Business Updates: China’s SenseTime Delays Hong Kong I.P.O. Amid Sanctions

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Credit…Daniel Rosenbaum for The New York Times

Vox Media is in talks to buy Group Nine Media in a deal that would merge two big digital media companies as the industry continues to consolidate.

In an email to Vox Media staff on Monday, which was viewed by The New York Times, Jim Bankoff, the chief executive of Vox, said that the company was in “advanced discussions” to acquire Group Nine.

“Their organization is strong and complementary to ours in many areas, from the topics they cover and the audiences they serve to the formats in which they tell stories and the platforms they tell them on,” he said in the email, adding that the combined companies would be “the clear leader in modern media.”

Mr. Bankoff sent the email after The Wall Street Journal reported news of the possible deal.

Vox Media, which was co-founded by Mr. Bankoff in 2011, is the publisher of Vox.com, The Verge and SB Nation. It bought New York magazine and its related websites in 2019. Group Nine operates the lifestyle websites PopSugar, the Dodo, Thrillist and Seeker.

Mr. Bankoff said in the email that Group Nine had more than 240 million social followers and more than 6 billion video views each month.

“The business rationale behind this merger is to grow revenue, increase scale and combine these incredibly powerful and complementary portfolios,” Mr. Bankoff said in the email.

He added that the deal was not yet signed, “but we anticipate it will be shortly.”

“Between now and when the deal closes, in early 2022, we will be operating as two completely separate companies,” he said.

Mr. Bankoff added that Ben Lerer, the founder and chief executive of Group Nine, would move onto the Vox Media board of directors, adding that there were “no immediate plans to go public.”

Digital media companies have been looking for ways to pay back investors and compete against Google and Facebook in an increasingly tough advertising market. BuzzFeed, known for both its quizzes and its news reporting, went public last week by merging with a so-called blank-check company. Its stock, which opened on its first day of trading on Dec. 6 at $10.95, was trading on Monday at around $6.20.

Group Nine had previously indicated interest in going public, creating its own blank-check company, which are known as a special purpose acquisition company or SPAC, in December 2020.

A wave of consolidation has swept across digital media in recent years. BuzzFeed announced in November 2020 that it would buy HuffPost from Verizon Media. In 2019, Vice Media acquired the women’s lifestyle publisher Refinery29, and Group Nine bought PopSugar.

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Credit…Christophe Petit Tesson/EPA, via Shutterstock

An appeals court in France on Monday ordered the Swiss bank UBS to pay a fine of 1.8 billion euros (about $2 billion) for helping rich clients evade taxes — less than half the penalty the bank had been ordered to pay two years ago in a sensational case that prosecutors had likened to the plot of a James Bond movie.

Judges had originally ordered UBS in 2019 to pay €3.7 billion — the largest fine in French history — for carrying out what prosecutors said was a long-running scheme to help wealthy French clients illegally hide huge sums of money from the authorities, using cloak-and-dagger tactics.

The court on Monday cut the fine but upheld the charges against UBS. The fine consists of a €1 billion confiscation order and €800 million in damages.

UBS has denied wrongdoing, and it said it would appeal the latest ruling to France’s highest court. It made a failed attempt earlier this year to get the case overturned on constitutional grounds. In seeking a reduced penalty, UBS lawyers argued that while some of its Swiss bankers met with wealthy French clients, they did not unlawfully solicit them to evade taxes.

The case blew open in 2019 following a seven-year investigation by French financial authorities. Several whistle-blowers at UBS France came forward with tales of how the banks’ employees in France and Switzerland engaged in illegal activity that essentially bilked the French tax authorities of more than 10 billion euros. UBS paid a $780 million fine in the United States in 2009 to resolve accusations that it had helped rich clients there dodge taxes.

Prosecutors described how bankers from UBS France, motivated by the prospect of hefty bonuses, had alerted their counterparts in Switzerland to potential “big potatoes” — French citizens with assets of €500,000 to €10 million.

To lure these people to open undeclared accounts outside of France, UBS employees traveled clandestinely from Switzerland to France, where they organized swank activities — including shows at the Paris Opera, art exhibits and hunting outings — where the bankers could mingle with prospects in hopes of slipping around French laws prohibiting foreign companies from soliciting clients on French territory, prosecutors said.

