North Korea said solving food and power shortages are urgent goals in 2012, and called on its people to defend Kim Jong Un, who inherited control of a country struggling to feed itself after 60 years of totalitarian rule.
+%3Cp%3E+Former+MF+Global+CEO+Jon+Corzine+returned+to+Capitol+Hill+Thursday%2C+where+he+rejected+allegations+aired+earlier+this+week+that+he+was+aware+of+fund+transfers+from+customer+accounts.%3C%2Fp%3E%3Cp%3ECorzine%27s+testimony+came+two+days+after+Terry+Duffy%2C+head+of+exchange+operator+CME+Group+%28%29%2C+suggested+in+a+separate+Congressional+hearing+that+Corzine+may+have+been+aware+of+unlawful+money+transfers+out+of+customer+accounts+in+the+days+before+MF+Global+filed+for+bankruptcy.%3C%2Fp%3E%3Cp%3E%3Cp%3E%3C%2Fp%3E%3Cp%3E%3Cp%3E%3C%2Fp%3E%3C%2Fp%3E%3C%2Fp%3E%3Cp%3ELawmakers+have+been+probing+the+brokerage%27s+collapse%2C+and+in+particular%2C+the+revelations+that+more+than+%241+billion+in+customer+funds%2C+mostly+from+commodities+accounts%2C+are+still+missing.%3Cbr%3E+%3Cbr%3E+Corzine+has+consistently+said+he+has+no+idea+how+the+money+went+missing%2C+never+ordered+that+customer+funds+be+misused+and+did+not+learn+of+the+massive+shortfall+until+less+than+24+hours+before+the+firm+filed+for+bankruptcy.+In+the+commodities+business%2C+customer+money+at+brokerages+like+MF+Global+%28%29+is+supposed+to+be+protected+at+all+times%2C+even+in+the+event+of+a+bankruptcy.+%3C%2Fp%3E%3Cp%3EBut+Duffy+claimed+Tuesday+that+Corzine+was+aware+that+the+firm+had+tapped+customer+accounts+for+its+own+use+in+its+final+days.+%3C%2Fp%3E%3Cp%3ESuch+a+transaction+could+be+legal+under+some+circumstances%2C+and+Duffy+did+not+specifically+say+that+Corzine+himself+had+authorized+illegal+money+transfers.+He+did+say%2C+though%2C+that+the+firm+had+made+at+least+some+transfers+from+customer+accounts+illegally.%3C%2Fp%3E%3Cp%3ECorzine+denied+Duffy%27s+allegations+Thursday%2C+saying+he+%26quot%3Bdid+not+in+any+way+know+about+the+use+of+customer+funds+on+any+loan+or+transfer.%26quot%3B+In+the+firm%27s+last+hours%2C+he+added%2C+he+learned+of+the+massive+hole+in+customer+accounts+but+did+not+know+how+it+was+formed.%3C%2Fp%3E%3Cp%3EInvestigators%2C+however%2C+have+been+developing+a+clearer+picture+of+just+what+went+wrong.+Rep.+Randy+Neugebauer+of+Texas+said+at+Thursday%27s+hearing+that+a+Congressional+investigation+had+shown+that+MF+Global+moved+at+least+%24700+million+out+of+customer+accounts+in+the+days+before+its+bankruptcy+%26quot%3Bto+meet+liquidity+needs+of+the+firm%26quot%3B.+%3C%2Fp%3E%3Cp%3EThis+was+apparently+done+without+putting+the+collateral+in+place+to+make+such+a+transaction+legal%2C+according+to+Neugebauer%27s+account.%3C%2Fp%3E%3Cp%3EThe+allegations+follow+on+similar+claims+from+CME+Group%2C+which+says+MF+Global+broke+the+law+in+using+customer+funds+for+its+own+benefit+%3Ca+href%3D%22http%3A%2F%2Fpayday-loans-cheap.com%22%3Epayday+loans+guaranteed+no+fax%3C%2Fa%3E%3C%21–+.+–%3E.+Duffy+also+claimed+Thursday+that+the+firm+had+falsified+accounting+statements+to+conceal+the+shortfalls+in+customer+accounts.%3C%2Fp%3E%3Cp%3ERegulators+under+scrutiny%3A+Witnesses+also+appeared+in+the+latter+half+of+Thursday%27s+hearing+from+the+New+York+Federal+Reserve+Bank+and+from+regulators+including+the+Securities+and+Exchange+Commission+and+the+Commodity+Futures+Trading+Commission.