Boeing to pay $200 million to settle civil charges it misled investors about 737 MAX
FRIDAY, SEPTEMBER 23, 2022
Boeing Co will pay $200 million to settle civil charges from the US Securities and Exchange Commission that it misled investors about its 737 MAX, which was grounded for 20 months after two fatal crashes killed 346 people, the agency said Thursday.
The SEC also said former Boeing Chief Executive Dennis Muilenburg had agreed to pay $1 million.
“In times of crisis and tragedy, it is especially important that public companies and executives provide full, fair, and truthful disclosures to the markets,” SEC Chair Gary Gensler said in a statement. He added that Boeing and Muilenburg “failed in this most basic obligation.”
The SEC said Boeing and Muilenburg did not admit or deny the SEC’s findings. The regulatory agency said a fund will be established for the benefit of harmed investors.
The SEC charged Boeing and Muilenburg “with making materially misleading public statements following crashes of Boeing airplanes in 2018 and 2019.”
Boeing confirmed the settlement and noted it did not admit or deny wrongdoing. It said it had made “fundamental changes that have strengthened our safety processes” and said the “settlement is part of the company’s broader effort to responsibly resolve outstanding legal matters related to the 737 MAX accidents.”
The crashes were linked to a flight control system called the Maneuvering Characteristics Augmentation System (MCAS). The SEC said “after the first crash, Boeing and Muilenburg knew that MCAS posed an ongoing airplane safety issue, but nevertheless assured the public that the 737 MAX airplane was ‘as safe as any that has ever flown the skies.'”
After the second crash, the SEC said, “Boeing and Muilenburg assured the public that there were no slips or gaps in the certification process with respect to MCAS, despite being aware of contrary information.”
In January 2021, Boeing agreed to pay $2.5 billion in fines and compensation to resolve a U.S. Justice Department criminal investigation into the 737 MAX crashes.
The Justice Department settlement, which allowed Boeing to avoid prosecution, included a fine of $243.6 million, compensation to airlines of $1.77 billion and a $500 million crash-victim fund over fraud conspiracy charges related to the plane’s flawed design.
In December 2019, Boeing fired Muilenburg after the company clashed with regulators over the timing of the 737 MAX’s return to service.
“Boeing and Muilenburg put profits over people by misleading investors about the safety of the 737 MAX all in an effort to rehabilitate Boeing’s image following two tragic accidents that resulted in the loss of 346 lives and incalculable grief to so many families,” said Gurbir Grewal, director of the SEC’s Enforcement Division.
Australia’s Optus says up to 10 million customers caught in cyber attack
FRIDAY, SEPTEMBER 23, 2022
Australia’s second largest telco, Optus, owned by Singapore Telecommunications Ltd, said on Friday that it will contact as many as 9.8 million customers whose personal details were taken in one of the country’s biggest cybersecurity breaches.
Optus chief executive Kelly Bayer Rosmarin said she was angry and sorry that an offshore-based entity had broken into the company’s database of customer information, accessing home addresses, driver’s licence and passport numbers. Up to 40% of Australia’s population may have been affected by the breach, but “that is the absolute worst-case scenario (and) we have reason to believe that the number is actually smaller than that”, Bayer Rosmarin said.
As a major telco, Optus considered itself a target for cyber attackers and routinely repelled attempts to breach its systems but “this particular one is not similar to anything we’ve seen before, and unfortunately it was successful,” she said.
Police and cybersecurity authorities were still investigating the attack which Optus told customers about on Thursday.
Japan will lift all Covid-19 border controls from October 11 in a bid to revive its tourism industry. All tourism routes will be reopened and visa waivers will also be reinstated, Prime Minister Fumio Kishida said on Thursday.
The PM made the announcement in a speech at the UN General Assembly in New York.
“I hope many people will utilise it,” Kishida told the press later. “I want to support travel, entertainment and other industries that have been struggling due to the coronavirus pandemic.”
Thailand is among 70 countries that Japan had visa waiver agreements with before the pandemic, and it will be reinstated after October 11. Thai passport holders will be part of the blue group, which means they will not be required to provide vaccine passport, RT-PCR test results or be required to isolate.
The cap on daily arrivals will also be lifted, Kishida said.
Japan has been slowly raising the daily arrival cap over the past six months, starting with 5,000 on March 1 to 50,000 now.
