South Korea court jails ferry operator chief for 10 years


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SEOUL // The head of the company that operated South Korea’s ill-fated Sewol ferry was sentenced to 10 years in prison Thursday, after being convicted of manslaughter over the disaster that killed more than 300 people.

A court in the southern city of Gwangju determined that Kim Han-sik, chief executive of Chonghaejin Marine Co, had allowed the ferry to be routinely overloaded and approved illegal renovations to increase its passenger capacity.

The 6,825-tonne Sewol was carrying 476 people — most of them high school students on an organised trip — when the overloaded, ill-balanced ship commanded by what the court termed as an "incompetent" crew capsized off the southern coast on April 16.

Kim, 71, was also found guilty of allowing the ship’s cargo to be left unsecured in breach of safety standards.

Ten other defendants, including six from Chonghaejin Marine, stood trial with Kim.

One was acquitted and nine were given sentences ranging from suspended jail terms to six years in prison.

Kim had repeatedly denied responsibility, insisting he was a salaried employee under the thumb of company owner Yoo Byung-Eun, whom he described as being deeply involved in the hands-on operations of the firm.

Kim was also convicted of diverting $2.6 million from Chonghaejin Marine over the past four years and funnelling it to Yoo, Yoo’s other companies and Yoo’s family members.

Following the disaster, Yoo became the target of a massive manhunt.

His badly decomposed body was found in a field in June but an autopsy failed to determine the cause of death.

Yoo’s eldest son, Yoo Dae-Kyun, was jailed for three years earlier this month for embezzlement, while his widow is still awaiting sentencing on the same charge.

The Sewol’s captain, Lee Jun-Seok, was jailed for 36 years last week, convicted of gross negligence and dereliction of duty, including abandoning his vessel while hundreds of passengers remained trapped on board.

* Agence France-Presse

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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The Voice of Hind Rajab

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