TheChek News Flow

Mohammed Zina is facing six counts of insider dealing and three counts of fraud

A former Goldman Sachs analyst on trial for insider dealing lied to investigators when he was arrested and thought he could “talk his way out of it”, the prosecution told the jury as his trial draws to a close.

Mohammed Zina, 35, declined legal representation in his first interview with the UK Financial Conduct Authority on the day of his arrest in December 2017, Peter Carter KC said in his closing speech for the prosecution at London’s Southwark Crown Court on Wednesday.

“Is it perhaps an indication that Mohammed Zina thought he could talk his way out of it?” Carter told the jury.

The jury was shown extracts from the interview in which Zina told FCA investigators he was “always worried” he did not have permission from Goldman to trade, but he was concerned that if the investment bank refused him permission it would have meant he “wouldn’t be able to fulfil my passion”, he said at the time.

“I was always sort of worried. I was always worried about it,” Zina said in the interview. “I just felt like if I told them, they would just restrict me.”

The trial, which started in November and is being prosecuted by the FCA, originally included Mohammed Zina’s brother, Suhail Zina, 36, who is a former Clifford Chance lawyer. The pair were charged with six counts of insider dealing between July 2016 and December 2017, as well as three counts of fraud related to loans obtained from Tesco Bank to fund the trading.

However, the judge directed the jury to acquit Suhail Zina on all counts on Friday, after ruling there was no case for him to answer.

Carter rebutted Mohammed Zina’s defence that he did not know he had inside information at Goldman, pointing to compliance training and witness accounts about the so-called material non-public information the bank held.

“He was an intelligent man, he knew what the job involved,” Carter said.

Brendan Kelly KC, acting for Mohammed Zina, responded in his closing speech with criticisms of the prosecution’s witnesses, questioning the evidence that his client knew he held inside information.

Kelly told the jury that one of the witnesses for the prosecution, Fergal O’Driscoll, head of Emea conflicts and reputational risk at Goldman, was interviewed by police for possible contempt of court after speaking to another witness. O’Driscoll was found not to be in contempt, Kelly said.

“There are rules in this building, there are rules in this court, and again and again we saw them broken,” Kelly told the jury.

“The real issue here is did [Mohammed Zina] know, did he know that the information that he had is inside information?” Kelly said. “The evidence on knowledge is as clear as mud.”

Prior to the closing statements, the jury heard from character witnesses for Mohammed Zina on Tuesday about how he and Suhail Zina were respected in their community and had both achieved successful careers, despite a challenging upbringing.

Even after he started working for Goldman in 2014, Mohammed Zina still worked at Sainsbury’s supermarket at the weekends for a while because “he missed working with ordinary people”, a school friend said in a witness statement read out to the court.

Negotiations between banks and highly indebted French IT services company hang in the balance

Negotiations between highly indebted IT services company Atos and its lenders are hanging in the balance after one of its biggest creditors, Crédit Agricole, signalled it wanted to walk away. 

Crédit Agricole has for several weeks said it no longer wanted to refinance the group, according to three people with knowledge of the talks, dealing a blow to debt negotiations aimed at pushing back €3.65bn in debt payments due by the end of 2025 by several years. 

Crédit Agricole “have been wanting to get out for some time now . . . it’s been at least three weeks that they’ve really wanted to get out”, said one person with knowledge of the situation. 

The setback points to growing fractures among creditors as Atos’ underlying business and financial situation rapidly deteriorate.

Under the leadership of recently appointed chair Jean Pierre Mustier, Atos is trying to refinance and avoid a wider debt restructuring that could wipe out shareholders. On Monday, the company appointed a mediator to oversee talks with creditors — a voluntary step before a potential court-supervised debt restructuring — which caused shares to plunge almost 30 per cent. 

Once a French corporate champion with prized assets such as supercomputers and sensitive contracts with the French military, attempts to split the group and sell assets to pay down debt have faltered after a series of strategic mis-steps and management changes. In the past three years, the company has had five chief executives, issued a series of profit warnings and shed 90 per cent of its market capitalisation.

A plan to split the company and sell its loss-making legacy business to Czech billionaire Daniel Křetínský is foundering. Talks have been at a standstill for weeks, though neither side is yet willing to declare the deal officially dead, according to multiple people with knowledge of the negotiations. 

As concerns over the debt burden at Atos have mounted and the Křetínský deal stalled, Mustier has explored a back-up plan by starting talks to sell the company’s prized big data and cyber security unit, BDS, to Airbus. A deal with Airbus would take time to finalise, however, since the parties only recently began due diligence.

