FB Roundup: Sumner Redstone, Samsung, and Bhushan Steel
Redstone locks in CBS ownership
Billionaire Sumner Redstone will make it difficult for his heirs to sell off media giants CBS and Redstone following his death.
The Redstone family’s National Amusements media group holds 79.8% of Viacom’s voting stock (about 10% of the equity) and 79.5% of the voting stock and 2.4% of the Class B stock of CBS Corporation (9.1% of the equity).
The trust agreement set up to govern these stakes following Redstone’s death said the family must always maintain at least 30% of the voting interest, even in the event of a sale.
The agreement came to public attention as part of legal proceedings between the family, led by Redstone and his daughter Shari, and the CBS board, who are challenging the Redstone’s level of control.
CBS turns over more than $20 billion a year. Sumner Redstone is thought to be worth at least $4.8 billion.
Samsung ramps up R&D spend
Samsung is to invest $22 billion in new technologies including artificial intelligence and electric vehicle parts over the next three years, part of a $160 billion R&D spend the company announced this month.
It said the investment would create up to 40,000 jobs in South Korea, which may help revamp its public image following one of its founding family members being released from prison. Lee Jae-young, second generation vice chairman, was released in February after serving five months for bribery and corruption.
Samsung’s electronics division has just announced its slowest quarter in two years, and an executive told reporters the company was aware of the impetus to keep up with emerging technology.
Samsung reported 2017 revenue of KRW 239.58 trillion ($220 billion) and full-year operating profits of $49 billion.
Indian heir arrested over fraud allegations
A member of the founding family behind Indian metals giant Bhushan Steel has been arrested and charged with siphoning money off his former family business.
Bhushan Steel took on too much debt over the last decade, and the Singal family lost control of the conglomerate earlier this year when India’s central bank forced it to declare itself insolvent. It was then acquired by Tata Steel.
Former managing director Neeraj Singal is accused by India’s Serious Fraud Investigation Office for siphoning off the equivalent of hundreds of millions of dollars from loans made by 80 different companies. He was also arrested in 2014 when he was accused of bribing bankers.
The Indian Government is executing a widespread crackdown on corruption in business. It is estimated that about 15% of the credit issued by India’s state-run banks are bad loans. The 1987-founded Bhushan Steel turned over $22 billion last year.
