Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
A senior Volkswagen executive has been deported from China, in another setback for the German group fighting for survival in the world’s biggest car market.
VW’s chief marketing officer and head of product strategy for China, Jochen Sengpiehl, is back in Germany after being detained in China for about 10 days, according to two people with knowledge of the details.
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He allegedly tested positive for drugs following a holiday abroad, they said. VW is reviewing the matter internally, one of them said.
Germany’s Federal Foreign Office on Tuesday confirmed that its embassy in Beijing had “provided consular assistance and was in regular contact with the concerned individual and his family as well as with the local authorities”.
The incident is another blow to VW in its most profitable market. Europe’s largest automaker has in recent years been losing grip of its decades-old market dominance in China and has announced investments of more than €5bn there to catch up to Chinese competitors, such as BYD.
VW, which is trying to push through historic job cuts at home, is also locked in sensitive negotiations with its Chinese joint venture partner SAIC over the future of a controversial plant in Xinjiang, the western province where Beijing has been accused of human rights abuses.
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The VW executive, who spent just over two years in China, had tested positive for cannabis and cocaine — both illegal in the country — following his return from a holiday in Thailand about two weeks ago, one of the people added.
German newspaper Bild first reported the deportation. It was not yet clear why the executive was tested. Thailand decriminalised cannabis use in 2022, while Germany legalised it earlier this year. Cocaine remains illegal in both countries.
VW said it could not comment due to “contractual and data protection confidentiality obligations”.
Sengpiehl was emailed for comment but had not responded by time of publication. According to his LinkedIn profile, he had been in his China role since 2022. Prior to that, he was VW’s global marketing officer for some five years, following earlier roles at Hyundai, WPP, Daimler, BBDO and Nissan.
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Following a series of raids on western consultancies and the introduction of tougher rules on espionage and state secrets, foreign investors and business people have become increasingly uneasy over their personal safety in China.
China has a criminal conviction rate of around 99 per cent and the country’s courts have been required to hand down tough sentences for drug convictions in recent years.
KLARNA, Britain’s biggest “buy now, pay later” firm, says it has saved customers nearly half a billion pounds in interest since its UK launch in 2014.
Around 10million — more than a third of households — have used Klarna to buy goods in the past year.
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Roughly 10million shoppers have used Klarna to buy goods in the past yearCredit: Getty
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Tulip Siddiq, economic secretary to the Treasury, confirmed rules would come in next year to legislate the ‘buy now, pay later’ sectorCredit: PA:Press Association
And the boom in “buy now, pay later” has prompted the Government to say it will legislate the sector to protect shoppers.
Last week Tulip Siddiq, economic secretary to the Treasury, confirmed rules would come in next year.
And Klarna co-founder and CEO Sebastian Siemiatkowski welcomed the move.
He said: “We are in favour of regulation — I’m not an anarchist that doesn’t believe in rules.
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“The main thing I’m worried about is if it will reduce competition against the banks who are raking in profits from customers.”
Klarna said that during its decade in the UK, the banks and traditional credit card firms such as American Express have made £160billion from customer interest charges.
The Swedish firm, co-founded by Mr Siemiatkowski in 2005, lets customers buy goods and split payments over three months without interest.
It made almost £1billion in revenues in the first half of this year from ads and charging retailers commission.
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Klarna charges people who miss a payment a maximum £5 late fee.
However, it says its default rates are 30 per cent lower than traditional lenders’.
We earn £50k but still get universal credit & put the food shop on Klarna – it’s impossible to feed our 5 kids otherwise
Mr Siemiatkowski, who started his working life flipping burgers at Burger King, told Sun Business: “We’ve saved consumers nearly half a billion pounds in interest — that’s real money in their pockets, not lining the banks’ coffers.
“We’ve proven that paying for everything — from flights to garden tools and getting your boiler fixed — doesn’t have to mean being gouged by high interest rates.”
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Debt charities have argued that Klarna encourages people to buy things they can’t afford.
But Mr Siemiatkowski said: “Having fixed payment instalments without interest is a lot better than racking up credit card debt.”
HSBC to be split in two
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Georges Elhedery, HSBC’s former finance chief, is now the company’s new boss
HSBC has announced a big shake-up that will split its UK and Hong Kong business into separate divisions.
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The overhaul comes six weeks after Georges Elhedery, the bank’s former finance chief, was promoted to the top job.
HSBC also named Pam Kaur as its first female finance chief as part of its restructuring.
The bank said the overhaul is along geographic lines of “Eastern” markets and “Western”, which will include UK high street branches.
HSBC, founded in Hong Kong in 1865, has been in the middle of rising geopolitical and trade tensions between Beijing and the US and UK.