Crédit Agricole’s stance on the company’s refinancing contrasts with the accommodating position often taken by French banks to big corporate clients. The country’s top lenders tend to extend lifelines during corporate blow-ups and remain longer than foreign banks, as with the slow-motion downfall of food retailer Casino. 

Crédit Agricole is one of the biggest French lenders to Atos in a group of banks that also includes BNP Paribas, Natixis, Credit Mutuel CIC and Société Générale. Together, the banks make up roughly 40 per cent of Atos’ creditors.

Other lenders were also disenchanted with Atos’ situation but more inclined to proceed with refinancing and find a solution by extending fresh funds, the people close to the talks said.

Crédit Agricole’s position could have a ripple effect on other smaller foreign bank lenders, which were also on the fence about re-extending credit lines to the group, the people added. If it fails to secure a voluntary extension of bank loans, Atos is likely to be forced into the French equivalent of a bankruptcy proceeding, which would involve a debt-for-equity swap. 

Distressed debt investors are now circling Atos, including hedge fund Attestor, which has bought some of the company’s debt. “Everyone is testing the market, but to date the prices have been too low for the banks,” the person with knowledge of the talks said. 

Crédit Agricole, Atos, Attestor and the French bank lenders declined to comment. Crédit Agricole’s stance was first reported by online publication L’Informé.

Securities commission chair Yi Huiman seen as ‘scapegoat’ for plunge in share prices in recent months

Beijing has removed the powerful Communist party boss and chair of its securities regulator as authorities battle plunging confidence in Chinese stock markets.

The Communist party’s central committee replaced Yi Huiman with Wu Qing, a senior official who made a name for himself cracking down on brokerages, as China Securities Regulatory Commission chair and party secretary, state news agency Xinhua reported on Wednesday.

The terse report did not provide any explanation for the decision to remove Yi. Before leading the CSRC, he was the chair of the state-owned Industrial and Commercial Bank of China (ICBC), whose past executives have been targeted in widespread corruption probes.

“He’s clearly gone down because of the market slump,” said Chris Beddor, deputy director of China research at Gavekal. “Part of his de facto job as securities regulator was to prevent exactly this from happening: a politically embarrassing market decline.”

A crisis in China’s property sector, which has worsened deflationary pressures, has hit equity valuations and led institutional investors to divest their holdings, further hurting retail investor sentiment.

One banker who has met Yi said he was taking the fall for recent losses in the market, which has suffered a particularly brutal sell-off since the start of this year. The benchmark CSI 300 index is down 44 per cent from its peak in 2021.

“At this point, someone needs to be made the scapegoat,” the banker said

Beijing this week intervened in the domestic stock market to stem prolonged falls, with a so-called “national team” of state-owned institutions buying shares.

The CSI 300, which tracks the largest and most liquid stocks listed in Shanghai and Shenzhen, is up 4 per cent this month following the state intervention after shedding more than 6 per cent in January.

Yi, who took over as chair of the CSRC in 2019, had become more vocal in recent months in his attempts to reassure investors that the regulator would stabilise the market, but sentiment continued to be volatile.

Analysts said Yi was still a relatively young official at 59 and was a member of the Communist party central committee, so another job might be found for him.

“It’s hard to say where he would be appointed next, but the leadership won’t appoint him soon as that won’t look good to angry investors,” the banker said.

Wu, who was previously executive vice-mayor of the city of Shanghai, was tipped early last year to replace Yi.

Wu, 58, headed the Shanghai Stock Exchange for almost two years before becoming Shanghai’s vice-mayor. During his time in the city, he worked alongside China’s number two leader, Premier Li Qiang, who was then Shanghai’s party secretary.

Before working at the Shanghai Stock Exchange, Wu served at the CSRC, where he specialised in “risk management”.

“During his tenure, he made a reputation for his no-nonsense work approach towards brokerage companies,” said Chinese media outlet Yicai Global, adding that Wu had penalised 31 brokerages for regulatory breaches.

Yi’s removal comes as authorities have also stepped up investigations into former officials of ICBC’s international arm in particular, leading one Chinese media site to recently headline an article: “Former executives at ICBC International are falling one after another”.

In November, the bank’s well-connected former vice-chair Zhang Hongli was detained in a corruption probe. His detention followed action against at least a dozen other former ICBC executives.

Senior Nomura banker Charles Wang Zhonghe, who had been at ICBC’s international arm, was banned from leaving mainland China last year. The president of China’s top tech-focused investment bank, Cong Lin, a veteran banker who had run ICBC International, was detained in 2022.

Gavekal’s Beddor said being a securities regulator in China was a “thankless task”.

