☕️ MYAirline loses its licence to operate

1. MARKET SUMMARY 📈

2. NUMBERS AT A GLANCE 🔢

Popular Taiwanese restaurant chain Din Tai Fung and two former managers in Australia have been fined over AUD4 mil (RM12.4 mil) for underpaying 17 employees. The underpayments occurred at Din Tai Fung’s Sydney and Melbourne restaurants between 2014 and 2018. The affected workers, mostly migrants under 30 years old on temporary visas, were underpaid amounts ranging from AUD2,300 to over AUD50,000.

According to the research firm Counterpoint, in the first quarter of the year, Apple experienced a significant setback in China's smartphone market, with shipments plummeting by 19%, marking its worst performance since 2020. This decline was attributed to increased competition from Huawei's new product launches, particularly in the high-end segment with the introduction of Pura 70. Apple's market share in China dropped to 15.7% from 19.7% year-on-year, bringing it nearly on par with Huawei, which witnessed a remarkable 70% increase in sales. Despite Apple's struggles, China's smartphone market saw a modest 1.5% growth in the first quarter, marking the second consecutive quarter of positive growth.

Since January 1, the U.S. government has reimbursed auto dealers with over USD580 mil (RM2.77 bil) in advance point-of-sale consumer electric vehicle (EV) tax credit payments, as confirmed by the Treasury on Friday. Previously, prior to 2024, U.S. auto buyers could only access the new EV credit, which amounted to up to USD7,500, or the USD4,000 used EV credit when filing tax returns the following year. However, effective January 1, consumers have the option to transfer these credits to a car dealer at the time of sale, thereby effectively reducing the purchase price of the vehicle. The Inflation Reduction Act of August 2022 reformed the EV tax credit, which now requires North American assembly to qualify, reducing eligible models by nearly 70%.

3. IN MALAYSIA 🇲🇾

Illegal investment scheme’s deposits forfeited
The Federal Court ruled in favour of the prosecution, allowing the forfeiture of RM1,112,700 from 79 investors involved in an illegal deposit-taking scheme. Chief Justice Tengku Maimun Tuan Mat, Court of Appeal President Abang Iskandar Abang Hashim, and Federal Court judge Hasnah Mohammed Hashim overturned previous decisions by the Court of Appeal and High Court.

The funds were related to Venus FX, a company involved in forex trading without proper licensing, and the investors were part of its scheme. Venus FX promised daily return on investment ranging from 4 to 6 per cent over 80 days. 🚩 Venus FX then instructed its members to deposit the investment sums into a bank account belonging to Yayasan Usaha Ventures Malaysia (YUVM).

Initially, the High Court ordered the return of the seized funds to the investors, a decision upheld by the Court of Appeal. However, the Deputy Public Prosecutor (DPP) How May Ling and DPP Parvin Hameedah argued that the funds were derived from illegal activity, making the investors ineligible to claim legitimate legal interest. How argued that the respondents weren’t victims of fraud as they willingly deposited money into YUVM’s account as Venus FX investors. The courts ultimately ruled in favour of the prosecution, allowing the forfeiture of the funds to government revenue. The lesson here is — don’t be greedy and don’t invest in too good to be true investment schemes.

MYAirline loses its licence to operate
The Civil Aviation Authority of Malaysia (CAAM) has revoked the air operator's certificate (AOC) of MYAirline Sdn Bhd due to its failure to secure a new investor before the deadline of April 14. As a result, MYAirline will need to reapply for both the AOC and an air service license (ASL) from CAAM and the Malaysian Aviation Commission (Mavcom), respectively, if it wishes to resume operations. This process can be lengthy and complex.

MYAirline ceased operations abruptly on Oct 12 last year, citing financial difficulties, less than a year after commencing flights. Prior to the suspension, neither Mavcom nor CAAM had observed any signs of financial or operational distress in MYAirline, and CAAM had even renewed the airline's air safety, security, and operational proficiency for an additional two years just days before the suspension.

