Business this week

Seven senior officials from FIFA were arrested on charges of corruption in a dawn raid on a hotel in Zurich, the Swiss city where football’s world governing body is based. They, and seven others, including five business executives, stand accused by America’s Justice Department of “rampant, systemic and deep-rooted” bribery stretching back 25 years. The Swiss authorities opened a separate criminal investigation into the awarding of the 2018 and 2022 World Cups to Russia and Qatar. The news shook the sport; many hope the arrests will lead to a cleansing of FIFA’s stables. See here and here.

First banks, now the bankers

A former trader went on trial in London over the LIBOR scandal. Tom Hayes, whose former employers included UBS and Citigroup, was described by prosecuting lawyers as the alleged “ringmaster” of efforts to manipulate the benchmark inter-bank interest rate. He pleaded not guilty to eight charges of conspiracy to defraud. It is the first time someone has appeared in the dock on LIBOR charges, though a few bankers have pleaded guilty in related cases rather than face a court.

The IMF declared that China’s currency is no longer undervalued because of its “substantial real effective appreciation over the past year”. This puts the IMF at odds with America, which reckons the Chinese government keeps the yuan at an artificially low rate in order to gain a trade advantage. In March Jack Lew, America’s Treasury secretary, read out a long list of concerns about the slow pace of reforms to China’s economy, and included the management of the exchange rate among them. See article.

China’s stockmarkets wobbled on May 28th, following a streak of bubbly gains. The Shanghai Composite ended the day 6.5% down as investors booked profits and fretted about tighter lending practices at brokerages.

The share price of Broadcom, a chipmaker, surged by more than 20% amid reports that it was the target of a bid by Avago Technologies, in what could be the biggest takeover in the semiconductor industry to date.

Coming to a tablet near you

Eighteen months after it first bid for the company, Charter Communications at last secured a deal to buy Time Warner Cable, for $55 billion. Charter was thwarted in its first bid by a rival offer from Comcast, though that offer ultimately fell foul of competition regulators. Charter’s acquisition is a triumph for John Malone, its biggest shareholder, who has pushed for consolidation in the cable-TV industry to meet the challenge from content streamed over the internet. Patrick Drahi, a French telecoms entrepreneur, was also in the running to buy TWC, but said the timing wasn’t right and he doesn’t do “bulimic growth”. See article.

The Irish government gave its approval to the proposed takeover of Aer Lingus, Ireland’s national airline, by IAG, which owns British Airways. IAG still needs the support of Ryanair, which holds a 30% stake in Aer Lingus, for its bid to succeed. Ryanair, meanwhile, said its profit had surged by 66% in the 12 months to March 31st, to €867m ($1.1 billion). Business has taken off since it ditched its strictly no-frills image in order to target wealthier flyers. Ryanair hopes to carry 100m passengers this year for the first time.

Uber was handed another setback, this time in Italy, where a court in Milan banned its app-based unlicensed car-sharing service across the entire country. Licensed taxi drivers argued that Uber creates unfair competition, a gripe that has been echoed in the many legal cases brought against Uber in cities around the world. It has two weeks to comply with the Italian ruling. In London hundreds of the city’s licensed black cabs brought traffic to a halt in another protest against Uber.

The growth of the global market for smartphones will slow this year to 11.3%, according to IDC, a market-research firm. That is down from 27.6% last year and a bit lower than IDC’s previous forecast. The main reason is that the Chinese market is nearing saturation point and is predicted to rise by just 2.5% in 2015, the first time it will have lagged the worldwide market.

Not disappearing soon

Evan Spiegel, the 24-year-old founder of Snapchat, a photo-messaging app that was valued at $15 billion after a round of fundraising in March, confirmed that his firm is preparing for an IPO, though he didn’t say when.

Pizza Hut said that it would no longer add artificial flavours and colours to its food. Like others in the fast-food industry it is adapting to the rising demand for fresher alternatives. Pizza Hut’s customers will now feel that little bit healthier tucking into a deep-filled Pepperoni Lovers pizza with a cheese-stuffed crust.