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More troubles for Boeing as shareholders sue company over 737-Max crashes
Shareholders of @Boeing are suing the company for “defrauding” when it concealed safety deficiencies in its 737 MAX planes.
Shareholders of Boeing Co are suing the company for “defrauding them” when it concealed safety deficiencies in its 737 MAX planes. The shareholders also accused the United States plane maker of putting profit ahead of air plane safety.
The company has recently been faced with all sorts of backlash ever after a second Boeing 737-Max plane belonging to Ethiopian Airways dropped from the sky in March, killing all 157 passengers on board; including one Nigerian.
The first Boeing 737-Max model that crashed in October killed all 189 passengers onboard of Lion Air.
These crashes resulted in a widespread, global banning of the plane model. Boeing Co’s market value also crashed by as much as $34 billion within two weeks of the Ethiopian Airlines crash which occurred on March 10, 2019.
And now, a class action suit from shareholders
The shareholders’ lawsuit against Boeing Co is in the form of a class action which seeks damages for alleged securities fraud violations. The suit was filed at the Chicago federal court, and named Chief Executive Dennis Muilenburg and Chief Financial Officer Gregory Smith as defendants.
What provoked the class action
The shareholders complained that Boeing Co “effectively put profitability and growth ahead of air plane safety and honesty” by rushing the 737 MAX to market to compete with rival, Airbus SE. By so doing, the company left out “extra” or “optional” features designed to prevent the Ethiopian Airlines and Lion Air crashes.
Part of the complaints included Boeing’s statements about its growth prospects and the 737 MAX were undermined by its alleged conflict of interest from retaining broad authority from federal regulators to assess the plane’s safety.
Concealing of negative information cost shareholders: The lead plaintiff, Richard Seeks, said he sold the 300 Boeing shares he bought early March at a loss, adding that the shortcomings of Max models began to unravel after the Ethiopian Airlines crash.
The lawsuit seeks damages for Boeing stock investors from Jan. 8 to March 21. The case is Seeks v Boeing Co et al, U.S. District Court, Northern District of Illinois, No. 19-02394.
Other cases against Boeing: There are many other lawsuits over the crashes, including by victims’ families and by participants in its employee retirement plans.
Crashes drag down orders for Boeing-737 MAX in Q1 2019
The orders for delivery placed on Boeing 737 Max models are beginning to drop, even as Boeing Co announced it recorded zero demand in the first quarter of 2019. This is a significant drop in the history of the company.
The Boeing Max model had been the best-selling model in the history of the American plane manufacturer. However, total demand fell to 95 aircraft from 180 a year earlier.
The company had cut monthly production of 737 to 42 planes from 52, Boeing disclosed last week.
Around the World
MTN Group runs into trouble in the US, faces new allegation
Some Washington based law firms filed the new amended complaint, on Friday, as they alleged MTN’s “conduct targeted the United States” by executing a strategy reliant on dominating markets in unstable countries not allied with Washington.
Telecoms giant, the MTN Group is facing a new set of allegations in the United States.
According to Reuters, some Washington based law firms filed the new amended complaint, on Friday, as they alleged MTN’s “conduct targeted the United States” by executing a strategy reliant on dominating markets in unstable countries not allied with Washington.
The telco, which is the largest telecoms company in Africa, allegedly aided militant groups in Afghanistan, including paying protection money, in an amended lawsuit filed on behalf of hundreds of families of US soldiers.
The initial lawsuit was aimed at 8 multinational companies which include MTN, security firm G4S, US infrastructure group Louis Berger and consultancy Janus Global that operated in Afghanistan and Iran between 2009 and 2017.
READ MORE: Two MTN Group Execs have resigned due to “personal reasons”
The suit which was filed in December 2019 in the United States District Court in the District of Colombia, alleges that these companies violated the US Anti-Terrorism Act by paying protection money to al-Qaeda and the Taliban.
MTN also allegedly violated the Anti-Terrorism Act by paying protection money of more than $100 million to al-Qaeda and Taliban so that its cellular towers would not be targeted for destruction. The telecoms firm deactivated those towers at night, preventing US intelligence operations,
MTN, however, has denied the allegations, asking the court to dismiss the original suit.
This appears to be another round of fresh controversy for Africa’s largest mobile operator, which has had running battles in some countries, especially with an alleged security breach.
Meanwhile, the Nigerian subsidiary was fined $5.2 billion by the Nigerian Communications Commission (NCC) in 2015 for partial compliance of regulatory guidelines by not disconnecting improperly registered subscribers’ identification module.
READ MORE: MTN Nigeria: Accelerated growth in data revenue to buoy earnings despite soft macro conditions
The compliance audit carried out by NCC on the network showed that 5.2 million customers lines were not deactivated as had been directed and so were fined the sum $1,000 for each unregistered SIM according to the Telephone Subscribers regulation law.
The federal government feared that this might have contributed to the security crises in the country. The fine was later reduced to $3.2 billion after pressure and negotiations with the South African government and the telecoms firm.
