Western officials say China is covertly building a naval facility in Cambodia - press (update)
- Officials say both countries deny the base is being built and are taking extraordinary measures to conceal the operation
U.S. Files Warrant to Seize Two Planes Owned by Russian Oligarch Roman Abramovich
Prosecutors say owner of U.S.-made planes breached U.S. sanctions by flying into Russia; it is first U.S. action against high-profile billionaire
WASHINGTON—U.S. authorities filed a warrant to seize two planes owned by Russian oligarch Roman Abramovich, saying that as U.S.-manufactured aircraft, they are subject to U.S. sanctions imposed in the wake of Russia’s invasion of Ukraine.
According to a court document filed Monday, a Boeing Co. 787 Dreamliner and Gulfstream jet owned by Mr. Abramovich flew into Russia after February, a trip that would have required a U.S. export license. One jet is in Dubai and the other in Moscow, according to the warrant.
“Those vessels are not today taken into U.S. custody, but they are now publicly known as wanted property, as tainted assets subject to forfeiture and under active pursuit,” a Justice Department official said. A representative for Mr. Abramovich couldn’t immediately be reached for comment.
The Wall Street Journal reported earlier this year that Mr. Abramovich, the world’s best-known Russian oligarch, flew his Dreamliner, worth hundreds of millions of dollars into Dubai on March 4, its last known location. The plane is designed for 250 passengers.
Known for his relationship with Russian President Vladimir Putin and his efforts to serve as a go-between between the Kremlin and Ukrainian leadership, Mr. Abramovich faces U.K. and European Union restrictions but hasn’t been subject to U.S. measures on account of his role in the talks. While he engaged as a mediator in the talks, the Journal reported in April, he also reshuffled his holdings to shield assets from sanctions, including by shifting control of an investment vehicle associated with him, moving two megayachts and trying to sell some U.S. hedge-fund assets.
Mr. Abramovich has continued to help with evacuations and prisoner swaps, but the peace talks have stalled, according to people familiar with the matter.
As part of a broad sanctions package in February, the U.S. and its allies imposed sweeping measures against Russia after Moscow launched what President Biden called “an unprovoked and unjustified attack” on Ukraine, hoping a fresh tranche of penalties would punish Russia and persuade it to ratchet down hostilities.
Those sanctions imposed limits on the export of aircraft and aircraft parts to Russia without a license, and further limited exceptions for Russian nationals.
The warrant said investigators had examined records related to the planes from Aruba, the British Virgin Islands and Jersey in their probe. The Journal reported last month that authorities in the latter offshore financial center in the English Channel are conducting a wide-ranging preliminary probe into Mr. Abramovich’s wealth held on the island, including whether a business partner helped the billionaire try to evade U.K. sanctions, citing people familiar with the situation.
The Gulfstream flew from Istanbul to Moscow on March 12, and again flew into Moscow on March 15, where the warrant said it had remained since. According to the document, a Jersey company controlled by Abramovich, Clear Skies Flights Ltd., bought the plane in March 2020 for $60 million.
Another company Mr. Abramovich allegedly controlled, a British Virgin Islands firm called Wenham Overseas Ltd., bought the jet for $93.6 million in December 2017 and customized the interior to make it worth around $350 million, the warrant said. In connection with that deal, Mr. Abramovich’s representatives disclosed that Mr. Abramovich was the ultimate beneficial owner of Wenham, the warrant said.
He controlled both companies through a series of shell companies, prosecutors said.
The Commerce Department earlier this year publicly flagged both planes as potential violators of U.S. sanctions.
Earlier this year, the Justice Department formed a task force known as KleptoCapture to track and try to seize assets of Russian elites as part of an international effort to raise the cost to the Kremlin and its supporters of pursuing the Ukraine invasion.
In April, authorities seized a $90 million super yacht in Spain that was owned by Viktor Vekselberg, a sanctioned oligarch with close ties to Mr. Putin. The yacht is now going through the forfeiture process in court.
In May, law-enforcement officials in Fiji seized a $325 million superyacht owned by another Russian oligarch who was previously sanctioned for alleged money laundering.
