Tag Archives: chief

India central bank chief endorses advisors on policy rate cut

MUMBAI: India’s central bank governor Duvvuri Subbarao endorsed the unanimous recommendation of all external members of the bank to cut its policy interest rate last month the first cut in 9 months minutes of the quarterly meeting released on Saturday showed.

Four of the six members suggested that the Reserve Bank of India (RBI) should reduce the policy rate by 25 basis points in the third quarter policy review as global conditions were favourable and marginal decline in WPI inflation provided room for some monetary easing.

On January 29 India’s central bank lowered its key policy repo rate by 25 basis points (bps) to 7.75 percent to help support an economy set to post its slowest annual growth rate in a decade.

It also unexpectedly reduced the cash reserve ration (CRR), the share of deposits banks must keep with the central bank, by 25 bps to 4.00 percent, to infuse an additional 180 billion rupees into the banking system.

The committee consists of seven external members, apart from the governor and the deputy governors.

The panel’s role is purely advisory, with the governor having the final say in deciding rates.

Two of the members felt that a 25 basis points reduction in the repo rate alone might not induce banks to reduce their lending rates and advised a cut in the banks’ cash reserve ratio (CRR) of 25 basis points to nudge the lending rates down was in order.

This would also enable loan rates to reduce more than deposit rates.

One of the other two members felt that the Reserve Bank should make use of open market operations (OMOs) to manage liquidity and keep the CRR unchanged.

These two members recommended a sharper reduction in the repo rate by 50 basis points and use of OMOs to manage liquidity.

Copyright Reuters, 2013

Ten board sacks Warburton as chief

Updated February 23, 2013 12:03:28

In a new crisis for the Ten Network, James Warburton has been sacked as chief executive.

The troubled television network says Mr Warburton, who was controversially recruited from rival Seven Network, has been “given notice of termination”.

He will be replaced by News Corporation executive Hamish McLennan, who will join Ten next month.

Mr Warburton was recruited from Seven amid fanfare and legal action that delayed his appointment until January 2012.

He was forced to take “gardening leave” after a non-compete clause in his Seven contract was enforced, meaning his Ten career rivalled his time between jobs.

Mr Warburton’s tenure at Ten was dragged down by a weak advertising market, poor ratings and full year loss of $12.9 million in October last year.

Ten has also suffered a share price plunge from $1.44 per share in April 2010 to 29 cents at the close of trade on Friday.

Mr Warburton’s appointment drew anger from Seven chairman Kerry Stokes and then chief executive David Leckie

Despite the brutal nature of the sacking, Ten chairman Lachlan Murdoch praised the man he lured.

“The Board would like to thank James Warburton for his hard work and contribution during what has been a difficult period for the company and for the broader media sector,” Mr Murdoch said in a statement.

“He steps down with Ten’s best wishes.”

Mr Murdoch signalled he is putting hopes of a turnaround in the hands of Mr McLennan.

“The Board is delighted to have been able to attract a world class CEO with a strong track record to lead Ten,” Mr Murdoch said.

Ten’s executive general manager Russel Howcroft will act as chief executive until Mr McLennan assumes the top job.

You can follow Peter Ryan’s updates on Twitter and his blog.

Topics: media, industry, business-economics-and-finance, company-news, australia

First posted February 22, 2013 21:14:33

Gill to step down as Man Utd chief

David Gill will step down as Manchester United chief executive on 30 June, the Premier League club have confirmed.

Gill, 55, joined United in February 1997 as finance director before becoming chief executive in 2003. He will remain a director of the club.

David Gill in 1997 Gill trained as a chartered accountant Before joining Manchester United, he worked at Proudfoot Consulting Plc and First Choice Holidays Plc He joined the Manchester United board in February 1997 (pictured) initially as the club’s Finance Director He became chief executive in September 2003 In October 2012, Gill became the new vice-chairman of the Football Association He has been nominated as the FA’s candidate in the upcoming UEFA Executive Committee elections in May 2013 He also serves as an Executive Board member of the European Clubs’ Association and UEFA’s Professional Football Strategy Council and Club Competitions Committee Executive vice chairman Ed Woodward will assume Gill’s responsibilities.

United manager Sir Alex Ferguson said: “Him stepping down is a big loss to me but the fact that he is staying on the board encourages me.”