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Its biggest investor, Chinese insurer Ping An, had tried unsuccessfully to agitate for a break-up of the company last year.
Mr Elhedery, who replaced Noel Quinn, said the revamp will result in “a simpler, more dynamic and agile organisation”.
Big buys ‘delayed’
CONSUMERS are still nervous about making big purchases, figures from DIY retailer Wickes and Halfords show.
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Wickes yesterday reported that sales of its bathroom and kitchens had fallen by 13 per cent in the last quarter as customers put off big projects.
Meanwhile, car parts to bikes retailer Halfords reported a 0.1 per cent slip in sales.
Boss Graham Stapleton said shoppers’ confidence was dented “by uncertainty around the contents of the Budget”.
In San Francisco today you can take a ride with a Waymo self-driving car.
At KLARNA, we have seen how our AI customer service agents help to resolve problems in just two minutes, compared to 12 minutes before.
Our lives and the way we work are already changing and it will affect jobs at an accelerating pace.
Governments need to stop dragging their feet.
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While we need smart regulations to keep AI in check, we can’t afford to strangle it with red tape.
The looming threat is that if our governments dither too much we will fall behind less democratic countries who do not share our values.
The answer has to be to promote progress while also offering an answer to those people impacted by the changes.
AI is already shaking up the job market — and we’ve already paused hiring more staff because of AI efficiencies.
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Some jobs will change, new roles will emerge and some will disappear. Some firms talk about retraining and upskilling but can we really expect a 55-year-old translator to magically become a TikTok star or influencer?
That’s why governments need to wake up and step up.
While AI is driving progress, they must ensure that it benefits society as a whole, not just a select few.
Mulberry hush
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MULBERRY has branded Mike Ashley’s £111million takeover “untenable”, as it swatted away a sweetened approach.
Mr Ashley’s Frasers Group already owns 37 per cent of the luxury handbag maker.
However, its second attempt to grab the business stalled after Mulberry’s biggest investor rejected it.
Challice — controlled by Singaporean billionaire Christina Ong and her husband — own a majority 56 per cent stake and can block any deal.
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Shares fell by almost 10 per cent, valuing it at £81million.
Failure of duty
THE VIRGIN WINES boss has attacked government plans to hike alcohol duty as “ill-thought through and amateurishly executed policies”.
Jay Wright, chief exec of the online wine seller, said the drinks industry had been “battered beyond belief” in recent years by people with “no understanding of the effects”.
Another duty hike is feared in next week’s Budget.
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Mr Wright still toasted £1.7million of profits, after a loss of £700,000 in the year to the end of June.
A cost-cutting drive saved £1.4million.
THE new Minister for Investment, Poppy Gustafsson, is launching a scheme to attract more funding into women’s sport.
She will say today that women’s sport, including football, rugby, tennis and netball, could be worth over £1billion this year alone.
LABOUR’S massive public sector pay hikes led to a record-busting September of borrowing.
The Office of National Statistics say the government has borrowed £6.7 billion more than planned this year after the third highest September on record.
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Labour’s massive public sector pay rises lead to huge surge in September borrowingCredit: Getty
It came despite an increase in tax take due to fiscal drag meaning more workers were stung on their wages.
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The stats bosses said: “While tax revenue increased, this was outweighed by increased spending, partly due to higher debt interest and public sector pay rises.”
Government borrowing rose to £16.6billion in September – £2.1billion more than a year earlier.
Borrowing for the year stood at £79.6billion, £1.2billion more than a year earlier and £6.7 billion more than forecast.
This came despite the first fall in central government benefit payments since early 2022, in part due to Labour’s decision to test the winter fuel allowance, which is paid out in November and last year cost around £2 billion.
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Treasury Chief Secretary Darren Jones said the state of the public finances meant there would be “difficult decisions” in the October 30 Budget.
City firm Blick Rothenberg said “Income Tax annual receipts were “up 8.6% in the last 12 months, equating to £22.6bn more in the Treasury’s coffers.
“The main cause of the income tax increase is fiscal drag which continues to bring more people into higher rates of tax.
“This has been created by wage rises over the past 12 months and the freezing of the personal allowances and tax bands.”
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New workers’ right rules will just mean firms hiring fewer people say Julia Hartley-Brewer
Abu Dhabi-based supermarket giant Lulu Retail Holdings on Monday announced its decision to proceed with an Initial Public Offering (IPO) of 25 per cent of its stock in a bid to list its shares in the Abu Dhabi Securities Exchange (ADX). A total of 258 crore shares will be on offer, with a nominal value of US 0.014 each.
UAE retail investors (including eligible employees of the group), professional investors, and eligible senior executives can subscribe to the IPO. The subscription period will open on October 28 and end on November 5, with the final offer price to be determined through a book-building process.
