Company news in brief
31 October 2018 | Business
South African lender Nedbank said on Monday it would appoint Ernst & Young as joint external auditors in May 2019, becoming the latest firm to drop the scandal-hit KPMG’s local unit.
The auditor’s South African unit has been under close scrutiny since 2017 over work done for a company owned by the Gupta brothers - who have been accused of using their links to former president Jacob Zuma to influence government decisions and the awarding of tenders - and more recently for small lender VBS Mutual Bank. The Guptas and Zuma have denied any wrongdoing.
KPMG sacked its South African leadership in September last year after it found work done for the firm owned by the Guptas “fell considerably short” of its standards.
KPMG said in a statement that Nedbank’s decision was part of efforts to introduce mandatory audit firm rotation.
“It is always disappointing to lose a client but we remain very proud of the work that we have performed for Nedbank over many years,” the firm’s executive chairman Wiseman Nkhulu said.
MTN subscribers rise
MTN Group, Africa’s biggest mobile operator, reported a 1.1% rise in quarterly user base on Monday, helped partly by strong performances in Nigeria, its largest but increasingly problematic market.
The company said its user base increased by 2.5 million subscribers to 225.4 million users in the quarter ended September, and mobile money customers grew by 1.7 million to 25.8 million users.
Mobile money customers charge their phones with cash, and send it to friends or family via the short message service. These counterparties can then make similar transfers or cash in their credits with pre-approved agents, such as merchants or banks.
MTN is embroiled in a US$10.1 billion dispute with the west African country of Nigeria, which has accused the company of illegally sending money abroad.
The telecom firm, which makes about a third of its annual core profit in Nigeria, said the allegations are without merit.
Nigeria’s central bank on August 29 ordered the South African firm and its lenders to bring US$8.1 billion back into Nigeria that it alleges the company sent abroad in breach of foreign exchange regulations. MTN also faces a US$2 billion tax demand from the country’s attorney general.
Intel says more women, African-Americans in workforce
Intel Corp has increased the ratio of women and African-Americans in its workforce after three years of a high-profile effort to improve diversity, the US microchip maker said in a report released on Monday.
Intel still lags behind several large US technology companies in terms of women and ahead of many for African Americans and Hispanics, the report showed. Chronic underrepresentation of minorities has been a source of concern for years at tech companies.
Overall, women comprised 26.8% of Intel’s US workforce in 2018, up from 24.7% in 2015. Women in leadership positions grew to 20.7% from 17.7%.
In two sessions, US$200 billion of FANG market cap up in smoke
Facebook, Amazon.com, Netflix and Google-parent Alphabet were at the center of a volatile session on the US stock market on Monday, cleaving US$200 billion off of the so-called FANG group’s combined market capitalization in two sessions.
With each company’s share price down between 14% and 24% in October, the quartet of stocks that has been the most popular trade on Wall Street in recent years appears to be in trouble.
The combined companies’ market capitalisation has fallen from a record US$2.5 trillion in July to US$1.93 trillion on Monday.
The most recent catalyst hurting FANG was Amazon’s quarterly results late on Thursday, which missed analysts’ expectations and ignited worries the tech darling is finally facing stronger competition.
Amazon’s stock has fallen 14% since then, its worst two-day decline since 2014, with the online retailer and cloud computing seller relinquishing its spot as the second largest US company by stock market valuation to Microsoft.
Google to grant US$25 million to AI
Alphabet Inc’s Google announced on Monday that it would grant about US$25 million globally next year to humanitarian and environmental projects seeking to use artificial intelligence (AI) to speed up and grow their efforts.
The “AI Impact Challenge” is meant to inspire organizations to ask Google for help in machine learning, a form of AI in which computers analyse large datasets to make predictions or detect patterns and anomalies.
Google’s rivals Microsoft Corp and Amazon.com Inc tout “AI for good” initiatives too.
Focusing on humanitarian projects could aid Google in recruiting and soothe critics by demonstrating that its interests in machine learning extend beyond its core business and other lucrative areas, such as military work. After employee backlash Google this year said it would not renew a deal to analyze US military drone footage.
Google AI chief operating officer Irina Kofman told Reuters the challenge was not a reaction to such pushback, but noted that thousands of employees are eager to work on “social good” projects even though they do not directly generate revenue.
At a media event on Monday, Google showcased existing projects similar to those it wants to inspire. In one, Google’s computers recently learned to detect the singing of humpback whales with 90% precision from 170 000 hours of underwater audio recordings gathered by the US government.
The audio previously required manual analysis, meaning “this is the first time this dataset has been looked at in a comprehensive way,” said Ann Allen, a National Oceanic and Atmospheric Administration ecologist.
Identifying patterns could show how humans have affected whales’ migration, Allen said. Eventually, real-time audio analysis could help ships avoid whale collisions.
To be sure, the data have gaps since whales are not always singing, and getting vessels to use animal location data could require new regulation, two whale experts said.