Meanwhile, Reuters quoted Kishida as saying that excessive fluctuations in the Japanese currency due to speculation cannot be ignored. In his speech at the New York Stock Exchange on Thursday, Kishida said his government would act “with a high level of vigilance” and intervene to support the currency if necessary. The yen has hit a 24-year low recently.
“In principle, the exchange rate is determined by the market, but I don’t think we can overlook the repetition of excessive fluctuations due to such speculation,” he said. “Based on this idea, today we implemented a foreign exchange intervention in Japan. The government will continue to monitor exchange rate trends with a high sense of urgency and take the necessary measures against excessive fluctuations.
“We will continue to observe these exchange trends with a high level of interest and a sense of urgency,” said Kishida.
Singthong Lapseedphan, ambassador of Thailand to Japan, said on Thursday that he believes the Covid-19 situation will improve gradually and travel between Thailand and Japan will soon be restored to before the pandemic.
“After 2019, up to 1.3 million Thai tourists have visited Japan, while up to 1.8 million Japanese have arrived in Thailand,” he said. “Japanese tourists are among the top spenders who help contribute to the recovery of our tourism industry.”
Japan enters market for first time in 24 years to rein in rising dollar
THURSDAY, SEPTEMBER 22, 2022
In a rare move last seen in 1998, Japan on Thursday intervened in the foreign exchange market by buying yen in a bid to shore up the depreciating currency.
The intervention came shortly after the Bank of Japan hinted that it would leave the country’s ultra-low interest rates at near zero for the next couple of years.
Japan, the world’s third-largest economy, is affected by the strong US dollar, which has appreciated against most major currencies following the US Federal Reserve’s repeated interest-rate hikes in recent months.
The runaway appreciation of the American greenback is making Japan pay more for essential imports, such as oil, natural gas and food, which have seen far higher costs in yen terms.
“We have taken decisive action [in the exchange market],” Japan’s vice finance minister for international affairs Masato Kanda told reporters on Thursday.
The intervention pushed the US dollar down by over 2 per cent, to trade at around 141 yen from 146 yen following the Japanese central bank’s decision to stick to its super-loose policy stance.
Japan’s last previous intervention to support its currency was in 1998, when the Asian financial crisis triggered a yen sell-off and rapid capital outflow from the region.
As of Thursday evening Tokyo time, the yen was trading at around 142.65 to the dollar.
The Japanese currency has depreciated nearly 20 per cent this year, sinking to 24-year lows. Earlier this year, the yen traded at around 115 against the dollar.
On Wednesday, the US Federal Reserve raised its policy interest rate by 75 basis points — its third straight hike this year. It also signalled more increases in the near future. The US move was viewed as its resolve not to let up in its battle against inflation while giving a further boost to the dollar.
‘Let’s see if I go back’, Russians disembark in Serbia, fearing conscription
THURSDAY, SEPTEMBER 22, 2022
Passengers disembarked early on Thursday in Belgrade from a fight from Moscow, a day after Russia’s President Vladimir Putin declared partial mobilization of 300,000 reservists for war in Ukraine. Many said they purchased tickets well beforehand, but not all were sure they would go back.
One passenger, Misha, who didn’t want to give his surname said his flight was a business trip planned earlier, but that it was maybe fortunate timing.
Asked if he would go back he said, “let’s see, let’s see. I can’t say ‘no’, I can’t say ‘yes’. Let’s see.” Another passenger said simply: “That’s a good question”.
Pavel who said he was in Belgrade on a business trip, said he would be returning to Russia as hoped he would be able to avoid any conscription.
“As our defence minister said, one per cent of the population would be sufficient to fulfil the goal of the mobilization,” Pavel told Reuters.
Moscow plans to conscript some 300,000 troops in an apparent escalation of its Ukraine invasion that began in February and has left thousands dead, displaced millions and reduced towns to rubble.
Another Russian who identified himself only as Sergey said he was concerned about mobilization.
“Every normal person (is concerned) I think. War is horrible so, it’s okay to be afraid of war and of death and of such things,” he said.
Sergey also said his friends and colleagues were anxious about the possibility of being sent to battlefields in Ukraine.
“They’re afraid also and it’s anxiety and uncertainty, maybe. So, it’s hard for everyone. It’s a difficult situation.”
Concern over being conscripted saw flights out of Russia quickly sell out, and jailed opposition leader Alexei Navalny called for mass demonstrations against the mobilization. Independent protest monitoring group OVD-Info said nearly 1,400 people in 38 Russian cities had been detained in protests by Wednesday evening.