They were expected to boost the market at critical moments but lacked effective tools, Beddor said, adding that the “national team” consisted of entities that were controlled by a mixture of other agencies and ministries and was probably outside the authority of the CSRC chair.

Issuance comes days after departure of central bank chief who had taken hawkish approach to high inflation

Turkey’s sovereign wealth fund is pressing ahead with plans for a debut international bond deal in a test of investor appetite for the country’s assets after the departure last week of its market-friendly central bank chief.

Banks hired by the Turkey Wealth Fund began pitching a US dollar-denominated bond to investors this week and started taking orders on Wednesday, according to documents seen by the Financial Times. The fund is seeking to raise about $500mn.

The TWF’s fundraising plans come after central bank chief Hafize Gaye Erkan stepped down late on Friday just over seven months into her tenure, during which she increased interest rates from 8.5 per cent to 45 per cent.

Local and foreign analysts have so far largely shrugged off Turkey’s latest central bank upheaval, betting that Erkan’s successor, deputy governor Fatih Karahan, will stick with her policy of using high borrowing costs as the main tool to cool an inflation rate of nearly 65 per cent.

A person with direct knowledge of the TWF deal said Erkan’s resignation had helped to clear uncertainty about the central bank’s leadership, after allegations had swirled in local media for weeks that she had given her father an unofficial role at the bank and that he had sacked an employee. Erkan denied the claims.

Early indications suggested the deal was receiving robust demand, with orders of about $4.75bn. That has led bankers to reduce their guidance for the bond’s yield to 8.625 to 8.75 per cent, from more than 9 per cent initially, according to a term sheet. Turkish sovereign dollar bonds maturing in March 2029 are at present trading with a yield of about 7.6 per cent.

TWF, which was set up in 2016, holds stakes in a broad array of Turkish companies and infrastructure and real estate assets, including flag carrier Turkish Airlines, several major lenders and the country’s stock exchange Borsa Istanbul. The fund also retains full ownership of energy group Botaş, widely seen as one of Turkey’s crown jewel assets, national postal company PTT and a major port near the western city of Izmir.

TWF declined to comment on its fundraising plans.

The mooted TWF deal comes as foreign investors, who had largely abandoned Turkey’s local and international assets over the past decade, start to return, encouraged by a broad economic overhaul following President Recep Tayyip Erdoğan’s re-election in May. The central bank’s rate rises, which reversed Erdoğan’s long-held insistence on keeping borrowing costs low at all costs, have been a main pillar of the programme.

Analysts say they broadly expect Karahan will continue with the tighter monetary policy.

“Unlike previous leadership changes . . . [Erkan’s] resignation appears not to have been triggered by any disagreement between the political leadership of the country and the central bank,” said Clemens Grafe, economist at Goldman Sachs. That was a reference to previous incidents in which Erdoğan, who previously called high rates the “mother and father of all evil”, sacked governors for raising rates.

“We see no reason to doubt that [Karahan] will pursue a similar path to the one chosen by his predecessor,” added Grafe. JPMorgan economists similarly told clients that Karahan, a former New York Federal Reserve economist, was “likely to keep monetary policy tight for longer”.

Turkish asset prices have broadly reflected economists’ calm reaction to Karahan’s appointment, helping to bolster bankers’ confidence in going ahead with the TWF deal.

Turkey’s lira has fallen slightly against the dollar since Erkan’s resignation, while the benchmark Bist 100 stock index has advanced 3 per cent. The cost to protect against a Turkish debt default using five-year credit default swaps, a key measure of the perceived risk in holding Turkish assets, slipped about 10 basis points since last Thursday to 330bp, according to FactSet data.

BBVA, JPMorgan and Standard Chartered are joint global co-ordinators and bookrunners on the TWF deal, while Bank of America, Emirates NBD Capital, ICBC, ING, QNB Capital and Société Générale are bookrunners.

Apple is building prototypes of at least two iPhones that fold widthwise like a clamshell, according to a person with direct knowledge of the situation. If Apple ends up launching a foldable iPhone, it would be one of the biggest hardware design changes in the product’s history.

Foldable phones can be smaller and more portable than typical smartphones and take photos without the help of a stand when they are unfolded at a 90-degree angle. Such phones have become more common after Samsung Electronics released the Galaxy Fold in 2019. Motorola, Google and a number of Chinese brands have since released their own foldable devices, but they are relatively niche because of their high retail cost and fragility compared to traditional smartphones.

The Takeaway

• Apple is building prototypes of two foldable iPhones

• Engineers have struggled with display durability and crease

• Apple discussed first releasing a foldable iPad

The foldable iPhones are in early development and aren't on the company’s mass production plans for 2024 or 2025, the person said. Apple recently approached at least one manufacturer in Asia for components related to two foldable iPhones of different sizes, they said. The products could be canceled if they don’t meet Apple’s standards, they said.