He added: “If I could have found a way of persuading him to stay I would love to have done that. But he has made his decision and I respect him for it.”

Gill, a chartered accountant by profession, was named vice chairman of the Football Association in October last year and has been nominated as its candidate in the upcoming Uefa Executive Committee elections in May 2013.

“It has been the greatest privilege to serve Manchester United,” said Gill.

“I have worked alongside the finest manager in the history of the game and been part of what I consider to be the best club in the best sport in the world.

“It has been a very hard decision because I love this club and, as the fans’ banner says, it is ‘more than a religion’.

“I’ve experienced some incredible highs, such as the Treble in 1999 and the Premier League and Champions League double in 2008, and lows, like losing the title with the last kick of the season last year. But that is what makes this club and this sport so compelling.”

Gill’s 10 years as chief executive has coincided with record revenues at the club, as well as the takeover of the club by the Glazer family.

United reported a 74% rise in profits for the second half of 2012.

Total revenues were up, with income from sponsors particularly strong, though broadcast revenues were down.

Co-chairmen: Joel and Avram Glazer Executive vice chairman: Ed Woodward Chief operating officer: Michael Bolingbroke Group managing director: Richard Arnold The Old Trafford club still has debts of £366.6m and staff costs rose by more than 10% to £84.5m, mainly because of new player signings and player wage increases.

Gill says his decision to step down and Woodward taking over his responsibilities, will help to “refresh” the club.

Former banker Woodward, 40, joined United in 2005, initially focusing on developing the growth strategy of the club before assuming responsibility for the commercial and media operations in 2007. He was elected to the board of directors the following year.

“I’m delighted Ed has accepted the role,” he added. “I have worked with him for more than seven years.

“I am looking forward to continuing my involvement on the club board and I hope to be able to make a contribution to the game on a wider national and European level.”

Manchester United are currently top of the Premier League and in the last 16 of the Champions League, drawing 1-1 with Real Madrid in the first leg of their tie.

BOE chief joins minority wanting more asset buying

00012LONDON: Bank of England Governor Mervyn King and two other officials voted to restart government-bond buying earlier this month, showing the bank closer than expected to taking more action to lift economic growth.

Minutes of the bank’s last meeting, released on Wednesday minutes also reveal the central bank is thinking about how to boost non-bank lending to the economy.

The pound fell to an 8-month low as the bank confirmed that it was in no hurry to force inflation back to its 2 percent target.

“The (policy) committee agreed that it was important to communicate clearly its willingness to bring inflation back to the target over a longer time horizon than usual,” the minutes said.

Britain’s economy has been stagnant for two years, but the central bank now sees a sluggish recovery. Unemployment data released at the same time as the minutes again showed a record number of people in work.

Many economists had largely written off the chance of more asset purchases – or quantitative easing (QE) especially after King last week stressed that monetary policy was near the limits of what it could do to boost growth. He also forecast inflation would remain above target until early 2016, even without additional stimulus.

But it now turns out that at the central bank’s Feb. 6-7 Monetary Policy Committee meeting, King and Paul Fisher, the bank’s executive director for markets, joined long-standing dove David Miles in arguing for an increase in bond purchases to 400 billion pounds ($618 billion) from 375 billion pounds.

“A case could … be made for undertaking additional asset purchases at this meeting,” the minutes of the nine-member committee said. “The degree of slack in the economy, and the likely positive response of supply capacity to increased demand, meant that higher output growth would not necessarily lead to any material additional inflationary pressure.”

The policy committee also said that they still believed that asset purchases still had the ability to help the economy by lowering interest rates and encouraging investment in riskier assets.

February marks the fourth time King has been in a minority since he became governor in 2003. While unusual, it is not the shock it would have been be at most other central banks as MPC members are encouraged to make differences in view public.

The last time King was in a minority was in June last year – when there was also a 6-3 split – and in July a majority of the MPC joined King in backing a 50 billion pound increase in asset purchases.

“February’s UK MPC minutes provide another clear demonstration of the committee’s increasingly flexible approach to inflation targeting,” said Samuel Tombs of Capital Economics. “More QE is likely this year, particularly if GDP growth continues to fall short of the Committee’s expectations.”


