said it was elevating Mr. Gavina to head coach while naming Mr. Garcia as “active consultant” apart from being the head of basketball operations of the team.

In separate posts, Rain or Shine said, “We are excited to announce the appointment of Chris Gavina as Rain or Shine’s Head Coach. He brings with him several years of experience as a coach in both the PBA and MPBL (Maharlika Pilipinas Basketball League).”

Adding, “[Meanwhile] Effective immediately, Caloy Garcia has been named Active Consultant and remains Head of Basketball Operations for the Rain or Shine Elasto Painters. Mr. Garcia will now be providing his veteran experience and leadership for the benefit of the team on and off the court.”

The team, however, did not say the reason behind the coaching change.

Mr. Garcia has been manning the Rain or Shine sidelines for nearly two decades both as an assistant and head coach.

In the lone PBA tournament last year held in a “bubble” in Clark, Pampanga, Mr. Garcia, 45, steered the Elasto Painters to a quarterfinal finish.

He was recently asked by the local basketball federation to be an assistant for Gilas Pilipinas for the FIBA Asia Cup Qualifiers.

Mr. Gavina, 42, meanwhile, ascends after three years as a deputy for the Elasto Painters.

He was a head coach for a time with the Kia franchise in the PBA and held coaching positions for the Bacoor and Valenzuela teams in the MPBL. — Michael Angelo S. Murillo

Giannis Antetokounmpo drops 36 as Bucks best Clippers

LA Lakers jump on Warriors early, roll to easy win

IN a duel between NBA championship contenders, Giannis Antetokounmpo and the Milwaukee Bucks got the best of Kawhi Leonard and the LA Clippers, 105-100 on Sunday in Milwaukee.

Antetokounmpo scored 36 points, 14 rebounds and five assists, becoming the second player in Milwaukee history to score 35 or more points in four consecutive games.

The Bucks, who won their fifth consecutive game, ended the contest on a 9-0 run.

Leading 101-100 after a pair of Antetokounmpo free throws, the Bucks regained possession after a missed jumper by Paul George. Following a time out, the Bucks rotated the ball on the perimeter and fed Antetokounmpo, who blew past Marcus Morris, Sr. and delivered an emphatic one-handed dunk with 10.3 seconds left.

Leonard had a chance to tie at the other end, but his three-pointer hit the front of the rim and bounced to Khris Middleton, who was fouled with 2.1 seconds left. Middleton hit both free throws to seal the victory.

Leonard finished with 25 points and nine rebounds as the Clippers used a 13-0 run to take a 73-70 lead late in the third. But the Clippers shot 0-for-seven over the final 4:01 of the game.

Jrue Holiday returned to the Bucks rotation after missing the previous 10 games due to health and safety protocols. Holiday entered the game with 5:23 left in the first quarter and finished with only two points and three assists. But Holiday finished with a plus-10 in plus-minus over 18 minutes.

Middleton scored 19 points and finished with eight assists and six rebounds, while Donte DiVincenzo had 11 points and seven rebounds.

George had 16 points, seven rebounds and seven assists. Serge Ibaka totaled 15 points and 11 rebounds. Lou Williams finished with 14 points and Morris Sr. scored 11 points off the Clippers bench.

Patrick Patterson (personal reasons) missed his sixth consecutive game. Jaylen Adams sat out for the fifth consecutive game due to health and safety protocols, and rookie Jordan Nwora missed his 14th game in a row with a left ankle sprain.

LAKERS ROLL TO EASY WIN
LeBron James scored 19 points, and the Los Angeles Lakers pounded the visiting Golden State Warriors (117-91) on Sunday.

James, who also had six rebounds, hit 7 of 12 shots, including three of five 3-pointers in a season-low 24 minutes. He and the Lakers’ starters rested the entire fourth quarter.

Markieff Morris contributed 13 points and eight rebounds, Alex Caruso also scored 13, and Dennis Schroder collected 12 points and six assists for the Lakers. Kyle Kuzma had 12 points and 11 rebounds and Talen Horton-Tucker scored 11 off the bench.

Stephen Curry, who entered the game averaging 29.9 points per game, managed just 16 points, seven assists and three steals as the Warriors had their three-game winning streak end. Curry misfired on five of the seven 3-pointers he attempted.

