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Oleg Deripaska, founder and owner of EN+ and Rusal aluminum, is in the hot seat this week because he has been hit by US sanctions. Moscow bureau chief Kathrin Hille writes in a profile that the tycoon, who was raised by his grandparents and served three years in a Siberian missile base, has previously succeeded precisely because he toed the Kremlin’s line. After becoming a metals trader and gaining control of the smelters at the core of Rusal’s business, he married Polina Yumasheva, the daughter of the son-in-law of former president Boris Yeltsin.
But now Mr Deripaska, well known for his lavish parties at Davos’ World Economic Forum, may have to sever his ties with the companies he built to save them from a worldwide transaction ban imposed by US authorities. “This is the worst thing that has ever happened to him in his entire career,” a Russian state bank executive told Kathrin. “He has always been a very hands-on guy…. What will he have left?”
Pointless M&A: It was a manic merger Monday, as companies confirmed more than $120bn in transations in a single 24 hour period. But Merryn Somerset Webb detects a dangerous whiff of short-termism in the takeover frenzy. She argues that stock markets should not be about the endless pursuit of cost savings and market share via acquisition and consolidation. Instead they should be funnelling savings from ordinary people into the financing of new productive activity that will boost economies and make everyone better off in the long run.
Middle-class tipple: Temperance is on the march right now. French doctors have rapped Emmanuel Macron for having wine with both lunch and dinner, Scotland has raised the minimum price for alcohol and the UK National Health Service has noted with disapproval that the professional classes are bigger boozers than everyone else. Ben Anderson offers a full-throated defense of middle-class drinking, arguing that alcohol is a stimulant in moderation and that professionals and older people have more than earned their right to a glass.
Tory troubles: Local elections in the UK have ended in stalemate, with Labour failing to live up to high expectations that they would flip several councils in long-time Conservative strongholds, particularly in London. Geoffrey Wheatcroft argues that Prime Minister Theresa May should not take much comfort from the result. Britain’s oldest and most resilient party — its forebears were supporters of Charles I — has generally been respected for its competence rather than truly loved. That respect is under threat because the endless travails over Brexit and the Windrush scandal have badly bruised the Tories’ reputation.
Best of the week
The City of London’s approach to oligarchs is craven— by John Gapper
How the Beijing elite sees the world— by Martin Wolf
Jaguar Land Rover lay-offs highlight the plight of UK’s temporary workers— By Sarah O’Connor
The question of identity cards— by Sebastian Payne, Karuna Nundy, Fred Studemann and Tammy Lai-Ming Ho
Business must step up and help fix American education— by Rana Foroohar
Donald Trump shatters international trust in America— Philip Stephens
AllianceBernstein’s Nashville move threatens New York and London— by Gillian Tett
Rudd’s exit shows the British state is set up for low-key shambles— by Janan Ganesh
How do we know that humans are earth’s first advanced race? — by Anjana Ahuja
What you've been saying
Satellite navigation is a crowded market— letter from Pierre Bartholomé
Some British officials suggest the UK could set up its own system to rival Galileo . . . Before implementing a satellite system, one must coordinate with operators of systems since they occupy the same orbital space and frequency bands. The newcomer has to prove the orbits and bands he intends to occupy will be such that no interference will affect systems. I was at ESA when the EU set up Galileo. The only system we had to coordinate with was GPS and that was painful since the Americans were not particularly well disposed towards us. Today there are four systems, GPS, Galileo, the Russian Glonass and the Chinese Beidou. The UK will have to coordinate with four administrations. I wish them good luck.
Comment from Richard on AllianceBernstein’s Nashville move threatens New York and London
Southern states have had some success in recent years moving low to mid level finance jobs from New York. The game changer is the new US tax law . . . For the first time the highest paid bankers will be very interested in migrating (voluntarily) to low/no income tax states in the South, especially now that it is technologically feasible to do so.
Don’t believe competition hype on Sainsbury’s deal— letter from Thomas Sharpe
The new [Sainsbury’s and Asda] group will account for more than 30 per cent of the market. Together with Tesco they will account for about 60 per cent of the market . . . There is simply no medium to long-term incentive for either party to engage in serious price competition over time as both would lose profits and the incentive to innovate with products, experiment with new suppliers and new systems will be diminished.
Graham Corbett, British business leader, 1934-2018
Moderniser who steered the Eurotunnel project had an enthusiasm for mobility gadgets
Person in the News: Oleg Deripaska, Russian oligarch under siege for Putin ties
The Rusal founder’s loyalty to Moscow has started working against him
Spotify offers a window into our souls — and wallets
The songs we listen to could reveal our economic confidence, and a lot more besides
Instant Insight: Martin Winterkorn’s prosecution has benefits for VW
Criminal charges against chief executives are rare, but they can help companies reform
Cheers to a glass of wine for hard-working professionals
What is wrong with enjoying your leisure with a fine vintage?
FT Collections: China’s global ambitions
US delegates went to Beijing to discuss trade this week, but what are China’s goals?
Instant Insight: Labour’s local election misfire shows limits of ground campaigning
Results deal blow to Corbyn activists who were certain a red tide was sweeping London
Undercover Economist: Cheap innovations are often better than magical ones
What we call artificial intelligence is best understood as low-cost prediction
The zeal for M&A reveals a dangerous short-termism
Stock markets should not be about the endless pursuit of cost savings and market share
Tories pay for forgetting Macmillan’s courageous pragmatism
The former prime minister persuaded his party to abandon imperialism and embrace Europe
FT View: An accelerating AI arms race can be slowed Scientists should help limit destructive uses of artificial intelligence
FT View: Fewer dark corners for dirty money to hide in Requiring transparency in UK overseas territories is a welcome step