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Nestle CEO fired over undisclosed affair

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Nestle's shares, a bedrock of the Swiss stock exchange, have lost almost a third of their value over the past five years, underperforming their European peers [File: Aljazeera]

Nestle has fired CEO Laurent Freixe after just one year in the job following an investigation into an undisclosed “romantic relationship”, ousting its second chief executive in a year and throwing the Swiss food giant into its deepest leadership chaos in decades.

Freixe’s sudden dismissal followed an investigation into an undisclosed romantic relationship with a direct subordinate that breached Nestle’s code of business conduct, Nestle said late on Monday.

Freixe was replaced by Nespresso chief Philipp Navratil, a rising star at the world’s largest food company as it battles slowing sales, the impact of United States tariffs and eroding investor confidence after years of underperformance.

The Frenchman’s predecessor Mark Schneider failed to cope with the challenge, and it cost him his job in August 2024. Paul Bulcke, CEO from 2008 to 2016, will step down as chairman in April and will be replaced by Pablo Isla, a former CEO of Spanish fashion retailer Inditex.

“The loss of two CEOs and a chairman in a year is of historic proportions for Nestle,” said Ingo Speich, head of corporate governance and sustainability at Deka, a top 30 Nestle investor.

“The new CEO needs to fix the business model and bring volumes back. He needs to do better M&A [mergers and acquisitions] and focus more on emerging markets.”

The upheaval underscores the struggle not only at Nestle but also other consumer goods companies to reignite sales and recover stock values as the post-pandemic cost-of-living crisis drives consumers towards cheaper alternatives. Meanwhile, US tariffs threaten to further inflate prices and alienate already price-sensitive shoppers.

Shares in the maker of Nescafe and KitKat chocolate bars were down 0.8 percent in Zurich by 1:18pm (11:18 GMT).

The company said concerns about a possible relationship were raised by staff via the company’s internal reporting channel, Speak Up, although an initial investigation was unsubstantiated. Freixe had initially denied the relationship to the board, a company spokesperson said.

When staff concerns persisted, Nestle said it ordered an investigation overseen by Bulcke and Lead Independent Director Isla with the support of independent outside counsel. Swiss media reported that Swiss lawyers from the Baer & Karrer law firm helped with the inquiry.

Freixe, who spent 39 years with Nestle, will receive no exit package, the company told the Reuters news agency.

In a short statement, Bulcke thanked Freixe for his years of service at Nestle but said the dismissal was a “necessary decision”.

His dismissal adds to a list of top executives forced to resign after investigations into their relationships with colleagues.

Energy giant BP’s former CEO Bernard Looney and McDonald’s CEO Steve Easterbrook were both removed for failing to disclose relationships with colleagues.

The Swiss financial news website Inside Paradeplatz reported that Freixe met the woman in 2022 before he became CEO and when he was head of Nestle’s Latin America business.

Freixe was not immediately available to comment when contacted via email. The identity of the female subordinate has not been made public.

Swiss law does not prohibit relationships between senior executives nor does it require disclosure although most large companies have internal codes of conduct that require they are disclosed.

Corporate governance expert Peter V Kunz from the University of Bern said he was not familiar with Nestle’s rules but said requirements at most public companies were broadly similar.

“In this respect, Mr Freixe’s behaviour – regardless of whether it was legal or not – seems to me to be simply stupid and incomprehensible in this day and age,” Kunz told Reuters, adding that he did not think investors had grounds for legal action against Nestle.

Nestle’s shares, a bedrock of the Swiss stock exchange, have lost almost a third of their value over the past five years, under-performing their European peers.

Freixe’s appointment failed to halt the slide, and the company’s shares shed 17 percent of their value during his leadership, disappointing investors.

One top 20 Nestle investor welcomed news of the change, saying Freixe had been a disappointment and bringing in Navratil was an opportunity for a more ambitious overhaul.

The new CEO needs to slim down the company, cut costs and above all reduce the headcount, the investor, who declined to be named due to the sensitivity of the matter, said, adding that it is also crucial for the company to raise organic growth to boost volumes.

“The cash flow must cover the dividend,” the investor said. “That’s an absolute priority.”

In July, Nestle launched a review of its underperforming vitamins business, which could lead to the divestment of some brands after first-half sales volumes missed expectations.

Freixe’s dismissal was featured on the front page of Swiss newspapers with Neue Zuercher Zeitung noting that Nestle had lost its “legendary stability” during which CEOs stayed on for years before eventually becoming chairmen.

AJ Bell investment director Russ Mould said the company would likely face a period of uncertainty over whether Navratil will follow the same path as his predecessor.

“While Navratil is also an internal appointment, he will want to put his own mark on strategy, and that suggests the clock could be reset when it comes to the turnaround plan,” Mould said.

[Aljazeera]



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Five Indian air force staff killed as transport plane crashes in Assam

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India's air force operates about 100 Antonov An-32 aircraft (Aljazeera)

Five Indian air force personnel have been killed after the aircraft they were travelling in crashed in the northeastern Indian state of Assam, according to officials.