Nepal Airlines to sell Chinese planes if nobody wants to lease them
THURSDAY, SEPTEMBER 22, 2022
Eight years after acquiring a batch of Chinese planes it had hoped to fly on underserved mountain routes, Nepal Airlines finally decided that it didn’t want the albatross around its neck anymore.
Except for operating services to a few airports in the Tarai plains, these aircraft spent more time on the ground than in the air, and they were becoming financial stress to the debt-ridden national flag carrier.
The Chinese planes have been grounded for more than two years. On September 14, Nepal Airlines issued a notice to lease them out.
The five condemned planes—three 17-seater Y12e aircraft and two 56-seater MA60 aircraft—are parked at the remote parking bay on the eastern side of Tribhuvan International Airport in Kathmandu. Another one crashed in Nepalgunj and is unflyable.
“It’s a dry lease notice,” said Archana Khadka, spokesperson for Nepal Airlines.
Under a dry lease, the owner will provide the aircraft only, without crew or ground staff.
“We followed the Finance Ministry’s instructions,” said Khadka. Out of the two options recommended by the Finance Ministry—dry lease or outright sale—Nepal Airlines will try the first one,” she said.
“If there are no takers, we will go for the second option.”
The deadline for the bids set by Nepal Airlines is October 31. Some top Nepal Airlines officials say they do not expect to see potential lessees.
Besides maintenance issues and lack of spare parts, Nepal Airlines couldn’t find pilots to fly the aircraft, and there was no sense in keeping them anymore.
In November 2012, Nepal Airlines signed a commercial agreement with the Aviation Industry Corporation of China (AVIC), a Chinese government undertaking, to procure six aircraft—two 56-seater MA60s and four 17-seater Y12es.
As part of the deal, China provided grant and concessional loan assistance worth 408 million Chinese yuan (Rs6.67 billion) to purchase the six aircraft.
Out of the total aid money, a grant worth 180 million yuan (Rs2.94 billion) went to pay for one MA60 and one Y12e aircraft; and a loan worth 228 million yuan (Rs3.72 billion) was used to purchase one MA60 and three Y12e aircraft.
The delivery of the rest of the Chinese aircraft was stalled for years after issues appeared in the first batch of planes that arrived in 2014.
These issues included lack of pilots, lack of instructor pilots, lack of spare parts and lack of engineers trained to maintain them.
The second batch of MA60 and Y12e aircraft, as part of the six-aircraft deal between Nepal and China, arrived in January 2017.
The corporation received the final two Y12e aircraft in February 2018.
Nepal Airlines has repeatedly said that the Chinese-made planes were causing heavy losses ever since they were acquired and that it wants to get rid of them to stop further losses.
The Finance Ministry is the owner of the planes and Nepal Airlines is the operator. The ministry gave the green signal to Nepal Airlines to lease out or sell the planes in March 2021.
In July 2020, the board of directors of Nepal Airlines unanimously decided to stop flying Chinese planes.
Five months after the decision, in December 2020, the national flag carrier submitted four options to its line ministry—Civil Aviation Ministry—to get rid of the six inefficient Chinese aircraft in its fleet.
The Finance Ministry had offered several options: Ask the aircraft manufacturers to buy back the planes by evaluating their existing worthiness; lease out the planes either on a long- or short-term basis; auction off the planes through a global competitive bidding process, or look for Chinese or international companies or banks interested in buying or leasing them.
“No doubt, the planes can fly. It was a management problem that the shiny new planes never flew for the purpose they were brought,” said Ashok Pokhrel, former board member of Nepal Airlines.
“Now, years after they were acquired, it is wise to sell them rather than keep them in storage,” he said. “If the planes begin to rust, they will become scrap.”
Photos of the aircraft obtained by the Post show that the tail section of the Y12e is covered in moss. There is corrosion appearing on the metal surfaces and components of the aircraft.
“These planes are susceptible to corrosion,” an unnamed senior Nepal Airlines captain told the Post recently.
As corrosion weakens the structural integrity of metal aircraft and its parts, it could lead to expensive repairs and significant safety hazards.
But according to Pokhrel, it will be difficult to find potential lessees. “I doubt companies are interested in flying them.”
As per the notice, the minimum monthly fixed lease rate for the MA60 with registration number 9N-AKQ is $78,097.
In a power-by-the-hour lease rate, the cost to lease the plane is fixed at $700 per flight cycle or $563 per flight hour, whichever is higher.
