Alibaba.com: Fraud Sparks a Shakeup
Alibaba.com shares took their biggest tumble in a year after an internal probe found more than 2,300 vendors used the Chinese e-commerce site to defraud global buyers. CEO David Wei and COO Elvis Lee, who weren't accused of wrongdoing, resigned to take responsibility for the "systematic breakdown" of integrity. In 2009, some 1,219 of its suppliers engaged in fraud and 1,107 did so last year, the company says. The probe also found that roughly 100 of Alibaba's 5,000 salespeople, as well as some supervisors and managers, either intentionally or negligently allowed vendors to evade the company's authentication and verification measures and set up "fraudulent storefronts."
Barclays, Lehman Brothers: An Imperfect, but Fair, Transaction
A U.S. judge ruled on Feb. 22 that Barclays' (BCS) purchase of a Lehman Brothers unit, just days after the lender went bankrupt in 2008, was fair. Lawyers for the Lehman estate had hoped to recover an alleged $11 billion "windfall." Their suit accused Barclays of taking a $5 billion secret profit on securities, and of making another $6 billion via measures such as skimping on promised payments and "grabbing" assets from Lehman accounts. The judge said the sale may have been imperfect, but was "adequate under the exceptional circumstances."
RWE: Selling Assets, Cutting Debt
Germany's No. 2 utility, RWE, is planning to sell about $11 billion of assets, starting with up to 75 percent of its German power network, according to two people familiar with the matter. RWE and its German peers will soon see their earnings sliced by Chancellor Angela Merkel's plan to tax nuclear power plants to help plug the budget deficit. In September, RWE said the tax, along with contributions to a government-run renewable energy fund, will cut the company's annual net income by $683 million starting this year.
Best Buy: Closing Branded Stores in China
Best Buy, the world's No. 1 consumer electronics retailer, will shutter its nine Best Buy-branded stores in China to focus on expanding Five Star, a higher-profile and more profitable domestic chain it acquired in 2006 for $180 million. The Minnesota-based company plans to add 40 to 50 Five Star outlets by early next year, bringing its store count in China to about 210. Wang Jian, co-founder of Five Star, has been appointed global vice president for Best Buy. The retailer also announced it will exit Turkey, shutting two stores there.
Cablevision, Time Warner Cable: U.S. Help May Fall Short
Cablevision Systems (CVC), Time Warner Cable (TWC), and other pay-TV providers aren't likely to get some of the federal help they are seeking in rate disputes with broadcasters that hike programing fees, according to two FCC officials. They say the agency is mulling rules that omit two provisions sought by cable companies: mandatory binding arbitration of fee disputes and a requirement that broadcasters air programs on pay-TV systems during negotiations. Last fall many New Yorkers missed World Series games due to a fee dispute.
On the Move
— Dynegy (DYN): CEO Bruce Williamson and the entire board will be replaced, following Dynegy's second failed effort to sell itself.
— Mahindra Holidays: Rajiv Sawhney appointed CEO
— Cisco Systems (CSCO): Gary Moore named COO