To avoid detection, the bankers involved in the scheme followed a UBS “security governance manual” that included instructions for using encrypted computers, business cards without the bank’s logo and switching hotels frequently, prosecutors said. If caught, the instructions described how to stash documents and USB computer keys in hidden pockets sewn into coats and backpacks.

The bank also created a parallel accounting system known as the milk books, after the small notebooks used as ledgers by Swiss cow farmers, prosecutors said. The books were used to keep tabs on and mask transfers of illicit money between Paris and Geneva, prosecutors said.

Four UBS bankers were given suspended jail sentences of up to one year and fines of €300,000 each.

UBS has five days to appeal the ruling. The bank’s shares jumped nearly 3 percent Monday following the court’s announcement.

  • U.S. stocks edged lower Monday, ahead of the Federal Reserve’s two-day policy meeting, which starts on Tuesday. The S&P 500 fell 0.9 percent and the Nasdaq composite dropped 1.4 percent.

  • Fed officials are expected to announce on Wednesday whether the central bank will slow down its monthly bond purchases at a faster pace than earlier planned. The Fed had already announced in November that it would slow purchases of government bonds — a measure meant to keep cash flowing through the financial system —  with the program expected to end by midway through 2022.

  • The S&P 500 had climbed to a record on Friday, capping its best week since early February. Early research suggesting the new form of the virus might be less severe than previous variants, as well as inflation data in line with economists’ expectations, helped push stocks higher last week.

  • Yields on 10-year U.S. Treasury notes fell six basis points, or 0.06 percentage points, to 1.42 percent.

  • In Europe, stock indexes closed lower, with the Stoxx Europe 600 down 0.4 percent. The Bank of England and the European Central Bank are set to meet to meet on Thursday to discuss whether to raise interest rates. The meetings come as the government raises its Covid alert level amid signs that Omicron is spreading rapidly throughout the country.

  • Oil prices fell slightly on Monday, with West Texas Intermediate, the U.S. crude benchmark, down 0.5 percent to $71.29 a barrel.

  • Shares of Pfizer rose about 4.6 percent on Monday after the company announced it planned to buy Arena Pharmaceuticals, a maker of treatments for inflammatory diseases. Shares of Moderna also rose 5.8 percent.

  • Travel and leisure stocks were among the worst performers in the S&P 500. American Airlines fell 4.9 percent on Monday, while United Airlines fell more than 5 percent. Norwegian Cruise Line and Carnival Corporation were down more than 4 percent.

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Credit…via Reuters

Federal and state officials said Monday that they will investigate the collapse of an Amazon delivery depot in Edwardsville, Ill., that was struck by a tornado on Friday, killing six people.

Gov. J.B. Pritzker of Illinois said at a news conference that a state investigation into whether the building was constructed according to building codes was ongoing, while federal workplace safety regulators said they had opened an investigation after the collapse.

Company officials have defended their safety procedures.

At the news conference, an Amazon spokeswoman, Kelly Nantel, said the company believed the building was constructed properly, despite the catastrophic damage. “Obviously we want to go back and look at every aspect of this,” she said.

Mr. Pritzker said he was already speaking with lawmakers about whether the state’s building codes should be updated, “based upon the climate change we are seeing all around us.” He added, “That is something we are deeply concerned about, to make sure code is where it ought to be.”

The federal investigation will be undertaken by the local office of the Occupational Safety and Health Administration, which has had compliance officers on the ground since Saturday, said Scott Allen, a regional spokesman for the agency. He said the agency has six months “to complete its investigation, issue citations and propose monetary penalties if violations of workplace safety and or health regulations are found.”

John Felton, an Amazon logistics executive, said at the news conference with the Illinois governor that “everything that we have seen, it was all procedures were followed correctly.” He said the 46 people in the delivery depot at the time that the tornado hit acted “heroically,” using phones, bullhorns and other tools to move as many people to safety as possible.

Thirty-nine people sheltered in a space on the north side of the building that was “nearly undamaged,” Mr. Felton said, and seven people congregated on the south side of the facility, which fell directly in the tornado’s path.

The shelter spaces were not separate rooms, but were interior locations away from windows and other hazards, Ms. Nantel said.

Governor Pritzker said the risk of flooding in the industrial area where the building sits prohibited the construction of basement structures that could have provided better protection. He said there was an “ongoing look” at the initial confusion over how many people were at the building, which was staffed by many contractors who were not required to scan their badges when they entered the building at the end of their shifts.

