Top Stories

April 18, 2017

Corporate Reputation

Airbus sued by dismissed middlemen following fraud inquiry

Airbus is being sued by consultants and middlemen who were dismissed as part of a compliance review initiated following fraud investigations around the world. The European aircraft maker has disclosed the litigation in its 2016 annual report, which also listed multiple investigations into alleged bribery, corruption or other offences in Germany, Greece, the UK, Romania and Australia. It has also emerged that an Indonesian middleman -named Soetikno Soedarjo- at the centre of bribery allegations at Rolls-Royce, is a focus of attention for UK investigators probing potential corruption at Airbus. This comes as several of the charges against Rolls-Royce related to the procurement of engines for Airbus aircraft purchased by Indonesia’s Garuda Airlines. The company had hired “legal, investigative, and forensic accounting expertise of the highest calibre” to review all of its third-party relationships. It has also has significantly reduced the number of middlemen used in foreign sales. (Financial Times)*


South Korea charges ousted leader Park and Lotte chief with bribery

South Korean prosecutors on Monday charged ousted president Park Geun-hye and retail giant Lotte Group chairman Shin Dong-bin with bribery in the latest twist to a corruption scandal that rocked the country for months. Prosecutors accused Park of colluding with Choi to receive 7 billion won ($6.16 million) from Lotte for favors, they said in a statement. Park was also charged with abuse of power and coercion by pressuring big businesses to contribute funds to non-profit foundations, the prosecutors said. Apart from this, Park is also charged with taking bribes worth about 29.8 billion won from Samsung scion Lee in exchange for supporting his succession, according to the prosecutors’ statement. Lotte denied allegations that it made improper deals with Park, or those linked to her, for favors, but said it would explain itself at court to resolve suspicions. Park, Lee, Choi and Samsung Group have also denied wrongdoing. (Reuters)


RSPO accused of letting palm oil firm proceed with dodgy audits in Papua

Greenpeace, the Environmental Investigation Agency (EIA), Pusaka and the Forest Peoples Programme have criticised the Roundtable on Sustainable Palm Oil (RSPO) for allowing a member to post public notification of new planting plans, despite knowing it hadn’t met the required standards set by the body. New Planting Procedure (NPP) documents submitted by PT Nabire Baru, a subsidiary of Singapore-based palm oil company Goodhope Asia Holdings, for plantation development in West Papua are “incomplete, substandard, insufficient, and in places factually untrue,” the coalition says. The RSPO confirmed to Mongabay that its Secretariat commissioned an independent review of Nabire Baru’s NPP submission before it was published. The NGOs say central to the issues with Nabire Baru is the RSPO’s apparent failure to implement a resolution adopted in 2015 to ensure the “quality, oversight and credibility” of assessments, and is now calling for “robust” action against the Secretariat. (Eco-Business)

Corporate Governance

Arconic CEO quits over letter sent in ‘poor judgment’ to Elliot

Arconic Inc said on Monday Chief Executive Klaus Kleinfeld resigned after the U.S. specialty metals maker found he sent a letter in “poor judgment” to Elliott Management, with whom it is embroiled in a proxy war and which used the chance to again criticize the company’s board. Activist hedge fund Elliott said the letter “read as a threat to intimidate or extort a senior officer of Elliott Management based on completely false insinuations” and that it immediately informed Arconic’s board of the letter. Arconic said Kleinfeld resigned as he sent the letter – the content of which neither party made public – without consulting the board. The company says now the hedge fund should choose whether to go ahead with its proxy fight or help find Kleinfeld’s successor. (Reuters)

Inclusive Business

Poorer graduates struggle for jobs as unpaid internships soar

A new report from the IPPR think-tank estimates that the number of internships has risen by as much as 50% since 2010, as the number of advertised graduate-entry jobs has sharply declined. The temporary positions are now considered a “must have” on the CV of any young person seeking a job, with nearly half of professional employers admitting that candidates without work experience “have little or no chance of receiving a job offer”. The report, The Inbetweeners: The New Role of Internships in the Graduate Labour Market, claims many of the positions do not offer meaningful learning opportunities, have poor working conditions, and are inaccessible to young people without the connections or the knowhow to obtain one. The sharp decline in job opportunities, triggered by the 2008 recession, led to an oversupply of graduates with the result that firms have been able to get highly skilled workers even for low-paid, insecure work, such as internships, the IPPR warned. (Guardian)

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