Why some think Cheung quit as Rusal chairman
Russian aluminium giant Rusal is one of those companies where you feel things are not quite as they seem. So when Hong Kong's Barry Cheung Chun-yuen recently stepped down as chairman of the Hong Kong-listed company and was replaced by Matthias Warnig, you had to wonder what was going on. Readers may recall we reported in May, after Warnig's appointment as non-executive director, that he was expected to become chairman at the AGM in June. However, that did not happen, and at the time Cheung said he had no reason to believe that was being planned, even though there was talk he was not favoured by the Kremlin.
Cheung became chairman in March after the acrimonious departure of Viktor Vekselberg, who said at the time Rusal was "in deep crisis". The thinking behind the Warnig elevation is that he is a long-time chum of Russian President Vladimir Putin from when they were cold warriors in their respective secret services. Cheung, on the other hand, is trusted by major shareholder and chief executive Oleg Deripaska. The latest board reshuffle, some say, may not be unconnected with the recent out-of-court settlement between Deripaska and his former business partner Michael Cherney, who claimed that he owned 13.4 per cent of Rusal.
For years Deripaska challenged the right of London's High Court to hear the case. Then, shortly after the case started, both sides announced a settlement had been reached. Details of this have not been released, but there is speculation Deripaska agreed to make a payment to Cherney. And to get even more speculative, the thinking is this may have weakened Deripaska's control of Rusal, with the result that he has had to bow to pressure for Warnig to be chairman.
However, Cheung tells this speculation is fanciful, that his resignation has been in train for some time and the proximity to the court settlement is coincidental.
"I found that I didn't have enough time to devote to the job to be an effective chairman," he said yesterday. He thought it was better for the chairman to be based in Moscow. Cheung was adamant his stepping down had nothing to do with the court settlement, nor was it engineered by Deripaska or anyone else. We suspect tongues will continue to wag on this for some time yet.
Those wandering around Central over the recent holiday were struck by how quiet it appeared compared with recent years. The relative calm was attributed to Hongkongers' penchant for fleeing the territory at every holiday opportunity, combined with lower numbers of mainland tourists. They have reportedly become somewhat jaded by Hong Kong's charms and have been going elsewhere.
Tokyo was clearly off-limits in view of the recent ruckus over the islands. Thailand is believed to have been a beneficiary.
Taipei, some people believe, will become the new Hong Kong, so far as mainland tourists are concerned. It's cheap to travel there, and it doesn't have the antipathy that seems to dog relations with mainlanders here. But if that happens, who's going to keep Hong Kong retailers happy? Certainly not Hongkongers, who are said to be reluctant consumers these days.
Morgan Stanley's decision last week to drop the Smith Barney name has had people wondering what's in a name for the banking industry, and why they are apparently so cavalier with brands. Smith Barney was founded in 1938 and survived several reincarnations, such as Salomon Smith Barney and Schroder Salomon Smith Barney, reports. Investment banks seem to struggle when it comes to rebranding after acquisitions. Hence inelegant mouthfuls such as MS Dean Witter & Discover or SBC Warburg Dillon Read.
Including the acquired bank's name in the title is a sign of weakness in the acquirer's brand, the newspaper says, as in Dresdner Kleinwort Benson or SBC Warburg. Some banks don't keep the brands they acquire. So we never saw a JP Morgan Bear Stearns, and Goldman Sachs doesn't lend its brand to its acquisitions. For a while the life expectancy of an acquired brand was about five years, but it's getting shorter. This raises questions about how much longer Merrill Lynch will survive as part of Bank of America Merrill Lynch before it is jettisoned. Will it make it to its centenary in 2014?
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