An Apple spokesperson didn’t respond to a request for comment.

Apple has explored foldable products for more than a decade but its leaders’ interest in them has fluctuated, according to interviews with multiple former Apple employees and a review of its patent filings. Apple CEO Tim Cook began asking the company’s designers and engineers about the possibility of a foldable iPhone as early as 2018. Also that year, he reacted positively to a demonstration by Apple’s designers and engineers of a 7-inch foldable display, that person said.

Two problems may stand in the way of a foldable iPhone. Apple’s engineers have struggled for years to overcome the technical challenges of building such a device, and its designers haven’t come up with enough compelling features that would make consumers want one, especially given its high retail cost compared to non-foldable phones, according to three people with direct knowledge of the effort.

Former Apple employees said Apple’s first foldable product would likely be the iPad, a lower-profile device that would test consumer appetite for a foldable iPhone. Apple has been working with South Korea’s LG and Samsung, both of which have been involved for several years in making foldable displays for the foldable iPad prototypes, they said. Some details of a foldable iPad were first reported by Chinese, Taiwanese and South Korean media.

Apple’s industrial design team has wanted to develop a foldable iPhone whose displays face the outside when the phone is shut, the person said. However, Apple hardware engineers struggled with the design because the devices are prone to breaking when dropped, they said. The industrial design team also wanted a foldable iPhone that was half as thin as current iPhone models so it wouldn’t be too thick when shut. But limitations on battery sizes and display components made it difficult for hardware engineers to meet these requirements, they said

Apple paused its work on foldable iPhones around 2020 and turned its attention to an inward folding iPad similar to the size of an iPad Mini. Such a device, with a roughly 8-inch screen, could be thicker than a foldable iPhone because people wouldn’t carry it in their pockets, and wouldn’t need to pass the stringent drop tests required of the iPhone, said a former Apple employee. Engineers working on the foldable iPad are trying to eliminate the crease in the middle of the display that forms after repeated folds, and they want to design a hinge that will allow the display to lie completely flat as opposed to having a small bump or dip in the middle. Those issues would make it difficult for the iPad owners to use an Apple Pencil.

Foldable phones haven’t exactly been hot sellers, partly because they cost significantly more than traditional phones. Owners of foldable devices from Samsung, Motorola, Google and others have complained that some of the screens and hinges can break or become deformed over time. Samsung has improved the quality of its foldable devices over time, according to display analysts. Google last year also faced similar complaints over broken screens in its first foldable phone, the Pixel Fold. It slashed the price by more than 20% to $1,400 less than six months after its release in June.

Apple has repeatedly shown the ability to succeed where others have failed, however. Last week it launched a mixed-reality headset, the Vision Pro, after spending nearly a decade trying to solve issues related to the lag between a user’s movements and what they see on their screen, along with fitting its advanced components into a small form factor. Such features had tripped up other companies in the past.

The world’s biggest luxury group is promoting its “You and ME” roadshow with outdoor ads and influencer partnerships.

PARIS — LVMH Moët Hennessy Louis Vuitton is casting its net ever wider in the search for young talents.

Faced with a chronic shortage of skilled workers, the world’s biggest luxury group on Wednesday kicked off the third edition of its “You and ME” recruitment roadshow, drawing a record 3,000 people to the opening day event at the Carreau du Temple in Paris.

In a bid to reach more potential candidates, LVMH advertised the initiative with a poster campaign in the Paris subway and enlisted the help of more than a dozen influencers to drum up engagement.

LVMH, which owns brands including Louis Vuitton, Dior, Sephora and Tiffany & Co., aims to recruit 22,000 people by the end of 2025. More than 3,500 positions, ranging from block release apprenticeships to permanent contracts, are available to be filled via the job fair, which will make four additional stops in France and three in Italy.

There are 280 skilled trades represented across the group’s 75 brands, many of which are not well known or understood. Some sectors, like retail and hospitality, have struggled to recruit since the COVID-19 pandemic.

“The skills gaps have never been as important globally,” Chantal Gaemperle, group executive vice president of human resources and synergies at LVMH, told WWD.

“It is truly a strategic priority for us to have the best people,” she added, noting that the group posted strong results in the fourth quarter. “We have needs, and these needs can be met by people who perhaps haven’t considered working for us.”

The campaign displayed in outdoor advertising and newspaper ads underlines the notion of handover, portraying experienced staffers alongside an apprentice.

