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Exclusive: GSK faces new corruption allegations, this time in Romania


LONDON Drugmaker GlaxoSmithKline, which was fined a record 3 billion yuan ($483 million) for corruption in China last year and is examining possible staff misconduct elsewhere, faces new allegations of bribery in Romania.

GSK confirmed it was looking into the latest claims of improper payments set out in a whistleblower’s email sent to its top management on Monday. A copy of the email was seen by Reuters.

The company is already probing alleged bribery in Poland, the United Arab Emirates, Lebanon, Jordan, Syria and Iraq.

The latest allegations say GSK paid Romanian doctors hundreds, and in one cases thousands, of euros between 2009 and 2012 for prescribing its medicines, including prostate treatments Avodart and Duodart and Parkinson’s disease drug Requip.

According to the email, the doctors were notionally paid for speaking engagements, but in three out of six cases, including the most highly paid one, they did not give any speech. The other three medics gave only one speech each, despite receiving multiple payments.

GSK also provided doctors with many international trips and made payments to them under the guise of participation in advisory boards, the email said.

The company said it would look “very thoroughly” into the claims, which cover a period before its pledge in December 2013 to stop paying doctors to speak on its behalf or to attend international conferences.

“We do receive letters of this sort from time to time. We welcome and support the opportunity for people to speak up if they have any concerns,” GSK said in a statement. “Sometimes we do find things and we act on it; sometimes our findings do not substantiate the matters being raised.”

The China scandal, which involved alleged bribes totaling hundreds of millions of dollars, hit GSK’s sales in the country, although Chief Executive Andrew Witty, reporting quarterly results on Wednesday, said its Chinese business was stabilizing.

The sender of the Romania email said its contents would be passed on to the U.S. Department of Justice and the Securities and Exchange Commission (SEC), which are investigating GSK for possible breaches of the Foreign Corrupt Practices Act.

An SEC program provides cash incentives for whistleblowers to report corporate malpractice.

(Editing by Jane Barrett and David Holmes)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/_t1feEED5AI/story01.htm

BAT sees ‘plain packaging’ challenge in Britain being heard in December


LONDON British American Tobacco expects its legal challenge to the implementation of “plain packaging” of tobacco in Britain to be heard in court in December, with possible final resolution by the end of 2016, a senior executive said.

“We expect a hearing in December,” Jerome Abelman, BAT’s director of legal and external affairs, told reporters on Wednesday, adding that “whatever the decision, there will likely be appeals.”

Britain adopted a law in March that would prohibit tobacco products from being sold with any branding, colors or logos. This “plain packaging” rule, aimed at reducing the lure of smoking particularly to youngsters, will go into effect in May 2016.

BAT and larger rival Philip Morris International are challenging the law.

Abelman said it was hard to judge exactly how long its challenge will take to move through the court system but said it was possible that any appeals could be decided by the end of 2016.

He said he thought the British government should grant a stay to the implementation of plain packaging pending a final decision.

Separately, BAT said it would do a market test this year of a next-generation product that heats tobacco without burning it. It declined to give any details about the product or the test.

Its announcement comes a day after U.S. tobacco company Reynolds American, in which BAT owns 42 percent, said it was shelving its own test of a tobacco-heating product due to poor consumer adoption.

(Reporting by Martinne Geller; Editing by Susan Fenton)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/fXw32cothVc/story01.htm

Greece’s Tsipras, hounded by left, vows ‘thus far and no further’


ATHENS Greek Prime Minister Alexis Tsipras, struggling to contain a revolt in his left-wing Syriza party, said on Wednesday that his government would not implement reform measures beyond those agreed with lenders at a euro zone summit this month.

Tsipras faces a tough Syriza central committee session on Thursday with many activists angered by his acceptance of bailout terms more stringent than those voters rejected in a July 5 referendum.

In a clear warning to party rebels, Tsipras said he could be forced to call early elections if he no longer had a parliamentary majority, and suggested an emergency party congress could be held in early September.

At the same time, Tsipras is under pressure from Greece’s creditors to go beyond the two packages of so-called prior actions passed by parliament and include unpopular steps to curb early retirement and tax breaks for farmers, EU sources say.

“I know well the framework of the deal we signed at the euro zone summit on July 12,” he told Sto Kokkino radio. “We will implement these commitments, irrespective of whether we agree with it or not. Nothing beyond that.”

With Greece close to the financial abyss last month, the government closed the country’s banks for three weeks under a capital controls regime, and Tsipras was later forced to make the major concessions on reform and austerity in order to open negotiations on a third bailout worth up to 86 billion euros.

