Friday 11 May 2018
FT
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BUSINESS DAY
FINANCIAL TIMES Donald Trump to meet Kim Jong Un in Singapore on June 12
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Oil market awaits global reaction to Trump’s Iran move Page A5
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World Business Newspaper
Russian tycoon dragged into Trump porn actress scandal Viktor Vekselberg links under scrutiny after targeting by US sanctions KATHRIN HILLE
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or a man who tries to stay out of the limelight, Viktor Vekselberg is failing badly. Not only has his metals, energy and telecoms empire become embroiled in US sanctions but now the 61-year-old Russian tycoon has been dragged into the fallout from porn star Stormy Daniels’ lawsuit against US president Donald Trump. Columbus Nova, a US-based investment management company, paid $500,000 to Essential Consultants, a vehicle through which Mr Trump’s lawyer Michael Cohen paid Ms Daniels, whose legal name is Stephanie Clifford, before the 2016 US presidential election to keep silent about an alleged affair with Mr Trump 10 years earlier. Mr Trump denies the affair. Ms Clifford’s lawyer, Michael Avenatti, claims that Columbus Nova’s payment was money from Mr Vekselberg. Columbus Nova has denied that Mr Vekselberg used the company as a conduit for a payment to Mr Cohen. Describing itself as American-owned and American-controlled, Columbus Nova has said it is independent from the Russian businessman. The payments to Mr Cohen were for his services as a “business consultant regarding potential sources of capital and potential investments in real estate and other ventures”, it said. The Ukrainian-born Mr Vekselberg is Russia’s ninth-richest man with a net worth of $13.5bn, according to Forbes. Last month he was targeted, together with six other leading Russian businessmen, by tough US sanctions intended to respond to Russia’s actions in Crimea, Syria and elsewhere. Mr Vekselberg set up Renova Group, his holding company, in 1990 as a joint venture with former college classmate Len Blavatnik, a Soviet-born US citizen. Mr Vekselberg made his fortune through the privatisation of the Russian aluminium
industry in the 1990s after the collapse of the Soviet Union. The single biggest contribution to his wealth came from the sale of a minority stake in oil joint venture TNK-BP to Russian state oil company Rosneft for $7bn in 2013. A spokesman denied any ties to Mr Cohen. “Neither Viktor Vekselberg nor Renova has ever had any contractual relationship with Mr Cohen or Essential Consultants,” said Andrey Shtorkh, via email. But Mr Vekselberg could struggle to disassociate himself completely from Columbus Nova, which described itself as “the US-based affiliate of the Renova Group of companies”, in a May 2017 SEC filing by Columbus Acquisition Corp. Columbus Nova also identified its chief executive, Andrew Intrater, as Mr Vekselberg’s cousin, in the same filing. According to other corporate filings, Mr Intrater has served as a director at Renova US Management LLC and held other executive positions at Renova Group. Mr Shtorkh, Mr Vekselberg’s spokesman, said: “As to [the] relationship between Columbus Nova and Mr Cohen, you have to ask Mr Andy Intrater, because Columbus Nova is a company owned and managed by him.” According to reports by CNN and the New York Times, both Mr Vekselberg and Mr Intrater were questioned by US investigators about the payments this year. It was reported that Mr Vekselberg was confronted by federal prosecutors as he disembarked from a private plane at a New York area airport. He has not been accused of wrongdoing. There are other intersections in the orbit of Mr Vekselberg and Mr Trump’s wider entourage. Mr Intrater was a big donor to the Trump campaign, giving $250,000 for the US president’s inauguration fund in January last year. He also contributed $35,000 to a committee for his re-election five months later. Mr Vekselberg was among the Russian guests at Mr Trump’s inauguration last year — on a ticket supplied by Mr Intrater, as his guest.
Mahathir sworn in as Malaysian premier after stunning poll win Veteran former PM’s comeback ends coalition’s 60-year grip on power HARRY JACQUES
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ahathir Mohamad was sworn in as Malaysian prime minister on Thursday after sealing a historic general election victory that ends the sixdecade rule of the governing coalition he once headed. The south-east Asian nation’s election commission earlier announced the Mahathir-led Pakatan Harapan (Alliance of Hope) opposition bloc had won 113 seats, one more than the 112 required to hold a simple majority. Former prime minister Najib
Razak’s Barisan Nasional (National Front) coalition claimed 79, with the Malaysian Islamic party (PAS) and others taking the remainder. The result marks the first democratic transition to an opposition party since Malaysia achieved independence from Britain in 1957, albeit in an unorthodox manner. The 92-year-old Mr Mahathir, who once repressed opposition parties during his 22 years as prime minister from 1981 to 2003, handpicked his two successors, including Mr Najib, before turning on his protégé and creating a new opposition Continues on page A4
Viktor Vekselberg with Russian president Vladimir Putin, right, in Sochi in 2014. The oligarch has been described as ‘close to Mr Putin’ © AFP
Daimler leads new investors in SoftBank’s $100bn Vision Fund German carmaker, Japanese banks and Larry Ellison are among venture’s final backers ARASH MASSOUDI, LEO LEWIS AND PATRICK MCGEE
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ermany’s Daimler and Japan’s three largest banks are set to become investors in SoftBank’s Vision Fund as the Masayoshi Son-led company looks to complete fundraising for its $100bn technology investment fund, according to people briefed on the matter. The Mercedes-Benz maker along with MUFG, Mizuho and Sumitomo Mitsui Banking Corp will be among the final investors in the fund, which is the largest ever created in private equity or venture capital, these people said. They added that other new investors will include Larry Ellison, the billionaire US co-founder of software group Oracle who is investing personally, and the sovereign wealth fund of Bahrain.
