Key Governance Developments - May 2024
Italy’s central bank halts shareholder pay-outs and orders governance review over loans by BFF Bank

The Banca d'Italia has ordered specialist lender BFF Bank to suspend shareholder pay-outs and review its governance structures. An investigation by the central bank has found that some of BFF's loans to state agencies should be classified as in arrears rather than being wrongly described as performing. The Milan-based bank revealed the results of the central bank's report at its first-quarter results presentation, causing its shares to plunge by one-third. BFF's secured bonds and additional tier 1 notes also dropped in value, since the freeze on pay-outs also applies to coupon payments on debt securities.

Best source: Bloomberg
Investors question readiness of HSBC to fulfil $1trn green finance commitment

Investors led by the Ethos Foundation and Royal London Asset Management are questioning the board of HSBC over the bank's promise to provide $1trn in financing for sustainable investment by 2030. The group says the plans are vague and too broad, according to UK activist group ShareAction, which is co-ordinating the campaign. The investors, which between them oversee $892bn in assets, question whether HSBC has set out a genuine path to net zero emissions.

Best source: City A.M.
See also: Edie
Equinor shareholder resolution calls for alignment with Paris Agreement

Investors including Sarasin & Partner, Storebrand Asset Management and KLP have filed a shareholder resolution at Equinor calling on the Norwegian oil and gas major to align its business strategy with the Paris Agreement. Storebrand says that Equinor's current strategy and capital expenditure plans are not aligned. The company has generated significant profits from the Russian invasion of Ukraine, which caused prices for gas in particular to spike as EU nations and energy users sought more stable suppliers. Equinor says it intends to maintain current levels of domestic output until 2035, but increase output in the UK, Brazil and US by 15% by 2030. The Norwegian government has a 67% majority holding in the firm but has yet to declare which way it would vote.

Best source: Reuters (free registration)
See also: Bloomberg (subscription required)
Panama law firm co-founder Ramón Fonseca dies before receiving money laundering trial verdict

Ramón Fonseca, a co-founder of the now-defunct law firm Mossack Fonseca, has died in hospital at 71, weeks after standing trial on money laundering charges in Panama alongside the firm's other co-founder, Jürgen Mossack. The two were awaiting a verdict, including possible sentences of up to 12 years' imprisonment, along with 27 other individuals, mostly former employees. Already suffering from ill health, Fonseca did not attend the trial, whose hearings concluded on April 19. The Mossack Fonseca partners were accused of providing false information to banks to open accounts and concealing the ownership of assets, as well as receiving and transferring funds of criminal origin from Germany and Argentina. Around 11.5 million documents dubbed the Panama Papers were leaked from the firm in 2016, making public evidence of wide-ranging tax evasion and avoidance by heads of state and politicians, known criminals and celebrities around the world.

Best source: AP
See also: BBC
See also: International Consortium of Investigative Journalists
HSBC shareholder Ping An voted against reappointment of CEO Quinn as director

China's Ping An Insurance Group voted against reappointing HSBC CEO Noel Quinn as a member of the board of directors at the bank's annual general meeting on May 3. Quinn was re-elected, supported by 83.93% of the votes, after announcing that he would step down as CEO once HSBC finds a successor. Last year, he defeated a campaign by Ping An, HSBC's largest Asian shareholder, to persuade the group to spin off its Asia business as a separate entity.

Best source: Bloomberg (subscription required)
See also: Reuters (free registration)

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AIFMD II – Overview and most significant amendments
Contribution by Borna Lisic, Laurie-Anne Tarkerkart & Juliette Thiebaut