The support in the minutes for further asset purchases was more nuanced than in the past, however. The three policymakers supporting purchases were only calling for a modest 25 billion pounds extra – in contrast to the increases of 50 billion pounds that were more typical in the past.

And there was a general acceptance – in line with King’s recent comments – that monetary policy alone will not get Britain’s economy back on track.

The minutes cited the importance of the central bank’s Funding for Lending Scheme, which opened in August and offers banks cheap finance if they lend more, as well as reiterating a call for British banks to strengthen their capital positions.

But there was also a hint that the bank may be looking at a new scheme to boost lending that bypasses banks.

“In addition to improving the supply of bank credit, the committee thought that consideration of measures to support the flow of credit more broadly, including from non-bank lenders, was also warranted,” the minutes said.

The central bank also said it would disregard upward price pressures from higher university tuition fees and energy levies.

Long-range communication is an approach favoured by Bank of Canada Governor Mark Carney, who will take over at the BoE when King steps down in July. Berenberg Bank economist Rob Wood said he expected more of this to come.

“We suspect the BoE’s toe in the water on guidance will get more specific over the coming months. Specifically, we expect any further easing to be in the form of something closer to Fed-style guidance accompanied by more QE,” Wood said.

Copyright Reuters, 2013

Bank chief outvoted on stimulus move

Continue reading the main story Bank of England governor Sir Mervyn King backed more action to boost the economy earlier this month, but was outvoted by his colleagues on the Monetary Policy Committee (MPC).

Minutes of the MPC’s meeting show it voted 6-3 against expanding the quantitative easing (QE) programme from its current level of £375bn.

However, markets saw the vote as increasing the chance of more QE later.

The pound fell sharply after the release of the minutes.

Against the dollar, the pound was down 0.75% at $1.5310, while sterling dropped 0.8% against the euro to 1.1433 euros.

The minutes were released as new figures from the Office for National Statistics showed the UK unemployment total fell by 14,000 between October and December to 2.5 million.

‘Flexible approach’

The last set of GDP figures showed the economy contracted by 0.3% in the final quarter of 2012, raising the prospect of the UK falling back into recession if the economy shrinks in first three months of 2013.

Under QE, the Bank of England buys government bonds, hoping to create beneficial knock-on effects for the economy.

The minutes from the latest MPC meeting show that three members of the committee, Sir Mervyn King, Paul Fisher and David Miles, voted to increase the size of the QE programme to £400bn.

Mr Miles has voted for an increase in QE for several months, but the addition of Sir Mervyn and Mr Fisher came as a surprise.

It is only the fourth time that Sir Mervyn – who is due to be replaced by Bank of Canada governor Mark Carney in July – has been outvoted since he became governor in 2003.

The last time the MPC was split in a similar way was in June last year, and the programme of QE was expanded by £50bn the following month.

Continue reading the main story
Today’s minutes have therefore made us more comfortable with our view that more QE is likely this year”

End Quote Samuel Tombs Capital Economics All nine members of the MPC voted to keep interest rates at the record low of 0.5%, where they have been since March 2009.

The MPC minutes show that committee members felt that more QE by itself would be “insufficient to transform the outlook for growth”.

Other policy measures discussed included buying assets other than government bonds, cutting interest rates, and reducing the marginal rate of interest on bank reserves held at the Bank of England to encourage them to lend more.

However, the MPC said it had noted “drawbacks” with all of these in the past, and these drawbacks remained.

Recently the Bank has indicated that it is prepared to tolerate a period of inflation above its target of 2%, as measures to bring inflation lower may hurt economic growth.

Presenting the Bank’s latest inflation report last week, Sir Mervyn said inflation, currently 2.7%, was expected to rise to at least 3% by the summer and to remain above the 2% target for two years.

Samuel Tombs of Capital Economics said: “February’s UK MPC minutes provide another clear demonstration of the committee’s increasingly flexible approach to inflation targeting.

“Today’s minutes have therefore made us more comfortable with our view that more QE is likely this year, particularly if GDP growth continues to fall short of the committee’s expectations.”

BHP chief quits after profit slide

Updated February 20, 2013 14:28:55

BHP Billiton chief executive Marius Kloppers will stand aside in May, after the company’s profit halved.

