Company news in brief
Reserve Bank slaps Nedbank with finesThe South African Reserve Bank (SARB) has imposed R35 million in fines on Nedbank for failures that included not reporting cash transactions of large amounts and shortcomings in record-keeping. The banking authority conditionally suspended R15 million of the fine.
In a statement on Friday, the central bank said that the penalties followed an inspection in 2019 to assess whether the bank complied with the Financial Intelligence Centre Act (FICA).
Among other failures, it was found that the bank did not sufficiently "risk-rate" its clients and that it failed to report a significant number of cash transactions that exceeded the threshold of R24 999.99.
Nedbank also failed to comply with its anti-money laundering and anti-terrorism rules in that it was unable to prove that certain senior management approvals were obtained.
"It is important to highlight that there was no evidence of Nedbank being involved in or facilitating transactions involving money laundering or the financing of terrorism," the Reserve Bank said. – Fin24
Saudi Aramco profit soars
State oil giant Saudi Aramco reported a soaring 90% rise in second-quarter profit yesterday, beating analyst expectations and propelled by higher oil prices, volumes sold and refining margins.
The company expects "oil demand to continue to grow for the rest of the decade, despite downward economic pressures on short-term global forecasts," Aramco chief executive Amin Nasser said in the earnings report.
Aramco's net profit rose to 181.64 billion riyals (US$48.39 billion) for the quarter to June 30 from 95.47 billion riyals a year earlier.
It declared a dividend of US$18.8 billion in the second quarter, in line with its own target, which will be paid in the third quarter.
Aramco shares have risen over 25% this year as oil and natural gas prices have scaled multi-year highs after Western sanctions against major exporter Russia squeezed an already under-supplied global market. - Reuters
Bain 'ashamed' of mistakes in SA
Bain & Co. said it’s “ashamed” of the consultancy’s role in destabilising South Africa’s tax agency after the country’s most senior treasury official called for companies to stop doing business with the firm.
SARS Commissioner Edward Kieswetter has however criticised the company for failing to reach out to the revenue service.
The public apology by Stephen York, Bain’s managing partner in South Africa, comes days after the UK banned the group from bidding for state contracts because of its links to corruption in the African nation under the presidency of Jacob Zuma.
Bain was found by the country’s judicial commission to have had ties to illegal dealings during work restructuring the South African Revenue Service, where senior staff were ousted and the institution’s investigative capacity was gutted.
The comments come after Ismail Momoniat, the acting director general of the Treasury, called for a halt to business with Bain and urged the country’s government institutions to investigate.
“We apologise to you,” York said in a full-page advert in finance newspaper Business Day on Friday. “Bain made serious mistakes in the procurement and execution of our work at SARS.”
York said much of what has been said about Bain is untrue - the company has denied being complicit in corruption - but the firm is “accountable for its mistakes.” He said he regrets “playing any role in the damage to this critical institution.” – Fin24/Bloomberg
New twist in battle for Telkom
The South African government received an unsolicited bid for its 40.5% stake in Telkom, following an announcement that MTN is planning to acquire part of the carrier.
Investment firm Toto Consortium made an offer valued at $433 million (R7 billion) for the stake in the nation’s third-largest mobile-phone company, according to Bloomberg calculations. The Telkom bid is based on a 30-day average share price of the firm, plus a 20% black empowerment discount, according to an offer letter seen by Bloomberg.
"The offer is subject to the satisfactory conclusion of a due diligence of Telkom," according to the document dated July 24. "We are not averse to collaborating with other stakeholders."
MTN announced last month it’s planning a takeover offer for Telkom, sparking interest in the smaller South African operator, with internet-service provider Rain also announcing its intention to combine with Telkom.
State-run Telkom said it would consider an offer or proposal from Rain to merge, once received. – Fin24/Bloomberg
US opens probe into Ford vehicles
US auto safety regulators said Friday they are investigating whether a 2020 Ford Motor Co recall for vehicles with front brake hoses rupturing prematurely is adequate.
The National Highway Traffic Safety Administration (NHTSA) is opening a recall query into 1.7 million US Ford 2013-2018 model year Fusion and Lincoln MKZ cars after receiving 50 complaints alleging front brake hose failures.
Ford recalled 488 000 Ford Edge and Lincoln MKX vehicles in 2020 in the United States for brake hose failures.
Ford said it would cooperate with NHTSA's probe.
NHTSA said many complaints reported brake hoses are rupturing, leaking brake fluid and occurring with little or no warning. The safety agency said it is aware of one alleged crash as a result of a failed brake hose. – Reuters
Jumia says it is past peak losses
African e-commerce firm Jumia Technologies last week said it was past peak losses and would focus on promotions, marketing and cost cutting in its quest towards profitability.
Jumia is an online marketplace for vendors and food sellers, with associated services including logistics and payments. It was the first Africa-focused tech startup to list on the New York Stock Exchange in 2019.
It reported an adjusted loss before interest, tax, depreciation and amortisation of US$57.2 million for the second quarter ended June 30 from US$41.6 million in the same period last year.
The company did not say when it expected to make a profit, but said achieving that would take a combination of measures including promotional discounts, ramping up marketing and cutting costs at warehouses by reducing consumption of packaging.
The company, which operates in 11 African countries, saw total orders increase 35% year-on-year as customers bought more beauty and cleaning products.
Jumia still expects a full-year adjusted EBITDA loss of US$200 million-US$220 million, but it reduced its full-year capital expenditure guidance to US$10 million-US$15 million from US$15 million-US$25 million. – Reuters