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Will Xi Jinping’s ‘Chinese dream’ include the rule of law?

Will Xi Jinping’s ‘Chinese dream’ include the rule of law?

By Fred Hiatt, Monday, June 3, 8:19 AM

As he accepted the Communist Party’s designation to be China’s president and supreme military leader in March, Xi Jinping vowed “to achieve the Chinese dream of great rejuvenation of the Chinese nation.”

Xi’s speech to the National People’s Congress won plaudits from the press. “His crisp yet rich voice and frank yet resolute gaze revealed a power to invigorate the people,” the China People’s Daily reported.

But the speech left analysts guessing about what sort of rejuvenation — also translated as “revival” or “renaissance” — the new leader has in mind. Presumably President Obama will be looking for clues when he meets with Xi later this week in California. Read more of this post

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How Samsung Got Big

How Samsung Got Big

CHRIS VELAZCO

Saturday, June 1st, 2013

The cellphones were stacked up high in the Gumi factory yard and more were coming out every minute. Phones, TVs, fax machines, and other gear shattered as it hit the concrete and Samsung CEO Kun-hee Lee and his board cracked the screens and cases with heavy hammers. Then they lit a bonfire and threw everything in.

The 2,000 workers began to cry. And still the hardware kept coming. The CEO was disgusted by the low quality product coming out of his factories in the early 1990s and, in a blaze of anger, ordered it all destroyed.

In all, something like $50 million worth of hardware burned on one day in 1995 when Samsung hoisted its “Quality First” banner and began its slow march towards world domination in earnest. Samsung Electronics emerged from those ashes a very different company, but the road leading to that cleansing fire was a long one. Read more of this post

Coutts Asia CIO bearish on Singapore property. Investors appear to be “in denial” about the risks over residential property in Hong Kong and Singapore

Coutts Asia CIO bearish on Singapore property

SINGAPORE — Investors appear to be “in denial” about the risks over residential property in Hong Kong and Singapore and that a slowdown in purchases will mean lower prices, private bank Coutts’ chief investment officer for Asia and the Middle East said today (June 3).

BY 2 HOURS 11 MIN AGO

SINGAPORE — Investors appear to be “in denial” about the risks over residential property in Hong Kong and Singapore and that a slowdown in purchases will mean lower prices, private bank Coutts’ chief investment officer for Asia and the Middle East said today (June 3).

“You get that fuzzy period when everyone tells you everything is fine until the point when the bank tells you (that) you must sell or you face a cash-flow problem,” Mr Gary Dugan told the Reuters Wealth Management Summit in Singapore. Read more of this post

Companies in Wenzhou, China’s entrepreneurial hub and epicenter of the underground banking sector, struggle to survive

Companies in Wenzhou struggle to survive

Staff Reporter

2013-06-02

Wenzhou City Sentai Environmental Protection Equipment has qualified for bankruptcy protection amid a growing wave of struggling companies in Wenzhou in eastern China’s Zhejiang province — the country’s entrepreneurial hub and epicenter of the underground banking sector — reports Guangzhou’s Southern Weekly.

The Wenzhou municipal party committee approved the application and under its restructuring and bankruptcy protection program, loss-making companies can continue to run their businesses without being targeted by debt collectors. It also means that the court cannot order the sale of the company’s assets, aiming to help struggling companies obtain financial aid and pay their dues through a legal process. Read more of this post

Conquering Global Markets: Secrets from the World’s Most Successful Multinationals

Conquering Global Markets: Secrets from the World’s Most Successful Multinationals [Hardcover]

Nancy A. Hubbard (Author)

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Release date: April 9, 2013 | ISBN-10: 0230293557 | ISBN-13: 978-0230293557

Conquering Global Markets offers assessments of the issues, statistics, cases, and best practices of mergers, acquisitions, joint ventures and alliances throughout the world. Using information gleaned interviews with CEOs, the book provides insights into making global M&As successful. Read more of this post

Risk Management Breakdown at AXA Rosenberg: The Curious Case of a Quant Manager Trusted Too Much

Risk Management Breakdown at AXA Rosenberg: The Curious Case of a Quant Manager Trusted Too Much

David F. Larcker Stanford University – Graduate School of Business

Brian Tayan Stanford University – Graduate School of Business

May 30, 2013
Rock Center for Corporate Governance at Stanford University Closer Look Series: Topics, Issues and Controversies in Corporate Governance and Leadership No. CGRP- 33

Abstract: 
All companies face challenges designing a governance system that works best for their particular situation and structure. Even the owners of privately held companies sometimes struggle with issues of separation and control. The challenges can be particularly acute when a company founder has considerable influence over the organization and its culture, and third-party investors have been brought in to share ownership. We examine the interesting case of AXA Rosenberg, a joint venture investment management firm founded and run by legendary finance professor Barr Rosenberg. Although successful for a time, the firm eventually collapsed due to a failure in risk management. We examine the governance structure, unique personalities, and series of events that led to the breakdown of the firm, and the SEC investigation that resulted in Barr Rosenberg’s lifetime ban from the securities industry. We ask: Is it possible for a board to monitor a renowned executive with extremely specialized knowledge? How can the board satisfy itself that risks are appropriately known and monitored? How does an executive’s personality affect a company’s risk management practices?

Do Private Equity Funds Game Returns? We find evidence of managers boosting reported NAVs during times that fundraising activity is likely to occur

Do Private Equity Funds Game Returns?

Gregory W. Brown University of North Carolina (UNC) at Chapel Hill – Finance Area

Oleg Gredil University of North Carolina (UNC) at Chapel Hill – Kenan-Flagler Business School

Steven N. Kaplan University of Chicago – Booth School of Business; National Bureau of Economic Research (NBER)

May 29, 2013

Abstract: 
By their nature, private equity funds hold assets that are hard to value. This uncertainty in asset valuation gives rise to the potential for fund managers to manipulate reported net asset values (NAVs). Managers may have an incentive to game valuations in the short-run if returns on existing funds are used by investors to make decisions about commitments to subsequent funds managed by the same firm. Using a large dataset of buyout and venture funds, we test for the presence of reported NAV manipulation. We find evidence of managers boosting reported NAVs during times that fundraising activity is likely to occur. However, this behavior is mostly limited to firms that are subsequently unsuccessful at raising a next fund which suggests that investors see through the manipulation. In contrast, we find evidence that top-performing funds under-report returns. This conservatism is consistent with these firms insuring against future bad luck that could make them appear as though they are NAV manipulators. Our results are robust to a variety of specifications and alternative explanations.

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