Telecom behemoth KPN must beg for mercy from its shareholders, who must accept… a €4 billion follow-on stock offering

From 2003 until May, 2011, the Dutch telecom company KPN was a dead-cert to the investors: not too exciting, but with always the right bang-for-the-buck. 

Former CEO Ad Scheepbouwer thought that, in order to keep the shareholders happy, a steady flow of high dividends was exactly what the doctor ordered. And happy the shareholders were… Especially the ones with a long-term vision that ended on dividend payment day. Unfortunately, this high-dividend strategy turned out to be a losing bet for KPN eventually. And now the grapes are sour for the shareholders.

The necessary investments for the future, in order to keep its fixed and mobile network up-to-date and state-of-the-art, were neglected by KPN in exchange for short-term ‘shareholder value’. In other words: the company has been used as a cash cow.

Currently the telecom behemoth is hit by a perfect storm of:

• An outdated infrastructure that is in desperate need of updating and/or replacement, if the company doesn’t want to lose its current position on the business-2-business fixed telephone+internet market and the b2c (consumer) market for 'internet+television+fixed voice-over-IP telephone' in The Netherlands;
  
• An earnings-model for smartphones and mobile computing that is still lightyears removed from one that compensates the lost earnings for normal telephone calls and SMS’s;
  
• A 4G-auction gone awry that cost the contenders about twelve times as much as initially planned: €3.8 bln instead of €300 mln. KPN was one of the biggest ‘victims’ of this auction, as it paid no less than €1.35 bln for its package of licenses;
  
• A war-chest that is depleted by the earlier excess dividend payments and the failed auction;

What makes things worse for KPN is that the money invested in 4G-licenses is dead money for the time being. As long as the new network, hosting the 4G-protocol, is not rolled out, these licenses don’t yield any revenues. This is the reason that KPN at this moment is truly hurrying to deploy the 4G mobile network in The Netherlands. Complicating factor is that deploying such a network costs massive amounts of money too.

In my earlier article on the 4G-auction, I estimated the costs for rolling out the 4G network itself in The Netherlands at €1 bln. Yesterday, however, a KPN official stated on BNR business-news radio that the costs for rolling out the 4G network would be closer to €2 bln, which made my estimate too optimistic.

With these circumstances in mind you can probably imagine that KPN didn’t have the best results for 2012Q4. And indeed, it didn’t, according to an article in Het Financieele Dagblad (www.fd.nl):

KPN sees further deterioration of results in Q4

During 2012Q4, Dutch telecom company KPN saw its sales and profit further deteriorate. The company only met its financial goal for 2012 by a whisker, thanks to the sale of a large quantity of radio masts to the tune of €480 mln.

This Tuesday, 5 February 2013, the telephone company published its Q4 data and the annual data on 2012. Last Quarter, sales dropped  by 7.3% and the revenues dropped by 15% y-o-y. The cashflow even dropped by 33%. “We have to deal with a period of reduced underlying profitability in all three core markets”, according to CEO Eelco Blok in a spoken statement during the presentation of the Q4-data.

The economic setbacks forced KPN to lower its targets for the broadband market, where the company desires a market share of 40%, thus postponing the earlier target of 45% for this market.

The company doesn’t mention any concrete targets for 2013, except that the investments should remain below €2.3 bln. In 2014, a period of ‘stabilisation’ will occur, according to KPN and afterwards the lowered dividend of 3 cents per share should grow again.

With €12.7 bln for the whole year 2012, sales were 3.5% lower than the previous year. KPN blamed this partly to the underperforming mobile branch and partly to the sales of parts of its ICT-subsidiary Getronics, which could not add to profit anymore. 

With €693 mln profits were 55% lower than the previous year:

• In 2011, KPN enjoyed a special tax break, which it did not have in 2012;
• Restructuring costs for the company grew during 2012;
• Operational results were under pressure in 2012;

In 2012, the company invested 7.9% more than in 2011.

