Wednesday 11 April 2018 FT FINANCIAL TIMES C002D5556 BUSINESS DAY A3 World Business Newspaper Donald Trump renews attack on raids on his lawyer’s office President tweets ‘Attorney-client privilege is dead!’ after FBI action KADHIM SHUBBER Donald Trump renewed his attack on the FBI and Robert Mueller, the special counsel investigating Russian meddling in the 2016 US election, following raids targeting his long-time personal attorney. In two separate Twitter posts on Tuesday morning, the US president wrote: “Attorney-client privilege is dead!” before firing a second riposte: “A TOTAL WITCH HUNT!!!” after federal agents, executing search warrants against Michael Cohen, had raided several locations in New York on Monday. Mr Cohen’s attorney said that the investigators acted in part on information referred by Mr Mueller’s office. The US president’s outburst comes after he had angrily denounced the FBI and Mr Mueller in the immediate aftermath of the raids less than 24 hours earlier, describing the actions as “disgraceful” and “an attack on our country”. On Monday, speaking after a briefing by his military advisers on the situation in Syria, following an alleged chemical weapons attack, Mr Trump said he had “just heard they broke into the office of one of my personal attorneys” and called the moves by investigators “a whole new level of unfairness”. When asked by reporters whether he might fire Mr Mueller, the president said: “Well, I think it’s a disgrace what’s going on. We’ll see what happens.” The action against Mr Cohen was first reported by The New York Times, which said Mr Cohen’s payment of $130,000 to porn star Stormy Daniels shortly before the 2016 election was one of the matters being investigated. Stephen Ryan, a lawyer for Mr Cohen, said agents had seized “protected attorney-client communications” in a series of raids executed by the US attorney’s office for the southern district of New York. Long-term loan could signal shift in appetite for African risk from institutional investors Justice department guidelines require Mr Mueller to consult on matters outside the Russia investigation with the attorney-general, who would decide whether to allow Mr Mueller to investigate or to refer such questions to other prosecutors. However, Jeff Sessions, the attorney-general, recused himself from the Russian matter last year following questions about his Senate testimony about his contacts with the Russian ambassador. His recusal means any decisions are now instead taken by Rod Rosenstein, the deputy-attorney general. Mr Trump also repeated his attacks on Mr Sessions on Monday for recusing himself. “He certainly should have let us know if he was going to recuse himself and we would have put a different attorney-general in,” said Mr Trump. “He made what I consider to be a very terrible mistake for the country. But you’ll figure that out.” Democratic Senator Chuck Schumer warned Mr Trump against using the raid to fire Mr Mueller “or otherwise interfere with the chain of command in the Russia probe”. “The investigation is critical to the health of our democracy, and must be allowed to continue,” said Mr Schumer in a statement. Mr Cohen is a close adviser of the president who has worked for the Trump Organization since 2007. In October, he appeared in front of two congressional committees investigating alleged Russian election interference. Several Trump associates have been indicted as part of the special counsel’s investigation, including Mr Trump’s former campaign manager Paul Manafort, deputy campaign manager Rick Gates, former national security adviser Michael Flynn, and former campaign adviser George Papadopoulos. All pleaded guilty to charges except for Mr Manafort, who denies wrongdoing. Allianz makes $120m investment in African infrastructure DAVID PILLING Buhari to seek second term as Nigeria’s president Page A4 Allianz will become the first large commercial lender to commit long-term funding to an African infrastructure fund by making a nearly $120m 12-year loan to a vehicle underwritten by western development agencies. The commitment from the European insurer to the Emerging Africa Infrastructure Fund — part of a $385m funding round to be announced on Tuesday — could encourage other institutional investors to look more closely at financing what are generally considered risky African projects. Allianz said the deal was structured in such a way that its loans were “risk remote”, because they were backed by collateral in more than 40 projects. “We would only lose money if all the other equity investors are taken out,” said Claus Fintzen, chief investment officer for infrastructure debt at Allianz Global Investors, referring to international development agencies from Continues on page A4 Michael Cohen has called himself a devoted supporter of Mr Trump: ‘I truly care about him and the family — more than just as an employee and an attorney’ © Reuters Volkswagen considering replacing CEO Müller German carmaker declines to expand on why it is exploring changes to management structure PATRICK MCGEE Volkswagen is considering replacing its chief executive, Matthias Müller, as part of an unexpected management shake-up announced on Tuesday. Two unscheduled releases from VW Group and Porsche SE, its parent company, said the companies were exploring changes to their management boards. The announcement from Volkswagen said the group was considering a “further development” of its management structure, including personnel changes. Mr Müller, it added, “had signalled his fundamental willingness” to participate in the changes, which could include a change in the position of CEO. Africa-focused Vivo Energy plans London IPO next month Listing could value