News Archive


UK Serious Fraud Office pursues investigation of Alstom: FT


LONDON (Reuters) – Britain’s Serious Fraud Office (SFO) is pursuing its investigation of alleged corruption at Alstom (ALSO.PA) as a major transatlantic takeover battle for the French engineering conglomerate reaches a climax, the Financial Times reported on Saturday.

The paper said Britain’s Attorney General – the government’s chief legal adviser – has given permission for the SFO to prosecute the company and former employees for alleged overseas bribery if considered appropriate.

The paper also said the SFO has notified seven individuals that they are under investigation.

The SFO declined to comment and no comment was immediately available from the Attorney General’s office.

The FT said the SFO, which opened its probe into the company over four years ago, has invited the company for discussions which could pre-empt any decision to file charges.

The reported moves come at a sensitive time for Alstom, which is expected soon to receive a joint offer from Germany’s Siemens (SIEGn.DE) and Japan’s Mitsubishi Heavy Industries (7011.T) for its turbine businesses.

That approach would counter an existing $17 billion offer from U.S. conglomerate General Electric (GE.N) for Alstom’s power arm.

An Alstom spokeswoman in Paris declined to comment on the specifics of the FT story but said: “Alstom continues to work constructively with the authorities to address any allegations of past misconduct.”

Alstom is also co-operating with the U.S. Justice Department over allegations of bribery in Asia.

According to court filings seen by Reuters, the Justice Department has evidence that a former Alstom executive tried to bribe officials to secure power projects in Indonesia, India and China.

Two executives of Alstom’s U.S. subsidiary in Connecticut have already pleaded guilty and admitted to paying bribes on behalf of the company in connection with a project on the Indonesian island of Sumatra.

The long-running investigation could result in penalties of several hundred millions of dollars, legal experts say.

(Reporting by Stephen Addison; additional reporting by Gus Trompiz in Paris; Editing by Elaine Hardcastle)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/-JVDBiY2i2o/story01.htm

Infosys founder plays down top management exits; focuses on innovation


BANGALORE (Reuters) – Infosys has enough senior managers to run the business even if more executives leave India’s second-largest IT services exporter, its founder said on Saturday, after a spate of staff exits triggered concerns about a leadership vacuum.

N.R. Narayana Murthy played down the departure of at least 11 senior executives since he was brought back from retirement in June last year to help regain market share, saying some of them were low performers.

Infosys has for the first time picked an outsider Vishal Sikka, former senior executive at German software company SAP AG as CEO, as it seeks to boost sales of high-margin services and stem a staff exodus. [ID:nL4N0OT0Z3]

“We are confident that we have enough budding leaders to handle any eventuality of some more people leaving us,” Murthy, who stepped down as the chairman of the company on Saturday, told an annual shareholders meeting.

The annualized rate of attrition at Infosys – the number of staff leaving or retiring – was a record 18.7 percent at end-March, 2.4 percentage points higher than a year earlier, out of a workforce of more than 160,000.

The departures included at least 11 top executives, some of whom were responsible for key business sectors at the company, which was founded by Murthy and six other engineers in 1981.

“Some had been identified as low performers by the external evaluation agency and the board. Some were evaluated to be low performers by senior management,” Murthy said, playing down concerns of the management exodus on the company’s growth.

SILVER BULLET

Infosys, a pioneer in India’s $100 billion-plus outsourcing industry, was taking several steps to bolster innovation and tap new technologies, as “commoditisation” of the company’s core IT outsourcing business increases, Murthy said.

Infosys, like its local rivals Tata Consultancy Services and Wipro, has relied for decades on labour-intensive, low-margin contracts from Western clients including Citigroup and BT Group Plc.

“The silver bullet for this company and this industry in the medium to long term will be how much of what we do today can be done faster and cheaper by employing intelligent software agents,” he said.

Infosys shareholders are betting on Sikka, who will take over on Aug. 1 from current CEO S.D. Shibulal, to turnaround the company by tapping opportunities in new technology areas including cloud computing and mobility.

Sikka, 47, is considered to be an innovator in the global software industry. A computer scientist by training, he was key in developing and marketing SAP’s flagship product, HANA, which helps firms analyse large amounts of data quickly.

(Writing by Nivedita Bhattacharjee; Editing by Sumeet Chatterjee and David Evans)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/6nUj_SjVfG0/story01.htm

BlackRock says Credit Suisse guilty plea has no impact on relationship: paper


ZURICH (Reuters) – BlackRock Inc. (BLK.N) said Credit Suisse’s (CSGN.VX) guilty plea in a U.S. tax evasion case does not affect its business relationship with the Swiss bank, the chief executive of the world’s biggest asset manager told a Swiss newspaper.