Alexandre Boquel, head of development for LVMH’s Métiers d’Excellence division, said the feedback has been positive. “People understand that ultimately, learning a skilled profession at LVMH also means being supported by a tutor who will complete theoretical learning through transmission in a very human, very personal way,” he said.

As usual, the fair featured stands where skilled craftspeople offered demonstrations on everything from leatherworking to cosmetics formulation. Human resources representatives were also on hand to guide potential applicants through the process.

“We really made a point of developing this support, precisely because we realize that many people are attracted to these professions but sometimes struggle with a lack of information on how to train for these jobs,” Boquel said.

“Each of our craftspeople is flanked by someone from human resources from the house who is there to explain what training programs are required, but also to help people write a CV and ace their job interviews. We even offer coaching workshops,” he said, noting that there is a dedicated app for follow-up advice.

Gaemperle put the accent on the regional initiatives, which will see the fair make stops in Orléans, a hub for leather goods manufacturing; Reims, a center for wines and spirits production; Lyon, the traditional home of the French silk industry, and Clichy-sous-Bois, an economically disadvantaged suburb of Paris that is a long-term partner of the initiative.

“Paris is home to many of our houses, but we have a lot of economic activity across the country and I think that is a strong message to put across,” Gaemperle said, noting that 64 percent of jobs generated by LVMH in France are based outside the Paris region.

“You and ME” will also alight in the Italian cities of Florence, Padua and Naples. The latter is a new addition to the circuit, and a hub for Dior’s leather goods division, as well as an important recruitment area for LVMH’s Belmond hospitality division.

Gaemperle said the message that LVMH wants to send, via influencers like vintage fashion enthusiast Zoé Hotuqui, or Emmanuelle Sits, a luxury expert known for her signature green nails, is that everyone is welcome.

“Our priority is to be able to attract, retain and grow the best talent. It’s what fuels the performance of the group and sustains our leadership position,” she said.

The 25-piece line inspired by a George Sand poem will bow for fall 2024 at the Sphere showroom during Paris Fashion Week.

PARIS — Charles de Vilmorin is ready for his next act: a ready-to-wear line.

His eponymous label will make its debut for fall 2024 at the upcoming Sphère showroom, the emerging designer showcase run by the Fédération de la Haute Couture et de la Mode.

“I may give the impression of preferring couture and crazy silhouettes but ready-to-wear is something that’s always spoken to me and inspired me a lot,” he told WWD exclusively. “They’re really complementary and when I look at brands I like, they’re often older labels that had both.”

The French designer, a graduate of the Ecole de la Chambre Syndicale de la Couture Parisienne, emerged during the pandemic thanks to an eye-catching line of patchwork quilted bomber jackets inspired by artist Niki de Saint Phalle.

A slew of accolades followed: a spot among the 2021 finalists of the LVMH Prize for Young Designers, another on the ANDAM’s shortlist, and participation in the GucciFest online festival. Rochas tapped him as creative director shortly after the launch of his brand, with his first collection for the house bowing in September 2021.

He credits his two-year tenure at Rochas for giving him a deeper understanding of how to develop a rtw lineup, while his recent experience as the guest designer for the Galeries Lafayette’s 2023 festive season helped develop his sense of product.

“Since all these little capsules worked really well, it was time I gave it a go,” he said.

Although de Vilmorin is best known for eye-catching couture creations with surreal touches, he leaned toward a cleaner silhouette here.

“Those are shapes I know I would reach for all my life,” he said. “I want to lay the foundation of my wardrobe for this first time, then have things evolve around that, step by step.”

Cue a 25-piece lineup that will include three dresses, denim shorts, shirting, a trenchcoat and, of course, new takes on his bomber jackets. “I think they still have a bit of life in them,” he joked.

There will also be a handful of printed scarves, which will further develop the season’s narrative, inspired by a poem by French author George Sand that hides a secret: the love letter turns into something much more risqué when skipping every other line when reading.

The Paris-based designer wanted to favor “beautiful, natural, noble materials rather than add ruffles and volumes,” so the fall collection will be centered around silk, silk taffeta and cottons, including poplins and denims sourced through Supima. The designer has been a regular of the Supima Design Lab for the past three years.

Entirely made in Paris, the line is expected to retail around 500 euros for a printed shirt in cotton poplin and under 2,000 euros for a voluminous trench with a silk taffeta lining.

In coming seasons he’ll be introducing knitwear and is already weighing his options for further categories, such as footwear.

If anything, de Vilmorin intends his first collection to read as an open invitation. “People can be part of my universe without wearing a horse on their head or having a six-meter train,” he said. “What allows me to be this creative can be accessible.”