G7 ministers agree on digital tax plan
G7 finance ministers reached a consensus on steps towards ensuring fair taxation of large tech companies, such as Google and Facebook, during a G7 meeting on 17 July in Chantilly, France. New rules will be developed in continuing negotiations at the Organization for Economic Co-operation and Development to address digitalized business models. Currently, digital giants pay little tax in Europe by funnelling sales through countries with favourable tax regimes, such as Luxembourg and Ireland. Earlier this month, the French parliament imposed a 3 percent turnover tax on tech companies. In response, the Trump administration announced a probe into France and threatened to impose tariffs.
80% increase in demand for financial compliance talent
Multinational companies in Mainland China are willing to pay up to 2 million yuan for professionals with experience in handling fraud, money laundering and sanctions, according to headhunter DHR International. The increase in corruption in the region has increased demand for financial compliance officers, especially younger, technology-savvy individuals in their 30s and 40s, by 80 percent. “As China continues to open up to the financial sector, it is going to add demand for senior financial officers and associated expertise on the Mainland,” said Managing Partner of DHR International Robert Knight.
Former KPMG South Africa CEO moves to London
Nhlamu Dlomu, KPMG South Africa’s former chief executive officer, moved to KPMG’s London office to take on the role of Global Head of People on 8 July. She is in charge of managing the firm’s human resources portfolio worldwide. Dlomu was first appointed CEO of KPMG South Africa in 2017 – the first black woman to hold the position – as part of a reshuffle of the firm’s team, following the reputation damage caused by the Gupta family scandal.
BDO uses virtual reality in hiring process
BDO United Kingdom has started using an Alice in Wonderland-themed virtual-reality game as part of its interview process. The game tests problem-solving skills, independent thinking, and how interviewees assess cause and effect. One challenge will see recruits try to find a key in a room, which changes size depending on the actions taken. BDO U.K.’s Head of Audit and Assurance Scott Knight said the unique hiring process is key to “helping us to know the real person better and understand their IQ, [as well as their] emotional and digital intelligence.”
Six IPOs raise more than HK$4 billion at Hong Kong Stock Exchange
Six companies debuted their initial public offerings (IPO) on the Hong Kong Stock Exchange on 16 July, raising a total of HK$4.4 billion. The biggest was Zhongliang Holdings Group, a Shanghai-based developer, with its HK$2.94 billion IPO. The other companies are involved in businesses ranging from property development, education and computer services. This brings Hong Kong’s fundraising tally to almost HK$74 billion for the year so far, but the city is still ranked third in global IPOs, behind Nasdaq and the New York Stock Exchange. The world’s largest brewer Anheuser-Busch announced plans to scrap its US$9.8 billion Budweiser IPO on the Hong Kong Stock Exchange this month to seek relief from its heavy debt burden.
Stepson of ex-Malaysia leader accused of laundering up to US$245 million
Riza Aziz, the stepson of Malaysia’s former prime minister Najib Razak, has been charged with laundering more than US$245 million. The alleged offences are said to have taken place in Singapore and Los Angeles from 2011 and 2012, and are linked to the 1Malaysia Development Berhad scandal which saw billions siphoned out of the state wealth fund allegedly by Najib for personal use. Aziz, who is the son of Najib’s wife Rosmah Mansor, has pleaded not guilty to all charges.
U.K. watchdog proposes limit to non-audit standards
The United Kingdom’s Financial Reporting Council (FRC) launched a consultation on 15 July to change rules designed to address conflicts of interest among auditors and limit non-audit services firms can provide to clients, which if passed, could result in large fines. “Our audit inspections and enforcement activity continue to identify a lack of professional scepticism and independence as being key points of failure when things go wrong,” said Stephen Haddrill, CEO of the FRC.
HKMA announces new chief executive
The Hong Kong government will promote its longest serving Deputy Chief Executive, Eddie Yue Wai-man, to be the next chief executive of the Hong Kong Monetary Authority (HKMA). He will succeed Norman Chan Tak-lam, who has served as head of the HKMA for 10 years, at the end of September. Yue has been with the HKMA since 1993, and was appointed to the new role by Financial Secretary Paul Chan Mo-po, who said Yue is the most experienced and suitable candidate. He is expected to take charge of the city’s HK$4 trillion exchange fund and oversight of the peg to the U.S. dollar.
FASB delays accounting standards
The Financial Accounting Standards Board in the United States voted on 17 July to propose delays to new major accounting standards for private companies, non-profits and small reporting companies. This includes standards involving credit losses, leases, hedging and long-duration insurance contracts. The delays, which range between one and two years, will give companies more time to train staff in implementing the standards.
High CEO turnover in 2018
The turnover rate of chief executive officers hit 17 percent in 2018, according to the 2018 CEO Success study by PwC. The global study also looked at 2,500 public companies over the past 19 years and found that CEO turnover was highest in Australia, Chile and Poland at 21.9 percent; and in India, Russia and Brazil at 21.6 percent. The lowest was in North America at 14.7 percent, and Mainland China at 7 percent. The study found that the median tenure of a CEO is five years, and that 39 percent were dismissed over errors in judgement rather than financial performance or board struggles.
SEC appoints new chief accountant
The Securities and Exchange Commission (SEC) in the United States has appointed Sagar Teotia to be its new Chief Accountant. Teotia replaces Wesley Bricker, who stepped down in May, and will be responsible for overseeing the Financial Accounting Standards Board and the Public Company Accounting Oversight Board. He joined the SEC in 2009 as a professional accounting fellow before joining Deloitte, where he became a partner in its national office. He rejoined the SEC in 2017 as deputy chief accountant. He said he was honoured and excited “to continue to work for the benefit of investors across the country.”
