CLSA staff hoping for some independence in deal with Citic
CLSA and Citic Securities are still locked in their tantalising dance marathon. While the embrace is getting firmer, they haven't moved off the dance floor yet. As things stand, Citic has agreed to buy 19.9 per cent of the company and enter negotiations for the remaining 80.1 per cent in the not-too-distant future. This differs from the original game plan, which was for CLSA to take over CA Cheuvreux, another subsidiary of French bank Credit Agricole CIB (CA), with Citic to buy 19.9 per cent in the enlarged company. However, that plan was kicked out of court, much to the relief of all at CLSA. As one insider put it, the prospect of taking over Cheuvreux had about as much appeal as 'putting a millstone around your neck and being asked to swim across the harbour'.
One of the intriguing features of CLSA's relationship with its parent, Credit Agricole as it was formerly known, was the management agreement hammered out between former CLSA co-founder and chairman Gary Coull. Although Credit Agricole owned about 70 per cent and CLSA staff and management 30 per cent, the agreement said Credit Agricole had no say in the running of CLSA. The CLSA staff are hoping to have the same arrangement with Citic, and possibly some equity. There is a reference to this in a statement on Citic's website: 'CLSA will maintain its management independence and continue to operate as an unconflicted provider of global brokerage services.' Whether this will be quite the same as its agreement with Credit Agricole remains to be seen. CLSA's strong point has always been its research, seen as being a good deal more independent than that of brokers with a large investment banking arm. However, it is assumed Citic will have a pipeline of products to bring to market and this inevitably will at least strain the independence of the research. But we don't want to get ahead of ourselves, since the deal hasn't been done yet. While it's thinking about what price to offer CA, Citic might like to reflect that in addition to its solid brand name, the brokerage does know how to throw a very good party.
Guagua's champagne degree
The Bo Xilai story continues to mesmerise the mainland equivalent of the Twittersphere. One strand has been the focus of the extravagant lifestyle of Bo's son Guagua during his time at the University of Oxford. Translated stories from the British press, notably The Daily Telegraph, have been circulating on Sina Weibo - China's Twitter equivalent. One theme has been Guagua's graduation from Oxford. Pictures of him bare-chested at one of his champagne parties have appeared on Sina Weibo. Unsurprisingly his academic studies did not prosper under this regime and he was very nearly sent down. It took intervention from the Chinese embassy, pointing out the considerable embarrassment this would cause the Bo family, before the university relented and allowed him another year. He appears to have buckled down to the task and graduated with a respectable 2.1 degree. This news has been greeted with considerable dismay in the Sina Weibo-sphere, as Oxford was held in high esteem for strictly adhering to the rules and for being one of the hardest universities for Chinese students to gain entry to. Little did they know that in the past, acquaintance with one of the senior academics, a 'good' family name, a period at one of the UK's better public schools, coupled with being good at either cricket or rugby, could also ease the way into the university. Others have jocularly suggested that giving Guagua a degree in champagne drinking would have been more appropriate.
Switzerland's wine tradition
