This past week has seen developments in three entities previously covered in this column, namely Royal Dutch Shell, HealthSouth and Unocal.
After a relationship of nearly 100 years, Royal Dutch Petroleum and Shell Transport and Trading shareholders have voted to do away with the group's dual structure. The separate arms of the group will now be merged into a single entity to be known as Royal Dutch Shell plc.
Quite apart from the greater transparency that is anticipated from a corporate governance point of view, the restructuring will give the group more flexibility with respect to the consideration to be offered for acquisitions.
In New York, attorney-general Elliot Spitzer and the Securities and Exchange Commission (SEC) collectively must be feeling sick to the stomach at the outcome late last month of the trial of the former chief executive of HealthSouth, Richard Scrushy.
This case had been held up as the test case for the effectiveness of the legislative measures introduced to curb corporate shenanigans such as manipulation of earnings.
Scrushy has been acquitted on all fraud, conspiracy and money laundering charges, notwithstanding specific testimony for the prosecution by five former HealthSouth finance officials.
The jury in the Scrushy case will be remembered for its numerous notes to the judge seeking simplistic directions, unpressured deliberation over many short sessions, and apparent inability to get their minds around some of the finer points relating to the charges.
To its credit, the SEC has not given up. It is now preparing to pursue a civil action against Scrushy, in which $786 million (about R5.4 billion) will be sought in penalties and "disgorgement". The SEC may have a better chance this time around in that its case need only be proved by a "preponderance of evidence" rather than the higher "reasonable doubt" standard required for conviction in criminal cases.
The battle between Chevron and the China National Offshore Oil Corporation (Cnooc) for Unocal is becoming more intense.
As a minimum in contested takeovers, the battle is for the hearts and minds of shareholders in the target company. In the Unocal tussle, the quest has extended to the hearts and minds of the American public.
The rhetoric of the protagonists in the Unocal matter seems to be reversed. On one hand, Cnooc, notably controlled by a communist government, is ironically appealing to all parties to let the market evaluate the merits of its bid and then decide. Cnooc has repeatedly highlighted the fact that its bid is significantly higher than Chevron's.
Chevron, on the other hand, almost appears to be playing out a spoiling, even desperate, role. It seems bent on taking the American public along with it. Among other emotive issues, it is playing up the fact that Cnooc's finances will come from low-interest or no-interest loans from Chinese banks, arguing that it is a de facto government subsidy.
The house of representatives resolved by 398 votes to 15 that allowing Cnooc to buy Unocal would "threaten to impair the national security of the US".
William Reinsch, a member of the US-China economic and security commission, an advisory committee to the US Congress, observed that "what we are seeing in Washington shows the hysteria about China".
If one looks through Chevron's nationalism, convenient or otherwise, and allows the numbers to speak, Unocal shareholders seem to be better off in a cash value sense with Cnooc's offer.
- Bert Chanetsa is a corporate and financial analyst and a director of Chanetsa Incorporated