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Malaysia court postpones 1MDB trial involving ex-PM Najib Razak

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Najib Razak, Malaysia’s former prime minister, gestures as he leaves the Kuala Lumpur Courts Complex in Malaysia, on Thursday, Sept. 20, 2018.

Joshua Paul | Bloomberg | Getty Images

A Malaysian court on Monday postponed for a week the biggest of five trials linked to a multi-billion-dollar scam at state fund 1MDB and allegedly involving former prime minister Najib Razak.

Najib, who lost a general election last year, has been hit with 42 criminal charges of graft and money laundering at 1Malaysia Development Berhad (1MDB) and other state entities.

He has pleaded not guilty and says the charges are politically motivated.

The hearing will now begin next Monday to allow time for the completion of a previous trial that revolves around former 1MDB unit SRC International, a Kuala Lumpur High Court judge said.

“If you need more time, I can stand down or adjourn … but for now we will proceed on Monday and check again on (this) on Thursday,” Judge Collin Lawrence Sequerah said.

1MDB, founded by Najib in 2009, is being investigated in at least six countries. The U.S. Department of Justice says about $4.5 billion was misappropriated from the fund.

In the trial in Kuala Lumpur, Najib will have to fight 21 charges of money laundering and four of abuse of power for receiving illegal transfers of about 2.3 billion ringgit ($550.8 million) between 2011 and 2014.

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Osama bin Laden’s son Hamza was killed in a US operation, Trump says

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In this image from video released by the CIA on Nov. 1, 2017, Hamza bin Laden is shown at his wedding.

CIA via AP, File

Osama bin Laden‘s son Hamza bin Laden, who was viewed as an eventual heir to the leadership of Al Qaeda, was killed in a United States counterterrorism operation in the Afghanistan/Pakistan region, President Donald Trump confirmed on Saturday.

His death not only deprives al Qaeda “of important leadership skills and the symbolic connection to his father, but undermines important operational activities of the group,” the White House said in a statement.

“Hamza bin Ladin was responsible for planning and dealing with various terrorist groups,” it said.

U.S. officials learned that Hamza was dead in July. He was killed sometime during the first two years of Trump’s presidency, but details on the strike are still unclear.

Hamza’s last known public statement was released by al Qaeda’s media outlet in 2018. In that statement, he threatened Saudi Arabia and called on the people of the Arabian Peninsula to revolt.

Hamza’s father went to Afghanistan in 1996 and declared war against the U.S. Osama bin Laden oversaw operations that led to the Sept. 11, 2001 attacks on New York’s World Trade Center and the Pentagon.

Navy SEALS killed Osama bin Laden in 2011 during a raid on his compound in Abbottabad, Pakistan. Hamza was not found at the compound at the time.

Trump’s confirmation that Hamza was killed in a U.S. operation comes just three days after the 18th anniversary of the attacks.

In February, the State Department said it would pay as much as $1 million for information leading to his whereabouts.

The department’s Counter-Terrorism Rewards Program described him on Twitter as “an emerging al-Qa’ida leader” who “has threatened attacks against the United States and allies.”

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This investor has found a way to make money in volatile Latin America

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Traders work at the Bolsa de Mercadorias e Futuros, Brazilian Mercantile and Futures Exchange (BM&F), in Sao Paulo, Brazil.

Marcos Issas | Bloomberg | Getty Images

Investing in Latin America’s equity markets can be scary, but Luiz Maria Ribiero has cracked a winning formula.

Ribiero manages the DWS Latin America Equity fund (SLARX), which has been on a tear this year. The fund is up nearly 23% in 2019. The 5-star rated fund has also outperformed its benchmark, the MSCI EM Latin America index, by about 13 percentage points.

The fund’s strong performance comes during a volatile time for Latin American equities. Brazil, Mexico and Argentina — the three biggest markets in Latin America — have faced wild swings amid political and economic uncertainty. Despite all this, Ribiero’s approach to Latin America’s volatile markets has handsomely rewarded the fund’s investors.

“The way we manage the fund, I think is quite different from most of our competitors in the sense we are really bottom-up,” Ribiero said. “We see ourselves as stock pickers and the country allocation is really a consequence of the companies we find at a certain point in time.”

Banco Inter, a commercial bank based in Belo Horizonte, Brazil, is the fund’s biggest holding with a 10.5% portfolio weight. The stock has been on fire this year, surging more than 180%.

The fund also owns Natura Cosmeticos — a cosmetics company in Sao Paulo — and Magazine Luiza, one of the largest retailers in Brazil. The two stocks account for 11.2% of the portfolio’s $325 million in assets under management. Both Natura and Luiza are up more than 50%.

Outside of Brazil, the fund owns MercadoLibre, an e-commerce company based in Argentina. MercadoLibre has a portfolio weight of 5.09% in Ribiero’s fund. The stock has nearly doubled in 2019.

Ribiero said he and his team don’t try to cover everything in Latin America. Instead, they aim for “a very concentrated, high-conviction portfolio.” The DWS Latin America Equity fund owns 46 stocks in total, according to Morningstar.

“Most of the time, what we find is mispriced growth,” he said. “I think we have a different view on the level of growth for those companies and the sustainability of growth for them as well. Due to that, we come up with a different valuation than what the market is pricing in. That’s how we build positions with high convictions.”

Ribiero’s stock picks have had a banner year and have led to strong investor returns. The broader Latin American stock market has been far more turbulent in 2019.

The iShares Latin America 40 exchange-traded fund (ILF) is up nearly 5% this year after jumping around 16% earlier in 2019. The ETF has also had 87 trading days with moves of at least 1%, FactSet data shows. By comparison, the iShares MSCI Emerging Markets ETF (EEM) has posted 57 moves of that magnitude this year. The S&P 500 has also closed up or down at least 1% in 32 occasions year to date.

