Western corporate bosses pull out of Russian economic forum
Around a dozen chief executives and chairmen of major U.S. and European corporations have withdrawn from an economic conference in Russia as pressure between Moscow and the West grows over the crisis in Ukraine.
Eleven business leaders who were listed in late March as scheduled to attend the May 22-24 St. Petersburg International Economic Forum are no longer on the forum's website.
Only one company said their executive's decision to stay away was because of political tensions with most declining to give a reason. The cancellations, however, coincide with the United States and Europe considering further sanctions on Moscow over violence in eastern Ukraine, which western governments have blamed in part on Russia.
Sanctions have already been imposed in reaction to Russia's annexation of Crimea.
The chief executives of oil producer ConocoPhillips, jet maker Airbus Group, Visa Inc, Aluminum group Alcoa, Siemens, Citigroup, Morgan Stanley, International Paper Company, Pepsi, Italian oil group Eni and the chairman of consulting group Bain & Company are among those no longer scheduled to attend the forum.
Ryan Lance, the chief executive of Conoco, said he decided not to attend after discussions with the U.S. government.
"Like many of the American CEOs and industry leaders, we were approached by the State Department and talked to about many of the concerns that they had," Lance told reporters after the company's annual meeting on Tuesday. "So based on some of those concerns and comments I made a decision to not attend this year."
More than a dozen Western business leaders, including Goldman Sachs Chief Executive Lloyd Blankfein, remain on the program but sources close to some of the companies said other bosses planned to pull out. Goldman declined comment.
White House spokesman Jay Carney said this month that U.S. officials had been discussing the event, Russia's answer to the Davos World Economic Forum, with business leaders, and had made it clear that attending would not be appropriate given "flagrant violations of a sovereign nation's territorial integrity."
Business sources said the withdrawal of CEOs from the forum, which is held "under the auspices" of the president, according to its website, could be considered as a sleight by Russian President Vladimir Putin and could damage their companies' businesses in Russia.
"I am sure that the forum will be held in a friendly atmosphere and that any withdrawals will not spoil the atmosphere," said Russian Deputy Minister of Economic Development Sergey Belyakov in a video interview posted on the forum's website.
"Many companies confirmed their participation and we have no problems with the quality of our participants or of the number. Around 6,000 participants confirmed - many top managers of Russian and foreign companies that are in Forbes and Fortune ratings," Belyakov said.
"I am surprised at the pressure coming from the White House administration. The only parties which will suffer will be American companies."
Belyakov said Russia understands the atmosphere in which American companies are making their decisions and said there would be no risks for those companies in Russia who cancel.
Representatives of Pepsi, Citigroup and Siemens confirmed their bosses had withdrawn, and blamed scheduling clashes. Representatives of Airbus, Visa, Morgan Stanley, International Paper, Bain & Company, declined comment or were not available for comment.
Interfax Ukraine: 14. May 2014
EBRD preparing new strategy of activities for Ukraine
Office of The Board of Directors of the European Bank for Reconstruction and Development
The Board of Directors of the European Bank for Reconstruction and Development (EBRD) plans in the coming months to consider a new strategy for Ukraine, EBRD President Suma Chakrabarti has said in an interview with Interfax-Ukraine.
Reuters: 14. May 2014
From Russia with concern - Cisco's audits raised red flags about resellers
Cisco Systems, Inc. is an American multinational corporation that designs, manufactures, and sells networking equipment.
From Russia with concern - Cisco's audits raised red flags about resellers
Cisco Systems, Inc. is an American multinational corporation that designs, manufactures, and sells networking equipment.
In a series of audits in 2009, Cisco Systems Inc found that much of the business between resellers of its products and a Russian state-owned telecommunications company, Svyazinvest, could not be verified because it was either "misrepresented" or documents were withheld by the resellers, according to an executive summary of the audits reviewed by Reuters.
Cisco is currently conducting an investigation into allegations of possible violations of the U.S. Foreign Corrupt Practices Act at the request of the U.S. Department of Justice and the U.S. Securities and Exchange Commission. The allegations concerned Cisco's operations in Russia and certain of the Commonwealth of Independent States, and some resellers of its products, the company said in a filing on February 20, without elaborating further.