The world’s biggest miner posted a 58 per cent fall in first-half net profit to $US4.24 billion, while the company’s underlying earnings – which excludes one-off write-downs and gains – dropped 43.4 per cent to $US5.68 billion.

The result came in broadly in line with average analyst forecasts of a $US5.72 billion underlying profit, according to a Bloomberg survey.

BHP Billiton’s revenue fell 14 per cent compared to the same period a year earlier to $US32.2 billion, as commodity prices generally softened.

The company says its profit was squeezed not only by the fall in commodity prices, but also due to the strength of currencies in major producing nations such as Australia and Chile, which pushed up local costs.

BHP Billiton also confirmed to the ABC that it was one of the companies that paid a Minerals Resource Rent Tax instalment to the Federal Government in January.

The miner says it paid a total of $77 million in MRRT in respect of the first six months of the tax being in operation.

However, the company says it is moving to contain costs, and also announced or completed $US4.3 billion in asset sales in the half-year to December 31.

BHP Billiton also says it expects a “modest improvement in the global economy” over the next 12 months as stimulus stabilises China’s growth and the US economy makes steady progress.

However, this rise in growth is likely to be offset by an increase in the supply of key commodities as new or expanded mines come online, limiting upside in commodity prices.

BHP has been part of this increasing supply, with the company undertaking 20 new projects, most of which are expected to enter production before the end of the 2015 financial year.

Today’s announcement that Mr Kloppers will step aside from the company’s top job on May 10 has ended months of speculation about when BHP Billiton would install a new leader.

The mining giant’s new chief executive will be the company’s current head of non-ferrous Andrew Mackenzie, who joined BHP Billiton in 2008, after previous experience working with BP and Rio Tinto.

Mr Kloppers has been in the top role for around five-and-a-half years and with BHP Billiton for almost 20, and will stay with the company until October 2013 to assist with the transition.

BHP Billiton chairman Jac Nasser says Mr Kloppers has made the company safer and stronger.

“Marius was appointed chief executive just prior to the global financial crisis. Despite an exceptionally difficult economic environment during his tenure, Marius and his team have delivered for shareholders, significantly outperforming our peers in terms of total shareholder returns,” he said in a statement.

“He drove new investments into next generation opportunities including US onshore gas and liquids and created one of the most valuable companies in the world.”

BHP Billiton shares have not moved much in early trade in response to either the profit results or the departure of Mr Kloppers – on the Australian market, its shares were down 0.4 per cent to $38.84 by 10:25am (AEDT), with much larger falls for rival miners such as Rio Tinto which was down 1.2 per cent.

Fat Prophets commodities analyst David Lennox says that is because BHP’s profit was in line with analyst expectations.

“Overall, I think the market won’t be in any way surprised by the results that they have seen,” he told ABC News Online.

However, Mr Lennox says the timing of the leadership transition was probably somewhat earlier than many expected.

“It was, perhaps, a little bit of a surprise,” he said.

“We were aware that BHP had activated a succession plan to look at eventually replacing Mr Kloppers as CEO, and we do think that there may have been a little [more] time for that particular plan to be executed.”

Mr Lennox says Marius Kloppers’s departure was under very different circumstances to that of former Rio Tinto boss Tom Albanese.

“There were very good reasons I guess for Tom Albanese to stand aside, and that was basically the $14 billion in write-downs out of the balance sheet, I guess a CEO can’t preside over a company and lose that quantity of value out of his balance sheet,” he explained.

“For BHP there’s no such circumstances, the write-downs were very controllable, very manageable.”

However, fund manager Roger Montgomery says Marius Kloppers has also been successful at destroying shareholder value in different ways.

“In 2006 the company earned $13.6 billion. In 2013 analysts estimate earnings will be $13.8 billion and, despite the fact there has been no net growth in profits, investors have contributed massive amounts of additional equity – from $32 billion in 2006 to $64 billion in 2012 and debt has risen from $12.9 billion to $27.6 billion,” he wrote in a note on the results.

“In other words BHP is significantly less profitable than it was in 2006.”

Topics: business-economics-and-finance, company-news, corporate-governance, mining-industry, australia, wa

First posted February 20, 2013 08:38:04

British Gas lines up new chief

Gas rings British Gas has about 16 million UK customers The UK’s biggest energy supplier, British Gas, plans to appoint Chris Weston as its new managing director.