A positive side to this annual data is that KPN increasingly invested in its network in 2012, which it failed to do sufficiently in the previous years. It seems that Eelco Blok is well on its way to cleanse the company from the negative influence of Ad Scheepbouwer’s senseless policy concerning dividends and investments. This might not make him popular among the shareholders, but it makes sense for the future in my opinion. 

Nevertheless, for 2013 Blok announced an investment ceiling of €2.3 bln, which doesn't seem smart if you really want to update your fixed and mobile infrastructures.

A bad thing is that while the investments in the networks (mobile as well as fixed) in The Netherlands, Belgium and Germany will remain enormous, the revenues will not grow accordingly.

In earlier articles (see the first link in this article), I wrote that fixed and mobile internet, telephony and television will probably become utilities like gas, water and light. You can buy them for a competitive price at the highest quality from a substantial number of nearly-equivalent providers. In the Dutch market, it doesn’t matter whether you buy these services from the telephone companies, the ‘cable(-TV) guys’ or through providers of satellite broadcasting services (TV and telephone): quality is optimal and the products are sold relatively cheap.

As the quality, speed and coverage of fixed and mobile services will come close to optimal (i.e. maximum speed and quality) soon for every provider of these services, this leaves only price as a unique selling point. 

SMS and mobile telephone calls had always been the genuine cashcows from 1994 until 2010 for the telco’s, but these services will not flourish anymore… ever.

The free apps (Whatsapp, Twitter, Skype etc.) that use the (nearly free) broadband possibilities of the smartphones, make this impossible. Even if Skype and Whatsapp want to ask a (token(?)) price for their services, there will be a herd of other app-makers and companies that will offer these services for free again.

As there is only the price to compete with, this could easily lead to a price war between the telco’s, the cable guys and newcomers on this extremely competitive market. In my opinion, this reflects a grim outlook concerning the future profitability of KPN and its peers.

And there was more yesterday in the statement of CEO Eelco Blok: He wanted to make the balance ratios of KPN more healthy and wanted to enable the necessary future investments in the fixed and mobile infrastructure. To achieve this, Blok announced a €4 bln (!), dilutive, follow-on stock offering for KPN for this year, exclusively to holders of current stock: a so-called claim-emission in The Netherlands.

This announcement hit the shareholders like a cluster bomb. After a catastrophic drop in the stock rate of 23% at the beginning of the trading day, KPN ended the day with a still massive 16% loss on its stock. This was the second day in a row that a tech-stock showed disastrous results at the stock exchange, after Imtech one day earlier.

One of the people most hit by the drop in stock rates of KPN, was Carlos Slim of América Móvil, officially the richest man in the world. Since he bought his 28% decisive stake in KPN, the Dutch telecom behemoth already cost him €1.7 bln in losses.

I don’t give advices on http://ernstseconomyforyou.blogspot.com, concerning buying or selling certain stock, as this is not my business. Therefore I don’t take any responsibility if you follow up my “non-advices” anyway.

Still, it might have been one of my best non-advices to my readers, when I wrote in my article “Is the fairytale of unlimited profits in the telecom business finally over? Why investors in Dutch telecom behemoth KPN should consider selling their stock to América Móvil!”:

Currently, there are lots of tricks and stunts that telecom providers pull to keep customers under contract, while paying lots of money:

• exclusive phone contracts (Apple(!)) with high subscription and usage fees;
  
• cheap or free smartphones (non-Apple) with high subscription and usage fees;
  
• opaque contracts and subscription forms that are impossible to comprehend for normal citizens;
  
• contract-limits for data usage;
  
• very expensive data usage beyond the contract-limits;
  
• pinched-off access to free apps that substitute dearly paid telecom services;

I think this business model will disappear to be replaced with a business model that treats fixed and mobile internet as a utility. The customer buys a phone and pays a very limited fee per month for internet bandwidth. All ´classic´ telephone actions (calling, SMS-ing) will go via IP connections, as there is no need anymore to use the classic digital voice or data connections.

