Lai Dai, CBD Corporation Considering Further Foreign Investment | EVE Online

Lai Dai, CBD Corporation Considering Further Foreign Investment

2008-04-13 - By Svarthol

Jita – Financial newsmagazine The Kimotoro Report is reporting that two of the eight Caldari megacorporations are considering increasing their stakes in a number of foreign markets as a hedge against the faltering State economy. The Lai Dai Corporation and CBD Corporation, already heavily invested in a number of foreign markets, were reported to be in "high-level discussions regarding foreign acquisitions and trade contracts," and that the recent spate of profit warnings has "troubled many in the executive offices" of the two corporate giants.

According to the article, Lai Dai, which already has a minority stake in the Carthum Conglomerate, is considering expanding its holdings in the Amarr corporation. The news brought about a small jump in the share price of the Conglomerate, with speculators hoping to cash in on a buyout. With Carthum's annual shareholder meeting coming up soon, this has generated rumors of an attempt by Lai Dai not only insulate themselves from the Caldari economy but also gain more influence over the Amarr concern's board.

Lai Dai has denied the report, saying that the article was based on "rumors and hearsay." "There has been no move by Lai Dai to increase our stake in the Carthum Conglomerate, and we encourage investors to look carefully at the true motivations for the report, coming as they do from a Nugoeihuvi-owned publication," said their chief spokesman, Haalonen Ihoya.

Reaction has been quick in coming from the Empire, with sources in the Amarr Trade Registry reporting that several of the noble houses have put pressure on the ATR to investigate the rumors. According to these sources, the prospect of one of the Empire's largest aerospace and heavy industry concerns becoming more tightly linked to the State than it already is has been called an "imperial security matter" and some in the Empire are worried that this will expose the corporation to the weakness in the Caldari economy. For its part, the Carthum Corporation itself has declined to comment on the matter.

Meanwhile, the Report also claims that the CBD Corporation, long the largest importer/exporter in the State, is quietly floating plans to move into "marginal" markets of the cluster, such as the Intaki Syndicate, Trust Partners, and ORE. According to sources in the company, these areas "present considerable growth opportunity" and "a lack of constraining financial regulation." The memo states that security concerns are "a possible issue," but that they can be dealt with through "adequate financial incentives to local militias."

The Caldari megacorporations have long considered most of these areas to be unprofitable or too politically sensitive to become involved with. CBD has a history of high-risk, high-yield venture taking, however, and many analysts believe that the current downturn is likely to encourage that behavior if it continues. Sources within the Caldari Business Tribunal, however, are quietly concerned that movement into such markets may bring more scrutiny on the State from the Secure Commerce Commission, a particularly sore subject in the wake of recent CONCORD involvement in the State, such as the Itsukame Innovations case.

"Organized crime, especially the Serpentis and Angels organizations, is so imbedded into what little semblance of government and administration there is out there that it will be nearly impossible for CBD to maintain distance from them," said Irine Otomo, professor of periphery state studies at the School of Applied Knowledge. "CBD is treading a fine line; while it could potentially pay off, there's always the chance it could backfire. The Tribunal is extremely touchy about such matters in the wake of the recent SCC allegations."

The CBD Corporation declined to comment on the matter, refusing to confirm or deny the validity of the leak, but so far The Kimotoro Report has stood by both stories, claiming that it has "reliable sources" in the upper echelons of both corporations that confirm the reports. Though the Report has often been the first to break such stories before, the newsmagazine was rocked by scandal last year when one of its junior editors was convicted of stock market manipulation by the CBT. As a result, many investors are waiting to see the story confirmed elsewhere before making any significant moves in the market.