Jes Staley’s ‘serious failure of judgment’ | USAEMALL.com

One thing to start: The US Treasury department has called on Congress to scrap a provision in Donald Trump’s flagship budget bill that would allow Washington to raise taxes on foreign investments, reversing a plan that had spooked Wall Street.

And a scoop: The private equity owner of the former KPMG restructuring and advisory business Interpath is poised to appoint bankers to manage a sale of the company at a target valuation of about £800mn.

In today’s newsletter:

• Jes Staley versus the FCA

• Unilever starves for style 

• The New World cash crunch 

Jes Staley’s bad day in court 

As a former investment banker, Jes Staley is no stranger to high risk, high reward plays.

So even though the odds of overturning a lifetime ban imposed on the former Barclays chief by UK regulators over his ties to convicted sex offender Jeffrey Epstein were slim, he decided to challenge it anyway. 

But at what cost? 

Staley’s cross examination in a London court in March was so gruelling that his legal team claimed he had been publicly humiliated. 

Meanwhile, the banker said he had put his marriage at risk, after he admitted to having sexual intercourse with one of Epstein’s employees, and was visibly enraged at questions over his daughter Alexa Staley’s ties to the disgraced financier to whom she had referred to as “uncle Jeffrey.”

After all that, Staley found out on Thursday that the high-stakes legal battle hadn’t paid off.

Judge Timothy Herrington of the Upper Tribunal sided with the Financial Conduct Authority in its decision that Staley had acted “recklessly” and “without integrity” by providing misleading information regarding his ties to Epstein.

The judgment, which runs to 93 pages, makes for interesting reading. 

At the heart of the dispute are two representations made by Barclays in a letter it sent to regulators in October 2019: that Staley “did not have a close relationship” with Epstein and that they last communicated “well before he joined Barclays in 2015”.

But a trove of emails handed to the FCA by Staley’s former employer JPMorgan Chase a few weeks later seemed to indicate otherwise. 

The now infamous exchanges about Snow White and Beauty and the Beast, declarations of profound friendship and references to each other as “family”, were read out in court and helped convince the judge (and even apparently Staley himself who at one point conceded Epstein had been a “friend”) they were close. 

Herrington also sided with the FCA on claims that Staley had communicated with Epstein through his daughter Alexa after he became Barclays’ chief executive. 

In a statement through his lawyer, Staley said he was “disappointed by the outcome” and that “as the Tribunal accepted, I was never dishonest”. 

Herrington did point out several inconsistencies between Staley’s written evidence and that given during cross-examination, not least that the American banker admitted he knew as early as 2010 that Epstein had lied to him in 2006 about the ages of Epstein’s accusers.

“What he told [the FCA] in an interview, which was that he had no idea of the conduct being alleged, was also untrue,” the judge wrote. 

Though Staley has failed to rehabilitate his image, he may find solace in the fact that the judge reduced his initial fine of £1.8mn by 40 per cent. Those lawyers aren’t cheap.

Unilever’s pivot to vanity 

Fernando Fernandez has been pressing to offload chunks of Unilever’s food assets ever since he took over as chief executive in March. 

And now the conglomerate, which sells everything from detergent to pot noodles, is swapping food for high-margin beauty brands. 

Unilever on Monday agreed to buy the private equity-owned men’s toiletries brand Dr. Squatch. It paid $1.5bn for the brand, the FT’s Madeleine Speed and DD’s Ivan Levingston reveal. It comes months after Unilever acquired the premium toiletry brand Wild earlier this year.

Now we know Fernandez is willing to pay top dollar to reshape the consumer products giant. Dr. Squatch isn’t the first beauty brand deal with an undisclosed multibillion-dollar price tag. The FT revealed in 2023 that Kering had paid €3.5bn to acquire Creed.

Fernandez has laid out a plan to shift Unilever’s portfolio from foods to higher-margin personal care products by selling a slew of unprofitable food brands.

