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Japan’s Toshiba president steps down amid acquisition talks

Associated Press

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Japan's Toshiba president steps down amid acquisition talks

The president of Toshiba Corp. stepped down Wednesday, a week after the the Japanese technology and manufacturing giant said it was studying an acquisition proposal from a global fund where he previously worked.

Nobuaki Kurumatani tendered his resignation at a board meeting, and the board accepted, effective Wednesday, Tokyo-based Toshiba said in a statement.

Kurumatani headed the Japan operations of CVC Capital Partners, which proposed the acquisition last week, before taking his post as chief executive of Toshiba in 2018.

Some questions had been raised, both within and outside Tokyo-based Toshiba, about Kurumatani leading the board discussions on the acquisition.

Kurumatani did not attend the online news conference, where two board members explained his resignation and fielded questions.

A company official read his statement that said the resignation was for personal reasons.

“Toshiba is a wonderful company and is Japan’s precious wealth. I love Toshiba deeply,” Kurumatani said in his message.

The CVC deal is estimated to be worth 2 trillion yen ($18 billion) and will turn Toshiba private. Toshiba had said it was giving it “careful consideration.” Osamu Nagayama, a board member, told reporters the proposal lacked details and could not yet be evaluated.

Trading in the company’s shares was suspended when the news hit last week. Shares of Toshiba, whose sprawling business includes making elevators and railways, shot up on the CVC news and have been trading at nearly 5,000 yen ($46).

CVC is a European private equity firm, based in Luxembourg, which has committed nearly $162 billion in funds, managing more than 300 investors. It has declined to comment on the acquisition proposal or the president’s resignation.

But speculation has been growing other funds may offer better prices.

Kurumatani will be replaced as chief executive and president by his predecessor, Satoshi Tsunakawa, who remained on the board, first as COO and currently chairman.

Tsunakawa oversaw some of the recent financial challenges at Toshiba. Before becoming CEO, in his previous stint from 2016, he had headed Toshiba’s medical systems business, now a group company of Japanese camera and equipment maker Canon.

Tsunakawa told reporters Toshiba was ready to embark on growth as “an infrastructure services company.” He promised to work in the interests of shareholders, employees and society overall, and continue to strengthen governance.

“We stand behind the principle of ‘Do the right thing,’ ” he said, delivering the motto in English.

Toshiba, founded in 1875, was long revered as one of Japan’s respected brands, developing the nation’s first radar and microwaves, electric rice cookers and laptop computers.

It also invented flash memory, the ubiquitous computer chips that store and retain data for digital cameras, cell phones and other gadgets. Toshiba no longer makes laptops, and it has sold its computer chips division.

The company’s fortunes began to crumble over its heavy investment in nuclear power. After the March 2011 nuclear disaster in Fukushima, costs of the business ballooned because of growing safety concerns. Some nations are turning toward sustainable energy.

Toshiba also had massive losses from the nuclear power operations of U.S. manufacturer Westinghouse, which Toshiba acquired in 2006. Westinghouse filed for bankruptcy protection in 2017.

In Japan, Toshiba is decommissioning nuclear plants, including the one in Fukushima, where the tsunami 10 years ago set off multiple reactor meltdowns.

In 2015, Toshiba acknowledged it had been systematically falsifying its books since 2008, as managers tried to meet overly ambitious targets. An outside investigation found it had inflated profits and hid massive expenses.

TOKYO (AP) — BY Yuri Kageyama

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Telstra announces $157 million co-investment fund to extend coverage

Karim Husami

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Telstra announces $157 million co-investment fund to extend coverage

Australian operator Telstra has announced a $157 million co-investment fund to generate additional investment in expanding regional mobile coverage.

This funding is in addition to the $118 million that Telstra plans to invest in the next 12 months to expand regional connectivity.

Telstra CEO Andrew Penn said the co-investment fund would run over the next four years and was aimed at enhancing and extending mobile coverage through stimulating infrastructure co-investment with governments, local councils and businesses in areas that would otherwise be difficult to justify on economic grounds.

“Technology is going to play a major role in meeting both of these aspirations – perhaps the most important role. Telecommunications technology is continuing to advance from 3G to 4G, 4G to 5G, from ADSL to NBN and from copper to fibre, satellite and mobile, and this is helping to bring new solutions to solve old problems,” he said in a statement.

Penn added: “In addition to the newly announcement co-investment fund, Telstra would be investing a further AUD 150 million ($118 million) over the next 12 months to improve its regional networks in a number of important areas.”

Both the $118 million and $157 million allotments are both backed up by a number of projects that has been awarded by the federal government, the telco claimed.

This includes the Regional Connectivity Program — which is set to receive $19.3 million in additional funding by the government in the upcoming Budget for 2021-22 — with Telstra working with the federal government to power $43 million worth of network upgrades.

Penn also claimed it was the only major mobile provider to both win projects and commit funding to improve services.