Research Calls
- Upgrades:
- American Express (AXP) upgraded to Buy from Hold at Edward Jones
- American Software (AMSWA) upgraded to Buy from Neutral at B. Riley Securities; tgt $23
- Ardagh Metal Packaging S.A. (AMBP) upgraded to Overweight from Equal Weight at Barclays; tgt $9
- Aurora Cannabis (ACB) upgraded to Hold from Sell at Stifel
- CAE (CAE) upgraded to Neutral from Underperform at BofA Securities
- CrowdStrike (CRWD) upgraded to Overweight from Equal-Weight at Morgan Stanley; tgt raised to $215
- lululemon athletica (LULU) upgraded to Mkt Perform from Underperform at Bernstein; tgt $300
- ResMed (RMD) upgraded to Outperform from Sector Perform at RBC Capital Mkts; tgt raised to $244
- Ryder System (R) upgraded to Peer Perform from Underperform at Wolfe Research
- Societe Generale (SCGLY) upgraded to Buy from Hold at Jefferies
- Spotify (SPOT) upgraded to Outperform from Mkt Perform at Raymond James; tgt $150
- Vallourec SA (VLOWY) upgraded to Equal Weight from Underweight at Barclays
- Downgrades:
- Dun & Bradstreet (DNB) downgraded to Sector Perform from Outperform at RBC Capital Mkts; tgt raised to $18
- Edison (EIX) downgraded to Neutral from Buy at UBS; tgt lowered to $73
- L.B. Foster (FSTR) downgraded to Neutral from Buy at B. Riley Securities; tgt lowered to $14
- Others:
- American Tower (AMT) resumed with a Buy at BofA Securities; tgt $315
- Bausch + Lomb (BLCO) initiated with a Buy at Citigroup
- DoorDash (DASH) initiated with a Mkt Perform at Raymond James
- GoodRx (GDRX) resumed with a Buy at BofA Securities; tgt $11
- Grab (GRAB) initiated with a Buy at China Renaissance; tgt $4.20
- GXO Logistics (GXO) initiated with an Outperform at Cowen; tgt $64
- Hanover Bancorp (HNVR) initiated with an Overweight at Piper Sandler; tgt $26
- MercadoLibre (MELI) initiated with an Outperform at KGI Securities; tgt $1200
- Modiv (MDV) initiated with a Buy at Colliers Securities; tgt $22
- Regeneron Pharma (REGN) initiated with an Underperform at Jefferies; tgt $536
- Selecta Biosciences (SELB) initiated with an Outperform at SVB Leerink; tgt $7
- SEMRush (SEMR) initiated with an Equal-Weight at Morgan Stanley; tgt $13
- Volaris Aviation (VLRS) initiated with an Overweight at JP Morgan; tgt $23
Gapping down
News:
- VERA -2% (files for $400 mln mixed securities shelf offering)
- AREC -1.7% (files for $36.39 mln mixed securities shelf offering)
- H -0.7% (reports May update)
Analyst comments:
- DNB -0.9% (downgraded to Sector Perform from Outperform at RBC Capital Mkts)
Gapping up
In reaction to earnings/guidance:
- SAIC +6%, ODFL +0.7% (Q2 update)
Other news:
- ASPN +12.6% (provides FY22 business update)
- CSIQ +5.9% (sells 70% Stake in 738 MWp Solar Projects to SPIC Brasil)
- SAVE +4.6% (JetBlue Airways submits improved proposal to acquire Spirit Airlines)
- HUT +3.9% (reports 7078 self-mined Bitcoin in reserve after 309 were generated in May)
- TOI +3.1% (files for 1342076 share common stock offering by selling shareholders)
- TSLA +2.7% (Elon Musk tweets "Total headcount will increase but salaried should be fairly flat")
- ARQT +2.6% (topline results from STRATUM pivotal phase 3 trial of roflumilast foam 0.3%)
- PK +2.2% (provides operating trends in Q2 update)
- BCRX +2.2% (Health Canada has authorized ORLADEYO (berotralstat) as prevention of recurrent hereditary angioedema (HAE) attacks)
- VERU +2.1% (presentation of final positive phase 1b/2 clinical trial results for sabizabulin in metastatic castration resistant prostate cancer at the 2022 American Society of Clinical Oncology Annual Meeting)
- SBUX +1.9% (Board of Directors affirms CEO transition details; Board reiterates plans of driving toward naming new leader in Fall)
- EPR +1.6% (files mixed securities shelf offering)
- DNA +1.4% (acquired certain assets from Bitome)
- GSK +1.3% (receives FDA approval of Priorix for the prevention of measles mumps and rubella in individuals 12 months of age and older)
- ET +1.2% (signs LNG sale and purchase agreement with China Gas)
Analyst comments:
- SPOT +5% (upgraded to Outperform from Mkt Perform at Raymond James)
- AMSWA +3.9% (upgraded to Buy from Neutral at B. Riley Securities)
- AMBP +3.7% (upgraded to Overweight from Equal Weight at Barclays)
- CRWD +2.8% (upgraded to Overweight from Equal-Weight at Morgan Stanley)
- ACB +1.9% (upgraded to Hold from Sell at Stifel)
- AXP +1.4% (upgraded to Buy from Hold at Edward Jones)
- RMD +1.2% (upgraded to Outperform from Sector Perform at RBC Capital Mkts)
- LULU +1.1% (upgraded to Mkt Perform from Underperform at Bernstein)
Early premarket gappers
- Gapping up:
- MRUS +5%, CARA +4.9%, TSLA +3.8%, PK +3.3%, TOI +3.1%, ACLX +2.4%, HOOK +2.4%, SHEL +1.9%, EPR +1.6%, SBUX +1.6%, LLY +1.4%, GSK +1.3%, ET +1.3%, BP +1.1%, BNTX +1%, GILD +0.7%, OXY +0.7%, COP +0.6%, XLE +0.5%, PSX +0.5%
- Gapping down:
- PBYI -2.1%, VERA -2%, STON -1.4%, JOAN -0.8%, AREC -0.6%
China to Conclude Didi Cybersecurity Probe, Lift Ban on New Users
Chinese authorities are also preparing to allow Didi’s app back on domestic app stores as early as this week
SINGAPORE—Chinese regulators are concluding yearlong probes into ride-hailing giant Didi Global Inc. DIDI -3.14% and two other U.S.-listed tech firms, preparing as early as this week to lift a ban on their adding new users, people familiar with the discussion said.