The company sees a semi-annual dividend payout ratio of 75 per cent of annual distributable profits after tax, and estimates the dividend for the six months ended 31 December 2024 to be paid in the first half of 2025. In the GCC alone, Lulu has more than 240 stores across six countries.
“Integral to our growth is the vision and ambition of the UAE, KSA and the other GCC nations where strong national leadership is enabling positive demographic and consumption trends and driving impressive economic growth,” said Lulu founder and chairman Yusuffali M.A.
“We’re looking forward to welcoming new shareholders to Lulu and are sure they will share our passion for the company and excitement for the future,” added Yusuffali.
The IPO will be done in three tranches. The first tranche is the public offering to UAE Retail Investors, including eligible employees. The second tranche is open to professional investors, and the third to eligible senior executives under the “Senior Executives Offering”.
Lulu sees GCC retail market to continue steady growth
“With GCC retail presenting a USD 100 billion market opportunity over the next five years and our business in the Kingdom of Saudi Arabia primed for further growth, we are confident that Lulu will continue to be where the world comes to shop,” estimated Lulu CEO Saifee Rupawala.
The group sees positive retail growth in the near-term future for the region, based on growing youth populations, rising spending power, and climbing employment rate. It projects a growth of 4.2 per cent CAGR for the GCC grocery retail market and 4.8 per cent CAGR for the GCC modern from 2023 to 2028.
Lulu boasted a 61 per cent rise in net income of USD 11.6 crore from continuing operations for the first half of FY 2024, up 61 per cent from USD 7.2 crore from the same period a year ago. Revenue grew 5.5 per cent to USD 386.8 million (around Rs 3,252 crore).
SPORTS Direct customers have been snapping up £14.99 urns to store their loved one’s ashes.
The retail giant, owned by businessman Mike Ashley, has offered the grey aluminium vase with silver trim on its website alongside its football boots.
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Sports Direct customers have been snapping up its £14.99 urns
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Sports Direct, owned by businessman Mike Ashley, heavily discounted the items down from £114.99Credit: Getty
The 26cm by 18cm urns were heavily discounted — down from £114.99.
Described as a “cremation urn”, the listing added: “Ashes of your loved one are securely stored in this urn via a top lid.”
Engravings were also available for an extra £5 — with one example reading: “In Loving Memory, Grandad.
“Forever in our hearts.”
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Shoppers were in hysterics about the merchandise at Europe’s biggest sports retailer, established in 1982 by the ex-Newcastle owner and now operating under Mr Ashley’s Frasers Group.
One Sports Direct customer joked: “I’ll have some Slazenger socks, some off-brand running shoes, and a cheap tin to stick nan in, please.”
Another said: “Stuff like this started after Mike Ashley bought House of Fraser a few years back.
“He’s merging all his other business into his existing Sports Direct stores.
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“It’s more obvious online, as you wouldn’t necessarily be browsing in-store for football boots, and stumble into the urn section.”
Last night, after The Sun contacted Sports Direct, website links to the item stopped working.
Sports Direct and JD Staff head-butted and bitten by violent shoplifters, probe reveals
The firm later refused to comment.
Sources said it had not been withdrawn, but had sold out.
The habits of millionaires are a topic of interest when it comes to financial advice. After all, unless they received a large chunk of money as an inheritance or gift, most millionaires had to be smart with their money to get where they are.
Learning how millionaires accumulate wealth — and where they keep it — can provide valuable insights for anyone focused on growing their money. One common question is whether or not millionaires keep money in checking accounts.
Studies show that in recent years, millionaires are keeping a significant portion of their wealth in cash. According to CNBC’s , that portion was about 24% in 2023. While this doesn’t necessarily mean a quarter of a millionaire’s wealth is sitting in a checking account, it does indicate the importance of maintaining liquid assets. And a checking account can be a helpful tool for doing so — whether or not you’re a millionaire.
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Anyone, regardless of net worth, can find value in a checking account. Checking accounts allow unlimited deposits and withdrawals, check writing, bill pay, and other features to help you manage your money day-to-day.
While millionaires may keep large portions of their wealth in other deposit accounts and investments, some may use a checking account to manage daily spending. Millionaires also recognize the importance of having liquid assets, like funds in checking and savings accounts. Accessible cash lets you cover unexpected expenses without needing to sell off investments, borrow money, or pay a penalty for tapping your retirement savings early.
The amount of money a millionaire keeps in their checking account is highly personal and depends on preference. However, because checking accounts rarely earn competitive — if any — interest, some millionaires intentionally limit their checking account balance. Some may choose to keep the bare minimum, such as a couple of months’ worth of essential expenses, in their checking accounts, keeping the rest of their wealth in more lucrative assets.
