Toyota Industries under investigation for emissions fraud | EU probes TikTok | Severn Trent fined for river pollution event

Toyota Industries under investigation for emissions fraud | EU probes TikTok | Severn Trent fined for river pollution event

In today’s Portfolio Intelligence Daily, where we highlight under the radar investment themes and idiosyncratic company risks: 

  • Toyota Industries under investigation for emissions fraud
  • EU probes TikTok for potential content violations 
  • Severn Trent fined £2m over river pollution

Auquan’s analyst team curates these summaries from our intelligence engine, which uses retrieval augmented generation (RAG AI) to uncover unique insights at scale, typically involving emerging markets, supply chains, financially-material ESG risks, and the impact of regulatory changes.

The latest news from Auquan: 


Toyota Industries under investigation for emissions fraud

Japan's transport ministry is taking action against Toyota Motor Corp affiliate for engine emissions cheating.

  • Toyota Industries, the world's largest forklift truck manufacturer, is ordered to prevent a recurrence of misconduct.
  • Toyota Industries could lose certification for an excavator engine, and similar actions may be taken for two forklift engine models.
  • The severity of the misconduct will be considered for engines used in Land Cruiser vehicles and HiAce vans.
  • In January, Toyota reported misconduct, involving tampering with performance test data for multiple forklift and automobile engine models.

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EU probes TikTok for potential content violations 

The European Union is investigating TikTok, owned by ByteDance, for potential breaches of online content rules, specifically focusing on child protection and transparent advertising.

  • The investigation is based on concerns about TikTok's design, including addictive features, screen time limits, the 'rabbit hole effect,' age verification, and default privacy settings.
  • The European Union's Digital Services Act (DSA), applicable since Feb. 17, requires large online platforms to address illegal content and risks to public security.
  • Potential fines for ByteDance could reach up to 6% of its global turnover if TikTok is found guilty of violating DSA rules.
  • The European Commission will focus on TikTok's system design, including algorithmic systems that may stimulate behavioral addictions, and assess the platform's measures for privacy, safety, and security for minors.

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Severn Trent fined £2m over river pollution

Severn Trent has been fined over £2 million for polluting the River Trent near Stoke, with the Environment Agency criticizing its storm contingency plans as "woefully inadequate.

  • Severn Trent is the UK's largest regulated water firm by customers and supplies clean water and waste management to over 17 million
  • The pollution occurred between November 2019 and February 2020 when huge amounts of raw sewage were discharged into the river from Strongford wastewater treatment works near Stoke-on-Trent, Staffordshire.
  • Severn Trent pleaded guilty to two charges of illegally discharging approximately 240 million liters of raw sewage into the river.
  • The company was fined £1,072,000 and £1 million, with additional costs of £16,476 and a victim’s surcharge of £181.
  • The sewage discharge resulted from the failure of two out of three screw pumps at the Strongford works.
  • The Environment Agency's investigation revealed that Severn Trent's contingency plans were inadequate, with a major pump being out of action for 52 days prior to the incident.

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