A move away from rating assessments done by international rating agencies could spell disaster for Russia as the likely outcome to come out of it would be even more dissuasion to foreign investors who require unbiased and impartial evaluations of investment grades pertaining to foreign investments.
This latest spat highlights the increasing pressure the West are piling on Russian President Vladimir Putin to restore order in Ukraine following the annexation of Crimea as well as lighten up his support for Syrian dictator Bashar al Assad who remains in power five years after civil war broke out in the Middle Eastern country. Putin has hoped that his military involvement in Syria may sway his Western counterparts to have a change of heart and possibly use his fight against terrorism, namely ISIS, as a negotiating tool to have sanctions dropped.
But the oil rich economy has had no such luck with the most recent statement made by Putin detailing Russia's retraction of airstrikes in Syria as a sign that the beleaguered state of affairs may be pushing Putin's government to scale down to save costs or either Putin holding the West's need to fend off terrorism seeping into the EU as a ransom note to grant him more freedom.
Anyway you want to look at it the situation on the ground remains tense and with little resolution taking place it will only serve to make things worse in the coming months which makes it vital for world leaders to suspend the petty political cat and mouse game and concentrate on the priority of Syrian civilians caught in the crossfire.
Valeant's stockholders face the most severe price valuation shockVladimir Putin starts his own credit-ratings firm in Russia https://t.co/Fe6D2k2VpZ pic.twitter.com/jdtkoh3GQE— Bloomberg Business (@business) March 18, 2016
If there's ever been a time to highlight the importance of corporate governance it today's era of business you don't need to look further than Valeant Pharmaceuticals who faced claims in late 2015 of falsifying sale records to inflate numbers opening a can of worms and possibilities of executives being charged of manipulation of accounting records following the explosive report made by Citron research firm who made the accusations.
The intensity of media hype around the story led CEO Michael Pearson being declared sick and unable to continue with his duties until such time he had recovered which quite frankly sounds like a distraction away from the main issue. Pearson has subsequently returned to office but not without less scrutiny than what was afforded to him when the story broke. The company dropped its 2016 guidance and raised the alarm that it could breach debt agreements if it couldn't publish its annual statements causing the stock to tumble over 50% on Tuesday.
News of the calamitous outcome placed billionaire and significant stockholder Bill Ackman in a difficult position in explaining to investors in his hedge fund why the fund continues to stick with the company after such a poor showing in terms of governance. The hedge fund owns approximately 9% of Valeant.
The situation now forces Ackman, which must be said has defended the company to the hilt, to take on a more active role in management in an attempt to save it from going bust. The self proclaimed investor activist who tried to tarnish the reputation of Herbal Life faces his own worst nightmare with this latest move signalling his own concession that all is not well inside the boardroom of the firm.
It goes to show that people in glass houses shouldn't throw stones and boy has Ackman landed himself in the stew with this one.
Bill Ackman says Valeant is a problem he knows how to handle https://t.co/fFTnWlrmA1 pic.twitter.com/0mCYEc7Q91— Bloomberg Business (@business) March 18, 2016
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