The fixed cost is typically driven per flight hour, or a calendar period such as monthly, while under the power-by-the-hour lease rate, the maintenance, storage and insurance are all paid by the lessee, saving the lessor’s expense if it were to repossess the asset. The lessee now only pays the rent when the aircraft is operated.
Similarly, for the MA60 with registration number 9N-AKR the minimum monthly fixed lease rate is $69,980 and a power-by-the-hour lease rate of either $704 per flight cycle or $564 per flight hour.
According to the notice, the Y12e with call sign 9N-AKS has a minimum monthly fixed lease rate of $29,416, and a power-by-the-hour lease rate of either $80 per flight cycle or $112 per flight hour.
The Y12e with call sign 9N-AKT has a minimum monthly fixed lease rate of $32,886, and a power-by-the-hour lease rate of either $95 per flight cycle or $141 per flight hour.
The Y12e with call sign 9N-AKV has a minimum monthly fixed lease rate of $33,785, and a power-by-the-hour lease rate of either $101 per flight cycle or $151 per flight hour.
All these five turboprops are in storage at Kathmandu airport and are available for inspection on an “as is, where is” basis, according to the notice published by Nepal Airlines on its website.
Only airlines with a valid air operator’s certificate and at least one aircraft in their in-house fleet are eligible to bid.
Nepal Airlines, which is known for its atrocious service, planes being grounded most of the time and management changes making news headlines thrice a year, has been ruined by politicking.
Every time a new management team comes, it begins the process to replace the Chinese planes with new Western-made regional turboprops.
“But Nepal Airlines management changes faster than its decisions,” said a top Nepal Airlines official. “There is no stability in the office, and the decisions are unstable as well.”
Dirty water prompts Cebu government to ban swimming off Cordova town
THURSDAY, SEPTEMBER 22, 2022
Cebu Gov. Gwendolyn Garcia has banned swimming and other water activities off Cordova town after a test done by the Department of Environment and Natural Resources (DENR) confirmed the presence of fecal coliform in the waters.
Although the test was confined only to Catarman, Garcia said her swimming ban would cover all areas on Cordova’s coastline.
“There is an urgent need to immediately prohibit public swimming and similar activities found within the coastal waters of Cordova … delineated by the technical descriptions,” she said in an executive order.
A high level of fecal coliform was found in the area where fixed and floating cottages for visitors were built.
Garcia asked owners of these cottages to remove their structures until Oct. 4. Those still standing after the deadline would be demolished by the local government.
The governor said the Philippine National Police Maritime Group, Philippine Coast Guard, Philippine Navy and the Cordova municipal government would help enforce the provincial government’s demolition order.
Garcia earlier ordered owners of floating and fixed cottages in Cordova to stop their operations after high levels of coliform were detected in municipal waters.
Illegal operation “When I saw these illegal cottages, I told myself they should not be allowed to operate again,” she said during a meeting with local officials and cottage owners at Cordova Sports Complex on Tuesday.
Garcia said the cottages had been operating without restrooms and proper waste management systems. Owners, she said, also failed to secure the necessary permits or clearances from the local government.
If floating cottages continue their operations, Garcia said this would practically “kill the goose that lays the golden egg,” referring to the income brought by local tourism. She described the situation in Cordova as a “marine disaster waiting to happen.”
On Aug. 15, Cordova Mayor Cesar Suan announced that the level of coliform in the town’s waters had increased, making it unsafe for swimming, citing a report from the Environmental Management Bureau (EMB) of the DENR.
Water quality tests conducted by the EMB in the past two months showed that the coliform level in the seas of Cordova reached 1,300 most probable number per 100 millilitres. For bodies of water to be safe for swimming, the coliform levels should only be at 100 MPN per ml.
The Department of Health earlier warned that swimming in waters with high fecal coliform bacteria levels can lead to various diseases, such as typhoid fever, hepatitis, gastroenteritis, and dysentery.
“You should know that the cottages in Cordova are illegal, and you cannot just do what you want,” Garcia said.
The provincial government would give each of the 73 owners of floating cottages and 54 operators of fixed structures P10,000 financial assistance.
Suan said the municipal government would set aside a separate P5,000 aid and a sack of rice for those whose cottages would be demolished.
