Thursday, May 31, 2018
Thu May 31, 2018
Guoco Group Takeover of UK Mecca Bingo was Rejected by Management
Gouco Groups is owned by Quek Leng Chan, one of the wealthiest Chinese men in Malaysia, who has a net worth of over $4 billion. His company already owns 40.8 percent of Rank, and needed 10% more to become the majority owner. Rank rejected the proposal as “significantly undervaluing Rank and its prospects.”
Rank breathed new life into UK’s land-based bingo hall chain, and is one of the market leaders when it comes to online gaming. Its empire includes online casino, poker, sportsbook and naturally online bingo. All gaming facilities operate in full compliance with British gambling laws. Among others, Rank owns Mecca Bingo, one of the biggest online bingo sites in UK.
Guoco’s offer was required by law, following the company’s investment in Rank’s shares which brought up Guoco's ownership of Rank to 40.8 percent. The investment company controlled by the Malaysian billionaire has been very supportive of Rank management. They, in turn, have showed extraordinary business acumen to keep the company alive throughout the recession.
Not only has Rank’s management saw the offer to be too low, but an analyst at Evolution Securities, James Hollins, commented on the bid: “We therefore conclude that Guoco is content to remain as a large shareholder in Rank, and that investors will and should reject the offer.”
China just signed off on its largest foreign takeover ever after it purchased a Canadian oil company. Stephen Harper approved it, but paranoia is rising in Canada. We spoke to a financial expert who actually knows what they're talking about.
A shot of China's oil giant CNOOC. They just took over a Canadian oil company.
When it comes to China’s economic involvement in North America, the popular story to tell has always been that the United States have become extremely reliant on borrowing from the Chinese (though apparently Japan is almost dead-even with them for swallowing up U.S. debt), and that if China were to call their debts in, America would be fucked. That may be true, but Canada has its own complicated and problematic relationship with China, who have recently signed off on their largest foreign takeover ever, after the state-owned China National Offshore Oil Corporation successfully executed a $15.1 billion takeover bid for Nexen Inc, a Canadian oil producer.
The deal was OK’d by the Harper government who, in response to a growing feeling of domestic paranoia, added: “When we say that Canada is open for business, we do not mean that Canada is for sale to foreign governments.” This statement ushered in new restrictions on state-owned takeovers of foreign interests, like the one that just happened with Nexen. Even though the Nexen takeover was approved, just yesterday Albertan M.P. LaVar Payne said that this takeover sets a “very dangerous precedent” and cited China’s “far from stellar” human rights standards as part of his concerns. Two other Conservative MPs have also revealed how bummed they are about the deal. Plus, despite the Harper government’s approval, the Americans are holding up the finalization of the takeover because they are scared about the “impact of financial transactions to U.S. security.” On top of all that, Canada’s own spy agency CSIS is worriedabout the deal, as they publicly raised their concerns about the Chinese threat to Canada, right after the Nexen takeover was approved.
What may seem like an innocent enough multi-billion dollar takeover from one international oil giant to another, appears to be coming on the heels of an alleged wave of Chinese surveillance and cyber-attacks in Canada. In 2010, an Australian company called BHP Billiton was trying to get away with a hostile takeover of Saskatchewan’s PotashCorp. After the deal was reviewed by Harper’s government, it was blocked. A year later, a stream of cyber-attacks against law firms in Toronto, Canadian financial institutions, and PR agencies, were traced back to Chinese computers. At the time, there was serious speculation by the mainstream media that these Chinese cyber-attacks were launched in order to gain more information about why BHP Billiton’s takeover attempts failed, in order to prevent the Chinese from making the same mistakes as the Australians.
I was able to speak with Wendy Dobson, a co-director at the University of Toronto’s Rotman Institute for International Business. She has written in English and Mandarin about “Asia’s rise” and the future of China’s economy. Regarding the failed BHP takeover, she said: “In the case of BHP, one of the reasons that that deal to take over PotashCorp never went anywhere was that it started as a hostile takeover. They came thundering into Canada on their kangaroos – without even informing the premier of the province, consulting anybody and just out of the blue – expecting it to work. The deal could have happened if it had been done properly and if it had been transparent.”
Weird Australian stereotyping aside, if it is true that China launched a very deliberate hacking campaign to uncover clandestine information about the failed Australian takeover of one of our potash producers, it certainly didn’t do much to limit China’s business relationship with Canada’s energy sector. On New Years Eve, PotashCorp sold a million tonnes of potash to China’s Sinofert Holdings Ltd. at a reported 15% drop from their normal rate.