The telecoms giant was also criticized for its activities in Iran’s telecommunication sector. A US-based advocacy, united against nuclear Iran alleged that MTN technology is enabling the Iranian government to locate and track individual cellphone users which it says as a violation of users’ human rights.
In 2012 it was alleged that MTN Group may have been complicit in securing American telecommunications technology from sun microsystems, Hewlett-Packard and Cisco Systems on behalf of Irancell in violation of trade sanctions against Iran.
Around the World
Buhari nominates Okonjo-Iweala as DG World Trade Organization
President Muhammadu Buhari nominated the former Minister of Finance and Coordinating Minister of the economy, Ngozi Okonjo Iweala, as the Director-General of the World Trade Organization (WTO).
President Muhammadu Buhari has nominated the former Minister of Finance and Coordinating Minister of the Economy, Ngozi Okonjo Iweala, as the Director-General of the World Trade Organization (WTO).
This was seen in a tweet posted by the Presidential aide on Digital and New Media, Tolu Ogunlesi, in the early hours of Friday, June 5, 2020.
In the statement, Ogunlesi said that the current Director-General of the intergovernmental organization, Roberto Azevedo, is stepping down from his position on August 2020, a year ahead of the end of his tenure.
READ ALSO: Naira gains N68 against $1 at 12-month forward market, as devaluation concerns ease
Azevedo, who has been the head of the WTO since 2013, is stepping down at this critical period of global economic crisis and the trade war between the United States of America and China. The WTO head said this is the best way to avoid my chaos at the alliance, which has witnessed attacks from US President, Donald Trump.
This means that the election that was earlier scheduled for 2021 when his tenure was supposed to expire might be coming up much earlier for a new four-year term.
READ MORE: Meet Ibrahim Agboola Gambari, President Buhari’s new Chief of Staff
Tolu Ogunlesi in his statement said, ”President Muhammadu Buhari has nominated Okonji-Iweala as Nigeria’s candidate for the position of the Director-General of World Trade Organization. DG Azevedo is stepping down in August 2020, a year earlier, so the election of the new DG, originally scheduled for 2021, may take place much earlier”.
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President @MBuhari has nominated @NOIweala as Nigeria’s candidate for the position of DG of @wto.
DG Azevedo is stepping down in August 2020, a year early, so the election of a new DG, originally scheduled for 2021, may take place much earlier.
— tolu ogunlesi (@toluogunlesi) June 4, 2020
Details later…
According to a monitored report, President Buhari withdrew the candidacy of Nigeria’s permanent representative to WTO, Yonov Frederik Agah, for the same position.
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AfDB agrees to the review of ethics committee’s report on Akinwumi Adesina
The independent review shall be conducted by a neutral high calibre individual with unquestionable experience, high international reputation and integrity within a short time period of not more than two to four weeks maximum, taking the Bank group’s electoral calendar into account.
The Bureau of the Board of Governors of the African Development Bank (AfDB), has agreed to authorize an independent review of the report of the ethics committee of the bank’s board of directors on the allegations levied against the President of the Bank, Akinwumi Adesina.
This was contained in a communique which was released and signed by the Chairperson of the Bureau of Board of Governors, Ms Niale Kaba, after the meeting of the bureau board of governors on June 4, 2020, with respect to the complaints against the President of the bank.
In taking the decision, the Bureau agreed that AfDB’s ethics committee performed its role on this matter in accordance with the applicable rule under resolution B/BG/2008/11 of the board of governors and that the Chairperson of the Bureau of Board of Governors performed her role in accepting the findings of the ethics committee in accordance with the said resolution.
READ MORE: AfDB’s Akinwumi Adesina hits back, denies allegations against him
The bank’s board of governors in its statement said, ‘’Based on the views of some Governors on the matter and the need to carry every Governor along in resolving it, the Bureau agrees to authorize an independent review of the report of the ethics committee of the board of governors relative to the allegations considered by the ethics committee and the submissions made by the President of the Bank Group thereto in the interest of due process.
‘’The independent review shall be conducted by a neutral high calibre individual with unquestionable experience, high international reputation and integrity within a short time period of not more than two to four weeks maximum, taking the Bank group’s electoral calendar into account.
‘’The Bureau agrees that, within a three to six months period and following the independent review of the ethics committee report, an independent comprehensive review of the implementation of the bank’s group whistleblowing and complaints handling policy should be conducted with a view to ensuring that the policy is properly implemented, and revising it where necessary, to avoid situations of this nature in the future.’’
READ ALSO: Akinwunmi Adesina receives highest honour of the Republic of Liberia
Following the allegations of unethical conducts, questionable appointments and contract awards by a group of whistleblowers and the subsequent clearance of all charges by the AfDB’s ethics committee, the United States Government, who is the largest shareholder outside Africa, asked for an independent probe of those allegations.
The US treasury secretary questioned the integrity of the committee’s process as well as the internal processes of the bank.
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Adesina, a few days ago, met with President Muhammadu Buhari, where he assured of the country’s support towards his travails and his second term bid for the Presidency of the multilateral institution.