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Regardless of preference, it would be surprising for a millionaire to keep more than $250,000 in a single checking account. That’s because the Federal Deposit Insurance Corp. (FDIC) only insures up to $250,000 in deposits per institution, per account holder.
While millionaires may use checking accounts for day-to-day financial transactions, they may also use some of the following accounts in addition to, or in place of, a checking account:
Savings accounts: Like checking accounts, savings accounts provide a high degree of liquidity, allowing you to access your money as needed for regular or unexpected expenses. High-yield savings accounts, in particular, give millionaires an extra bang for their buck. Some of the best accounts currently offer rates upwards of 4% versus the national average savings account rate of 0.46%.
Cash management accounts: Cash management accounts (CMAs) pay competitive interest rates while maintaining more accessibility than a savings account. Some CMAs come with a debit card and ATM access, and many provide extended FDIC coverage limits by “sweeping” additional deposits into partner banks. CMAs are available at brokerages, not banks, facilitating easy transfers between investment and cash accounts.
Money market accounts: Similar to CMAs, money market accounts combine features of checking and savings accounts, often paying competitive interest rates and providing check writing and ATM access. Banks and credit unions offer these accounts, which are federally insured. Minimum opening deposit and minimum balance requirements are often higher than those for standard savings accounts.
Retirement and tax-advantaged accounts: Millionaires understand the importance of investing for their later years, and retirement accounts such as 401(k)s and IRAs allow them to do so in a tax-advantaged way. Some retirement accounts, like 401(k)s, are offered by certain employers. Others, such as traditional and Roth IRAs, are available to anyone.
Brokerage accounts: The IRS limits contributions to tax-advantaged accounts, and millionaires typically invest beyond these limits. They do so with taxable brokerage accounts, which can hold investments such as stocks, bonds, and mutual funds without contribution limits.
Other investments, like real estate, commodities, and art: Some millionaires may decide to diversify their portfolio with other investment types. These could include real estate investments, such as investment properties or real estate investment trusts (REITs); commodities, such as metals or energy products; art; and more.
The amount of money millionaires keep in their checking accounts depends on personal preference. While some millionaires may keep six figures in their checking account to maintain a comfortable cash cushion, others may choose to keep the bare minimum in checking. You wouldn’t expect millionaires to keep more than $250,000 in a checking account, however, because balances over this threshold aren’t typically insured.
There’s no single bank that’s a favorite among millionaires; it’s another matter of preference. However, millionaires are likely to bank with institutions that offer private banking to those who meet specific financial requirements. Private banking may include wealth planning services, waived fees, dedicated bankers, and additional perks. J.P. Morgan Private Bank, Citi Private Bank, and Bank of America Private Bank are among some of the most popular banks for millionaires.
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Billionaires may have checking accounts, but they likely use accounts that cater to ultra-high-net-worth individuals. These accounts may come with perks such as a dedicated banker, waived fees, and competitive interest rates. Alternatively, billionaires may opt for a cash management account with higher FDIC insurance coverage limits and checking account features.
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No rule says you can’t have a million dollars in a checking account, but FDIC insurance typically only covers up to $250,000. Plus, you can get a bigger return on your investment by keeping $1 million elsewhere. One alternative is a cash management account, which acts like a checking account but generally earns higher interest. Plus, many cash management accounts insure more than the standard $250,000 by sweeping funds into multiple partner banks.
Lumen And Meta Join Forces To Boost AI With Flexible, On-Demand Network Solutions
Lumen Technologies, Inc. (NYSE:LUMN) shares are trading higher on Monday after the company announced it is partnering with Meta Platforms, Inc. (NASDAQ:META) to significantly increase Meta’s network capacity and help drive its AI ambitions.
Lumen’s partnership offers Meta enhanced flexibility with secure, on-demand bandwidth, supporting its complex computing requirements and enabling it to serve billions daily.
Ashley Haynes-Gaspar, Lumen’s EVP and chief revenue officer, said, “We’ve transformed our company to meet this demand. As Meta’s customers use more AI services across its platforms, we’re helping provide Meta with a seamless, effortless, and flexible network that will meet its growing needs.”
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Lumen Technologies said its Private Connectivity Fabric enables long-term network capacity for Meta’s AI.
Alex-Handrah Aimé, director of Meta’s Network Investments stated, “Our AI tools are performing increasingly more complex tasks including enabling conversations in a variety of languages and translating text to images in real time, while helping people interact with the world around them in new, immersive ways.”
Investors can gain exposure to the stock via Invesco S&P SmallCap Utilities & Communication Services ETF (NASDAQ:PSCU) and First Trust Cloud Computing ETF (NASDAQ:SKYY).
Price Action: LUMN shares are up 9.50% at $7.38 at the last check Monday.
Image via Shutterstock
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