Based on this opinion that I still endorse completely, it would be a smart move of the Dutch shareholders of KPN to take the money of América Móvil and run… KPN has been and still is a very good company, that will present its shareholders with decent profits in the future and will remain a leader in innovation in my opinion. However, I strongly doubt that this company will be the money machine with the excess profits it had been before. The same is true for its main competitors in The Netherlands and abroad: T-Mobile, Vodafone, Téléfonica and others.

The decreasing profits of KPN in 2012 and especially yesterday’s events show in my opinion that I was right on May 29, 2012 and still am right with these assumptions. All shareholders that sold their KPN shares for €8 to Carlos Slim, had a pretty good bargain. The others that kept the KPN stock, including Carlos Slim himself, saw its value shrink to €3.45 as of yesterday.

While ‘slim’ in Dutch means ‘smart’, it doesn seem to apply to Carlos Slim’s takeover of KPN. Maybe, times do still change for him, but I’m afraid they don’t…

Spanish PM Mariano Rajoy allegedly received €25,000 in kickbacks per year for more than a decade and so did many others: can the Partido Popular be held partly responsible for the Real Estate bubble in Spain?

The Partido Popular, the conservative party of Spain, has become under heavy fire due to recent accusations of corruption and bribery. While the attention focused initially on other members of the PP, since 31 January the spotlight is firmly aimed at Prime Minister Mariano Rajoy himself. He is accused of receiving more than €25,000 in kickbacks per year for the full period between 1997 and 2008.

The generous donors have supposedly been large building companies, who made their fortune during the emerging of the Spanish real estate bubble. The involvement of Rajoy in this year-long corruption case has been discovered by the Spanish newspaper El País. However, for purposes of convenience I start with some quotes from the Financial Times:

Rajoy drawn into corruption scandal

Spain’s prime minister has become embroiled in a growing scandal over secret cash payments to ruling party politicians after a newspaper published what it claimed to be accounts showing payments reaching as high as Mariano Rajoy himself.

The Popular party on Thursday again firmly denied that its leaders, including Mr Rajoy, received improper cash payments funded from donations from construction companies, as flames from the corruption allegations licked at the feet of some of its most senior figures.

The PP insisted that no party leader received payments outside their regular salaries after El País, Spain’s biggest selling daily, claimed that the prime minister had received €25,200 each year since 1997 in payments made every three or six months, reproducing on its front page what it claimed to be pictures of the former PP treasurer’s accounting book.

Maria Dolores de Cospedal, the PP’s general secretary, said that the accounts published in photograph form were fake. She denied any member had been paid outside their normal salaries, and insisted no form of secret accounting had taken place.

After Pío García Escudero, the PP president of Spain’s Senate, confirmed that a loan referencing his name in the alleged accounts was genuine, Ms Cospedal said this did not in any way confirm the veracity of the other entries in the accounts, which showed herself receiving several payments in 2008.

While the Financial Times only states that payments have been made by Spanish construction companies, El País supplies some more details on this shocking corruption case. 

The snips mentioned here have been translated from Spanish by me:

The secret accounts of Luis Bárcenas

The accounts held by Luis Bárcenas had nothing to do with official state subsidies for the Partido Popular, as part of the public financing for Spanish political parties. To the contrary, all payments have been recognized as private donations from well-known companies and entrepreneurs, especially from the construction industry.

From  those payments, according to these accounts, €120,000 have been donated in 2004 by Luis de Rivero, who was at the time vice-president of Sacyr Vallehermoso. In 2006, he donated another €240,000 when he was already president of this construction company. 

Other payments have allegedly been made by Juan Miguel Villar Mir, president of OHL: respectively €100,000, €180,000 and €200,000 in 2004, 2006 and 2008. 