While we’re on the topic of aviation companies, Tony Fernandes’ tenure as the chief executive officer of Capital A Bhd has been extended for another five years. Additionally, he will serve as a strategic adviser to Capital A’s airline business. Capital A is currently undergoing a series of restructuring efforts to address its negative equity of RM10.47 bil as of December 31, 2023. These efforts include merging its airline business with AirAsia X, as well as listing its branding business in the United States. It will be a busy few weeks for the group — Tony said that this is “the start of many announcements over the next two weeks”.

Shorts

1. KLIA terminals up its security with e-scooters
   Selangor’s Menteri Besar Incorporated (MBI) has gifted four e-scooters worth RM55,000 to the security teams at KLIA Terminal 1 and 2. Selangor Menteri Besar Amirudin Shari stated that micro-mobility vehicles would accelerate police patrols and increase public confidence in security at the country's main entry point. Previously, the Inspector-General of Police, Razarudin Husain Polis, stated that the police had increased security and personnel at KLIA Terminal 1 and 2 following the shooting incident on April 14.

2. Kuala Kubu Baharu by-election updates

   Nga Kor Ming’s aide, Pang Sock Tao, will represent the unity government as a DAP candidate in the upcoming Kuala Kubu Baharu by-election. Nomination Day will be this Saturday (April 26) and the polling date is fixed for May 11. Umno Supreme Council member Ahmad Maslan said the party will activate a war room to support the unity government’s candidate for the by-election, although the candidate is from Pakatan Harapan. How times have changed. From salah DAP to sapot DAP.

3. Defence Minister: Families of victims of copter tragedy to receive RM10,000
   Defence Minister Mohamed Khaled Nordin said a special fund has been set up by the ministry to allow donations from the public to the families affected by the tragedy. Families of the tragic Lumut helicopter crash victims will each receive RM10,000 in preliminary assistance. Khaled stated that a board of inquiry, formed in the aftermath of the incident, has been directed to provide the preliminary report of the crash within 14 days. Additionally, a comprehensive investigation report regarding the crash is to be submitted within 30 working days.

4. Perlis MB’s son remanded by MACC 👀
   Six individuals, including the son of Perlis Menteri Besar Mohd Shukri Ramli, have been remanded by the Malaysian Anti-Corruption Commission (MACC) to assist in an investigation. The case is under investigation for document forgery related to false claims made about a project that was not actually carried out. The project in question — estimated worth RM600,000 — was supposed to involve maintenance, repair, supply, and service works from 2022 until now.

4. AROUND THE WORLD 🌎

Gaza — famine, mass grave
According to the World Food Programme, the Gaza Strip could reach famine status in six weeks, with reasonable evidence that the thresholds of food insecurity, malnutrition, and mortality will be exceeded then. The WFP official also noted the conflict in Gaza is making it “difficult, sometimes impossible” to reach affected people and has called for humanitarian efforts to “scale up massively” though the official believes the situation is likely to deteriorate further.

The discovery of mass graves containing hundreds of bodies at the destroyed Nasser and Al Shifa medical facilities has “horrified” the UN rights chief. Over 300 bodies were found at a single mass grave at Nasser alone, according to Palestinian authorities, with Israel calling the reports of mass graves “baseless and unfounded”. However, the rights organisation is also investigating claims that some of the bodies had their hands tied, which indicates severe violations of international human rights law and international humanitarian law.

Amnesty International: System on the brink of collapse
The organisation highlighted numerous human rights violations from conflicts globally in its report on the state of the world’s human rights, with attention called to the Gaza conflict. Amnesty also concluded that the international system of institutions meant to protect peace and security, set up after 1948, is on the brink of collapsing. This is due to the institutions being “intentionally disrupted or weakened”, according to Amnesty International secretary general Agnès Callamard. The official named the US as an example, stating it has weakened the United Nations Security Council and the International Court of Justice to protect Israel from international scrutiny.
Read: The State of the World’s Human Rights: April 2024

Crypto firm founders in trouble

1. US seeks 36 months' jail for Binance's Zhao Changpeng

   US prosecutors are seeking a 36-month prison sentence for Binance founder Zhao “CZ” Changpeng after he pled guilty to violating laws against money laundering. However, federal sentencing guidelines set a maximum sentence of 18 months for Zhao, who agreed not to appeal against any sentence up to that length. Zhao is currently free in the US on a USD175 mil bond. Binance was earlier fined USD4.32 bil.

