MNCs in the News-2014-01-31

Industrial and Commercial Bank of China (ICBC), the world’s largest bank in terms of assets and market capitalization, recently became the first state-owned Chinese lender to establish significant trading operations in London by investing US$ 765million to buy a majority stake in South Africa’s Standard Bank global market business. This marks a departure as most other Chinese banks in the UK such as Bank of China focus on corporate and retail banking. The deal flowed an improvement in the banking investment environment resulting from a UK government initiative to welcome Chinese banks with special incentives such as “lightly regulated branches” (Andrew England and Daniel Schafer, “Standard Bank to Sell Control of London Arm for $765m,” Financial Times, Jan. 29, 2014)

The Brunei Economic Development Board (BEDB) recently signed an agreement with Chinese petrochemical firm Hengyi Industries pursuant to which Hengyi will build an integrated oil refinery, which will produce gas and diesel, and an aromatics cracker, which will produce paraxylene and benzene. The deal stands out as a result of its scale, the fact that it is Brunei’s second largest petrochemical project, and BEDB anticipated job, business development, and technology transfer benefits. To support the project, the BEDB plans a number of infrastructure projects including roads, utilities, and a bridge (“Hengyi Industries, Brunei Sign Land Lease Agreement,” China Daily, Jan. 28, 2014,

Mitsubishi Motors Corporation has increased the size of a planned public stock offering, which is anticipated to generate 2571 billion yen in funding. The stock offering is necessitated by the company’s need for funds to cover a massive payment deficit flowing from recall scandals in 2000 and 2004. Reports suggest that sovereign wealth funds from Singapore and the UAE may take stakes in the offering. If so, this will rescue Mitsubishi from its immediate financial problems. However, it remains to be seen how well Mitsubishi will utilize its capital increase (“Mitsubishi Motors Corporation, Approved as ‘Blue-Chip Stock’ by Inflow of Sovereign Wealth Fund?” Nikkei, Jan. 28, 2014, “Mitsubishi Motors Corporation, Capital Increase of 2571 billion yen –1120yen per Stock by Public Stock Offering,” Bloomberg, Jan. 22, 2014,; and “Mitsubishi Motors Corporation, 2000 Billion Yen Public Offering—Growth Strategy in South East Asia,” Nikkei, Sept. 12, 2013,

With the improvement of local Southeast Asian infrastructure in recent years, the Japan International Cooperation Agency, Sony Corporation, and NTT data have decided to work together to market an IC card in Vietnam. In line with this, they will provide, at no cost, 20 million cards for a bus line in Hanoi from May 2014. The total cost is estimated to be about 1 billion yen, which will be wholly supported by ODA. The “FeliKa,” developed by Sony, is the most widely used card in Japan. The Japanese government plans to market the card next in Thailand, India, and China (“IC Pass in Asia, Initial testing by ODA Support—20 Million Free Cards in Vietnam,” Nikkei, Jan. 28, 2014,; and “IC Card in Asia—20 million Cards in Vietnam,” Local Government Public Private Partnership, Jan. 28, 2014,

Foreign insurance companies including AIA Life, AIG, Lina, and ACE Insurance criticized the Korean government’s ban on financial firms’ telemarketing activities. They argued that they gained most of their customers through telemarketing and that the ban could be a violation of Korea’s free trade agreements. In response to the complaint, the government countered that the ban did not violate any free trade agreement because the measure, which was promulgated in the wake of massive personal information leakage by financial firms, applies to domestic and foreign financial firms equally (Kim, Rahn and Yi, Whan-woo, “Foreign insurers criticize telemarketing ban,” The Korea Times, Jan. 29, 2014,, and “Financial Regulators defend Their decision on Telemarketing Ban” The Korea Economic Daily, Jan. 30, 2014,

On January 28, the Korea Communications Commission (KCC) announced that it would fine US firm Google about 210 million won (US$ 196,000) for illegally collecting personal data through street imaging technology. The KCC determined that Google had illegally collected information such as internet IDs and passwords through the camera equipped vehicles that it deploys for its street imaging databases. Google already has been investigated for similar violations in 20 different countries, but Korea’s fine is the second largest after Belgium’s (Ryan Whang, “South Korea fines Google $196k for illegal data gathering,” ZDNet, Jan. 30, 2014, and Kim, Young-won, “Google fined W210m for data gathering” The Korea Herald, Jan. 28, 2014

Korea’s largest steelmaker, POSCO, finished its construction of a second steel plant in Mexico on January 28. For POSCO, Mexico is strategically important because of the large number of global automobile company production plants. Attractively, Mexico offers a cheap labor force and close proximity to the US, the world’s second largest auto market. When POSCO began building the second plant, the Secretary of Economy, Ildefonso Guajardo emphasized that the investment of POSCO will strengthen not only the Mexico-Korea economic relationship, but also their diplomatic relations (Yi, Whan-woo, “POSCO builds 2nd plant in Mexico” The Korea Times, Jan. 28, 2014; and Lee, Ji-yoon, “POSCO finishes 2nd Steel plant in Mexico” The Korea Herald, Jan. 28, 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.