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N.Y.C. Food Banks Adapt to Pandemic’s Long Haul

Persistent food insecurity and economic pressures have forced aid organizations to expand and adapt their systems for getting food to those in need.

“Food Bank for New York City is the largest food assistance organization in New York City. We service about 800 or so agencies across the five boroughs in New York. We move 40 trucks in and out of here on a daily basis. We’re actually moving more food out of the warehouse than we ever have before. The challenges we’re facing are challenges similar to a lot of businesses out there. We have trucks that we have purchased that were waiting on delivery that have been delayed. And then we also have to balance that with the fact that we’re constantly looking for drivers to put in those trucks. And we’re doing that in an environment where the volume is growing.” “We served over 1.6 million meals from this location last year. And though we have seen a decrease in the amount of clients in as opposed to the height of the pandemic, we’re still dealing with the aftermath of the pandemic. And across the city, we’re seeing a 44 percent increase in New Yorkers who rely on food bank services.” “In my house, there are eight people and two babies. And we are only three people working in the house. So, it’s important for us because we have no much money to buy food.” “A lot of the supply chain issues are being handled all the way in the Bronx at our warehouse and taken care of by our team there. Gratefully, we have the food that we need right now. But we also have partners who are working hard across the city that are seeing lines go for several blocks that are calling us up at our warehouse and asking for more food because they have more people.” “Out of this kitchen, daily, we’re sending out between 808 and 850 meals per day, Monday through Friday. The need is greater than it was, but I think what it’s done is help to open up a lot of people’s eyes to see that this has been real all along. It’s just that the blinders are off now, and everybody can really see how much has been needed.” “The numbers of folks that don’t have anything to eat, it’s unacceptable. And it’s not going down. And we were already dealing with a crisis pre-Covid, so now we have this bigger crisis and this bigger imperative in ensuring that our neighbors are getting food.”

Persistent food insecurity and economic pressures have forced aid organizations to expand and adapt their systems for getting food to those in need.CreditCredit…Niko Koppel/The New York Times

By Christina Kelso and Yousur Al-Hlou

Once a month, Dominga Espino, 59, heads from her job as a home health aide in Harlem to a nearby food pantry to pick up groceries for her family in the Bronx. She has come to the pantry for years, but she said pandemic-related job losses among the members of her household had contributed to making the assistance more urgent.

“One used to work in the supermarket, and the supermarket closed,” she said. “And one used to work in a restaurant, and the restaurant closed.”

Ms. Espino is one of 1.6 million New Yorkers who receive food assistance from the Food Bank for New York City. In the second winter of the pandemic, demand at city food banks, kitchens and pantries has remained high. The need for hot meals has dropped from pandemic highs, but demand for groceries has continued to grow.

At the same time, supply chain disruptions and labor shortages have complicated the systems used to distribute food to needy families. In response, food aid organizations have scaled up their operations citywide.

From a 90,000-square-foot warehouse in the Bronx, staff members at the Food Bank for New York City sort, package and ship food to more than 800 soup kitchens and pantries across the five boroughs. The amount of food they distribute has more than doubled since the start of the pandemic, said Dennis Garvey, who manages logistics for the organization’s warehouse.

“We really haven’t seen a drop off,” he said. “This winter, this current quarter, we’re actually moving more food out of the warehouse than we ever have before.”

To handle the growing volume, the Food Bank of New York added a second shift at night in its warehouse. It also set up an in-house trucking operation to get around nationwide truck shortages.

But twenty-five trucks originally expected to be delivered in June have still not arrived, Mr. Garvey said. And then there’s the challenge of finding drivers amid a shrinking work force and increased competition.

Those logistics and shipping delays have had a significant impact on food aid in New York. The Masbia Soup Kitchen Network, which operates three locations in Brooklyn and Queens, has found creative solutions, like ordering prepackaged produce to avoid having to manually sort produce in bulk, said Alexander Rapaport, the organization’s executive director. But he added that the transportation issue had been more difficult to navigate.

“What if the trucker just doesn’t show up? Which means the vendor doesn’t show up and we have people in line? Which kind of happened yesterday.” Mr. Rapaport said Thursday. “We had truckloads of fresh produce, but there were not enough truckers at the vendor’s place to send out all the deliveries.”

At Community Kitchen and Pantry in Harlem, the pandemic has meant distributing more food with fewer volunteers. But organizers are still managing to provide 800 to 850 meals to needy families every Monday through Friday from their kitchen, which gives the culinary manager and head chef, Sheri Jefferson, optimism.