%3C%2Fp%3E%3Cp%3ELawmakers+quizzed+them+on+how%2C+in+an+era+following+the+global+economic+meltdown%2C+regulators+could+allow+another+big+financial+institution+to+fail%2C+and+lose+more+than+%241+billion+of+its+customers+money+in+the+process.+%3C%2Fp%3E%3Cp%3EThomas+Baxter%2C+general+counsel+of+the+Federal+Reserve+Bank+of+New+York%2C+testified+on+Thursday+that+his+agency+had+scrutinized+MF+Global+for+more+than+two+years+before+giving+it+the+green+light+to+trade+U.S.+securities.+%3C%2Fp%3E%3Cp%3EBut+there+were+some+major+compliance+issues+along+the+way+which+the+brokerage+eventually+fixed%2C+he+said.+%3C%2Fp%3E%3Cp%3EBaxter+said+the+U.S.+Commodity+Futures+Trading+Commission+found+that+the+company+failed+to+supervise+traders%2C+neglected+to+transmit+accurate+prices+of+its+natural+gas+options+and+didn%27t+maintain+written+records+of+at+least+one+of+its+clients.%3C%2Fp%3E%3Cp%3E%3C%2Fp%3E%3Cp%3E+%3C%2Fp%3E%3Cp%3EFurthermore%2C+MF+Global%27s+parent+company+was+based+in+Bermuda%2C+he+said%2C+noting+that+the+Fed+requires+its+primary+dealers+to+be+domiciled+in+the+U.S.%3C%2Fp%3E%3Cp%3EBut+MF+Global+fixed+all+of+these+issues%2C+said+Baxter%2C+and+that%27s+why+the+Fed+finally+approved+the+now-bankrupt+brokerage+to+trade+in+U.S.+securities.%3C%2Fp%3E%3Cp%3E%26quot%3BThe+New+York+Fed+designated+MF+Global+as+a+primary+dealer+to+meet+our+highly+specialized+needs%2C+and+we+followed+our+primary+dealer+policy+to+the+letter+without+fear+or+favor%2C%26quot%3B+said+Baxter%2C+in+prepared+testimony+to+a+Congressional+subcommittee.%3C%2Fp%3ELame+responses+from+CEOs%3Cp%3EThe+Fed+designated+MF+Global+as+a+primary+dealer+in+February+and+conducted+due+diligence+on+the+company+through+October%2C+%26quot%3Bwhen+its+financial+condition+deteriorated+abruptly+and+quickly%2C%26quot%3B+said+Baxter.%3C%2Fp%3E%3Cp%3EMoody%27s+downgraded+MF+Global+on+Oct.+24+and+the+following+day+the+brokerage+reported+its+%26quot%3Blargest+quarterly+earnings+loss+ever%2C%26quot%3B+said+Baxter.+At+that+point%2C+he+said+the+Fed+blocked+MF+Global+from+dealing+securities.%26nbsp%3B+%3C%2Fp%3E++%3Cp%3E%3Ca+href%3D%27http%3A%2F%2Fmoney.cnn.com%2F2011%2F12%2F15%2Fnews%2Fcompanies%2Fmf_global_fed%2Findex.htm%27+rel%3D%27nofollow%27%3ESource%3C%2Fa%3E%3C%2Fp%3E+
+%3Cp%3ETORONTO%97The+Toronto+stock+market+opened+higher+as+oil+and+gold+prices+rose+and+traders+digested+positive+economic+news.%3C%2Fp%3E+%3Cp%3EThe+S%26P%2FTSX+composite+index+was+up+25.01+points+at+11%2C660.39.%3C%2Fp%3E+%3Cp%3EThe+Canadian+dollar+added+0.24+of+a+cent+to+96.67+cents+US%2C+with+gains+accelerating+after+the+release+of+statistics+showing+wholesale+trade+grew+more+than+expected+in+October.%3C%2Fp%3E+%3Cp%3EWall+Street+also+opened+higher%2C+with+the+Dow+Jones+up+46.7+points+11%2C913%2C+the+Nasdaq+ahead+12.4+points+at+2%2C567.73+and+the+broader+S%26P+500+up+4.7+points+at+1%2C224.34.%3C%2Fp%3E+%3Cp%3EAnd+commodities+were+mostly+higher%2C+with+the+January+oil+contract+up+85+cents+to+%2494.38.%3C%2Fp%3E+%3Cp%3EThe+February+gold+contract+added+US%245.70+to+US%241%2C603.60+per+ounce%2C+while+copper+shed+a+penny+to+US%243.32+per+pound.%3C%2Fp%3E++%3Cp%3E%3Ca+href%3D%27http%3A%2F%2Fwww.thestar.com%2Farticle%2F1104172%27+rel%3D%27nofollow%27%3ESource%3C%2Fa%3E%3C%2Fp%3E+
Covidien plc will spin off its Hazelwood-based drug business, turning it into an independent company that may restore the historic corporate name of Mallinckrodt.