Last month, Credit Suisse pleaded guilty to a U.S. criminal charge and will pay more than $2.5 billion in penalties for helping Americans evade taxes.

Asked what consequences the guilty plea would have on BlackRock’s business relationship with Credit Suisse, Larry Fink told Swiss newspaper Finanz und Wirtschaft: “None at all, we’ll continue to do business with Credit Suisse.”

The newspaper said BlackRock was Credit Suisse’s biggest counterparty, but a spokesman for the bank would not confirm this.

Ending the business relationship would only have been a realistic option if the bank had lost its banking license in the United States, Fink said in the interview published on Saturday.

He declined to comment on the case of BNP Paribas (BNPP.PA) that is also under investigation by U.S. authorities to determine whether it evaded sanctions between 2002 and 2009. The French bank may have to pay a fine of about $10 billion and face other penalties such as being suspended from clearing clients’ dollar transactions, sources have said.

Fink said that it was up to BlackRock’s clients to decide how they wanted their money to be invested.

“If a customer asks us not to do business with a bank that has been found guilty, we have to respect that for that particular client,” he said.

The head of Credit Suisse’s private bank said earlier this month that the bank had lost a limited amount of business as a result of the guilty plea.

(Reporting by Silke Koltrowitz, editing by David Evans)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/4Cv97m6Rn3k/story01.htm

Bayer faces law suits in United States over Xarelto: paper


FRANKFURT (Reuters) – Germany’s Bayer AG (BAYGn.DE) faces its first law suits in the United States over anti-clotting drug Xarelto, one of its top five medicines, the Frankfurter Allgemeine Zeitung newspaper reported on Saturday, citing company sources.

There are fewer than ten suits so far, the paper cited one company insider as saying. It gave no details of the suits.

A Bayer spokesman declined to comment on the newspaper’s report but said the drug’s safety profile since its launch is consistent with the results of clinical studies that involved more than 75,000 patients.

Xarelto had sales of 949 million euros ($1.3 billion) last year and Bayer Chief Executive Marijn Dekkers has said he expected sales could reach around 3.5 billion euros annually.

Bayer peer Boehringer Ingelheim last month said it would pay about $650 million to settle U.S. lawsuits that claimed the company’s blockbuster blood thinner, Pradaxa, had caused severe and fatal bleeding in patients. [ID:nL3N0OE3RI]

Boehringer said it expected to resolve about 4,000 claims with the settlement. The claimants had accused the company of not issuing sufficient warnings of the risks associated with Pradaxa.

(Reporting by Frank Siebelt and Jonathan Gould, editing by William Hardy)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/3PFRjpzK6hw/story01.htm

Ukraine expects new gas talks with Russia: government source


KIEV (Reuters) – Ukraine is expecting Russian and European Commission delegations to arrive in Kiev on Saturday to resume talks on a natural gas pricing dispute, a Ukrainian government source said.

“The arrival of the representatives of the European Commission is already confirmed and now we are waiting for confirmation from the Russian side,” the source said. The Commission has been mediating the talks.

Ukrainian Energy Minister Yuri Prodan proposed on Friday holding new talks, starting on Saturday in Kiev or another European city. Russia has threatened to cut supplies to Kiev on Monday if it does not pay off $1.95 billion in debts.

(Reporting by Pavel Polityuk, Editing by Timothy Heritage)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/YQSeBlVo8gA/story01.htm

Exclusive: Honda’s Takata airbag recall could top 1 million


TOKYO (Reuters) – Honda Motor Co expects to recall vehicles with potentially defective air bags, a move that could expand a massive, multi-company air-bag recall by more than a million, according to a person with knowledge of the matter.

The recall involves faulty air-bag inflators supplied by Takata Corp and would follow a similar move this week by Toyota Motor Corp. The Honda recall should be announced by the end of June, according to the person, who declined to be identified.

Honda, while waiting for further information from Takata on its inflator problems, is also investigating on its own how many vehicles it may need to call back and where they are, according to the individual. The number of vehicles it recalls could exceed the 1.135 million vehicles Honda called back globally last year, the person said.

Asked whether Honda will expand air-bag-related recalls from last year, company spokeswoman Akemi Ando said: “We are conducting investigations quickly and if we decide that there are vehicles that should be called back, we will swiftly file for a recall.”

