Corporate Robbery - state sanctioned

In the Gas Natural v.s Endesa takeover battle, a report in El Mundo today states that the Chairman of Endesa doubled his personal holding in Endesa on Friday (news broke of the takeover offer on the following Monday).
Even though Endesa has rejected the takeover offer as hostile and insufficient, the Chairman seems to have decided that he can personally profit from the move. Claims by company representatives that there is no connection between the two events just aren't enough. The CNMV needs to get on the case double quick, examine all trading in Endesa and Gas Natural derivatives as well and come down very hard if there is evidence of wrong doing.
So much for corporate governance ... let's not allow state sanctioned corporate greed.

As an afterthought, the Chairman could quickly off-load his recent purchase (50,000 shares) and donate the profits to the Katrina hurricane victims or a similar cause closer at home - US$100,000 may not be a big contribution, but its a big profit on holding shares for two or three days.

Katrina and caos in New Orleans

Whilst most of my comments are limited to Spain or other countries that I am familiar with, the big surprise about the Katrina hurricane aftermath, looking from a distance, is how it took so long to get any real response moving.
I've read lots of comments and articles from a variety of sources in recent days and figure that others are much better placed to provide detailed analysis.

But the question needs to be asked: don't the American people expect their taxes to be used to help in a situation like this? We know the US government has been running a deficit for years, but are American citizens happy with the idea that their taxes finance a huge military operation in Iraq but there is a shortage of support at home. Obviously the scale of the disaster is so great that lots of people are only too willing to help, offering shelter to people, donating money to relief funds and so on.

It was amazing to see the massive traffic jams as the city was evacuated. So the authorities got it right - warned people to get out of the area - and the people who could responded.
I don't trust the media images that we get any more. I don't need to see senior US politicians helping to put food in emergency boxes just for the camera... and if the focus moves to the looters, the issue is moved from one of lack of disaster response and organisation to one of law and order. An effective way of avoiding criticism. Thankfully somewhere down the track there will be an enquiry about why money was never spent on strengthening the dyke, why it took so long to respond after the hurricane, how people where trapped in official shelters without water and food and something will be learned from this tragedy, but not before we are fed more images of death and suffering and more misinformation.

The initial death figures reported by media after the hurricane had passed were between 50 and 100 - but then the dyke burst ... and the disaster really started.

Lets hope other Administrations around the world learn from this disaster. Those are our taxes which you are administering in our best interests - to provide a series of services that include security, health, education, civil defence, economic planning and many others. We expect you to manage these services efficiently and effectively. (Especially in the world's largest economy)

State Corporations, Mergers and Politics

Yesterday's big business story was the rumoured takeover bid by Gas Natural for Endesa to create a Spanish and European energy giant.
A quick glance at the television news reports this morning pitched this as not only a business operation but also a political move by the Catalan savings bank, la Caixa, which is the leading shareholder in Gas Natural and a major shareholder in Repsol (which also holds shares in Gas Natural).
The socialist government is playing down any question of political interests, but naturally the centralist opposition party has hit the alarm bell.
First of all the electricity, gas and petrol industries in Spain would be best described as oligopolies. Inevitably the Government plays a role in setting prices (gas sector) or limiting price increases (electricity) or setting taxes (petrol). That said, both companies are publically listed companies ... so the decision of whether or not to except the takeover bid is an issue for shareholders, not the Government.
There may be legitimate concerns about a lessening of competition, but there is an Energy Commission that is responsible to monitor such questions and the takeover would be subject to clearance on issues of competition. If the mechanisms exist, let them work without political involvement.

And what if the bid is politically motivated? La Caixa is a Barcelona based savings bank - the third largest banking institution in Spain after the giants, BBVA and Santander. Caja Madrid - the leading shareholder of Endesa is a large Madrid based savings bank. Now if the Caja Madrid was smart it might just take the premium being offered in the takeover bid and find some other healthy businesses to invest in. Who really cares whether the head office of the resulting merged company (should the operation succeed) is in Barcelona instead of Madrid - apart from the politicians? The employees faced with moving might opt to take generous severance pay or decide that living on the Mediterranean isn't such a bad alternative.