Headlines

Malaysia today said the U.S. Department of Justice has returned 1.9 billion ringgit ($460.22 million) of funds recovered from assets related to sovereign fund 1Malaysia Development Berhad (1MDB), Reuters reported. Malaysian and U.S. investigators say that at least $4.5 billion was stolen from 1MDB between 2009 and 2014, in a wide-ranging scandal that has implicated high-level officials, banks and financial institutions around the world. The United States has been returning funds it has recovered from seized assets that were allegedly bought with stolen 1MDB money.

A judge in London ruled that gym chain Virgin Active can wipe out the rent arrears on most of its venues and avoid future steep payments, despite the opposition of a majority of its creditors, Bloomberg News reported. The decision represents a victory for tenants and a blow for landlords, with other companies now likely to seek a reduction in their debt pile using the same tool. Rent arrears have been building since March last year when non-essential businesses were forced to close or operate with restrictions due to the pandemic.

Bridging Finance Inc. received a $126-million emergency cash infusion last year that gave new institutional backers better rights and more seniority than existing retail investors – but decided not to ask existing investors if they approved, according to documents reviewed by The Globe and Mail. Detailed terms of the emergency money also were not disclosed upfront to existing investors, despite the potential impact on their standing with other creditors should Bridging get into financial trouble. Some details were later outlined in Bridging’s audited year-end financial statements.

The Biden administration announced yesterday that it was asking Mexico to review whether labor violations had occurred at a General Motors facility in the country, a significant step using a new labor enforcement tool in the revised North American trade deal, the New York Times reported. The administration is seeking the review under the novel “rapid response” mechanism in the United States-Mexico-Canada Agreement, which replaced the North American Free Trade Agreement and took effect last summer.

Chileans flocked for a third time to withdraw money from their retirement funds this week, draining nearly $10 billion from the country's privatized pension system in a move some billed as a lifeline amid a fierce second wave of the coronavirus pandemic, Reuters reported. Chile's Congress in late April approved a bill allowing citizens a third opportunity to withdraw 10% of savings held in privately held pension funds. Many Chileans have already twice tapped their funds since the pandemic struck in March last year, hobbling a system once hailed by free-market economists worldwide.

Germany loosened travel rules to allow people fully vaccinated against Covid-19 to enter the country without needing to get tested or go into quarantine, Bloomberg News reported. The rules, which also apply to those who have recovered from the virus, were approved by Chancellor Angela Merkel’s cabinet on Wednesday. One-third of German residents have received at least one dose of a Covid vaccine, and nearly 10% have been fully inoculated. As the pace ramps up, Germany has granted more privileges to people immune from the disease, including easing trips to hairdressers.

Hong Kong sold a rare land parcel in the Causeway Bay area for a higher-than-expected price, a sign of recovery for the city’s commercial real estate market, Bloomberg News reported. The government sold the site to Hysan Development Co. and Chinachem Group for HK$19.8 billion ($2.5 billion) in a public tender, according to a statement. That exceeds a previous valuation of about HK$15 billion by Midland IC&I Ltd., reflecting optimism from developers that Hong Kong’s office and retail markets will rebound.

Corporate insolvencies in Germany fell by 21.8% on the year in February, the Federal Statistics Office said on Tuesday, continuing a downtrend that saw them hit their lowest level since 1999 last year thanks to a waiver during the pandemic, Reuters reported. Germany introduced the waiver last March, when the COVID-19 pandemic hit, part of a package of measures aimed at supporting businesses but which gave rise to the charge that the government was simply propping up “zombie companies” with no future. Insolvencies duly fell. But since October, Berlin has phased out the waiver.

Former British Prime Minister David Cameron repeatedly contacted senior ministers over a four-month period in 2020 to lobby for the now-failed, supply-chain finance firm Greensill Capital, according to documents published on Tuesday, Reuters reported. Cameron’s involvement in efforts to secure access for Greensill Capital to the government’s pandemic funding schemes have fueled wider questions about lobbyists’ influence over British government decision-making.

Australia unveiled a big-spending budget that aims to run the economy red hot, joining the U.S. and Europe with a fiscal-monetary tandem that seeks to drive unemployment down to levels rarely seen in the past 50 years, Bloomberg News reported. Treasurer Josh Frydenberg’s 2021-2022 fiscal blueprint aligns both economic orthodoxy with the political needs of a government facing an election in the next year.