José Mayor Oreja, president of FCC Construction and brother of the former Minister of Domestic affairs, has made two payments of €90.000 and €75.000 in 2008. A person or company, nicknamed “Mercadona” (i.e. ‘market’) donated €90,000 and €150,000 in 2004 and 2008. All persons mentioned here, however, denied directly or through their spokesmen to have donated these amounts.

The article in El País is a must-read for people who are interested in this matter and master Spanish. The amounts that have been paid might not seem too spectacular, but according to another article in El País, the total amount of briberies over the years has been €40 million: a very substantial amount, especially for a political party.

Besides that, we should look at those payments in the light of A. the fact that the Partido Popular has claimed that the Spaniards have been “living beyond their means” and B. the desperate economic situation in Spain.

According to Lex Rietman, the Dutch correspondent for BNR business radio (www.bnr.nl) in Spain, the claim that the Spaniards have been living beyond their means is ridiculous: the average Spaniard doesn’t earn more than €1000 per month.

And concerning the economic situation of Spain: the country, ‘prominent’ member of the PIIGS countries, has currently more than 26% of unemployed workers and more than 55% (!) of unemployed youngsters, according to the latest unemployment data by Eurostat. The economic situation in the country is yet somewhere between ‘hopeless’ and ‘extremely difficult’. 

The country is still in the middle of a very difficult transition from an agricultural and tourism-oriented country towards a modern services and industry-oriented country and this process would take at least another 20 years in prosperous economic times. In these desperate times, next to Seat and Zara, the only viable export product from Spain seem to be the Spaniards themselves. These are leaving Spain in large numbers to find jobs elsewhere in Europe.

On top of that, since more than a decade the country has suffered from a real estate bubble of epic proportions, that brought the Spanish economy and the banking industry almost to its knees. It seems that the Partido Popular has received briberies from the construction industry, exactly during the period in which this real estate bubble has emerged. These events make this party at least partially responsible for the Spanish real estate bubble.

Like other liberal-conservative parties all over Europe, the Partido Popular has little compassion with the unemployed and other people in need of welfare in Spain. Parties like these often use big words for these ‘spongers on society’.  In general, these parties think that the unemployed people would earlier find a job, when the unemployment benefits and welfare amounts would be diminished to the bare minimum.

However, when parties like Partido Popular (and prominent members of the VVD in The Netherlands) have been involved in widespread corruption, they should meet as little compassion as they show to people-in-need themselves. Receiving briberies for a large number of years is already a disgrace, but lying about it and washing your hands of innocence is even worse.

If the facts in El País and other newspapers can be proved beyond reasonable doubt and I have not much doubt that they can, than Mariano Rajoy has one way to go: to the exit! In this case, the Partido Popular and its donors should go through an extensive cleansing process, in which all perpetrators of this bribery affair should be fired and prosecuted.

It seems that the Spanish opposition and the many protestors in the streets of Madrid came to the same conclusion!

Modern leaders: knights of the divine self-righteousness!

Everybody probably knows the rules-with-a-wink that some managers of companies have on a piece of paper in their office:

Rule 1 – I am always right

Rule 2 – When by chance I am wrong, then rule 1 automatically applies

Fortunately, most people have enough self-reflection and sense of humour to admit that they are just a drop of water in an endless sea. They do their best and try hard, but the lists of successes and failures is nicely balanced out.

The search for perfection and divinity in ourselves is often frustrated by laziness, disorder, lack of concentration, ignorance and other ‘bad’ habits: these habits are what makes us human after all.

On top of that, most humans are surrounded by people that either love them and respect them or dislike and criticise them. Both categories are very well able to keep people firmly with their feet on the ground.

However, there is a category of people that is often not so much connected with the earth anymore. These are the so-called leaders. It doesn’t matter much whether those leaders are:

• leading scientists and pundits; 
• CEO’s of small companies or multinationals; 
• Religious leaders on a local, national or global level; 
• Political leaders on a regional, national or global level. 