Cisco has not said whether the probe concerns one or both of the main parts of the law - the anti-bribery or the accounting provisions. Under the former, it is prohibited for American companies and persons to make corrupt payments to officials of foreign governments or state-controlled companies. Under the accounting provisions, companies must keep books and records that accurately and fairly reflect transactions and have an adequate system of internal accounting controls.
"It's is an ongoing investigation and we're putting a lot of resources into making sure it is done right," said Mark Chandler, Cisco's general counsel, in a statement to Reuters. "We're fully cooperating with and sharing the results with the SEC and the Justice Department. The outcome of the investigation isn't determinable, but we don't expect it to have any adverse material impact on Cisco."
Cisco, which has hired the law firm WilmerHale to do the internal probe, declined to be more specific about the investigation or to comment on the audits summary and other documents.A source familiar with the matter said that the DOJ and the SEC are carrying out their own investigations into Cisco's behavior to see if it breached the FCPA.
SOME DOCUMENTS "FALSIFIED"
Cisco is currently conducting an investigation into allegations of possible violations of the U.S. Foreign Corrupt Practices Act at the request of the U.S. Department of Justice and the U.S. Securities and Exchange Commission. The allegations concerned Cisco's operations in Russia and certain of the Commonwealth of Independent States, and some resellers of its products, the company said in a filing on February 20, without elaborating further.
Cisco has not said whether the probe concerns one or both of the main parts of the law - the anti-bribery or the accounting provisions. Under the former, it is prohibited for American companies and persons to make corrupt payments to officials of foreign governments or state-controlled companies. Under the accounting provisions, companies must keep books and records that accurately and fairly reflect transactions and have an adequate system of internal accounting controls.
"It's is an ongoing investigation and we're putting a lot of resources into making sure it is done right," said Mark Chandler, Cisco's general counsel, in a statement to Reuters. "We're fully cooperating with and sharing the results with the SEC and the Justice Department. The outcome of the investigation isn't determinable, but we don't expect it to have any adverse material impact on Cisco."
Cisco, which has hired the law firm WilmerHale to do the internal probe, declined to be more specific about the investigation or to comment on the audits summary and other documents.A source familiar with the matter said that the DOJ and the SEC are carrying out their own investigations into Cisco's behavior to see if it breached the FCPA.
SOME DOCUMENTS "FALSIFIED"
The June 2009 audits summary shows that Cisco was having trouble knowing what happened to the product it was selling.
Out of $23 million in sales bookings for Cisco's telecom equipment destined for Svyazinvest during 2008-2009 that were examined in the audits, only $5 million, or 22 percent, "are likely to be ok," the summary said. Those sales to Svyazinvest - which is now part of state-controlled Rostelecom - went through a company called Compulink.
An opinion on almost two thirds of these bookings, or $14.7 million, "could not be rendered due to partner refusal to provide supporting documentation," the summary said. Those sales were handled by a reseller called Step Logic Companies.And another $3.1 million, or 13 percent, through two firms - AKOM and Stins Coman - were described as "misrepresented." Some Stins Coman documents were classified as "falsified" in an accompanying table in the summary.
A Rostelecom spokesman said that "we have not heard about such facts" and declined further comment.A Compulink spokeswoman said Cisco does not carry out audits of the company, while Stins Coman spokesperson Ida Gill said it has not had any contracts with Svyazinvest. Step Logic denied withholding audit documents from Cisco, according to Inna Ozerova, the firm's marketing director. AKOM could not be located for comment.
Out of $23 million in sales bookings for Cisco's telecom equipment destined for Svyazinvest during 2008-2009 that were examined in the audits, only $5 million, or 22 percent, "are likely to be ok," the summary said. Those sales to Svyazinvest - which is now part of state-controlled Rostelecom - went through a company called Compulink.
An opinion on almost two thirds of these bookings, or $14.7 million, "could not be rendered due to partner refusal to provide supporting documentation," the summary said. Those sales were handled by a reseller called Step Logic Companies.And another $3.1 million, or 13 percent, through two firms - AKOM and Stins Coman - were described as "misrepresented." Some Stins Coman documents were classified as "falsified" in an accompanying table in the summary.
A Rostelecom spokesman said that "we have not heard about such facts" and declined further comment.A Compulink spokeswoman said Cisco does not carry out audits of the company, while Stins Coman spokesperson Ida Gill said it has not had any contracts with Svyazinvest. Step Logic denied withholding audit documents from Cisco, according to Inna Ozerova, the firm's marketing director. AKOM could not be located for comment.
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