A European Commission spokeswoman declined to say what additional measures were expected of Athens before the conclusion of the new bailout, although she said earlier this week that more reforms were due before the first aid is disbursed.

Tsipras said Greece’s primary budget balance before debt service would break even at best or show a deficit this year, depending on a financial situation that has deteriorated sharply since the imposition of capital controls on June 28.

The terms for launching the bailout talks that began this week did not include specific fiscal targets but Athens had previously been expected to achieve a primary surplus equivalent to 1 percent of annual Greek economic output this year and 2 percent in 2016.

Germany’s Der Spiegel magazine reported that the creditors were willing to allow a gentler fiscal path taking account of Greece’s return to recession, provided Athens pursued economic and administrative reforms more energetically.

“PLAN C”

With the banking squeeze easing, the European Central Bank kept its cap on emergency funding for Greek banks unchanged on Wednesday after Athens did not request another increase, a source familiar with the decision said.

The stock market remained closed because authorities are still waiting for a ministerial decree needed to resume trading after a nearly five-week shutdown, a senior official at the Greek securities regulator said.

The Athens Stock Exchange has been shut since June 29 after the government closed the banks and imposed the capital controls to stop a run on deposits by savers and companies.

European Commission spokeswoman Nina Andreeva, keen not to add to Tsipras’s domestic problems, praised the conduct of the bailout talks so far, brushing aside talk of issues over security and access.

“We are satisfied with the smooth and constructive cooperation with the Greek authorities and that should now allow us to progress as swiftly as possible,” she told reporters.

Intensive preparatory talks with officials from the Commission, the ECB, the International Monetary Fund and the euro zone’s rescue fund, the European Stability Mechanism, began on Monday. The creditors’ Athens mission chiefs are due to start negotiations with Greek ministers later this week.

Andreeva played down critical comments by Tsipras on the bailout made to his domestic audience, saying the commitments made at the summit were being carried out as foreseen.

Tsipras faces an uncertain vote in the 200 member Syriza central committee with sacked former energy minister Panagiotis Lafazanis leading a leftist faction that rejected the July 13 deal and is demanding a tougher line with the creditors.

Compounding his problems, former finance minister Yanis Varoufakis continues to pour abuse on the agreement in daily media interviews and articles, accusing the creditors of trampling on Greek sovereignty and justifying his own secret planning while in office to set up an alternative currency.

“It was a financial war,” Varoufakis told Germany’s Stern magazine in an interview released on Wednesday. “Today you don’t need tanks to beat someone. You’ve got your banks.”

European Economics Commissioner Pierre Moscovici laughed off Varoufakis’s disclosures about a “Plan B” he had developed with a covert five-member unit that would have involved hacking into citizens’ tax codes to create a parallel payments system.

“This is perhaps something for domestic politics. It’s a career plan, a Plan C for Mr Varoufakis,” Moscovici told France’s Europe 1 radio. “Everything done in a dilettante way is an absurdity.”

In Germany, Greece’s biggest creditor country, the leader of Chancellor Angela Merkel’s Bavarian sister party warned that a Greek exit from the euro zone would cause “utter chaos” but might have to be accepted if Athens did not implement reforms.

“No one can predict the consequences of a Grexit other than that a lot of Greece’s debts would have to be written off and at the same time monetary help would be necessary,” Bavarian state premier Horst Seehofer told German newspaper Die Welt.

“On top of that there would be utter chaos. If Greece were not prepared to reform, a path like that would have to be accepted but one shouldn’t strive for it oneself or organize it,” he added.

(Additional reporting by Deepa Babington in Athens and Francesco Guarascio in Brussels; Writing by Paul Taylor; editing by David Stamp)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/fR4rEYjLQeY/story01.htm

Higher incentives, strong dollar weigh on MasterCard’s revenue


MasterCard Inc (MA.N), the operator of the world’s second largest payment network, reported lower-than-expected quarterly revenue as it offered more rebates and incentives to win deals.

MasterCard was also hurt by a strong dollar as markets outside the United States account for nearly 60 percent of its purchase volumes.

The company paid $940 million in rebates and incentives in the second quarter, up 21 percent from a year earlier.

Mastercard usually pays higher incentives to its partners than larger rival Visa Inc (V.N).

Client incentives accounted for nearly 28 percent of MasterCard’s gross revenue in the quarter, way above Visa’s 16 percent.

MasterCard’s cross-border volumes – the value of transactions made by card holders outside the card-issuer’s country – jumped 17 percent.