Very often, you notice that similar patterns are emerging in those persons:

• When they acquire their position, they build up a circle of trusted persons around them, while shutting out ‘strangers’, people that have very different opinions or a different personality and/or people that they don’t like or trust;
  
• Their office, headquarters or palace starts to look like a cocoon that becomes more and more disconnected from the real world surrounding it;
  
• They become overdosed with compliments on their decision-making, personality, character and looks, while at the same time they suffer from a lack of critical and contradictive people around them;
  
• They start to believe in their own divinity and truly think that everything they do is God-given;
  
• In the end, they can’t see the difference anymore between their own property and interest and other people’s properties and interests: “what is good for me personally, is good for my company or country”;
  
• The worst victims of this ‘leaders-disease’ start to get rid of people who stand in their way or pose a (future) hazard for their position: sometimes by firing them and sometimes even by simply killing them or making their life impossible; 

I came to these reflections under influence of three events last week:

• The nationalization of SNS Reaal NV in The Netherlands, as a consequence of past mismanagement and recklessness;
  
• The sudden, serious illness of a member of the (in)famous Pussy Riot punk-rock group in Russia, caused by fatigue as a consequence of forced labour;
  
• The hacks into the computer systems of the Washington Post, by presumably Chinese government officials, who want to intercept / terminate unfavorable news on China in the most important and authorative foreign newspapers; 

Ultimately, all these events have  been caused by leaders who started to believe in their own divinity and couldn’t stand criticism on their position.

The leader of SNS Reaal

Sjoerd van Keulen was CEO of SNS Reaal NV, a combination of a relatively small Savings and Loans bank and an insurance company in The Netherlands. 

This bank/insurer was doing fine and it had a rock-solid future ahead, as it filled the void that the large bank/insurers Fortis ASR and ING Groep (ING) and the large banks ABN Amro and Rabobank left open.

However, in the mind of ‘leader’ Van Keulen, this small, but sturdy bank was not ‘exciting enough’. In 2006, Van Keulen guided SNS Reaal through an IPO at the Amsterdam Exchange (AEX) and – with the shareholder money burning in his pockets – he started a take-over spree that left the CEO’s of ING Groep NV, Fortis-bank and ABN Amro flabbergasted.

Van Keulen and his henchmen took over:

• Route Mobiel, an emergency car breakdown service, that was directly competing with the emergency service of the Dutch automobile association ANWB;
  
• Bouwfonds Property Finance, a Commercial Real Estate investment company with enormous, billion-euro assets in the US, Spain, Luxemburg and The Netherlands. This company later turned out to be the Nemesis of SNS Reaal;
  
• AXA The Netherlands: the Dutch activities of the large French insurer AXA;
  
• Zwitserleven: the Dutch and Belgian activities of Swiss insurer SwissLife; 

SNS Reaal started to falter during the first months of the credit crisis in 2008: the top-heavy insurance branch of this “small bank with a big attitude” was hit heavily by the collapsing stock and bond markets and the diminishing demand for Life-insurances. Just like its peers Fortis-bank, ING and Aegon insurances, SNS Reaal needed to be rescued with state support, albeit much less than the other banks: €750 million.

At the time that the problems with the insurance branch of SNS Reaal were more or less solved, the real problem-child SNS Property Finance (formerly Bouwfonds PF) started to bleed money at an unprecedented rate, leading the bank into its demise eventually.

Afterwards, it became clear that SNS Reaal and Van Keulen had been warned for the underlying risk of their expansion plans on a number of occasions, starting as early as 2006. They had been warned for Bouwfonds through the media [FEM Business Magazine in its issue of August 5, 2006 | unfortunately no vivid link available – EL] and even by their peers Rabobank and ABN Amro, who almost reluctantly sold them Bouwfonds PF(!). Also the risk control department within SNS Reaal itself, is said to have warned the executive management.