Covidien, based in Dublin, makes medical devices and medical supplies in addition to drugs. The proposed spinoff also will have its legal headquarters in Ireland, largely for tax reasons, company executives said in a conference call.
But the spinoff’s U.S. operation will be based in Hazelwood, and its new CEO will work from here. Spokesman Steve Littlejohn said the company has not made a final decision on its name, “but chances are good that it will be Mallinckrodt.”
Covidien’s pharmaceutical business has $2 billion in sales, with two-thirds of that coming in the U.S. market. It turned an operating profit of $318 million this fiscal year.
The drug business is a large provider of acetaminophen, the ingredient in Tylenol, and the largest U.S. supplier of opioids; both are pain medicines. Other lines include contrast products used with medical imagery and nuclear medicine products.
The pharmaceutical operation currently employs about 2,500 people in metro St. Louis. A company spokesman said the move should have no immediate impact on jobs here. Some jobs might be added as the firm sets up its own administrative operation.
Analysts had speculated that Covidien might get rid of the drug operation. Although profitable, it is less lucrative than the rest of Covidien and demands a higher investment in research and development. The drug operation earns a 16 cent operating profit for every dollar of sales, compared with 28 cents for the rest of the company.
The drug operation has a “lumpy” revenue history, notes analyst Aaron Vaughn of Edward Jones in Des Peres. The division is largely a generic drugmaker, and that sector suffered through a price war in past years, he noted.
“We thought they would be getting the business right-sized so that they could spin it off and let it grow on its own,” he said.
Covidien Chief Executive Jose Almeida said the pharmaceutical drug division’s performance had improved in recent years.
“We’re confident the business can now stand on its own,” he said in a conference call Thursday morning.
He said the company had been thinking about shedding the business for several years, citing “major differences” between drugs and Covidien’s other medical products. The operations have different business models, sales channels, customers and capital requirements, and demand different talents, he said.
Separating the operations would allow both to focus on their own strategies, Almeida said. Shareholders also might get more value over the long term, he said.
The drug business “definitely needs some investment,” said analyst Jeff Jonas of Gabelli & Co. in an interview with Bloomberg News. “They need to find new products, invest in the pipeline. That’s a multiyear process.”
Research and development consumes 7 percent of revenue in the drug division, compared with 4 percent in the rest of Covidien.
The spinoff would be in the form of a stock distribution, tax-free to U.S. shareholders, the company said. That tax-free aspect made the option of a spinoff superior to the alternative of selling the unit, company officials said.
The spinoff could take 18 months to complete and would need approval of regulators.
Bloomberg News, citing unidentified sources, reported last summer that Covidien had tried to sell the unit, but talks broke down.
Almeida said he has picked a CEO for the new company, although he didn’t name the person. The person is a ’strong leader” with “broad pharmaceutical experience,” Almeida said, and will join the spinoff from another company.
The drug operation is now headed by Matt Harbaugh, the drug division’s chief financial officer serving as interim president. Based in Hazelwood, he has led the unit since the previous president left last year.
Besides its Hazelwood headquarters, the drug unit has a research operation in Webster Groves, a nuclear medicine facility in Maryland Heights and a plant just north of downtown St. Louis.
That plant sits on what was the Mallinckrodt family farm. G. Mallinckrodt & Co. was founded there in 1867 and grew up as a chemical and drug firm. It refined uranium for the Manhattan Project, which created the atomic bomb during World War II.
Avon Products acquired Mallinckrodt in 1982. Avon sold the company to International Minerals and Chemical Corp. in 1986, which later changed its own name to Mallinckrodt.