The company’s worldwide gross dollar volume rose 12.8 percent on a constant-currency basis, but just 1.4 percent in dollar terms, Sandler O’Neill Partners analyst Christopher Donat wrote in a note.

The dollar has risen about 21 percent in the past year.

MasterCard said it was facing challenges in Latin America and Asia Pacific, mainly in Brazil and China.

The company, however, is investing in China after the country said in April that it would open up its market for clearing domestic bank card transactions.

MasterCard will be ready to start processing domestic transactions in China by the end of 2016, Chief Executive Ajay Banga said on a conference call.

MasterCard currently has a tie-up with Chinese bank UnionPay to issue co-branded cards that Chinese people could use when traveling overseas.

The association is expected to give the company an edge over Visa, which is gearing up to take on MasterCard in the Europe market through a potential combination with former subsidiary Visa Europe Ltd.

Any potential implications of a combination of Visa and Visa Europe on pricing and yield depends on “how long it will take for them to put the companies together,” Banga said.

MasterCard’s net income fell 1.1 percent to $921 million in the quarter ended June 30 due to a $44 million after-tax charge related to a litigation settlement.

Excluding the charge, MasterCard earned 85 cents per share.

Net revenue rose 0.9 percent to $2.39 billion.

Analysts on average had expected earnings of 85 cents per share and revenue of $2.41 billion, according to Thomson Reuters I/B/E/S.

MasterCard’s shares were little changed at $95.16 in noon trading, recovering from a 2 percent decline earlier.

(Editing by Kirti Pandey)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/4tvX8tMXXLY/story01.htm

Weak home purchase contracts hint at pause in sales activity


WASHINGTON Contracts to buy previously owned U.S. houses unexpectedly fell in June after five straight months of increase, suggesting some cooling in home resales activity after recent hefty gains.

The decline in contracts, which came on the heels of reports showing the pace of home price appreciation stalling in major cities and new home sales dropping, did little to change perceptions that the housing market recovery was on track given a tightening labor market.

“The June decline is a hiccup. It is important to bear in mind that there is still plenty of fundamental support for the housing market,” said Jennifer Lee, a senior economist at BMO Capital Markets in Toronto.

The National Association of Realtors said on Wednesday its Pending Home Sales Index, based on contracts signed last month, declined 1.8 percent to 110.3.

Still, the index was the third highest reading for this year and contracts were up 8.2 percent from a year ago.

Pending home contracts become sales after a month or two, and last month’s drop pointed to a pause in sales of existing homes after they reached a near 8-1/2-year high in June.

Economists had forecast pending home sales rising 1.0 percent last month.

U.S. financial markets were little moved by the data as investors awaited the outcome of the Federal Reserve’s two-day policy meeting. The housing index .HGX was up 0.97 percent.

The U.S. central bank’s statement will be scrutinized for clues on the timing of the first rate hike, which is expected later this year. The Fed has kept its short-term interest rate near zero since December 2008.

While contracts to buy a previously owned home and new home sales fell last month, and the pace of house price increases stalled in May, other housing market indicators such as groundbreaking on new projects, building permits and builder confidence have painted a bullish picture for housing.

“We would interpret the June weakness as payback after housing activity made a strong start to 2015 and expect the housing market to remain in recovery mode,” said Blerina Uruci, an economist at Barclays in New York.

A strengthening labor market, which is starting to lift wages, is driving demand for housing, particularly among young adults. A large portion of that is going into the rental market, boosting construction of multi-family homes.

A report on Tuesday showed the rental vacancy rate in the second quarter fell to its lowest level since the mid-1980s. Economists say sky-rocketing rents will soon make home buying a more attractive option for Americans.

Last month, home purchase contracts edged up 0.4 percent in the Northeast and gained 0.5 percent in the West. They declined 3.0 percent in both the South and the Midwest.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/juHrLmjiQ2I/story01.htm

Wall St. higher ahead of Fed meeting


Wall Street was higher on Wednesday as investors assessed earning ahead of a statement from the U.S. Federal Reserve that could give clues regarding the timing of a rate hike.

Investors are focused on the outcome of the Fed’s two-day policy meeting with markets divided on whether it will take a hawkish or dovish stance. No move on rates is expected this week.

In a recent congressional testimony, Fed Chair Janet Yellen neither ruled out a September interest rate hike nor guided the market toward thinking it was a done deal. The statement is expected at 2 p.m. EDT (1800 GMT).

U.S. interest rates have remained near zero for almost a decade and the Fed has said it will raise rates once it sees a sustained recovery in the economy.