Asian Stocks Decline As Fed Forecast More Hikes Ahead
THURSDAY, SEPTEMBER 22, 2022
Asian Stocks Dove On Thursday, As Investors Digested The U.S. Federal Reserve’s Latest Interest Rate Hike And Its Forecast Of More Hikes To Come In Its Fight Against Soaring Inflation.
The Nikkei 225 index opened down 0.95% and repeatedly tested the 27,000 psychological barriers before falling through for the first time since July 19. It closed for the break down 0.97% at 27,047.37 points. The Bank of Japan kept ultra-low interest rates unchanged on Thursday and vowed to hold them there, contrasting against a global tide of monetary tightening by central banks.
South Korea’s benchmark KOSPI fell 1.16%, to 2,319.98 points as of 0115 GMT, hitting its lowest intraday level since July 15. Hong Kong stocks slumped to the lowest since 2012 with the benchmark Hang Seng Index dropping as much as two per cent to 18,080.9 points. China’s Shanghai Composite Index started lower by 0.59% at 3,098.77 points.
The Fed raised rates sharply, by 75 basis points, on Wednesday – the third such rise in a row. That took the bank’s benchmark overnight rate target range to 3-3.25% and led to the dollar index surging to a fresh two-decade high.
World Leaders Pledge Billions To Fight AIDS, Tuberculosis, Malaria
THURSDAY, SEPTEMBER 22, 2022
The Global Fund To Fight AIDS, Tuberculosis And Malaria On Wednesday Reached $14.25 Billion Pledged As World Leaders Seek To Fight The Killer Diseases After Progress Was Knocked Off Course By The Covid-19 Pandemic.
US President Joe Biden, who hosted the conference in New York on the sidelines of the annual high-level meeting of the United Nations General Assembly, said the funding is crucial to combating the diseases.
“This is an investment that will save another 20 million lives, reduce mortality from these diseases another 64% in the next four years,” Biden said.
The United States had previously said it would pledge $6 billion for the next funding cycle.
The fund, a public/private alliance based in Geneva, is seeking $18 billion for its next three-year funding cycle from governments, civil society and the private sector. Before Wednesday’s conference, it had already raised more than a third of the total.
The Global Fund said the $14.25 billion figure is likely to increase as more donations are expected.
Canada would contribute C$1.21 billion ($898.9 million) to a global health fund to fight AIDS, tuberculosis and malaria, and support health services that have been disrupted by the coronavirus pandemic, the Canadian government said in a statement on Wednesday.
The funding commitment to the Global Fund is a 30% increase over Canada’s last pledge to the initiative and brings the country’s total contributions to the fund to nearly C$4 billion.
French President Emmanuel Macron pledged another 300 million euros, bringing France’s total contribution for the funding period to 1.6 billion euros.
In its 2022 report, the fund said the reach of its treatment and prevention efforts rebounded last year after declining for the first time in almost 20 years in 2020, but the world is still not on track to defeat these diseases.
The fund estimates its work has saved around 50 million lives since its inception in 2002.
Prisoners Of War Released In Ukraine After Major Surprise Swap
THURSDAY, SEPTEMBER 22, 2022
Prisoners Of War Were Released In Ukraine On Wednesday After An Unexpected Prisoner Swap Was Carried Out With Russia, The Largest Since The War Began And Involving Almost 300 People.
The swap included 10 foreigners and the commanders who led a prolonged Ukrainian defence of Mariupol earlier this year.
Various prisoners were seen walking free in a location given as Chernihiv.
Saudi Arabia brokered an arrangement whereby the 10 foreigners were flown to Saudi Arabia.
The mediation involved Saudi Crown Prince Mohammed bin Salman, who has maintained close ties with Putin.
The freed prisoners were American, British, Croatian, Moroccan and Swedish nationals, the ministry said in a statement, adding that a plane carrying the prisoners landed in the kingdom.
The timing and magnitude of the swap came as a surprise, given that Russian President Vladimir Putin had announced a partial troop mobilisation earlier in the day in an apparent escalation of the conflict that began in February.
Pro-Russian separatists had also said last month that the Mariupol commanders would go on trial.
President Volodymyr Zelenskiy said the swap – which involved help from Turkey and Saudi Arabia – had been under preparation for quite a long time and involved intense haggling.
Under the terms of the deal, 215 Ukrainians – most of whom were captured after the fall of Mariupol – were released.
In exchange, Ukraine sent back 55 Russians and pro-Moscow Ukrainians and Viktor Medvedchuk, the leader of a banned pro-Russian party who was facing treason charges.
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