The Warriors lost Draymond Green late in the second quarter with a left ankle sprain. Green, who recorded a career-high 19 assists in Friday’s win over the Charlotte Hornets, finished with six points and two assists in 13 minutes. — Reuters

Collin Morikawa captures WGC for fourth career title

COLLIN Morikawa continued to solidify his place among the next generation of golf, winning for the third time in eight months with a victory Sunday at the World Golf Championships (WGC) — Workday Championship at The Concession in Bradenton, Florida.

The 24-year-old Morikawa shot a 3-under 69 to finish at 18-under 270 and win by three strokes over Billy Horschel (70), Brooks Koepka (70), and Norway’s Viktor Hovland (67). The Cal product won for the fourth time since turning pro in 2019, taking the lead into the final round for the first time in his career.

“It shows that I can come out here and compete, but what a week,” Morikawa said on the NBC broadcast. “I was working on so much over the past couple of weeks. I got tips from Mark O’Meara and Paul Azinger and it got me through this week. My game felt so good and I’m just so excited right now.”

Scottie Scheffler (68) finished alone in fifth place at 14-under, while South Africa’s Louis Oosthuizen (69), Northern Ireland’s Rory McIlroy (71) and Webb Simpson (72) finished tied for sixth place at 12-under.

After a bogey at the second hole Sunday, Morikawa got his final round on track, going 4-under over a stretch of eight holes from Nos. 5-12.

The 2020 PGA Championship winner, who also won an added event at Muirfield Village in Dublin, Ohio, last year, never relinquished the lead after moving into the top spot Saturday with a run of six birdies over nine holes.

On a day when some players in the field were wearing red shirts and black pants in honor of Tiger Woods, Morikawa became the only player other than Woods to win a major title and a WGC event before the age of 25.

Woods was seriously injured in a single-car crash on Tuesday.

“Tiger means everything to me, and yes he had the crash, and thankfully he’s all right and hopefully he has a quick and great recovery,” Morikawa said. “But I don’t think we say ‘thank you’ enough. So, I’m going to say thank you to Tiger. Sometimes, you lose people too early. Kobe (Bryant). I lost my grandpa about a month ago… So, thank you guys.”

After Horschel briefly tied for the lead early in the final round, Morikawa channeled Woods’ final-round focus with birdies at the fifth, seventh and ninth holes to make the turn with a 2-under 34. — Reuters

Auckland coronavirus lockdown tests New Zealanders’ patience

WELLINGTON — The mayor of Auckland called for residents to be prioritized for coronavirus disease 2019 (COVID-19) vaccines after New Zealand’s biggest city was thrown into its fourth pandemic lockdown over the weekend.

The seven-day lockdown imposed by Prime Minister Jacinda Ardern on a city of 2 million was prompted by just a single new COVID-19 case, reinforcing the New Zealand leader’s strict “go hard, go early” response throughout the crisis.

That approach has been credited with making New Zealand one of the most successful countries in the world at controlling the spread of the coronavirus, but the latest shutdown has been criticized by some on social media.

Auckland Mayor Phil Goff said the city would lose an estimated 200 jobs and more than NZ$30 million ($21.7 million) per day under the level 3 restrictions.

“We need the vaccine roll-out to be prioritized in Auckland to help avoid future lockdowns, protect jobs and incomes, and ensure Auckland can play its role in supporting the national economic recovery,” Mr. Goff said in a statement.

The lockdown led to several major sporting and cultural events being canceled or postponed and also caused traffic chaos over the weekend with people trying to get home stuck for hours at city checkpoints.

The case that prompted the shutdown was a person who had been infectious and out in the community for a week. Two more locally transmitted cases were subsequently reported over the weekend, but no new cases were reported on Monday.

Ms. Ardern said on Monday the person who sparked the lockdown had made “multiple mistakes,” after public anger at reports the person had made contact with an infected family during lockdown and had visited public venues after taking a COVID test.

“It has had devastating consequences, no question,” Ms. Ardern told Newshub’s The AM Show, adding that any punishment was up to the police.

“People do dumb things but we’re not going to get through this if people pillory them to the point they do not tell the truth,” she said.