“I’m fortunate that we have a staff that are as passionate as I am about what we’re doing,” she said. “We still get it done.”

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Credit…Travis Dove for The New York Times

Return-to-office dates used to be like talismans; the chief executives who set them seemed to wield some power over the shape of the months to come. Then the dates were postponed, and postponed again.

At some point, the spell was broken, writes The New York Times’s Emma Goldberg.

For many companies, office reopening plans have lost their fear factor, coming to seem like wishful thinking rather than a sign of futures filled with alarm clocks, commutes and pants that actually button. The R.T.O. date is gone. It’s been replaced with “we’ll get back to you.”

“The only companies being dishonest are the ones giving employees certainty,” said Nicholas Bloom, a Stanford professor who advises dozens of chief executives. “As a parent you can hide stuff from your kids, but as a C.E.O. you can’t do that to adult employees who read the news.”

A late August survey of 238 executives, conducted by Gartner, found that two-thirds of organizations had delayed their return to office plans because of news about coronavirus variants.

The pandemic hasn’t been an optimal time for assumptions of any kind. Some employers went ahead and made them anyway, trying to position themselves as bold decision makers by setting concrete R.T.O. dates. Many have since given up on that level of specificity.

With the spread of Delta, Jessica Saranich, who runs U.S. operations at the productivity software company Monday.com, got a flurry of notes from colleagues: Will we really go back to the office in August? Last month brought the news of Omicron, with a fresh set of questions. Ms. Saranich’s team has delayed its return to office date three times, which has left some employees pleading for more permanence in the company’s policies.

“Sometimes our team will say, ‘Please just make a decision, pick something, make us come back to the office or make us be remote,’” Ms. Saranich said. “But it’s not something that we want to rush.”

Visions of full-scale reopenings and mandatory returns have remained nebulous. READ THE ARTICLE →

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Credit…Gilles Sabrié for The New York Times

A Chinese artificial intelligence company called SenseTime said on Monday that it had postponed its $770 million initial public offering after its work for Beijing landed it on an American government blacklist.

The company said in a filing with Hong Kong’s stock exchange that it “remains committed” to completing a listing but did not offer a new timetable. It said investors who had applied to buy shares could get refunds.

SenseTime is one of a number of Chinese companies that has drawn condemnation from American officials and human rights groups for the help they provide the Chinese government in its fast-growing and widening surveillance systems.

The company in particular has drawn scrutiny for the services it provides to China’s efforts to track and suppress Uyghurs and other largely Muslim ethnic minorities who live in a western Chinese region called Xinjiang. The New York Times reported in 2019 that SenseTime’s A.I. technology had been used as part of an effort to identify and track Uyghurs using facial recognition.

Several months later, the U.S. Commerce Department under President Donald J. Trump placed SenseTime and other Chinese technology companies on a blacklist for their role in developing China’s security systems. That blacklist limited their ability to sell to American customers.

President Biden has maintained that pressure. On Friday, the U.S. Treasury Department added SenseTime to a list of Chinese companies that American investors can’t buy shares in.

SenseTime has said it complies with all laws and has denied wrongdoing. “The accusations are unfounded and reflect a fundamental misperception of our company,” it said in a statement dated Saturday. “We regret to have been caught in the middle of geopolitical tension.”

Two years ago, a company spokeswoman told The Times that it had been unaware that its software was being used to track Muslims.

  • Fed meeting: The Federal Reserve will announce the results of a two-day meeting, which starts on Tuesday, in which officials are expected to discuss whether the central bank should scale down measures to support the economy at a faster pace than earlier planned. The Fed is slowing its buying of government bonds, with an aim to ending the purchases entirely by the middle of 2022.

  • Retail sales: The Commerce Department is scheduled to publish its monthly report on spending, which has shown three consecutive months of increases. Economists are expecting another positive month for consumer spending as shoppers brush off higher prices and supply chain woes.

  • Holmes trial: Closing arguments for the trial of the disgraced founder of the blood testing start-up Theranos, Elizabeth Holmes, are expected to begin. The case will then be given to the jury, with deliberation expected to start the week after.

  • European bank meetings: Both the Bank of England and the European Central Bank are set to meet. The Bank of England is expected to decide whether to raise interest rates as the country braces for a new coronavirus surge because of the Omicron variant, while the E.C.B. will provide new economic forecasts.