That's a whole lotta potash!
Wendy didn’t seem too fazed regarding the allegations that China has been hacking our computer systems to further their chances at scoring foreign takeovers on Canadian soil: “Cybersecurity is an area where we don’t have any international norms, roles, or standards. The Chinese and the Russians are certainly taking advantage of that to satisfy some of their information requirements, shall we say. And that’s a big issue... But everybody does that. The basic rationale for foreign investment flows is for countries to accept foreign direct investment, they are either accepting it because it brings capital that they don’t have, or it brings dollars that they don’t have.... Don’t say to me that the Chinese are the only ones who hack. I’ll just remind you of Stuxnet.”
Stuxnet is, of course, the operation that the Americans and Israelis allegedly launched against the Iranian government to stifle their nuclear program. There has been no allegations of any Canadian involvement, nor is there a precedent for Canadians hacking into other nations in order to secure large scale business deals, but the point is somewhat taken. I guess.
Perhaps the most alarming facet of this whole story is CSIS’ public declaration that they are worried about how China’s interests are being assimilated into Canada. Richard Fadden, the head of CSIS, sat down with Peter Mansbridge on CBC News in what Peter called an “unprecedented interview.” By speaking in non-committal and non-specific terms, Richard said: “At least one, possibly a couple of countries, take a very, very long range view of their efforts to influence Canada… You find somebody, usually in your diaspora (somebody who has a connection back to the homeland) and you start developing a relationship. In some cases this is done in Universities, through social clubs or whatnot, that are financed by embassies, and through time you invite somebody back to the homeland, you pay their trips.. and when an event is occurring that is of particular interest to Country X, you call up and you ask the person to take a particular view.”
Richard Fadden: Canada's #1 spy guy.
In a strong attempt to cut through the bullshit of “Country X” Peter said, “You never named any countries here, but it seems like China.” Richard got a weird smirk on his face after that, and said “Well, I’m not going to name any countries, but there were a few stories in the media a couple of months ago and I wouldn’t say those stories are entirely incorrect. And, the country that you mentioned, I believe, was mentioned in those stories.” Right. Being a spy sounds hard.
During a segment on CBC’s The National in September of last year, it was reported that CSIS had been “privately warning top corporate executives that their companies may be the targets of Chinese cyber-spies.” It goes on to say that CSIS insists Canadian government and corporate computers are being targeted on “a daily basis” and connects the cyber-attacks surrounding BHP’s failed PotashCorp takeover to the Chinese.
The National segment also brings up Huawei, a Chinese communications giant who has been in talks with the Harper government. In May of 2012, Greg Weston over at the CBC quoted a former “spy-catcher” for George W. Bush, who said that: “The involvement of Huawei Technologies in Canadian telecom networks risks turning the information highway into a freeway for Chinese espionage against both the U.S. and Canada.” Pretty serious claim, right? Well, five months later in October, a White House review of Huawei’s business practices “found no clear evidence that Huawei Technologies Ltd had spied for China.”
So is this all crazy paranoid racist bullshit? Is the Harper government actually making smart moves? Is CSIS just trying to freak out the Canadian public? Wendy thinks this paranoia reflects Canada’s ‘inward lookingness’, “For some reason that still puzzles me, despite the fact that we’re an immigrant nation, we’re just inward looking and complacent and we don’t really understand what’s going on in the world. So we grab onto something like a large transaction, and we get paranoid about it. Even though the shareholders approved the transaction. I would say that it’s up to us and this paranoia is basically like a victim mentality, ‘Oh, look what these big guys are doing to us.’ When you know, we have our own laws, our own regulations, our own decision making structures and we have a PM who made state visits to China and said, ‘I will welcome investment in our natural resources.’ So what do you expect them to do?”
Harper in his negotiating pose.
She also makes the fair point that America has a ton of foreign investment in Canada, although they’d be the ones bombing people if anyone bombed us, and they don’t seem to hack our shit to further their economic agendas: “We can look at what the Americans have done. They’ve held very large stakes in the Canadian economy over the years and over time those stakes have been reduced in part because Canadian enterprises have grown in size and, particularly in the financial sector, we’ve acquired a whole ton of American enterprises... One of the issues that’s coming up in the Western democracy is as the emerging market economies become larger, China at the top of the heap, they’ve got a lot of capital that they’re willing to deploy. And we need capital.”
