Goldman ends bond scandal for $3.9B
KUALA LUMPUR, Malaysia — Malaysia’s government said Friday it has reached a $3.9 billion settlement with Goldman Sachs in exchange for dropping criminal charges against the bank over bond sales that raised money for the 1MDB sovereign wealth fund, which was looted of billions of dollars in a massive scandal.
Malaysian and U.S. prosecutors had alleged that the bond sales organized by Goldman provided one of the means for associates of ex-Prime Minister Najib Razak to steal billions over several years from a fund that was ostensibly set up to accelerate Malaysia’s economic development.
Najib is on trial on multiple corruption charges. Goldman and two of its former executives were charged with alleged breaches of securities laws including misleading investors over the bond sales. Another 17 former and current Goldman executives were also charged over alleged roles in the fraud.
The finance ministry said Goldman agreed to pay $2.5 billion in cash and guarantee that Malaysia gets at least $1.4 billion in proceeds from assets bought with the bond money that have since been seized.
It said the deal was a sharp jump from Goldman’s previous offer of $1.75 billion in 2019 and will avoid lengthy and costly court battles.
Oilfield firm slashes jobs amid rout
HOUSTON — Schlumberger is cutting more than 21,000 jobs as the global coronavirus pandemic quashes demand for energy and oil prices are routed. The company will pay more than $1 billion in severance benefits.
The job cuts announced Friday, about a quarter of its entire workforce, puts the number of people employed by the world’s largest oilfield services company close to where it was at the start of the oil and gas fracking boom that upended global energy markets and put the U.S. on top.
“This has probably been the most challenging quarter in past decades,” said CEO Olivier Le Peuch.
Crude prices have dropped 33 percent this year, and natural gas has fallen 17 percent, as much of the world took shelter from the coronavirus. Almost all major users of energy have been crippled because of the lockdown.
McDonald’s to require masks in US
NEW YORK — McDonald’s says it will be requiring customers to wear face coverings when entering its U.S. restaurants as the number of new virus cases continue to surge in many states. The move, announced Friday, will be in effect on Aug. 1.
McDonald’s joins a parade of companies issuing mask mandates for its customers in the last week or so and includes Walmart, Target, and Kohl’s. Starbucks also recently issued a mask mandate for customers who visit its company-owned café locations in the U.S.
McDonald’s said that 82 percent of its restaurants are in states or localities that require facial coverings for both crew and customers. But it said it is “important we protect the safety of all employees and customers,” according to a joint statement from McDonald’s USA president and the chair of the National Franchise Leadership Alliance.
The iconic fast food chain also said that in cases where customers decline to wear masks, it will “put in place additional procedures to take care of them in a friendly, expedited way.”
McDonald’s said it will delay the re-opening of its dining rooms for another 30 days. It is also adding protective panels in the back and front of the restaurant to help with social distancing.
Sales of new homes jump 13.8%
WASHINGTON — Sales of new homes rose a sharp 13.8 percent in June, the second straight increase after two months when sales plunged as the country went into lockdown because of the coronavirus.
The Commerce Department reported Friday that the June gain pushed sales of new homes to a seasonally adjusted annual rate of 776,000, a better-than-expected performance. The increase follows a 19.4 percent increase in May.
The two months of sales gains followed two months of sharp declines in sales in March and April as much of the country went into lockdown.
A separate report Wednesday showed sales of previously owned homes surged 20.7 percent in June to a seasonally adjusted annual rate of 4.72 million. Even with the gain, which followed three months of declines, new home sales remain about 20 percent below pre-pandemic levels.
The median price of a new home sold in June increased to $329,200, up 5.6 percent from a year ago. Sales are being helped by ultra-low mortgage rates.
FAA tells airlines to check some 737s
WASHINGTON — Safety regulators issued an emergency order directing airlines to inspect and if necessary replace a critical engine part on popular Boeing 737 jets after four reports of engines shutting down during flights.
The Federal Aviation Administration said its order affected about 2,000 twin-engine passenger jets in the United States.
Corrosion of the valves on both engines could lead to a complete loss of power without the ability to restart the engines, forcing pilots to land somewhere other than an airport, the FAA said in the order, dated Thursday.
Boeing Co. said that with planes being stored or used less often during the coronavirus pandemic, “the valve can be more susceptible to corrosion.” The company said it is providing inspection and parts-replacement help to airplane owners.
The emergency order applies to versions of the 737 called the NG and Classic, the latter of which are no longer in production but remain in some airline fleets. The directive does not apply to the newer Boeing 737 Max, which has been grounded worldwide since March 2019 after two crashes that killed 346 people.
Airbus moves to end US tariffs
PARIS — European planemaker Airbus says it is taking the last step to end 16 years of litigation with the United States at the World Trade Organization over subsidies.
The manufacturer and Boeing Co. rival said it will end a system of financial support from France and Spain that the WTO had deemed illegal and unfair to rival Boeing. The Trump administration used the case as justification to slap tariffs on $7.5 billion worth of European exports.
The U.S. tariffs covered not only Airbus planes but also a range of typical European exports, from gouda cheese to single-malt whiskey.
The Airbus case centers on so-called launch aid from European countries that WTO judges ruled had impeded sales for aircraft from Boeing in the twin-aisle and very large aircraft markets.
Airbus said Friday that it had agreed to make changes to this system of financial support.
“After 16 years of litigation at the World Trade Organisation, this is the final step to stop the long-standing dispute and removes any justification for U.S. tariffs,” the company said.
Brooks Brothers lures potential suitor
NEW YORK — A retail venture owned by licensing company Authentic Brands Group and mall owner Simon Property Group has entered into an agreement to buy the iconic Brooks Brothers for $305 million.
The offer from Sparc Group announced late Thursday has been designated as a “stalking horse” and is subject to court approval and any higher or better offers as part of the company’s ongoing auction process. A court hearing to approve the bid has been set for Aug. 3. and competing offers are due by Aug. 5. The sale process is expected to take place Aug. 11.
The 200-year-old New York-based clothier, which has dressed nearly every U.S. president, filed for bankruptcy protection earlier this month. At the time, it had more than 200 stores, including a downtown Charleston location on King Street that has not reopened since the COVID-19 lockdown.
Under the terms of the agreement, Sparc intends to purchase substantially all the company’s global business operations as a going concern. Sparc has also committed to acquiring at least 125 Brooks Brothers retail locations.