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The Swiss engineering group ABB is to book a $100m charge after uncovering ‘massive criminal activity’ in its South Korean subsidiary. ABB, whose businesses include making robots and power transmission systems, said that a senior employee who went missing in South Korea last week is suspected of colluding with outsiders to steal from the company. Chief executive Ulrich Spiesshofer wrote in a letter to staff that “based on the large sums involved and the sophisticated fraud, it is almost certain that the employee in question was not acting alone”.
Only last week Mr Spiesshofer was bullish about the future after reporting the group’s first increase in quarterly orders in almost two years. Two days later, the UK’s Serious Fraud Office announced the group was under investigation for alleged bribery in a criminal probe into Monaco-based oil company Unaoil. News of the fraud in South Korea will raise questions about internal controls at the Swiss-based group. The company’s shares, which have risen 35 per cent over the past year, fell 0.3 per cent to SFr23.20 in Wednesday morning trading.
In the news
North Korean diplomat suspect in Kim assassination A North Korean diplomat in Pyongyang’s embassy in Malaysia and a North Korean working for the country’s state-owned airline have been identified as suspects in the murder of Kim Jong Nam, brother of the country’s leader. Police in the Malaysian capital also said that attempts were made to break into the morgue where Kim’s body is being held. (FT, Guardian)
Brexit casts doubt over rating agencies Britain is the European hub for the big three rating agencies, which grade the creditworthiness of companies and countries, but they are overseen by an EU watchdog. With no UK body ready to step in, the government faces the prospect of cobbling together a new regulatory regime post-Brexit for institutions often blamed for exacerbating the financial crisis. (FT)
Breaking the 90 barrier Women in South Korea will be the first in the world to have an average life expectancy above 90, a study by the Imperial College London and the World Health Organization suggests. Japan, once the picture of longevity, will tumble down the global rankings, as will the US. (BBC, FT)
Ecuador run off The stage is set for a divisive second round of presidential elections in Ecuador after authorities acknowledged Lenín Boltaire Moreno, the candidate of the ruling leftwing Alianza Pais movement, had fallen just short of the votes necessary to secure the presidency in Sunday’s first round of voting. The run-off could see the combined opposition votes overwhelm Mr Morena’s chances, ending a decade of leftwing rule in the country. (FT)
Disgrace for Tsang Former Hong Kong leader Donald Tsang was jailed for 20 months on Wednesday for misconduct in public office, making him the most senior city official to serve time in jail. The ruling was praised as a reaffirmation of the financial hub’s vaunted rule of law. (Reuters)
It’s a big day for
South Africa Finance minister Pravin Gordhan will attempt to ward off the risk of the country being cut to junk status in his annual budget, and is expected to advocate a rise in fuel and income taxes. (The Citizen)
Keep up with the important business, economic and political stories in the coming days with the FT’s Week Ahead.
Food for thought
India’s bold experiment with cash Narendra Modi’s banknote ban is a shock for an economy with so many outside the formal system, writes Martin Wolf. “It is often hard to draw the line between decisive leaders who take unpopular decisions for the benefit of their country and those who make arbitrary decisions for the benefit of themselves.” (FT)
Inside the $143bn flop Unilever successfully fought off Kraft Heinz, Warren Buffett and 3G Capital — but it would be foolish to rule out a new bid. (FT)
Fordlândia: the 1920s dream Carmaker and industrialist Henry Ford, one of the world’s richest men, tried turning a colossal swath of Brazilian jungle into a Midwest fantasyland in 1928. Now the ruins, still home to 2,000 people, stand as testament to the folly of trying to bend the jungle to the will of man. (NYT)
Samsung chief’s fall from grace He pledged a more independent board. He told security guards not to bow to him. Employees were allowed to wear shorts, and mothers got longer maternity leave. He once surprised clients in New York by showing up to a meeting wearing khakis and munching on a soft pretzel. But the promising start of Lee Jae-yong, the head of South Korea’s biggest conglomerate, has ended in a scandal reaching to the top levels of government, leaving the country rudderless. (WSJ, NAR)
How to curb inequality Politicians appealing to an idealised past where life was better tend to miss out the catalyst for societal equality: catastrophe — most recently in the form of two world wars. (The Atlantic)
Video of the day
Chart doctor: the bubble chart Alan Smith looks at the genius of the late Hans Rosling, and how he popularised the use of bubble charts for visualising demographic data. (FT)