petrol group at $4bn and break drought of Africa-related offerings DAVID PILLING Vivo Energy, which operates petrol stations and retail outlets in 15 African countries, has announced its intention to list on the London Stock Exchange next month in a deal that could break a drought of Africa-related initial public offerings. The listing, expected to value the company at $3bn-$4bn, comes after Helios Towers, an Africa-focused mobile phone tower operator, last month abandoned plans for an IPO because of weaker than expected investor appetite. Regional rival Eaton Towers is also considering dropping its listing, according to bankers. It also came amid reports on Tuesday that Vitol Group, the oil trader that owns 55 per cent of Vivo, was in discussions with private equity group Carlyle about pulling a listing of their joint-owned European refiner and petrol station operator Varo. That listing, on the Amsterdam stock exchange, was supposed to value Varo at €2bn. Christian Chammas, chief executive of Vivo Energy, said he could not comment on other listings but that Vivo was an Africa-focused petrol and retail operation that could not Ivan Glasenberg steps down from Rusal board as sanctions bite Page A5 A separate statement from Porsche SE said that personnel changes at VW could also result in changes to the Porsche board, where Mr Müller oversees corporate strategy. The VW statement said the group is holding discussions with various executives amid speculation from analysts that Mr Müller could be replaced by Herbert Diess, head of the VW passenger car brand. It remains unclear why VW is considering a shake-up and a spokesperson declined to answer any questions. Volkswagen shares are up 4.4 per cent in mid-afternoon trading, extending gains within the past hour. Mr Müller became VW CEO just after the diesel emissions scandal was revealed in September 2015. The for- be compared with other businesses. He positioned Vivo as offering international investors exposure to a diverse group of mostly fast-growing African economies with rapidly expanding urban populations. “We are at the heart of the growth story, the growth of Africa’s population and consumer demand,” he said. The other big investor in Vivo, which was carved out of Shell’s African retail business in 2011, is Helios Investment Partners with a 44 per cent stake. Management owns 1 per cent. Under the IPO plans at least 25 per cent of the company will be floated. If the deal gets away successfully, it will mark the first significant listing of an African-based business since 2014, when Seplat, a Nigerian oil and gas group, raised $500m in a London- Lagos IPO. Since then, the “Africa rising” narrative has sagged amid lower commodity prices and greater scepticism about the potential of countries from the continent to break decisively from poverty. However, other African businesses are now preparing to list, bankers say, propelled by high demand for African debt offerings and more re- mer Porsche CEO has led a revival at VW, with car sales overtaking Toyota and shares largely recovering from the scandal. Mr Müller has embarked on a major electrification strategy to leave his mark on the group. He will be 67 when his contract expires in 2020 and has expressed no plans to stay on beyond then. “We have to look to make our top management more female, more international, and younger,” Mr Müller told the FT last September. “I’m German, I’m not female, and I’m not young.” Mr Müller, who was born just outside Karl-Marx-Stadt (now known by its original name of Chemnitz) in the former East Germany, said back then that the role was fun, but also challenging and “costs a lot of energy.” He would be 67 if he served through to the end of his term. alistic valuation assumptions. Aliko Dangote, founder of Nigeria’s Dangote Group, told the Financial Times he was seeking at least two independent directors from Europe for his cement business ahead of an expected listing in London as early as this year. He said he expected to float 10-15 per cent of the business, which operates in more than 10 African countries, and raise between $1.2bn and $2bn. Liquid Telecom, which supplies cable fibre lines across southern, central and east Africa, is also expected to seek a listing as early as this year. “There are a number of companies that are considering coming to market,” said one banker with knowledge of the transactions. “There is interest from investors but there’s a high level of sensitivity to the quality of companies coming to market and the valuation they’re trying to attract.” Mr Chammas said a listing was a next logical step for Vivo, which wanted to broaden its shareholding and allow Vitol and Helios to monetise part of their investment. “We don’t need cash today but this will enable us, in the years to come, to go to the market for future investments,” he said.
A4 BUSINESS DAY C002D5556 Wednesday 11 April 2018 FT NATIONAL BlackRock’s gun-free funds show ethical investing is a good bet The investment manager is creating options for those who want to avoid firearms BROOKE MASTERS Americans fed up with gun violence now have the chance to speak with their purses. Last week, BlackRock, the world’s largest investment manager, said it was creating several options for investors who want to avoid AR-15 rifles and other civilian firearms. Gunmakers and most gun retailers will now be excluded from BlackRock’s broader socially responsible mutual and exchange traded funds. Such funds have historically excluded companies that make cluster bombs, nuclear reactors and cigarettes, while favouring companies that are rated socially responsible. BlackRock’s institutional investors will be offered an even more targeted option: they can