The list of brands on the block is long. Unilever has struck deals to sell the Dutch brands Conimex and Unox, as well as plant-based brand The Vegetarian Butcher and is shopping its snack brand Graze.

Food has ultimately been a financial sinkhole for Unilever. Some shareholders, such as David Samra, a portfolio manager at Artisan Partners, argue more selling is needed in Unilever’s foods unit. 

Fernandez’s billion-dollar soaps acquisition comes as he still has a long list of challenges ahead. Unilever’s ice cream business, which is in the process of a demerger, has become a reputational liability. 

The conglomerate’s subsidiary Ben & Jerry’s is suing its parent for attempting to silence its activism on Gaza.

With Dr. Squatch, Fernandez is leaning on influencer marketing campaigns to change the conversation. The expensive soap brand has a slate of ad campaigns — including Sydney Sweeney in a bubble bath and Mike Tyson in an ice bath — that Unilever hopes bring it the right kind of buzz.

Cheng family property giant’s race to refinance 

If you’ve ever stayed at a Rosewood Hotel or bought a piece of jewellery from Chow Tai Fook, you’ve interacted with assets controlled by Hong Kong’s powerful Cheng family.

But the family’s New World Development property company has been in the trenches recently. 

In a plot twist that wouldn’t be out of place in the TV show Succession, Adrian Cheng — grandchild of the company’s founder Cheng Yu-tung — abruptly stepped down as CEO of the property company last September.

That was after the company reported an annual loss of HK$20bn, its first one in more than two decades.

Analysts and insiders told the FT the company launched an “aggressive” debt-fuelled expansion, including for mainland Chinese commercial properties and a new mall.

The company is also caught in the wider headwinds of the Chinese property sector and economic slowdown. 

NWD has been locked in negotiations over refinancing its bank debt, while it also suspended interest payments on some perpetual bonds.

If the company isn’t able to get its affairs in order, it could hit the Hong Kong economy hard, with NWD bank loans accounting for about 7 per cent of total Hong Kong commercial real estate loans, according to Barclays. 

The company told the FT it did not comment on market rumours.

Bloomberg has reported the developer has secured written commitments for loan refinancing from people close to the matter, but the deal hasn’t officially closed.

Even if it formally restructures its bank debt by offering up its assets as collateral, including the crown jewel Victoria Dockside property in Kowloon, the question remains how bondholders will make out in any refinancing.

Job moves

• JPMorgan has appointed Anthony Diamandakis as vice-chair. He joins from Citi, where he was global head of asset managers franchise. 

• Anna Wintour is stepping down as editor of US Vogue. She will maintain her position as Condé Nast content chief and Vogue global editorial director. 

• BCG has promoted Christin Owings to managing partner for the UK. She succeeds Jess Frame, who will join Halfords. 

Smart reads

The next crisis They say no two financial crises are the same. The FT’s Pilita Clark argues that after CDS and CDOs brought down the banking system in 2008, it is climate shocks that could bring on the next big financial catastrophe. 

Posh-plastic Spenders who rely on exclusive credit card benefits as a lifestyle subsidy are in for a rude awakening as annual fees surge. It further shows credit cards are a gold mine for American Express and JPMorgan Chase, says Lex. 

Almost American A mere week after its “Made in the USA” debut, Trump Mobile has walked back its promise that the mobile phone will actually be made in America. Now it will be “designed with American values in mind”, the FT writes. 

News round-up

White House says decision on nominating next Fed chair not ‘imminent’ (FT)

Private equity firm HIG targets £800mn for sale of ex-KPMG restructuring unit (FT)

Nike shares surge 10% on turnaround hopes despite worst results in years (FT)

Uber in talks with its founder, Travis Kalanick, to fund self-driving car deal (NYT)

Fears over US debt load and inflation ignite exodus from long-term bonds (FT)

Minister promises to curb powers of UK’s financial ombudsman (FT)