  • Pfizer said it planned to buy Arena Pharmaceuticals, a maker of treatments for inflammatory diseases, for about $6.7 billion in cash. The deal is the latest in the pharmaceutical industry as big drug makers race to buy smaller rivals that focus on specialty treatments. In a sign of Pfizer’s enthusiasm for the deal, it is paying roughly double what Arena’s stock price closed at last week.

  • Harry’s is acquiring Lumē, a natural deodorant brand, the DealBook newsletter reports. The deal is the shaving brand’s first acquisition via its start-up incubator, Harry’s Labs. Terms were not disclosed. The deal comes after the Federal Trade Commission blocked Harry’s $1.37 billion sale to Schick parent Edgewell last year, over fears it would reduce competition in the shaving industry. Andy Katz-Mayfield, Harry’s co-founder and co-chief executive, said that the company is considering going public “at some point.”

  • Gwyneth Paltrow, the actress and entrepreneur, was among the investors in a $200 million funding round for TeraWulf, a Bitcoin mining company that uses renewable energy, DealBook reports. Her Goop lifestyle brand has published primers on Bitcoin and podcasts about crypto investing, and she was introduced to TeraWulf as a solution to many cryptocurrencies’ heavy electricity use. TeraWulf is expected to complete a reverse merger with Ikonics, a listed photo-imaging technology, and begin trading on the Nasdaq on Tuesday.

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Credit…Neeta Satam for The New York Times

One of the tornadoes that roared through the Midwest on Friday plowed straight into an Amazon delivery station in Edwardsville, Ill. The toll was grim: Six people died, with 45 making it out alive, according to the Illinois governor, J.B. Pritzker.

On Sunday, the authorities said that there were no additional reports of missing people but that search efforts were continuing. It was initially unclear how many people had been at Amazon’s site and what safety measures could have been taken to minimize the loss of life. The tornado was ferocious, ripping off the building’s roof. Two of the structure’s 40-foot-high concrete walls collapsed.

Americans’ reliance on Amazon soon turned the deaths at the delivery depot into a public focus of the tornadoes’ toll, Karen Weise and Eric Berger report for The New York Times.

At a church service on Sunday at Thrive Church in Granite City, Ill., about 15 miles from Edwardsville, clergy and congregants tried to make sense of the disaster and the company’s response.

“It’s not lost on me, Lord, that this was an Amazon warehouse, and I, like so many other people in this country, get irritated if I can’t get my Christmas gifts in three days from Amazon,” Sharon Autenrieth, the pastor, said during the service.

The tornado struck at the busiest time for Amazon, which complicated the rescue effort in Edwardsville. The more than 250,000 drivers who fuel Amazon’s delivery network do not work directly for the company but instead are employed by over 3,000 contractor companies. On Saturday, Mike Fillback, the police chief in Edwardsville, said the authorities had “challenges” in knowing “how many people we actually had at that facility at the time because it’s not a set staff.”

Aerial footage of the wreckage showed dozens of vans, many of which had Amazon’s logo, underneath the rubble. READ THE ARTICLE →

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Credit…Ruth Fremson/The New York Times

Chris Wallace, the leading anchor of Fox News’s reportorial ranks, said on Sunday that he had decided to leave the network after 18 years.

He will become an anchor for CNN+, a streaming service from CNN that is expected to debut next year. His announcement surprised the television news industry, and his departure will deprive Fox News of a prominent figure in news, Michael M. Grynbaum reports in The New York Times. Mr. Wallace has been the face of its influential “Fox News Sunday” program, and he was the first anchor at the network to receive an Emmy Award nomination for his work.

“It is the last time, and I say this with real sadness, we will meet like this,” Mr. Wallace told viewers at the end of his Sunday broadcast.

An equal-opportunity interrogator of Democrats and Republicans, Mr. Wallace proved himself an outlier at times at Fox News, particularly in recent years when the network’s conservative opinion hosts closed ranks behind former President Donald J. Trump. Mr. Wallace’s criticisms of Mr. Trump earned rebukes from some viewers and the president’s own Twitter account, but he also irritated liberals who wished he would denounce his partisan colleagues.

In his on-air remarks on Sunday, Mr. Wallace said that “the bosses here at Fox promised me they would never interfere with a guest I booked or a question I asked, and they kept that promise. I have been free to report to the best of my ability, to cover the stories I think are important, to hold our country’s leaders to account. It’s been a great ride.”

READ THE ARTICLE →

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