screen gun stocks out of their endowments and include gun-free index funds in their employees’ pension plan choices without going the whole hog on ethical investing. This level of pointed shunning is unprecedented for BlackRock. The investment manager began looking at the issue after the February massacre of 17 people at Marjory Stoneman Douglas High School in Florida sparked widespread protests against the US’s lax gun laws. The move also comes shortly after BlackRock’s chief executive, Larry Fink, warned companies that financial performance was not enough — they must also “make a positive contribution to society”. That is a noble idea, but investors have long been wary about the potential impact on their portfolios of trying to do good, while also doing well financially. “Sin stocks” — companies that sell alcohol, tobacco, weapons and gambling — have historically done better than the broader market. And Norway’s recent experience tends to back this up. Its sovereign wealth fund began excluding such stocks from its broad based equity investments in 2004. That decision has cost it about 0.1 percentage points a year. On the other hand, the fund calculated that excluding individual companies over specific environmental, human rights and other ethical issues had boosted its returns by 0.04 percentage points annually. Over a 12-year period, the fund estimated that ethical investing cut returns by 1.6 per cent compared with its equity benchmark. Allianz makes $120m investment Continued from page A3 Britain, Sweden, Germany and elsewhere, which have put equity in the 16-year-old fund. Mr Fintzen added that the loan satisfied Allianz’s fiduciary responsibility to its investors. The interest rate was “more attractive than listed emerging market debt available on the market”, he said. We would only lose money if all the other equity investors are taken out Claus Fintzen Nazmeera Moola, co-head of fixed income at Investec, which manages the fund, called the Allianz investment “a milestone in terms of mobilising capital into infrastructure projects across the continent”. Allianz had decided to invest, she said, because it had understood there was “quite a big gap between perceived risk and the actual experience” of investing in African projects, which range from water supply in Rwanda to solar power in Uganda and a cement plant in the Democratic Republic of Congo. In spite of EAIF’s remit, which includes investing in fragile states, there had only been two debt writedowns out of more than 70 projects in 22 countries, she said. Allianz’s participation could open the way for other insurers to look more seriously at investing in EAIF, or similar African infrastructure funds, she said. Allianz is lending €75m and $25m, both over 12 years. Returning investors to the fund, which has cumulative investments of about $1.3bn, are the African Development Bank and Standard Chartered as well as KFW and FMO, the German and Dutch development banks, respectively. The fund has 40 ongoing projects, half of which are in the power sector. Of those, two-fifths are in renewable energy, mostly solar and hydro. Most of sub-Saharan Africa has huge infrastructure shortages. Only 35 per cent of people have access to electricity, against 78 per cent in south Asia and 96 per cent in east Asia and Latin America, according to the World Bank. It estimates that gross domestic product could be 2 percentage points higher if the power deficit could be fixed. Ms Moola said that, since the 2008 financial crisis and the imposition of Basel III, which imposes stricter capital requirements, banks’ appetite for lending to infrastructure projects in Africa had “completely dried up”. However, while there were legitimate concerns about the risk of default or regulatory changes, she said, deals could be structured in such a “belt and braces” way that they were relatively insulated from political risk. President Buhari Buhari to seek second term as Nigeria’s president Growing doubts over 75-year-old’s health and competence DAVID PILLING Muhammadu Buhari said he would seek re-election as Nigeria’s president in spite of doubts over the 75-year-old’s health and criticism of his first-term performance running Africa’s biggest economy. In pursuing re-election, Mr Buhari has bucked the advice of at least two former presidents who pleaded with him to hand over power to a younger man. Last month, Ibrahim Babangida, a former military leader, reiterated his attack, calling Mr Buhari an “analogue” president in a digital age. Having stated his intention to run in the February 2019 election, Mr Buhari was likely to win the nomination of his All Progressives Congress, according to analysts. Running for the APC against an as-yet-unknown candidate for the opposition People’s Democratic party, he would enjoy significant advantage in a system that favours incumbents, they added. Mr Buhari told the APC’s national executive committee of his intention to stand shortly before he flew to London ahead of a meeting of Commonwealth heads of state. According to Rusal suffered another blow on Tuesday after the London Metal Exchange took steps to stop material produced by the Russian company from being dumped in its warehouses. From April 17, the LME said it would introduce a “temporary conditional suspension on placing Rusal metal” under warrant in warehouses unless the owner could prove that it would not constitute a breach of sweeping US sanctions announced on Friday. “The temporary conditional suspen- Bloomberg, he told delegates he was running in response to “the clamour from Nigerians”. In apparent reference to his war on corruption, he added: “Together we must continue to santise Nigeria’s political environment.” Under