2. US regulator seeks USD5.3 bil fine for Terra co-founder

   The US Securities and Exchange Commission is looking to impose a USD5.3 bil fine on Terraform Labs and its co-founder Do Kwon. The proposed fine, which would be the largest issued in the crypto industry, comes after Kwon and Terraform were found liable for fraud after the failure of their stablecoin, TerraUSD. The fine comprises a USD4.2 bil disgorgement penalty and USD545 mil in prejudgement interest, with a further USD420 mil fine for Terraform and USD100 mil fine for Kwon in civil penalties. The collapse of TerraUSD and the corresponding Luna token saw about USD60 bil worth of value wiped out in a matter of 1-2 weeks back in May 2022.
   Read: Anatomy of a Run: The Terra Luna Crash

Business

1. Tesla profits halved due to falling demand, but stocks recover as Musk promises "more affordable Teslas"

   Tesla saw its profits for the first quarter of 2024 dropping 55% to USD1.1 bil compared to the previous year’s USD2.5 bil, leading to the announcement of thousands of job cuts as Tesla axed over 10% of its workforce. However, Tesla’s shares surged about 10% in after-hours trading following the announcement by Tesla CEO Elon Musk that more affordable models will be rolled out in early 2025. Still, Musk was a bit light on the details of the “more affordable models”.
   View deck: Tesla Q1 2024 earnings update

2. Boeing reports first revenue drop in seven quarters — surprise, surprise

   The planemaker reported a quarterly revenue of USD16.6 bil, down from USD17.9 bil a year earlier, marking its first revenue drop in seven quarters. Still, Boeing beat analyst expectations, which were lowered following slowed production of its strongest-selling 737 MAX jets after a cabin door blowout in January. Meanwhile, Boeing’s deal to acquire its supplier Spirit AeroSystems is moving ahead and is expected to be completed in the second quarter, with the only remaining issue being the pricing of the deal.
   View deck: Q1 2024 Performance Review

3. Nvidia nears completion of USD700 mil purchase of Israeli AI startup

   The chipmaker is set to acquire Israeli AI startup Run:ai, which offers an AI infrastructure orchestration and management platform. The deal is valued at about USD700 mil and would mark Nvidia’s biggest acquisition in Israel since it purchased computer networking products supplier Mellanox for USD6.9 bil in 2019. Approximately 10% of Nvidia’s 30,000 employees are based in Israel, and Run:ai’s staff are reported to be joining the local R&D centre.

Shorts

1. Australian police arrest 7 teens who were "likely plotting an attack"
   The teens were arrested as part of a wave of counter-terrorism raids across Sydney, with the suspects believed to share a “religiously motivated violent extremist ideology”. The raids follow the stabbing of an Assyrian bishop last week, which has been declared a “terrorist act” by Australian authorities. The teens arrested are alleged to belong to the same network as the teen who attacked said bishop.

2. Athens covered in orange haze of Sahara desert dust
   The orange haze comes from clouds of dust blown in from the Sahara desert and is one of the worst episodes since 2018. The current haze has caused air quality to deteriorate in many areas of Greece, with the atmosphere in the country now stifling due to the combination of dust and high temperatures brought there by strong southerly winds. Looks like Mars, or Arrakis (Dune reference).

5. FOR YOUR EYES 📺

1. I spoke with a friend a couple of weeks ago about how much wealth is in Jakarta, the soon-to-be-former capital of Indonesia. He said, just think about how the majority of the economic activity of Indonesia is focused in Jakarta, which houses approximately 31 mil people (11.3%) out of the country’s population of 275 mil. Then I thought about Kuala Lumpur & Selangor, and I saw this tweet by World Bank Lead Economist (Malaysia) Apurva Sanghi, which shows what it would look like if each state’s land area was proportional to its contribution to Malaysia’s GDP. Probably Malaysia in Universe Version 1957.

2. The most popular podcast on Spotify is The Joe Rogan Experience, but by a surprisingly huge margin — almost triple the amount of the next most followed program, TED Talks Daily. Spotify renewed its deal with Joe Rogan in a multi-year deal worth USD250 mil back in Feb 2024.