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Huawei Founder Top Executives To Pay 469000 Fine For Management Oversight

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HONG KONG – Top executives of Huawei Technologies Co [HWT.UL], including founder Ren Zhengfei, will pay a self-imposed fine totaling 3 million yuan ($469,000) for management oversight of some quality breaches at the firm, an internal company memo shows.

In a notice sent to Huawei staff on Jan. 17, Ren said there had been cases of “quality breach and business falsification” at some business units in recent years, and the board had decided to hold key leaders responsible.

Employees of the Chinese tech firm confirmed the contents of the memo, a copy of which was seen by Reuters.

Ren, who did not provide any details about the breach, was fined 1 million yuan, while Huawei’s three rotating CEOs – Guo Ping, Eric Xu, Ken Hu – and human resources president Jason Li were fined 500,000 yuan each, according to the memo.

Founded in 1987 by Ren, an ex-People’s Liberation Army officer, Huawei is collectively owned by its employees and known for a culture of strong discipline including self-criticism.

The Shenzhen-headquartered company has some 180,000 staff and has grown rapidly in recent years to become China’s biggest maker of telecom equipment and smartphones.

“Ren Zhengfei did not issue this penalty in response to any specific event, but to encourage the management team to reflect on past management and decision-making gaps,” Huawei told Reuters in a statement.

The fine in question relates to incidents uncovered during an internal audit, Huawei added.

According to a person briefed on the matter, Huawei’s northern and eastern European regional business, including its Poland office, was found to have inflated sales data.

An internal memo was put out last week announcing a demotion and fine for four regional leaders involved, including Huawei’s northern and eastern Europe president Jim Lu Yong, said the person, who did not want to be named because of the sensitivity of the matter.

Lu declined to comment when reached by Reuters by phone.

($1 = 6.3980 Chinese yuan renminbi)

Reporting by Sijia Jiang;

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Japan Raps Coincheck Orders Broader Checks After 530 Million Cryptocurrency Theft

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TOKYO – Japan’s financial regulator said on Monday it would inspect all cryptocurrency exchanges and ordered Coincheck to get its act together after hackers stole $530 million worth of digital money from its exchange in one of the biggest cyber heists on record.

The theft highlights the vulnerabilities in trading an asset that global policymakers are struggling to regulate and the broader risks for Japan as it aims to leverage the fintech industry to stimulate economic growth.

The Financial Services Agency (FSA) on Monday ordered improvements to operations at Tokyo-based Coincheck, which on Friday suspended trading in all cryptocurrencies except bitcoin after hackers stole 58 billion yen ($534 million) of NEM coins, among the most popular digital currencies in the world.

Coincheck said on Sunday it would return about 90 percent with internal funds, though it has yet to figure out how or when.

The NEM coins were stored in a “hot wallet” instead of the more secure “cold wallet”, outside the internet, Coincheck said. It also does not use an extra layer of security known as a multi-signature system.

The FSA said it ordered Coincheck to submit an incident report and measures for preventing a recurrence by Feb. 13.

If necessary, it will conduct on-site inspections of other exchanges, an official told a briefing.

The regulator said it has yet to confirm whether Coincheck had sufficient funds for the reimbursement.

Japan started to require cryptocurrency exchange operators to register with the government only in April 2017, allowing pre-existing operators such as Coincheck to continue offering services ahead of formal registration.

The FSA has registered 16 cryptocurrency exchanges so far, and another 16 or so are still awaiting clearance. Coincheck’s application was made in September.

“It’s been long said that cryptocurrencies are a solid system but cryptocurrency exchanges are not,” said Makoto Sakuma, research fellow at NLI Research Institute.

“This incident showed that the problem has not been solved at all. If Coincheck screws up its crisis management, that could deal a blow to the current cryptocurrency fever.”

NEM fell to $0.78 from $1.01 on Friday but recovered to $0.97 on Monday, according to CoinMarketCap. Crypto-currency related shares mostly rose in Tokyo, with GMO Internet, which offers cryptocurrency exchange service, gaining 5.7 pct.

CRYPTOCURRENCY RISKS

Singapore-based NEM Foundation said it had a tracing system on the NEM blockchain and that it had “a full account” of all of Coincheck’s lost NEM coins. It added that the hacker had not moved any of the funds to any exchange or personal accounts but that it had no way to return the stolen funds to its owners.

In 2014, Tokyo-based Mt. Gox, which once handled 80 percent of the world’s bitcoin trades, filed for bankruptcy after losing around half a billion dollars worth of bitcoins. More recently, South Korean cryptocurrency exchange Youbit last month shut down and filed for bankruptcy after being hacked twice last year.

World leaders meeting in Davos last week issued fresh warnings about the dangers of cryptocurrencies, with U.S. Treasury Secretary Steven Mnuchin relating Washington’s concern about the money being used for illicit activity.

Many countries have clamped down on exchanges.

South Korea will ban cryptocurrency traders from using anonymous bank accounts to crack down on the criminal use of virtual coins. China has ordered some exchanges to close, with the aim of containing financial risks.

But Japan has taken a different tack, becoming last year the first country to introduce national-level regulation of cryptocurrency exchanges.

The move, intended to protect consumers and stymie money laundering, was praised by many traders and operators as progressive.

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Japans Rakuten To Acquire Asahi Fire For 45 Billion Yen

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TOKYO – Japanese e-commerce company Rakuten Inc said on Monday it would acquire Asahi Fire & Marine Insurance Co Ltd for 45 billion yen ($413.6 million), its latest move to diversify beyond its online shopping site.

Rakuten said it would launch a tender offer and pay 2,664 yen per share of Asahi Fire, a property insurance firm owned by Nomura Holdings and its subsidiary. Nomura confirmed the tender offer in a separate statement.

Reporting by Minami Funakoshi;

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Google Says Invests In Indonesian Ride-hailing Firm Go-jek

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SINGAPORE – Google has invested in Indonesian ride-hailing firm Go-Jek, as part of its strategy to support and participate in the growth of Indonesia’s internet economy, Caesar Sengupta, a vice president at Google said in a company blog.

“This investment lets us partner with a great local champion in Indonesia’s flourishing startup ecosystem, while also deepening our commitment to Indonesia’s internet economy,” Sengupta said in a post titled “Investing in Indonesia.” bit.ly/2nmqPAf

This month, sources told Reuters that Alphabet’s Google, Singapore state investor Temasek and others were investing in Go-Jek as part of a $1.2 billion fundraising round, bolstering the Indonesian start-up in its battle with deep-pocketed rivals Grab and Uber.

Reporting by Anshuman Daga;

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