The Antonov An-32 transport plane “met with an accident” during a “routine sortie” in Assam’s Jorhat region, the Indian Air Force said in a statement on Saturday.

“Crash site management and initial enquiries are on at this time,” the Air Force wrote, adding that an investigation to determine the cause of the accident was under way.

News channel NDTV broadcast images of the crash site, showing a thick black plume of smoke and the aircraft apparently broken into pieces.

India’s air force operates a fleet of about 105 An-32 aircraft to transport people and cargo.

The last major crash involving a  twin-engine turboprop took place in 2019 in Arunachal Pradesh state, near the border with China, when 13 people were killed

(Aljazeera)

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Kidnapped Nigerian retired general dies in captivity

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Retired Maj Gen Rabe Abubakar, pictured here in 2009, was spokesman for the army a decade ago [BBC]

A retired Nigerian army general who had been kidnapped by gunmen in the country’s north-west has died while being held captive, the military has said.

Maj Gen Rabe Abubakar, who had a high-profile job as military spokesman between 2015 and 2017, was abducted with his wife while travelling in Katsina state last month.

No group has said it was behind the kidnappings.

The abduction and death of Abubakar highlights the continuing security challenges facing parts of north-west Nigeria, where criminal gangs known locally as “bandits” frequently carry out kidnappings for ransom, as well as cattle rustling and attacks on rural communities.

Some militant jihadists have also operated in the region. An alleged militant camp in Sokoto state was the target of a US airstrike on 25 December last year.

Katsina has been one of the states most affected by the violence.

Local media reported that the retired officer had been going to a wedding on 30 May when armed men attacked his vehicle and seized him, his wife and their driver.

Days before news of his death emerged, a video shared on social media appeared to show Abubakar in captivity. He was seen with an apparent injury to his left leg alongside his wife and other hostages.

The military said it chose not to comment publicly on the abduction while efforts to free those in captivity were being made.

“In deference to ongoing rescue efforts by security agencies, the Armed Forces withheld public comment while every operational resource was deployed in the hope of securing his safe return,” the statement said.

The whereabouts and condition of Abubakar’s wife remain unknown. But a military spokesman said that “ongoing operations have since been further intensified to bring perpetrators to justice and to dismantle all terrorist networks threatening our nation”.

The military paid tribute to the major general, who local media reported was 61 when he died, describing the loss as “tragic” and offered condolences to his family and former colleagues.

A statement said he made “immense contributions to counter-insurgency operations… His commitment to duty and to the unity of Nigeria remains a shining example for all personnel.”

[BBC]

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Jailed South Korea ex-president gets 30 more years for sending drones into North

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Prosecutors argued that Yoon (pictured) had ordered the operation in Oct 2024 as a way to provoke Pyongyang [BBC]

A South Korean court has sentenced former President Yoon Suk Yeol to 30 years in jail for sending drones into North Korea.

Prosecutors argued that Yoon ordered the operation in October 2024 to provoke Pyongyang and create a pretext for his failed martial law bid later that year.

When Yoon declared martial law on 3 December, he had claimed he was protecting the country from “anti-state” forces that sympathised with North Korea. But it soon became clear he was driven by domestic troubles and he rolled back the order in the face of mass protests.

Yoon was impeached and is now serving time in prison after he was sentenced to life for insurrection over his botched martial law attempt.

On Friday, the Seoul District Court found Yoon, as well as his former defense minister Kim Yong-hyun, former head of the Defense Counterintelligence Command Yeo In-hyung and former head of Drone Operations Commands Kim Yong-dae guilty of treason and abuse of power.

Kim was sentenced to 30 years in jail, while Yeo received 15 years and Kim Yong-dae received three years in prison with a five-year suspended sentence.

“The defendants used the guise of a military operation to induce provocations from North Korea with the aim of creating a state of emergency,” the court said.

It added that all three officials had “provoked North Korea”, thus “increasing the risk of a military conflict”, but concluded that Yoon bore the “greatest responsibility” in this event.

Yoon’s lawyers had argued that his actions were a “legitimate” response to North Korea’s “provocations with rubbish balloons”.

This was a reference to North Korea dropping hundreds of balloons in 2024, which were later found to contain “filthy waste and trash”, across the border in the South.

The two countries have used such “propaganda balloons” in their campaigns since the Korean War, where messages are put inside the balloons.

But tensions shot up in 2024 when North Korea accused the South of flying drones into its capital. These drones allegedly scattered propaganda leaflets all over Pyongyang, in what the North described as a provocation that could lead to war.

It was Yoon who sent these drones into the North expecting it to strike back, said a judge in Friday’s ruling.

Apart from insurrection, Yoon has was also sentenced to five years in jail for abuse of power and obstructing his own arrest.

Yoon’s martial law attempt and the protests that followed created months of chaos in the country, ending in an election which saw the opposition Democratic Party’s Lee Jae-myung win a decisive mandate.

[BBC]

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