Mr Buhari’s presidency, Nigeria’s economy has limped out of its worst recession in 25 years but has been unable to regain much dynamism outside an oil sector that still provides the vast majority of government revenue. The country has also faced several serious security problems, including continuing activity from Boko Haram Islamist militants in the north-east and Fulani herders, whose clashes with settled farmers throughout the country have caused thousands of deaths. Some have blamed Mr Buhari, who is also a Fulani, for not taking more decisive action to prevent the violence. The stock market fell to threemonth lows after Mr Buhari’s announcement, signalling concern about four more years of similar policy. However, Dipo Salimonu, chief executive of a fuels storage company, said there was something to be said for continuity and “having a firm and Rusal suffers blow from London Metal Exchange NEIL HUME sion shall continue until further notice, allowing the LME to engage with stakeholders to determine the appropriate longer-term approach,” the exchange said in a statement. The LME said certain market participants had expressed concern that metal produced or supplied by Rusal after April 6 might constitute a sanctions risk. “In particular, the LME notes concern in the market that, even though the General Licenses provide exclusions after the date of 6 April 2018, they are not sufficiently broad in scope to provide full comfort to market participants that metal produced and supplied within the incorruptible hand at the wheel”. The president had “staunched a lot of the haemorrhage of waste and theft, which has given Nigeria breathing space for new polices, such as in the oil and gas sector and in redesigning tax collection”, he added. Nonetheless, Mr Salimonu also wondered whether “because of his advanced age and frail health he would have stepped aside and let the party field a more dynamic candidate”. Mr Buhari, who had ruled Nigeria once before as a military leader during the 1980s, was the first opposition candidate to win power through democratic elections. He came into office in 2015 on a wave of optimism that he could tackle corruption, curb the militant activity that had paralysed parts of the country and get the economy moving again. Much of that early optimism yielded to disappointment when Mr Buhari took months to set a policy direction or even to appoint a cabinet, a perceived indecisiveness that earned him the nickname “Baba Go Slow”. The view that he was ineffective was compounded by frequent trips abroad for medical treatment and his reputation for being aloof, even from members of his own cabinet. dates of the General Licenses would not be subject to Sanctions.” Rusal is scrambling to shore up its finances in the wake of the sanctions, which have sent shockwaves through financial markets and driven the price of aluminium up 9 per cent as traders and consumers try to find alternative suppliers. Rusal is the biggest producer of aluminium outside China, supplying 3.7m tonnes of the metal last year. Tuesday’s move by the LME present another challenge for the company, which analysts say might have to rescued by the Russian government. Uber handed further legal blow by European Court of Justice Campaigners say decision threatens regulatory protection for tech companies in EU MEHREEN KHAN The European Court of Justice has dealt another legal blow to Uber, just a few months after the Luxembourg court ruled that the ride-hailing app should be regulated like a traditional taxi company. Judges at the EU’s highest court on Tuesday ruled that the French government was within its rights to pass a criminal law in 2014 banning some illegal transport services without first notifying the European Commission of its plans. Tech companies are granted an additional layer of protection from national legislation in the EU with draft laws affecting them needing to be approved by Brussels. Uber had challenged France’s bypassing of the notification system after it was taken to court by a taxi driver in Lille for running its Uber- Pop service that used unlicensed drivers. Uber was fined €800,000 under the law in 2016 after two of its executives were found to have run an illegal service. The ECJ said the EU’s 28 member states were allowed to “prohibit and punish the illegal exercise of a transport activity such as UberPop without having to notify the commission in advance of the draft legislation laying down criminal penalties for the exercise of such an activity”. Campaigners for digital companies said the ruling threatens to reduce the regulatory protection that tech companies have in the EU. The decision is the latest against Uber in Europe. In December the ECJ ruled that Uber should be classified as a taxi service, rather than a purely digital intermediation service, which opened it up to tougher transport national legislation in the EU. Uber has been under intense global scrutiny after a series of crises, including hiding details of a mass data breach from regulators, the alleged use of spy tactics and its failure to report sex attacks by its drivers. Travis Kalanick quit as chief executive last year and was replaced by Dara Khosrowshahi. In London, Uber has appealed against a decision by the regulator to block the renewal of its licence to operate in the capital. The city’s transport authority plans to overhaul regulations for taxis, in a move designed to increase oversight of ridehailing companies such as Uber. The company said in a response to the French decision that the ruling would have little impact on its operations; the UberPop peer-topeer service was suspended in 2015. The company now works only with licensed drivers in most of the EU.