Toyota, the world’s largest automaker, on Wednesday called back 1.62 million previously recalled vehicles outside Japan as well as 650,000 more in Japan not previously recalled. The additional vehicles brought to more than 7 million the total number of cars equipped with Takata air bags to be called back worldwide over the last five years.

Toyota’s recall from 2013 was a part of a bigger recall by car makers that include Honda, Nissan Motor Co and Mazda Motor Corp. In total, they recalled about 3.6 million vehicles with air-bag inflators that could explode in an accident and send pieces of shrapnel into the vehicle.

Toyota said it has determined that the serial numbers of potentially faulty inflators that Takata previously supplied were incomplete. Takata said it supports Toyota’s decision to recall the vehicles.

The Japanese Transport Ministry has ordered car makers including Honda, Nissan and Mazda to determine quickly whether they need to expand their recalls. Mazda spokeswoman Misato Kobayashi declined to say when the company would finish its investigations, while Nissan could not be reached immediately.

The U.S. auto industry regulator, the National Highway Traffic Safety Administration, said it had opened an investigation this week into an estimated 1,092,000 vehicles made by not only Toyota, but also Honda, Nissan, Mazda and Fiat SpA’s Chrysler Group after receiving six reports of air bags not deploying properly in the humid climates of Florida and Puerto Rico.

(Additional reporting by Maki Shiraki in Tokyo; Editing by Paul Lienert in Detroit and Peter Henderson in San Francisco; Editing by Robert Birsel)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/7cueDvsRGIs/story01.htm

Exclusive: Complaint about shutting off Camaro with knee dates back a year


DETROIT (Reuters) – U.S. safety regulators received a complaint about a Chevrolet Camaro driver accidentally shutting off the car with a knee more than a year before General Motors on Friday recalled half a million of the sports cars over the issue, which is similar to the defect linked to 13 deaths in older GM small cars.

Regulators have received at least 18 consumer complaints since 2009 about Camaros involving engines stalling or sudden loss of power, a Reuters review of a National Highway Traffic Safety Administration database showed. The first of two describing turning off the car with a knee is from April 2013.

“When the ignition switch/ key is slightly bumped with knee, the car shuts off. Three times now. Dealership not responsive. Taught my teen drivers what to do if this happens and this saved my daughter’s life when it happened to her,” the complaint said. The database does not identify who made the report.

Most of the 18 complaints do not mention knees or ignition switches, and it is not clear whether they were related to the issue behind the Friday recall of 2010-2014 Camaros.

GM said a driver’s knee could bump the Camaro’s key fob and move the ignition switch out of the “run” position, causing the engine to shut off.

Spokesman Alan Adler said that GM became aware of the Camaro issue through internal testing and then did a “sweep” of complaints to GM and others.

Asked about the consumer complaints, Adler responded, “We were not tracking complaints for Camaros. Once we look at them, they need to be studied to determine if they are related to a certain cause. That is why we have listed the crashes and injuries in today’s release as inconclusive. We know there were no air bag deployments. We are not certain whether this was related to the ‘knee bump’ issue or not.”

GM has received reports of minor injuries and no deaths in three crashes that it has linked to the Camaro switch issue. The air bags did not deploy in those three crashes, GM said.

The ignition switch problem in Chevrolet Cobalts and other older model small cars led to the recall of 2.6 million vehicles. In those cars, a bump of the key fob could turn off the engine, disabling power steering and air bags. GM has said it took too long to respond to the problem, which engineers first noted more than a decade ago.

The first of the 18 Camaro incidents in the complaint database occurred in September 2009, in a 2010 model car, as the owner was traveling on I-80 from Reno to San Francisco, according to the complaint.

“Without warning, my 2010 Camaro had 100 percent loss of all power and operating functions,” wrote the driver, who reported being injured after “jamming (the car) into the guardrail” on the freeway.

Two consumer complaints in 2010 involved complete loss of power while traveling at freeway speeds in Camaros. Both incidents ended in crashes, according to the complaints.

The most recent complaint was received by NHTSA in early May and involved the engine stalling in a 2014 Camaro. It said simply: “Knee bumped key, engine turned off at 60 mph.”

(Reporting by Paul Lienert in Detroit, editing by Peter Henderson)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/vCHx4xqEBOA/story01.htm

Iraq conflict brings defense stocks in focus


NEW YORK (Reuters) – With the possibility of escalating violence in Iraq, stocks in the defense sector could garner more attention next week.