Contracts to buy previously owned U.S. homes unexpectedly fell in June after five straight months of increase, suggesting some cooling in sales activity after recent gains.

Recent concerns surrounding the Greek debt crisis and the rout in Chinese markets have prompted some investors to bet that the Fed may hold off raising rates until the end of the year.

“I don’t expect anything different out of the FOMC meeting today. Investors tend to take a cautious stand ahead of such meetings and that’s why we aren’t seeing too much a rally today,” said Art Hogan, chief market strategist at Wunderlich Securities in New York.

At 11:18 a.m. ET, the Dow Jones industrial average .DJI was up 87.22 points, or 0.49 percent, at 17,717.49, the SP 500 .SPX was up 9.08 points, or 0.43 percent, at 2,102.33 and the Nasdaq Composite .IXIC was up 6.80 points, or 0.13 percent, at 5,096.00.

Eight of the 10 major SP sectors were higher with the industrials index’s .SPLRCL 0.92 percent rise leading the advancers.

Pledges from Chinese regulators to buy shares to stabilize stocks if needed and hints of more policy easing from the central bank also soothed sentiments.

U.S. stocks ended sharply higher on Tuesday, breaking a five-day losing streak as attention shifted from trouble in Chinese equities to U.S. corporate earnings.

With second-quarter reports well under way, analysts now expect overall earnings of SP 500 companies to edge up 0.8 percent and revenue to decline 3.9 percent, according to Thomson Reuters data.

While earnings are expected to increase this quarter, valuations remain a concern. The SP 500 is trading near 16.9 times forward 12-month earnings, above the 10-year median of 14.7 times, according to StarMine data.

“Earnings have been fairly good but the problem is that we haven’t seen organic revenue growth and are also seeing tepid guidance from companies in face of the strong dollar,” said Hogan.

Companies scheduled to report after the bell include Facebook (FB.O) MetLife (MET.N) and Whole Foods Market WFM.N.

Twitter (TWTR.N) shares fell as much as 14.3 percent to a year-low of $31.30 after the microblogging company said its number of monthly average users rose at the slowest pace since it went public in 2013.

Yelp (YELP.N) slumped as much 29.4 percent to a nearly two-year low of $23.66 after the operator of consumer review website Yelp.com, reported a surprise loss and forecast disappointing revenue for the current quarter.

Gilead Sciences (GILD.O) rose 3.9 percent to $119.46 after the company raised its outlook for 2015 product sales by $1 billion.

General Dynamics (GD.N) rose as much as 6.3 percent to hit a record high of $153.39 after earnings, and lead a sector-wide rally across major aerospace stocks. Northrop Grumman (NOC.N), Spirit Aerosystems (SPR.N), Lockheed Martin (LMT.N) and Transdigm Group (TDG.N) were all up between 2.4 percent and 5.4 percent.

Advancing issues outnumbered decliners on the NYSE by 1,970 to 932. On the Nasdaq, 1,412 issues rose and 1,158 fell.

The SP 500 index showed 23 new 52-week highs and one new lows, while the Nasdaq recorded 37 new highs and 49 new lows.

(Editing by Don Sebastian)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/LAKIp6KgnRc/story01.htm

Thomson Reuters profit beats, finance unit shows growth


Thomson Reuters Corp (TRI.N) (TRI.TO) on Wednesday reported higher-than-expected quarterly profit as the company’s biggest division that serves banks and financial institutions showed underlying revenue growth for the first time since 2011.

Revenue at its Financial Risk segment rose 1 percent in the second quarter when excluding currency and acquisitions.

“It was very encouraging to see organic growth in FR,” said Jefferies analyst Dan Dolev. “Everybody has been waiting for it. They delivered it.”

Thomson Reuters shares, which had been down more than 6 percent in 2015 through Tuesday, rose 4.5 percent after the results, their best one-day move in about four years.

The news and information company posted underlying revenue increases across its four main divisions.

“The quarter and the first half just confirms the momentum that is building inside the business,” Chief Executive Jim Smith said in an interview.

Second-quarter net earnings were $281 million, or 33 cents per share, compared with $260 million, or 31 cents per share, a year ago.

Adjusted for special items, earnings were 52 cents per share. Analysts, on average, were looking for 50 cents per share, according to Thomson Reuters I/B/E/S.

Revenues fell 4 percent to $3.04 billion, but rose when factoring out currency rate swings. That was slightly below Wall Street estimates of $3.07 billion, based on a survey of 12 analysts who follow the New York-listed shares.