The regulators plan as well to allow the mobile apps of Didi, logistics platform Full Truck Alliance Co. YMM -3.09% and online recruitment firm Kanzhun Ltd. BZ -2.40% back on domestic app stores, also as early as this week, the people said. The apps were removed last July when Chinese authorities opened data-security probes into the companies, citing national security reasons
With concerns growing over a rapid deterioration in China’s economic outlook, Beijing has moved to pause its campaign to tighten its grip on homegrown tech giants and their troves of data.
The three companies went public in the U.S. last June and raised nearly $7 billion in total. Shortly afterward, China’s internet regulators began cybersecurity reviews. Didi was hit particularly hard—its market value plummeted in the following months, and less than a year after listing its shares in the U.S., the Beijing-based company decided to delist from the New York Stock Exchange.
The three companies have a combined market capitalization of about $25 billion, compared with $110 billion last July 2—just before the investigations were announced—according to FactSet. Didi registered the steepest decline.
Chinese government authorities including the Cyberspace Administration of China conveyed the plan in meetings last week with executives from Didi, Full Truck Alliance—also known as Manbang Group—and Kanzhun, the people said.
Authorities are expected to deliver a conclusion of the probes into these companies around the same time, the people said. The three companies are expected to face financial penalties, they said—a relatively large fine for Didi, relatively lenient for the other two, some of the people said.
The companies are also expected to offer 1% equity stakes to the state and give the government a direct role in corporate decisions, some of the people said.
The Cyberspace Administration didn’t immediately respond to written questions. The companies didn’t immediately reply to requests for comment.
Last July, China’s internet watchdog ordered the companies to stop adding users and app-store operators in China to remove their mobile apps, saying they were collecting personal data illegally. The companies said at the time that they would fully cooperate with the review.
Cybersecurity agents launched monthslong on-site inspections, people familiar with the issue have said. Agents have questioned senior executives, downloaded internal records and collected emails and internal communications, they have said.
Some people familiar with the investigations said the authorities didn’t find substantial problems with the companies.
Around October, the Cybersecurity Administration suggested the three companies explore separate listings in Hong Kong. In May, Didi said its shareholders approved its plan to delist from the New York Stock Exchange. Didi had told shareholders it needed to delist before it could resolve a cybersecurity probe in China, and that it would pursue a listing in Hong Kong.
Full Truck Alliance is also pushing ahead with a Hong Kong share-offering plan, with the goal of listing by year-end, according to a person familiar with the matter. The company is likely to raise less than it did in the U.S., the person added.
At an April Politburo meeting, Chinese leader Xi Jinping said that any oversight of the technology sector would be more standardized to support the “healthy development” of tech firms. At a May meeting with attendees including tech executives, China’s top political advisory body, the Chinese People’s Political Consultative Conference, expressed support for a stronger digital economy, signaling a regulatory reprieve for tech giants.
>>> Up
* Aegean Air Raised to Buy at Wood & Company; PT 6.50 euros
* Ardagh Metal Packaging Raised to Overweight at Barclays; PT $9
* Credit Suisse Raised OUT1V.FI to Outperform from Neutral, price target: €6.90
* Derwent London Raised to Add at Peel Hunt
* Intermediate Capital Raised to Buy at Peel Hunt; PT 2,625 pence
* Lululemon Raised to Market Perform at Bernstein; PT $300
* SocGen Raised to Buy at Jefferies; PT 35 euros
* Vallourec Raised to Equal-Weight at Barclays; PT 17 euros
* Wood Raised to Overweight at Barclays; PT 340 pence
>>> Down
* Aker Solutions Cut to Underweight at Barclays; PT 39 kroner
* Aveva Cut to Sell at Citi; PT 2,000 pence
* EDF Cut to Reduce at HSBC; PT 7.40 euros
* EnQuest Cut to Underweight at Barclays; PT 23 pence
* Hunting Cut to Underweight at Barclays; PT 360 pence
* Johnson Matthey Cut to Hold at HSBC; PT 2,350 pence
* Tecnicas Reunidas Cut to Equal-Weight at Barclays; PT 12 euros
>>> Initiation
* Hexagon Rated New Neutral at Citi; PT 125 kronor
* Nemetschek Rated New Buy at Citi; PT 85 euros
* Volaris ADRs Rated New Overweight at JPMorgan; PT $23
>>> Call
* Bernstein Strategists See Potential Margin Squeeze in Europe (+)
* Derwent London Raised on London Prime Office Outlook: Peel Hunt
* MS Strategists Expect Earnings Cuts to Weigh on US Stocks (+)
* Nemetschek Top Digital Industry Pick, Aveva Cut to Sell: Citi
* RBC’s Calvasina Cuts S&P 500 2022 Target to 4,700 on Growth Pace
* Societe Generale Raised to Buy at Jefferies as Risks Cleared