In 2010, auditors of Ernst & Young warned SNS Reaal in a secret report that a write-off of €1.2 bln on their CRE-portfolio was inevitable.

However, as true ‘leaders’, Van Keulen and his successor Ronald Latenstein van Voorst didn’t listen to these warnings. Instead, they collected and maintained their X-mas tree of companies, only to see it crumble five years later, at the beginning of 2013. At that time, Van Keulen had already left SNS Reaal as CEO, while receiving a book for the occasion, called: “Daring as a virtue”.

There is one quote by SNS Reaal itself that I don’t want to withhold from you. It comes from the Adopted Minutes of the SNS shareholders meeting 2008 (clicking the link immediately starts the download of this PDF-file):

The chairman noted that it is hard to remain humble when one is as good as we are.

That says it all, doesn’t it?!

The leader of the Kremlin

Vladimir Vladimirovich Putin is the archetype of the modern, hedonistic leader that I try to describe in this article.

When Putin rose to power in the Kremlin as the young and dynamic successor of the notorious “boozer” Boris Yeltsin, he seemed like a down-to-earth and sensible Russian president. Approachable, intelligent, humorous (albeit sometimes quite vulgar) and from a common, middle-class descent, with good knowledge of the German language. At the time, this enormously helped Russia’s relation with the Germany of Bundeskanzler Gerhard Schröder.

He was a former student of the State University of St-Petersburg, who had enjoyed a brilliant career in the Russian Secret Service KGB/FSB.  And although Putin had some good friends-with-a-dark-past, it seemed that he could further normalize the relation with the West from the point where Gorbachev and Yeltsin left it. 

However, after a few years Putin got corrupted by the power and influence that the Kremlin stands for. He became a victim of his own cocoon of compliments and (forced) admiration, protection and lack of contradiction and criticism.

In other words, Putin turned into a solar king, like Louis XIV:

• Putin’s own actions became more and more audacious (take f.i. the fatally messed-up liberation action of Russian children, taken hostage by Chechnian terrorists or the murder on Alexander Litvinenko that people surrounding Putin have been accused of) and grotesque (‘Putin in a Delta-wing, saving the geese…’);
  
• His humour and leadership-style became more hostile, aggressive and vulgar, alienating leaders from former adversaries and friendly countries;
  
• He started to mix up Russia’s interests and his own: for instance by using Gazprom as his personal pension plan or by appointing his ‘henchman’ Dmitriy Medvedev as his (temporary) successor, while changing the constitution, so he could remain in charge as president for two more stints;
  
• On top of that, he allowed that his friends and trustees built up their own empires at the expense of the Russian people. 

Deepest point during Putin’s presidency: the arrest and year-long imprisonment of the harmless punk-rock group Pussy Riot, that dared to criticise and personally offend him in a Russian-Orthodox church.

During the last Russian elections, Vladimir Putin has for the second time been re-elected as president of Russia. Apart from the blatant signals of election fraud during this day, there is still a majority of Russians that trusts him better than they trust the opposition.

However, if Putin’s increasingly erratic behaviour of the last few years is a tell-tale signal, Putin is not certain at all that this group will remain loyal to him in the future. It could be that if Putin stays in charge a few years longer, the Russian people will finally become fed up with him and will try to impeach him or even worse. Time will tell…

The leaders of China

Under a thin capitalistic varnish, China is still very much the communist country that it had been since the days of Mao Zedong. In this context, I mean communist as in ‘all animals are equal, but some animals are more equal than others’. And China will probably remain to be so for a very long time. To paraphrase Keyser Sösze from the classical movie ‘The Usual Suspects’: ‘the greatest trick the devil ever pulled, was convincing the world he didn’t exist anymore’.

Although there is now much more room in China for entrepreneurship, it is the kind of entrepreneurship that only benefits a relatively small group of people, while ignoring or even hurting the interests of the largest group of Chinese: the common people.