New Zealand has reported just over 2,000 cases of the coronavirus and 26 deaths since the start of the pandemic. — Reuters

An ‘industry custom’: Little-known fees help Japan trust banks dominate profitable niche market

The break fee—2,000 yen ($19) per shareholder—is a little-known practice among Japan’s biggest trust banks when they lose a client in the shareholder record-keeping business, multiple insiders say. — REUTERS

TOKYO  — When Japan’s Honda Motor Co. Ltd. stopped using Sumitomo Mitsui Trust Bank Ltd. as its stock transfer agent last year, the lender slapped it with a roughly $4 million termination fee, according to two people familiar with the matter.

The break fee—2,000 yen ($19) per shareholder—is a little-known practice among Japan’s biggest trust banks when they lose a client in the shareholder record-keeping business, multiple insiders say.

The bank that takes the new client typically pays the fee. Insiders say this arrangement keeps a profitable business in the hands of a few big trust banks because newcomers balk at the cost. One departing client was told the charge was an “industry custom.”

Japan’s three largest trust banks, Sumitomo Mitsui Trust, Mitsubishi UFJ Trust and Banking Corp., and Mizuho Trust & Banking Co. Ltd., control at least 97% of the market, according to an internal bank document.

Details of the fees, including the amount and the expectation that the new bank pay, as well as Honda’s experience, are reported here for the first time.

Some executives at listed companies privately express frustration over the practice, which they say illustrates banks’ abuse of their considerable power in corporate Japan.

It’s not clear why banks’ break fee amounts are identical. The fees varied until the late 1990s, when weakened lenders were consolidating, one of the people familiar with the matter said.

“It’s not right to charge 2,000 yen for doing nothing. Any way you look at it, it’s a barrier to entry and in violation of anti-trust laws,” said one executive at a major manufacturer. He and other sources declined to be identified because the information isn’t public.

Transfer agents keep records of a company’s shareholders, process dividend payments and count votes at annual general meetings. Mitsubishi UFJ Trust shouldered Honda’s fee when it took over records of the automaker’s roughly 210,000 shareholders, according to the two people familiar with the matter.

Honda said it couldn’t comment on the content of contracts.

Sumitomo Mitsui Trust, Mitsubishi UFJ Trust, and Mizuho Trust said they charge administrative fees when a client leaves. All declined to comment on the amount of the fees or on specific transactions.

Mizuho Trust said that contracts differed from client to client, and that there are cases in which it discusses the break fee from a former transfer agent when negotiating a contract. It said that the fees were appropriate and that its business complied with the law.

Mitsubishi UFJ Trust said there was no legal issue with the fees because the trust banks had not agreed on them together.

A spokesman for the Japan Fair Trade Commission declined to comment.

A representative for the regulatory Financial Services Agency (FSA) said: “Contracts in the private sector are at the discretion of each company”.

‘INDUSTRY CUSTOM’
Trust banks came under scrutiny last year after Sumitomo Mitsui Trust and Mizuho Trust separately revealed widespread failure to count all valid votes at annual general meetings over the last two decades. Both have apologized and pledged to revise practices.

Banks don’t always make break fees explicit in contracts, one of the people familiar with the matter said.

Mitsubishi UFJ Trust said that in general, administrative fees are determined after discussions with the client. Mizuho Trust said there are cases where it spelled out the fees in contracts.

Another executive, at a midsize listed firm, said his company refused to pay when switching transfer agents years ago.

“There was no clause for specific break fees in our contract but the bank demanded it, saying it was an industry custom,” the executive said. “I told them it doesn’t make sense.”

His company never paid the fee and the bank gave up trying to collect it, he said.

For decades, the transfer agent business was labor intensive because stock certificates and other records were handled manually. But digitalization has helped streamline it, making it more profitable, industry insiders say.

Sumitomo Mitsui Trust’s transfer agent business, which includes two small subsidiaries, had a 49% profit margin in the last financial year, compared with 39% for the bank overall, according to regulatory filings.

At Mitsubishi UFJ Trust, it was 60% for the business, nearly double the bank’s overall margin of 31%. Mizuho Trust doesn’t give a breakdown for the business.

ANTI-MONOPOLY LAWS
When a client moves, the banks just need to retrieve and forward their database records, according to the two executives, one of the people familiar with the matter and another industry insider.