In 2000, Tyco bought the company. After Tyco went bankrupt amid scandals, its health care operations were spun off as Covidien in 2007.
Without the drug business, Covidien would have $9.6 billion in sales. Covidien’s remaining business makes trays, hypodermic needles, retractors, pumps for patient feeding and pain management, and other medical devices.
Covidien stock rose $1.39 to $43.55 on Thursday.
The president of scandal-battered Olympus on Thursday called business partnerships an option for shoring up the gaping hole that the huge investment losses it hid for years have left in its balance sheet.
Olympus Corp. met its deadline to avoid being removed from the Tokyo Stock Exchange by filing correct earnings for the April-September first half and for the past five fiscal years on Wednesday.
The deception at Olympus, dating back to the 1990s, to hide 117.7 billion yen ($1.5 billion) in investment losses came to light when former President and Chief Executive Michael Woodford blew the whistle, questioning expensive acquisitions and exorbitant fees for financial advice.
Woodford, a 51-year-old Briton and a rare foreigner to lead a major Japanese company, was fired in October after confronting Olympus directors. Woodford, in town this week to meet with investors and other stakeholders to attempt a comeback, is demanding that the entire board, including President Shuichi Takayama, resign.
The battle over who will lead the camera and medical equipment maker _ embroiled in one of Japan’s worst corporate scandals _ could come to a head at the next shareholders’ meeting. Takayama said that might be held in March or April.
“Capital adequacy ratio is a big problem, and we are considering how we can overcome it,” he told reporters at a Tokyo hotel. “We are considering various options, including a capital tie-up and operational or sales tie-ups.”
Olympus appointed three outsiders to a new reform committee to beef up governance and present a plan to shareholders. The committee is in addition to an earlier panel announced by Takayama, which is investigating the scandal.
The company’s loss of 32.3 billion yen ($414 million) for the first half of the fiscal year, through September, a reversal from a 3.8 billion yen profit the same period a year earlier, was mainly from the economic downturn and losses from Thai flooding, Takayama said.
Woodford said he was opposed to tie-ups and had better ways to get capital for Olympus to shore up its hobbled balance sheet. He promised not to break it up or seek a partner, which may reduce its independence.
“I am very fearful of the current management working with parties to look for strategic alliances, which would mean in the end the loss of our independence,” he told The Associated Press on Thursday.
“Because of the strong cash flows and profitability of the medical business, we could raise funding from additional sources without losing our sovereignty,” he said at a Tokyo hotel.
Olympus should focus on core businesses _ medicine, microscopes, industrial products and cameras and other consumer products _ and stop acquiring unrelated companies, as it had in recent years, he said.
Woodford said he was talking with investors and many “influential people in the Japanese establishment” to line up support for his return at the top. He declined to give specifics, saying the discussions were “delicate.”
It is still unclear if Woodford will manage a comeback. Some people, such as former board member Koji Miyata, see him as a hero and have begun an online campaign to bring back Woodford.
The scandal has prompted soul-searching in Japan Inc. on living up to global standards in governance.
Some experts say laws need to be updated, corporate boards need more outside members and transparency needs to be strengthened. Ruling and opposition legislators met with Woodford earlier this week to hear his ideas about better corporate practices.
No one has been charged in the scandal. But Olympus management has said several top company men were involved in the scheme and has promised to investigate 70 officials, including former and current executives and auditors, to pursue possible criminal charges.
A third-party panel set up by Olympus, including a former Japanese Supreme Court judge, released the findings of an investigation earlier this month, which said top executives who were “rotten to the core” had orchestrated the accounting cover-up spanning three decades.
The fees for financial advice and overvalued acquisitions were part of an elaborate deception utilizing overseas banks and several funds to keep the massive losses off the company’s books, according to Olympus.
Japanese magazine Facta was first to report the dubious money.
Tsuyoshi Kikukawa, who was behind Woodford’s appointment as chief executive and later his firing, has since resigned as chairman. He is among several executives suspected of knowing about the scheme.
Ford Motor Co. said Thursday it will resume paying a dividend in March, more than five years after it halted payments because of its financial problems.
The company’s board approved a quarterly dividend of 5 cents per share. It will be paid on March 1 to shareholders of record as of Jan. 31.