In its Financial Risk segment, revenue was $1.55 billion. Revenues in the Americas and Asia each rose by 1 percent, while they were flat in Europe, Middle East and Africa. The division’s net sales outpaced cancellations – a key indicator of future growth.

“We have seen the underlying momentum now over the past couple of years,” Smith said about the key division, which represents more than half of the company’s overall revenue. “I am confident in the trajectory, and we will maintain that trajectory of continued improvement.”

Jefferies’ Dolev said the company has been successful in migrating customers to new versions of its Eikon financial platform.

Revenue in its Legal business, which includes the Westlaw legal database, was $840 million, rising 2 percent on an organic basis. Tax Accounting sales increased 5 percent organically.

The company reaffirmed its 2015 forecast, including the expectation for positive organic revenue growth. It said it continues to project that currency is likely to have a higher-than-usual impact on 2015 results.

Thomson Reuters, which is the parent of Reuters News, competes for financial customers with Bloomberg LP, as well as News Corp’s (NWSA.O) Dow Jones unit.

Shares were up 4.2 percent at C$50.73 in Toronto and 4.5 percent at $39.36 in New York trading.

(Reporting by Lewis Krauskopf in New York; Editing by Alden Bentley and Nick Zieminski)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/yQHfx51KA2c/story01.htm

Judge dismisses ‘pyramid scheme’ lawsuit versus Herbalife, CEO


A federal judge has dismissed a lawsuit accusing Herbalife Ltd (HLF.N) and its chief executive officer of misrepresenting the weight-loss and nutritional products maker’s sales practices as legitimate when the company was “at its core” a pyramid scheme.

U.S. District Judge Dale Fischer in Los Angeles, who dismissed a version of the complaint in March, said on Tuesday the Oklahoma Firefighters Pension and Retirement System did not show the defendants defrauded shareholders by concealing the company’s inability to track retail sales.

The judge also said that CEO Michael Johnson’s reducing his Herbalife stake by a net 12 percent over roughly one year, while “undeniably large,” did not raise suspicions, nor did disclosures that top executives expected “some form of disciplinary action” over the company’s business practices.

“Herbalife openly disclosed that it was susceptible to legal challenge precisely because its practices occupy the gray area between legitimate multi-level marketing company and illegal pyramid scheme,” Fischer wrote.

The lawsuit seeks class-action status from Feb. 23, 2011 and March 10, 2014. Fischer said the plaintiff may file an amended complaint by Aug. 27.

“We are disappointed with the ruling and will determine our next steps after consultation with the client,” Maya Saxena, a lawyer for the Oklahoma fund, said in an email on Wednesday.

Herbalife did not immediately respond to requests for comment about the ruling. It has denied wrongdoing.

A pyramid scheme often occurs when participants earn more money by recruiting others to sell products than by selling the products.

Billionaire hedge fund manager William Ackman has also accused Herbalife of being a pyramid scheme. He said in December 2012 that his firm, Pershing Square Capital Management LP, had made a $1 billion bet against Los Angeles-based Herbalife.

In May, another federal judge granted final approval to Herbalife’s $15 million settlement with distributors who said the company misled them.

Herbalife shares added 0.1 percent to $50.66 in Wednesday trading, and remained above levels at the time Ackman revealed his short bet.

The case is In re: Herbalife Ltd Securities Litigation, U.S. District Court, Central District of California, No. 14-02850.

(Reporting by Jonathan Stempel in New York; Editing by Jeffrey Benkoe)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/xlso1GHyUOw/story01.htm

U.S. pending home sales take a breather in June


WASHINGTON Contracts to buy previously owned U.S. homes unexpectedly fell in June after five straight months of increase, suggesting some cooling in sales activity after recent hefty gains.

The National Association of Realtors said on Wednesday its Pending Home Sales Index, based on contracts signed last month, declined 1.8 percent to 110.3. Still, the index was the third highest reading for this year.

Pending home contracts become sales after a month or two, and last month’s drop pointed to a pause in home resales after they reached a near 9-year high in May. Economists had forecast pending home sales rising 1.0 percent last month.

The decline in contracts comes on the heels of a drop in new home sales. Still, that will probably not change views the housing market recovery was back on track given a tightening labor market. Other housing market indicators such as groundbreaking on new projects, building permits and builder confidence have painted a bullish picture for housing.

Pending home sales rose 8.2 percent from a year ago.

Contracts edged up 0.4 percent in the Northeast and gained 0.5 percent in the West. They declined 3.0 percent in both the South and the Midwest.

(Reporting By Lucia Mutikani; Editing by Andrea Ricci)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/k-j0BBj5ki0/story01.htm