The stock market and oil prices were rattled late in the week after violence in the nation escalated as a Sunni insurgency against the government heats up. A continued escalation of the conflict could result in a civil war and a possible break-up of the country.

Even with tensions in the region mounting, the PHLX defense sector .DFX was down about 1 percent for the week, retreating with the broader SP 500 .SPX after both indexes had closed at record highs on Monday. Some caution in the market would be expected, but higher oil prices and concerns about a worsening of the conflict would be felt in defense and energy areas.

“As investors try to determine what stocks and which sectors would benefit if we continue to see troubles in Iraq, it’s logical that more defensive sectors would benefit and especially the defense stocks themselves,” said Kate Warne, investment strategist at Edward Jones in St. Louis.

“As investors get more nervous about the situation in Iraq, it will be a typical situation where it’s positive for the stocks like oil … and we will see more caution across the board in other stocks.”

Escalation doesn’t necessarily mean investors will flock to defense stocks solely on expectations they will see a revenue boost as a result of an increase in new government contracts.

Americans are wary of getting re-involved in the fighting in Iraq given forces are still in country after the U.S. invasion in 2003 that has since cost the lives of more than 100,000 civilians and several thousand soldiers.

Scott Armiger, portfolio manager at Christiana Trust in Greenville, Delaware has owned Northrop Grumman Corp (NOC.N) since August, but said, “We are not going to boost defense stocks holdings on this move in Iraq, especially with this administration. I surely don’t think it’s a build-up, it conflicts with other agenda items, domestic is still number one.”

The defense index has gained 93 percent in the last three years. It has a 50-day correlation with the benchmark SP index of 0.89, but that may begin to break down should violence in the region grow, putting stocks in the defense sector in position to move higher while the broader market retreats.

The United States does appear to be acting in a deliberate fashion for the time being. After threatening military strikes against militants from the radical Islamic State of Iraq and the Levant (ISIL) on Thursday, President Barack Obama said on Friday he will take several days to review options for how the United States can help Iraq deal with the insurgency.

Another consideration for defense stocks is they generally have other businesses to go along with revenue generated from defense contracts – Boeing (BA.N) is involved with commercial airplanes and Precision Castparts (PCP.N) also deals with medical implants – so while they may get a lift a growing conflict it will not be the sole factor for any price boost.

“Many of the defense stocks trade with the expectations that we will see cutbacks in government spending in areas like defense but the stocks are really reflecting better performance on other parts of the business,” said Warne. “Any company that relies solely on defense right now is probably not in great shape.”

(Reporting by Chuck Mikolajczak; Editing by Nick Zieminski)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/FWSiokItK4E/story01.htm

GM employees under probe for defective ignition switch: sources


(Reuters) – U.S. prosecutors are interviewing present and former General Motors Co (GM.N) employees as part of the criminal probe into the automaker’s ignition-switch problem that has been linked to at least 13 deaths, two sources said.

Since early this year, GM has been embroiled in a scandal over why it took more than a decade to begin recalling low-cost Chevrolet Cobalts, Saturn Ions and other cars with the problems that were causing the vehicles to stall during operation.

The sources said Manhattan U.S. Attorney Preet Bharara’s office had asked present and former GM employees to come for interviews.

In addition to Bharara’s criminal investigation, at least 11 state attorneys general are investigating GM over the ignition-switch problem. The states are Arkansas, Connecticut, Florida, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Nevada, and New York, representatives of those offices told Reuters.

GM recalled 511,528 Chevrolet Camaros on Friday for an ignition switch problem similar to the defect in the Chevrolet Cobalts and other models.

The automaker has turned over thousands of emails and other documents to help in the probe, The Wall Street Journal reported earlier on Friday, citing sources. (r.reuters.com/sec22w)

GM’s 3.1 million switch-related recalls are a fraction of the record 16.5 million cars the automaker has recalled this year in 38 actions. That’s about as many cars as the entire auto industry expects to sell this year in the United States.

U.S. safety regulators have received at least 18 consumer complaints since 2009 about Camaros involving engines stalling or a sudden loss of power, a Reuters review of a National Highway Traffic Safety Administration database showed.

Last week the company dismissed 15 employees, including several high-ranking executives, for their roles in matters relating to the faulty switches in older GM cars.

(Additional reporting by Nate Raymond, Jessica Dye and Karen Friefeld in New York, and Ankit Ajmera in Bangalore; Editing by Savio D’Souza and Leslie Adler)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/8qRcgrhRna0/story01.htm