Mr Son, founder of SoftBank and the person who has final say on the Vision Fund’s investment decisions, is also set to make a personal investment as well as create structures that allow the company’s executives to participate in the fund. The new investments will allow the fund to reach its goal of hitting about $100bn, set out when it was launched with the backing of the state investment funds of Saudi Arabia and Abu Dhabi just over a year ago. SoftBank is debating internally when it should begin fundraising for its next fund, one of these people said, which is expected to be named Vision Fund II. Daimler and the Japanese banks are set to be among the smaller ones in the fund, alongside earlier participants such as Apple, Qualcomm, Foxconn and Sharp. About $88bn of the fund comes from Soft-
Bank, Saudi Arabia and Abu Dhabi. Daimler has been among the most active carmakers investing in ride-hailing and car-sharing platforms in recent years. In 2014 it acquired MyTaxi, a cab-hailing service that now has 70m passengers in Europe. Last year it acquired Chauffeur Privé in France, a rival to Uber. It also owns the car-sharing company car2go. To build up scale, Daimler and BMW announced in March that they would merge their new mobility services on everything from electric vehicle charging to ride-hailing. Individuals close to the three Japanese banks said their decision to invest had a twin motivation: the quest for returns in Japan’s ultra lowinterest environment and the desire to further strengthen their relationships with what is by far Japan’s most active corporate name.
Donald Trump declares trade war on China No sovereign power could accept the humiliating demands being made by the US MARTIN WOLF
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he Trump administration has presented China with an ultimatum on trade. That is what the US’s “draft framework” for the trade talks with Chinese officials in Beijing last week actually is. China could not accede to its demands. The US administration is either so foolish that it does not understand this or so arrogant that it does not care. This may be a decisive moment for relations between the world’s two greatest powers. The US side demands the following “concrete and verifiable actions”. China is to reduce the US-China trade imbalance by $100bn in the 12 months beginning June 1 2018, and by another $100bn in the 12 months beginning June 1 2019. China should also immediately eliminate all “market-distorting subsidies” conducive to excess capacity. It will strengthen intellectual property and eliminate technology-related requirements for joint ventures. “Furthermore, China agrees to . . . cease the targeting of [US] technol-
ogy and intellectual property through cyber operations, economic espionage, counterfeiting and piracy. China also agrees to abide by US export control laws.” Moreover, China will withdraw requests for World Trade Organization consultations relating to tariff actions on intellectual property. “In addition, China will not take any retaliatory action . . . in response to actions taken or to be taken by the US, including any new US restrictions . . . China immediately will cease all retaliatory actions currently being pursued.” China “will not oppose, challenge, or . . . retaliate against US imposition of restrictions on investments from China in sensitive US technology sectors or sectors critical to US national security”. But “US investors in China must be afforded fair, effective and non-discriminatory market access and treatment, including removal of . . . foreign investment restrictions and foreign ownership/shareholding requirements”. By July 1 2020, China will reduce tariffs in “non-critical sectors to levels that are no higher than” equivalent US
tariffs. It will also open access to services and farm products as the US specifies. The agreement is to be monitored quarterly. Should the US conclude that China is not in compliance, it may impose tariffs or import restrictions. China “will not oppose, challenge or take any form of action against” any such US impositions. China will also withdraw its WTO complaint that it is not being treated as a market economy. What is to be made of these demands? The call for a reduction of the bilateral deficits by $200bn (up from $100bn) is ridiculous. It would require the Chinese state to take control over the economy — precisely what, in other respects, the US demands it not do. It is a violation of the principles of non-discrimination, multilateralism and market-conformity that underpin the trading system the US created. It should be ashamed of itself. It ignores the overwhelming probability that this will not reduce overall US deficits, particularly given US fiscal irresponsibility. It ignores the inevitable adverse effects on third countries.