Although the volume of data depends on the number of shareholders a company has—some of Japan’s biggest firms have 700,000 or more—the records are supplied electronically by the Japan Securities Depository Center, a common platform for stock transfers.

Mitsubishi UFJ Trust said other data needed to be prepared and transferred, including dividend payment records.

“If the break fees cannot be rationally explained and serve as an obstacle to newcomers, the practice could be against anti-monopoly laws,” said Yasuo Daito, a lawyer specializing in antitrust issues at Nozomi Sogo Attorneys at Law.

But if larger banks’ services are simply better than those of potential challengers, then a violation of anti-monopoly laws would be less likely, Daito said.

Investor-relations firm IR Japan Holdings in 2012 became the first new market entrant in four decades. It now has a 1% share.

IR Japan said it doesn’t charge break fees. It declined to comment on the practice.  — Makiko Yamazaki and Maki Shiraki/Reuters

US doubles down on protecting university research from China

OAKLAND, Calif./WASHINGTON — A US national security commission is recommending that American universities take steps to prevent sensitive technology from being stolen by the Chinese military, a sign of growing concerns over the security of academic research.

The National Security Commission on Artificial Intelligence (NSCAI), led by former Google chairman Eric Schmidt, is set to vote Monday on its final report to Congress. A new section on university research was added to a recently published final draft, which also features numerous recommendations in areas including competition in artificial intelligence and the semiconductor supply chain.

The fresh recommendations come as the United States pushes ahead with the prosecution of at least five Chinese researchers arrested last year in various cities across the US on charges of visa fraud for not disclosing ties to the Chinese military.

Among those arrested was Chen Song, a former Stanford University visiting scholar in neurology who faces charges including obstruction of justice, destruction of records, and making false statements to a government agency. She pleaded not guilty at an arraignment last week in the United States District Court Northern District of California.

“Dr. Song is a physician. She was here to do medical research that would have benefited stroke victims in the United States had she been allowed to complete her work,” her lawyer, Ed Swanson, said in an e-mail.

Other cases involve Juan Tang, a visiting researcher at University of California (UC) Davis School of Medicine; Xin Wang a visiting researcher at UC San Francisco who was working on projects related to metabolism and obesity; Kaikai Zhao a PhD student studying AI and machine learning at Indiana University in Bloomington; and Lei Guan, who worked as a researcher at UCLA’s mathematics department.

Stanford, UCSF, and UC Davis all said they are cooperating with the authorities on the investigations. University of Indiana did not reply to request for comment and UCLA was not immediately available.

China has denied allegations it was trying to steal US research.

The cases are part of the US Department of Justice’s so-called “China initiative” launched in 2018 to counter China’s national security threats.

The NSCAI recommendations would require more disclosure on research funding and partnerships at universities. It also proposes creating a database of individuals and entities to flag risks in advance.

Gilman Louie, a Silicon Valley venture capitalist and NSCAI commissioner, said a database could help avoid unilateral bans based on affiliations and instead allow the US to judge individual cases. Mr. Louie said the commission wanted to avoid a “sledgehammer approach.”

The lack of guidance so far has meant that some nervous university presidents have kept Chinese nationals away from any research projects, said Mr. Louie. “That somebody simply looks at you and determines because you’re ethnically Chinese that you can no longer be trusted on programs in the US, that’s a big issue with me.”

Tobin Smith, vice president for science policy and global affairs at the Association of American Universities said universities have struggled with assessing risk and welcomed the blueprint.

“The issue is most of the time universities don’t have the resources to be aware that something’s been stolen from them until it becomes a national security issue and it’s a front-page headline somewhere,” said Jason Jardine a patent lawyer at Knobbe Martens Olson & Bear who works with universities on patent theft.

Emily Weinstein, an analyst at Georgetown University’s Center for Security and Emerging Technology, said the challenge will be to define which Chinese entities are defense-affiliated. While some universities in China are clearly tied to the military, the links aren’t always clear-cut.

“On paper, these measures seem fine,” said Qiaojing Ella Zheng, a partner at Sanford Heisler Sharp who is also president of the Chinese American Lawyers of the Bay Area. “The problem always occurs during the implementation and enforcement. The entire Asian American community here in the US and abroad will be watching closely how this action plan unfolds in practice.” — Jane Lanhee Lee and Daphne Psaledakis/Reuters