Despite Harper’s call for new foreign business that lead to the Nexen takeover, his government stated that any new takeover deals in the oilsands will only be accepted under “exceptional circumstances” and all new attempts to buy Canadian companies from foreign, state-owned entities will be faced with “greater scrutiny.”
A large part of the reasoning behind Canadian paranoia appears to be that CNOOC, the company who bought Nexen, is owned by the state of China. To this, Wendy responded: “State-owned means that the parent companies are owned and controlled by governments. In China, you probably wouldn’t be the head of a state-owned enterprise if you weren’t a senior member of the Communist party. So that gives rise to [paranoia]. But if you look at the enterprise, the affiliate that actually made the offer [for Nexen], is listed on the NY stock exchange.”
While it appears that we need to have a fair and reasonable strategy for handling economic decisions as emerging countries like India and China become larger players, we really shouldn’t have to put up with our computers getting hacked and our information being stolen. Hopefully these deals can reach a more friendly level as this will quite certainly be a continuing issue within the Canadian worlds of business and politics.
Dopey Trudeau loves the Chinese dictatorship and welcomes China buying up Canada...enough already boy!
...and in the USA
Wednesday, May 30, 2018
NOVEMBER 1, 2017China Will Surpass US in AI Around 2025, Says Google’s Eric Schmidt
Schmidt, who also chairs the Defense Innovation Advisory Board, says the Chinese are poised to erase a key American advantage — and the Trump administration is helping them.
In April, as Eric Schmidt watched a computer program defeat China’s top go player in a ground-breaking match in the Chinese city of Wuzhen, the executive chairman of Google’s parent company was struck less by the considerable innovations displayed by human and machine than by the audience: “To me the more interesting thing [was that] all the top computer science people in China had shown up.”
It showed, Schmidt said, the importance placed on AIdevelopment by both the Chinese government and its people, and was a postcard from the future competition for AI dominance.
“I’m assuming our [U.S.] lead will continue over the next five years and then that China will catch up extremely quickly,” the Google leader told the Center for New American Security’s Paul Scharre at the Artificial Intelligence & Global Security Summit on Wednesday.
Schmidt doesn’t like the term “arms race” to describe the U.S.-Chinese rivalry in artificial intelligence, in part because defining AIas a weapon is limiting at best and flatly inaccurate at worst. But it is a tool that can make one military, company, economy, and even nation much more effective than another. And China, he says, is positioning itself to devour the current U.S. advantage in just a few years.
In July, China unveiled a massive, national plan for the future of artificial intelligence, to guide both commercial and military development. Its timeline caught Schmidt’s attention. “By 2020, they will have caught up. By 2025, they will be better than us. By 2030, they will dominate the industries.”
For Schmidt, the take-home was clear: “We need to get our act together, as a country…This is the moment when the [U.S.] government collectively, and private industry, needs to say, ‘these technologies are important.’”
But, he said, the Trump administration isn’t doing that. In fact, several moves are putting the U.S. at a disadvantage.
For example, Trump’s 2018 budget request slashes funds for basic science and research by $4.3 billion, roughly 13 percent compared to 2016. (Trump’s military budget does increase money for basic science and research in the Pentagon, but only by $117 million.) While there’s lots of private and corporate money going into AI research, those funds don’t guarantee advantage on a national level.
“It feels, as an American, that we are fighting this conflict with one hand behind our back. What I would rather do is not adopt the Chinese policies, but…fund basic research. The Trump budget does reduce that. It’s the wrong direction,” Schmidt said.
The Google leader also slammed Trump’s multicountry travel banand other immigration policies that would close America’s doors to smart students, researchers, and entrepreneurs who want to come study and start companies.
“Let’s talk about immigration. Shockingly, some of the very best people in AI are in countries that we won’t let into America. Would you rather have them building AI somewhere else or would you have them building here?” he asked. “Iran produces some of the top computer scientists in the world. I want them here. I want them working for Alphabet and Google. It’s crazy not to let these people.”
Schmidt has not been shy about his disagreement with Trump on immigration, but Wednesday marked the first time he cast the disagreement in terms of future national security and state-on-state competition. It’s an area he knows something about; the Google leader currently chairs the Defense Innovation Advisory Board, set up by then-Defense Secretary Ash Carter. In January, the Board approved 11 recommendations to help the Pentagon better integrate technology and innovation into the way it buys and operates weapons. The future of those recommendations, and the board itself, is undetermined.