Argentina’s Merval index is down 0.4% for 2019 — after surging as much as 50.3% — following market-friendly President Mauricio Macri’s loss in a primary election in August. The Merval dropped 37% on Aug. 12 following the election. Earlier this month, Argentina imposed currency controls to stem the country’s downward economic spiral.

In Mexico, investors grapple with the new administration’s optimistic growth expectations. Last week, President Andres Manuel Lopez Obrador’s administration sent the Mexican Congress a budget plan that assumes the economy will grow between 1.5% and 2% in 2020. However, Dirk Willer, head of emerging market strategy at Citi Research, thinks this is outlook is too rosy since it assumes a sharp increase in oil production.

Brazil’s stock market has been buffeted with volatility bouts as the country tries to reform its pension system. So far this year, the Bovespa index has posted 69 moves of at least 1%.

“We believe that markets are efficient in the long run, but in the short run they are quite inefficient, especially in a place like Latin America where volatility is sometimes very high,” Ribiero said. “That short-term volatility actually creates opportunity for stock pickers, especially in the region.”

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Elon Musk is not the problem at Tesla — blame the people around him

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NEW YORK, NY – APRIL 4: Tesla CEO Elon Musk arrives at federal court, April 4, 2019 in New York City. A federal judge will hear oral arguments this afternoon in a lawsuit brought by the U.S. Securities and Exchange Commission (SEC) that seeks to hold Musk in contempt for violating a settlement deal. (Photo by Drew Angerer/Getty Images)

Drew Angerer | Getty Images News | Getty Images

Tesla CEO Elon Musk epitomizes the reason so many people place their total trust in a leader with a view on changing the world. Musk has a heady vision of what he wants to create. And he does not shy away from any challenge; he runs straight at them. Musk is a dyed-in-the-wool trailblazer and rule breaker. With a powerful leader like Musk at the helm, what else do we need to do? What could possibly go wrong?

Quite a lot it turns out. Musk has behaved so erratically in the past few years that many have questioned his ability to lead. Tesla shares slumped after a bizarre earnings call during which Mr. Musk cut off an analyst saying, “boring bonehead questions are not cool”. Then came his attempted involvement in the rescue of the 12 boys trapped in a flooded cave in Thailand. Later he flummoxed investors and sent the share price on a rollercoaster ride with a tweet about taking the company private. As a result, the SEC bristled, leveled a fine and called for changes in the board.

Partly as a result of Musk’s leadership style, shorting Tesla stock has become a common bet for investors. It was the most shorted stock in 2018 and shows signs of continuing in that vein in 2019. The stock is down more than 25% this year.

Musk is not the only game-changing leader with confusing and obstreperous behavior. He typifies the problem we create when we give a maverick CEO the nod to be visionary and break the rules but neglect to add sufficient governance and support.

Steve Jobs was a visionary leader at Apple, but he also had a reputation for being a difficult, cantankerous jerk. At one point, things got so bad the board fired him. Elizabeth Holmes, CEO at Theranos, thrilled investors with her vision to change healthcare but then was charged with multiple counts of fraud and conspiracy in federal court after investors lost nearly a billion dollars of their investment in her company. Travis Kalanick’s leadership at Uber changed the city transportation industry, but it also led him to be ousted from the company he founded.

The lure of a gifted trailblazer with the ability to create a powerhouse company that challenges the status quo is a magnetic draw for investors and employees. Musk is currently one of the most visible, but he is not the only maverick we will have to deal with in the coming years.

Sometimes these visionaries deliver on their vision. But other times they create havoc.

We spoke to a number of experienced board members and execs to learn how to handle these kinds of leaders. They agreed that with an inspired powerhouse like Musk at the helm, the stakeholders — the board, investors, executives, and employees — need to be ready for a different kind of journey. Traditional corporate governance principles are needed, but they must be supplemented with additional practices.

Here are some of the things Musk’s stakeholders need to do.

Close the door — hold executive sessions that make sure the board and executive team are active, properly structured, and engaged in making the maverick CEO a winner. They need to build a supportive governance network without weaponizing the board and destroying winning bets.

Mind the gaps — fill in management holes in the CEO’s repertoire of skills. Adding a seasoned leader as COO would complement Musk’s visionary leadership.

Curate the culture — Culture eats strategy for breakfast, as a common business saying goes. Build board processes to monitor the company culture the CEO is creating. Stakeholders need keep a watchful eye out to make sure things are going well.

Be contrarian — make constructive conversations of alternatives a standard practice. Every board member said it is not easy to do but it is essential.

Build paths of least resistance — establish one-on-one channels between the CEO and the board. Even Steve Jobs talked to select board members that acted as mentors.

The best visionary-led companies have a collaborative give-and-take between the CEO, board, and executive team. The brilliant boss’s job is to create a highly valuable, robust, and sustainable company for all stakeholders. The performance of board members, executives, and investors is judged on how well they help make that happen.

Tesla stakeholders — investors, employees, executives, and the board — need to realize that the mixture of brilliance and mischief is a result of two things: Musk’s maverick mindset and the ways he is governed. Embracing Musk’s brilliance carries the responsibility to govern.

Rob Shelton is a globally recognized Silicon Valley-based consultant, author, and speaker on entrepreneurs and innovation. Marc J. Epstein, Ph.D, is the former professor at Stanford Business School, Harvard Business School, and INSEAD and former Distinguished Research Professor of Management at Jones Graduate School of Business at Rice University in Houston, Texas. Their new book is “The Brilliant Jerk Conundrum.” You can connect with them at theconundrumpress@gmail.com.

Follow @CNBCTech on Twitter for the latest tech industry news.



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