Protests of these common people against the inequality of the Chinese society, the environmental damage and straightforward abuses of workers caused by these entrepreneurs, have often been brought down in the most brutal manner by the local and central authorities. Many Chinese protestors paid the ultimate price for their protests.

The ‘most equal’ group in China are the leaders of the executive committee of the Chinese Communist party: leaders like current president Hu Jintao and PM Wen Jiabao and the future president Xi Jinping. While they try to look like simple civil servants in their uniform-like, common blue suits, reality is very different. These are people with unlimited power and – as a consequence – probably unlimited wealth.

There are two things that the current Chinese leadership are extremely allergic to:

• Losing control over the people of their country;
• Criticism on them personally and on their position;

How extreme the Chinese desire for total control, ‘peace and quiet’ is, became already dramatically clear during the events at the Tiananmen Square in 1989, that cost the life of hundreds and maybe even thousands of protestors. Now, more than 24 years later, it is still not clear how many people have been massacred on this doomed day in June, 1989.

Even today, this desire for total control by the Chinese government is very much alive and kicking. Numerous local and national dissidents have been killed in the past. Others have either been imprisoned or they live at home in fear, being stalked and intimidated 24-7 by the police and government officials that follow all their whereabouts.

While the internet had initially been allowed and partially ignored by the Chinese government as being harmless, this changed during the last years. 

The Chinese government got an ever tighter grip on the internet and presented internet behemots like Youtube, Yahoo and Google with ever-longer lists of do’s, don’ts and forbidden subjects. If these companies wouldn’t follow the Chinese guidance, their sites were simply shut down by the Chinese officials.

Also other sources of news and information have been victims of the Chinese control fetish. At the beginning of this year, Chinese journalists - sick and tired with the stringent government control - were protesting against a overdiligent civil servant, who had censored a critical article in the Southern Weekly newspaper.

And during the last few weeks, at least two leading American newspapers (The New York Times and the Washington Post) have been attacked by Chinese hackers, after they published critical articles about the €2.7 bln fortune that PM Wen Jiabao allegedly gathered during his stint as Prime Minister of China.

These were the last, for the time being, in a series of Chinese attacks that started in 2008, according to the following article in the New York Times:

Washington Post Joins List of News Media Hacked by the Chinese

The question is no longer who has been hacked. It’s who hasn’t?

The Washington Post can be added to the growing list of American news organizations whose computers have been penetrated by Chinese hackers.

After The New York Times reported on Wednesday that its computers as well as those of Bloomberg News had been attacked by Chinese hackers, The Wall Street Journal said on Thursday that it too had been a victim of Chinese cyberattacks.

According to people with knowledge of an investigation at The Washington Post, its computer systems were also attacked by Chinese hackers in 2012. A former Post employee said there had been hacking attempts at the Washington Post for at least four years, but none targeted the company’s newsroom. Then, last year, newsroom computers were found to be communicating with Web servers that were traced back to China, according to people with knowledge of the Post investigation who declined to speak on the record.

Security experts said that in 2008, Chinese hackers began targeting American news organizations as part of an effort to monitor coverage of Chinese issues.

In a report for clients in December, Mandiant, a computer security company, said that over the course of several investigations it found evidence that Chinese hackers had stolen e-mails, contacts and files from more than 30 journalists and executives at Western news organizations, and had maintained a “short list” of journalists for repeated attacks.Among those targeted were journalists who had written about Chinese leaders, political and legal issues in China and the telecom giants Huawei and ZTE.

One could argue that the uncharismatic and inconspicuous Chinese leaders are the total opposite from flamboyant leaders, like solar-king Vladimir Putin or bank-buccaneer Sjoerd van Keulen.

However, all these leaders have in common that:

• They all live in a self-built cocoon that clouds their vision on reality;
• They don’t accept contradiction and personal criticism anymore;
• They all confuse personal for mutual interests, dragging the people down with them that were under their responsibility; 

Summarized, they are all knights of the divine self-righteousness!