Saturday, February 18, 2017

Saudis prepare for Aramco IPO, world's biggest; When Zuckerberg sets the rules; Fake news isn't a new phenomenon

1 Saudis prepare for Aramco IPO, world’s biggest (Khaleej Times) Saudi Arabia is considering two options for the shape of Saudi Aramco when it sells shares in the national oil giant next year: a global industrial conglomerate, and a specialised international oil company, industry and banking sources said.

The listing of Aramco, expected to be the world's biggest initial public offer and raise tens of billions of dollars, is a centrepiece of the government's ambitious plan - known as Vision 2030 - to diversify the economy beyond oil.

When the plan was publicly released in June last year, it pledged to "transform Aramco from an oil-producing company into a global industrial conglomerate". But now Saudi officials and their advisers are debating whether to make Aramco "a Korean chaebol", as one source said, referring to sprawling South Korean conglomerates, or a specialised company focused purely on oil and gas.

A specialised company might be easier to value because of its simplicity and, since the risks in its business would be clearer, achieve a higher price for its shares. Other than its core oil and gas production, exploration and refining businesses, Aramco - which employs more than 55,000 people - has plans to build solar and wind power facilities.

As the kingdom's biggest company and one of its most efficient, it is being pressed into service to jump-start industrial projects that are too big or daunting for the private sector. It is developing a $5 billion ship repair and building complex on the east coast, and working with General Electric on a $400 million forging and casting venture.

As the IPO approaches, officials are asking themselves whether the domestic and international investors who will be asked to buy Aramco shares really want exposure to such a complicated array of assets. Last year, Prince Mohammed said he expected the IPO would value Aramco at a minimum of $2 trillion, and that the figure might end up being higher. But this will depend partly on the tax regime which Aramco faces.


2 When Zuckerberg sets the rules (Carole Cadwalladr in The Guardian) Last week, Mark Zuckerberg set out a new mission for the company he has created. “In times like these, the most important thing we at Facebook can do is develop the social infrastructure to give people the power to build a global community that works for all of us,” he says. A global community that “prevents harm, helps during crises and rebuilds afterwards”.

A role that might be more accurately described as this: government. Because that’s what this letter is, a template for Facebook’s role in a new world order. A supranational power that exists above and beyond the nation state. A digital interface between you and everything else: your friends, the news, the world.

But where does that power end? Who holds it to account? What are the limits on it? Because the answer is there are none. Facebook’s power and dominance, its knowledge of every aspect of its users’ intimate lives, its ability to manipulate their – our – world view, its limitless ability to generate cash, is already beyond the reach of any government.

He is wrestling with the question of how Facebook can change the world. Whereas the question is: do we actually want Facebook to change the world? Do we want any corporation to have so much unchecked power? “In recent campaigns – from India across Europe to the US – we’ve seen the candidate with the largest and most engaged following on Facebook usually wins,” Zuckerberg writes.

Zuckerberg’s letter is a big deal. And yet, in the current news cycle, you may well have missed it. He released it on Thursday, coincidentally the same day on which Donald Trump denounced the press as the enemy of the people. A press whose financial model has been undermined by Google and Facebook. Which, we all have to hope, finds another financial model – and fast.

Because good intentions are not enough. It is not enough that Mark Zuckerberg is not an arrogant fool. Facebook is a corporation doing what corporations do: making money, grabbing market share, maximising profit.


3 Fake news isn’t a new phenomenon (BBC) Fake news, false stories that masquerade as real news are not new. In the spring of 1917 some of Britain's most influential newspapers published a gruesome story. Britain was at the time trying to bring China into the war on the Allied side.

In February a story appeared in the English-language North China Daily News that claimed the Kaiser's forces were "extracting glycerine out of dead soldiers". Rumours about processing dead bodies had been in circulation since 1915 but had not been presented as facts by any official source.

That changed in April when the Times and the Daily Mail published accounts from anonymous sources who claimed to have visited the Kadaververwertungsanstalt, or corpse-utilisation factory. The Times ran the story under the headline Germans and their Dead, attributing the claim to two sources - a Belgian newspaper published in England and a story that originally appeared in a German newspaper, Berliner Lokal-Anzeiger on 10 April.

The German government protested loudly against these "loathsome and ridiculous" claims. But their protests were drowned out by public expressions of horror from the Chinese ambassador. China declared war against Germany on 14 August 1917.

It was in 1925 that Sir Austen Chamberlain admitted, in a Commons statement, there was "never any foundation" for what he called "this false report". In the same year the Conservative MP John Charteris - who served as head of intelligence - reportedly admitted, while on a lecture tour of the US, that he had fabricated the story.

In 1917 MI7 employed 13 officers and 25 paid writers, some whom moonlighted as "special correspondents" for national newspapers. One of their most talented agents was Major Hugh Pollard who combined his work in the propaganda department with the role of special correspondent for the Daily Express. After the war Pollard confessed his role in spreading the corpse factory lie to his cousin, Ivor Montague. But lies have consequences. During the 1930s the corpse factory lie was used by the Nazis as proof of British lies during the Great War.


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