“We have made tremendous progress in reducing debt and generating consistent positive earnings and cash flow,” Executive Chairman Bill Ford said in a statement. “The board believes it is important to share the benefits of our improved financial performance with our shareholders.”
Its stock pared its loss for the day after the announcement. Ford shares fell 4 cents to $11.04 per share in midday trading. Before the dividend was announced, it had traded as low as $9.84 earlier in the session.
The company stopped paying a dividend in September 2006, when it was deeply in debt. The company lost $12.7 billion that year fast cash advance.
But since then Ford has shed brands like Volvo and Mercury, closed factories, offered buyouts to thousands of employees and earned praise for new products like the Ford Explorer SUV and Ford Fiesta subcompact. Ford reported its tenth straight profitable quarter in the third quarter of this year, and it earned $6.6 billion in 2010.
“We have demonstrated our capability to finance our plans and we are confident that we can begin to pay a dividend that will be sustainable through economic cycles,” Chief Financial Officer Lewis Booth said in a statement.
Ford spokesman Todd Nissen said the New York Stock Exchange halted trading of Ford shares temporarily just before the noon announcement. Trading resumed about 10 minutes later.
Students clashed with police across Italy in protests against budget cuts, while transport strikes idled buses and trains Thursday, as Italian Premier Mario Monti prepared to unveil his anti-crisis strategy ahead of a confidence vote in his day-old government.
Police in riot gear scuffled with students in Milan, where they planned to march to Bocconi University, which forms Italy’s business elite. Monti, an economist and former European Union competition comissioner, is Bocconi’s president.
Monti formed his government Wednesday, shunning politicians and turning to fellow professors, bankers and other business figures to fill key cabinet posts. His administration is tasked with restoring confidence in the country’s financial future and avoiding a worsening in the eurozone’s debt crisis.
But his choice of unelected experts to lead the government and the prospect of tough reforms have fueled unrest among some Italians.
“The government of the banks,” read one placard held by a youth marching in the protest in Milan.
In Palermo, Sicily, demonstrators hurled eggs and smoke bombs at a bank, and protesters threw rocks at police who battled back with pepper sprays, the Italian news agency ANSA said. One protester was injured in the head in Palermo, where police charged demonstrators who were trying to occupy another bank, it said.
In Rome, hundreds of students gathered outside Sapienza University, while others assembled near the main train station. They planned to march to the Senate, where Monti was scheduled to speak ahead of an evening confidence vote on the new government.
Monti’s cabinet took the place of the center-right government led for 3 1/2 years by media mogul Silvio Berlusconi, stepped down last week, the victim of markets punishing Italy for its escalating public debt and stubbornly stagnant economy.
As Berlusconi’s squabbling coalition argued for months over how to attack the crisis, Italian unions and industrialists pressed for measures to encourage job creation and revive the economy.
Parliament gave final approval Saturday to a package that will reform pensions, slash state spending and open up the economy guaranteed cash advance. Hours later, Berlusconi resigned, paving the way for Italy’s president to ask Monti, a former European Union competition commissioner, to form a government that could tackle the crisis.
But many Italians are expecting to swallow harsher medicine, including a possible return of home property taxes which Berlusconi abolished, a special tax on wealth, and a faster increase in the retirement age.
Antonio Romano, who was distributing leaflets to protesters, said the government’s strategy was to “make the workers and retired people pay for the crisis, not those who provoked the crisis, I mean big business, bankers.”
“Income for all, debt for none,” read the spray-painted letters on a white sheet affixed to a fence in Palermo. University and high school students, as well as young people unable to find full-time jobs joined the protest.
In Rome, marcher Titti Mazzacane said she was skeptical about the new government. While Monti chose “decent and competent people,” the government … “is a little bit too free-market liberal. I am a bit scared,” said the 53-year-old elementary school teacher.
A transit strike of several hours idled the subway system and many buses in Rome. A similar walkout in Milan to press for better work contracts was also called.
State railways said a 24-hour nationwide train strike, which was called by one small union affected only 5 percent of the train rains. Train workers have been pushing for better work rules.
Alitalia warned that a four-hour strike, from noon to 4 p.m. (1100 GMT-1500 GMT) in the air travel sector could cause flight delays, and said it was reducing the number of flights as a precaution during the four-hour window. It noted that the walkout mainly involved air traffic controllers and airport workers and not Alitalia personnel.
Powered by WordPress