MNCs in the News-2014-01-24

A US Securities and Exchange Commission (SEC) administrative trial judge has barred four American Chinese accounting joint ventures from practicing in the US for 6 months for violating the Sarbanes-Oxley Act. The judge ruled the firms had violated the act by failing to turn over audit working papers requested by the SEC in several fraud investigations. The four firms all said they would appeal, arguing Chinese law does not allow them to release the papers. The problem emerged despite the conclusion of a memorandum of understanding between the US Public Company Accounting Oversight Board, China Finance Ministry, and the CSRC (Josh Noble and Paul J. Davies, “US SEC Slaps Six-Month Ban on Auditors’ China JVs,” Financial Times, Jan. 23, 2014)

The Board of Directors of French automobile firm Peugeot Citroen recently approved a capital increase that would give China Dongfeng Motor Co. and the French government minority stakes in the company and result in the founding Peugeot family losing control of the automaker. State-owned Dongfeng and the French government each would invest US $4.1 billion in an effort to keep the company, which has been experiencing falling sales and using substantial cash reserves, competitive and to enhance its position in China and other Asian markets (“Peugeot Moves Closer to Dongfeng Deal as Sales Sag,” China Daily, Jan. 21, 2014,

In a thought-provoking piece, The Economist opined the party had ended for multinational corporations (MNCs) in the world’s second largest economy. While the scale of the China market and China’s continuing growth continue to attract, MNCs have been finding the China environment far more challenging as a result of three factors. The first is the negative macroeconomic mix of declining growth rates and rising costs. The second is increasing government hostility in the form of market limitations, media attacks, and operating restrictions. The third was rising competition from domestic companies. Some MNCs have left, but others are learning to adapt (“China Loses Its Allure,” Economist, Jan. 25, 2014,

Nissan has revealed a new cab, called NV200, for London. The taxi is designed to look like its traditional black London cab and has a LED headlight for better visibility. The mayor of London announced that the city will mandate a zero emission electric vehicle to a new taxi registration from 2018 in order to eliminate the emission of carbon dioxide. Nissan will compete against the London Taxi Company, now purchased by a Chinese firm, and Eco City Vehicles PLC. Nissan has already promoted an EV project in Barcelona last year and has started a test drive in New York (“Nissan Releases Its ‘Black Cab’ for London, Getting into Oligopolistic Market This Year,” Reuters, Jan 7, 2014,; and “London Taxi Mandated an Electric Vehicle from 2018, New Business Opportunity for Nissan,” Nikkei, Jan 17, 2013,

Mitsui & Co., Ltd. and Chubu Electric Power Co., Inc. have partnered with Indian government –owned Oil and Natural Gas Corporation (ONGC) for the procurement of natural resources oversea. India and Japan have a common interest—India needs to meet its demand for electricity due to growing population, and Japan needs to decrease its fuel cost due to ceased nuclear plants. Mitsui and ONGC have co-financed to have a holding in oil and natural gas, and Chubu Electronic and ONGC have co-procured North American shale gas. By co-funding, they strive to lower the purchasing price with the maximized procurement volume (“Resources Procurement, Mitsui and Chubu Electric Partner with Indian State-owned Enterprise,” Nikkei, Jan 24, 2013,

POSCO, a large South Korean steel corporation, may speed up its construction of a plant in India after South Korea President Park Geun-hye four-day state visit to India in mid-January. During the visit, President Park met with Indian Prime Minister Manmohan Singh and they agreed to speed up the project, which has been delayed due to several factors. The project relates to a 2005 memorandum of understanding that POSCO signed with the state of Odisha on the east coast of India, but the project had been delayed due to a failure to receive needed environmental clearances from the state government (Kim Tae-gyu, “India Vows to push for POSCO project,” The Korea Times, Jan. 16, 2014, and “National Green Tribunal tells Posco not to cut trees until forest clearance” The Times of India, Jan. 25, 2014,

*The information compiled in the MNCs in the News digest is gathered from sources believed to be reliable, but the Wong MNC Center does not guarantee their accuracy. The content of the MNCs in the News digest does not necessarily represent the view of the Wong MNC Center, its Board of Directors, or its Advisory Board, but is intended for the non-commercial use of readers in order to foster debate and discussion and to facilitate and stimulate research.