He said the telco has also participated in the federal government’s Mobile Black Spot Program, with it contributing “more than double the capital investment of the rest of the industry put together to build more than two thirds of the mobile black spot towers in the program,” he claimed.

Among the projects are eight mobile coverage improvements from Telstra, two mobile coverage upgrades from Pivotel, three projects upgrading fixed wireless coverage, two improving satellite broadband connectivity, and one project more than $2.53 million to shift from satellite coverage to fiber to the premise in Halls Creek.

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Three Chinese telcos to be delisted from NYSE

Inside Telecom Staff

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Three major Chinese telcos said late last week that they will be delisted from the New York Stock Exchange (NYSE) after the latter denied their requests for appeal, Reuters reported.

The delisting comes in line with the U.S.’ Communist Chinese military companies (CCMC) under the National Defense Authorization Act of 1999, enacted by the former Trump Administration.

The CCMC designation bars any U.S. investors from purchasing any shares or stakes from companies that the government considers to be linked to the Chinese military.

The three telcos – China Mobile, China Unicom, and China Telecom Corp – had filed an appeal request to the NYSE to review their delisting as soon as U.S. President Joe Biden was sworn in as the 46th president back in January.

The telcos noted in separate statements last week, that they expect the NYSE to notify regulators of their delisting after the appeal was rejected.

According to Reuters, the companies had highlighted that the delisting will become effective ten days after the exchange files a Form 25 to the U.S. Securities and Exchange Commission.

The three telcos join the likes of Huawei and ZTE who have also been delisted – however, budget smartphone maker Xiaomi was able to escape the same fate after a U.S. federal judge rolled back the blacklisting on the company citing insufficient evidence that Xiaomi posed a national security threat.

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NY: Broadband cos paid for 8.5M fake net neutrality comments

Associated Press

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The Office of the New York Attorney General said in a new report that a campaign funded by the broadband industry submitted millions of fake comments supporting the 2017 repeal of net neutrality.

The Federal Communications Commission’s contentious 2017 repeal undid Obama-era rules that barred internet service providers from slowing or blocking websites and apps or charging companies more for faster speeds to consumers. The industry had sued to stop these rules during the Obama administration but lost.

The proceeding generated a record-breaking number of comments — more than 22 million — and nearly 18 million were fake, the attorney general’s office found. It has long been known that the tally included fake comments.

One 19-year-old in California submitted more than 7.7 million pro-net neutrality comments. The attorney general’s office did not identify the origins of another “distinct group” of more than 1.6 million pro-net neutrality comments, many of which used mailing addresses outside the U.S.

A broadband industry group, called Broadband for America, spent $4.2 million generating more than 8.5 million of the fake FCC comments. Half a million fake letters were also sent to Congress.

The goal of the broadband industry campaign, according to internal documents the attorney general’s office received, was to make it seem like there was “widespread grassroots support” for the repeal of net neutrality that could give the FCC chairman at the time, Ajit Pai, “volume and intellectual cover” for the repeal.

The agency is supposed to use the comments it receives, from industry and public-industry groups and the public, to shape how it makes its rules.

The FCC did not immediately answer how or if it has changed its commenting process, but the acting chairwoman, Jessica Rosenworcel, said in a prepared statement that “widespread problems with the record” of the 2017 proceedings “was troubling at the time” and the agency has to learn and improve the commenting process.

The fake comments had high-profile victims. In 2018, two senators, Democrat Jeff Merkley of Oregon and Republican Pat Toomey of Pennsylvania, said their identities were stolen to file fake comments for the net neutrality proceeding. “We were among those whose identities were misused to express viewpoints we do not hold,” they wrote to the FCC’s then-chairman, Pai, asking him to investigate the fake comments.

Many expect the FCC to try to reinstate net neutrality rules once a third Democratic commissioner is appointed. The agency is currently split half Democrat and Republican, which makes undoing the repeal unlikely.

Broadband for America’s website says its members include AT&T and Comcast as well as major trade groups for the wireless, cable and telecom industries.

The campaign hired companies known as lead generators which created the fake comments, but that the attorney general’s office had not found evidence that the broadband companies had “direct knowledge of fraud” and thus they had not violated New York law, according to the report.

Still, the report criticized the broadband industry group’s behavior as “troubling,” saying the campaign organizers ignored red flags and hid the broadband industry’s involvement.

The lead generators copied names and addresses they had already collected and said those people had agreed to join the campaign against net neutrality, the report said. One company copied information that had been stolen in a data breach and posted online.

The attorney general, Letitia James, also announced agreements with three of the companies that were responsible for millions of the fake comments, Fluent Inc., Opt-Intelligence Inc. and React2Media Inc., that require them to change practices in future advocacy campaigns and pay $4.4 million in fines. The companies did not reply to requests for comment.

The attorney general’s office and other law enforcement agencies are still investigating “other responsible parties,” according to the report.

AT&T, Comcast and industry trade groups NCTA and USTelecom did not respond to questions.


By TALI ARBEL AP Technology Writer.

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