Centrica, which owns British Gas, said it was proposing Mr Weston, the current head of Centrica’s US retail gas business, to succeed Phil Bentley.

If approved by the board, it will be formally announced alongside Centrica’s financial results on 27 February.

The company has denied reports that Mr Bentley is leaving because of a boardroom rift.

But it is understood that Mr Bentley had wanted to pursue a chief executive role and that was not going to be possible at Centrica.

British Gas has about 16 million customers in the UK.

The exact details of Mr Bentley’s departure, after six years as managing director, have not yet been announced.

Unconfirmed newspaper reports suggested last month that he could leave with a total package, including shares and a pension, worth somewhere between £6m and £13m.

HMV chief executive made redundant

 Deloitte said the latest job cuts were a difficult but necessary move HMV’s chief executive has been made redundant by administrators in charge of restructuring the failing music and DVD retailer.

Trevor Moore, previously boss of camera firm Jessops – another recent High Street casualty – was among 60 people made redundant from HMV’s head offices.

HMV entered administration in January and the closure of 66 stores across the UK was announced on Thursday.

That move puts the jobs of nearly 1,000 staff at risk.

Administrators Deloitte said the latest cuts across the head office network at Eastcastle Street in London, Marlow and Solihull had been “a difficult decision, but a necessary one in restructuring the business”.

Deloitte still hopes to sell the business on but it is likely to become a much smaller operation.

HMV currently has 220 stores in the UK, employing about 4,000 staff.

When administrators were called in last month Mr Moore said he was convinced that the music chain could be saved, and that he hoped to remain involved in the business in the future.

He took over as HMV chief executive in August last year, moving from camera retailer Jessops, which also went into administration in January and has ceased trading.

JGBs firm on easing expectations after BOJ chief signals early departure

TOKYO: Japanese government bonds firmed on Wednesday on expectations that Bank of Japan Governor Masaaki Shirakawa’s earlier departure would bring forward more policy easing measures.

Shirakawa said late on Tuesday he would leave together with his two central bank deputies three weeks ahead of the end of his five-year term, clearing the way for slightly earlier implementation of aggressive monetary easing under his successor.

Pressured by the government led by Prime Minister Shinzo Abe, the central bank doubled its inflation target to 2 percent and committed to open-ended asset purchases from 2014.

The 10-year JGB yield fell 1.5 basis points to 0.775 percent after opening higher, at 0.800 percent.

The benchmark yield remained solidly in its recent range between a then-six week low of 0.720 percent hit on Jan. 25 and a three-week high of 0.805 percent touched on Monday.

“Given how the FX market and equity markets have reacted, bonds should be selling off, but they’re not, as they’re effectively pricing in more easing by the BOJ,” said Shogo Fujita, chief Japanese bond strategist at Bank of America Merrill Lynch.

“On Shirakawa leaving early, the market reaction should be more neutral, as it doesn’t really change the landscape,” he added.

The Nikkei stock average surged 3 percent, while the dollar hit a 2-1/2-year high of 93.91 yen.

The 10-year JGB futures contract ended morning trade up 0.19 point at 144.09, closing in on its 20-day moving average, now at 144.12.

The improved bond market sentiment even carried over into the superlong tenor, which in recent weeks has typically underperformed amid fears that the government’s aggressive policies might eventually lead to inflation, and that fiscal stimulus might darken Japan’s debt picture and prompt sovereign ratings downgrades.

Fears of a steepening yield curve led bond investor giant Pimco to shift funds away from the superlong zone into shorter-term debt, the head of its Japanese portfolio management told Reuters in an interview on Tuesday.

The 20-year bond yield shed half a basis point to 1.7980 percent, while the 30-year bond yield lost 1 basis point to 1.990 percent.

“Most of today’s buying is concentrated in the 10-year zone, on BOJ easing hopes, but some investors are apparently using today as an opportunity to cover short positions in longer maturities, though activity is thin,” said a fixed income fund manager at a Japanese asset management firm.

The five-year yield slipped 1.5 basis points to 0.140 percent, matching a low hit several times since last month which was its lowest recorded level since Japan started issuing 5-year notes in 2000.

Copyright Reuters, 2013

Bank of England to hold fire as new Canadian chief speaks

bank-of-england 400LONDON: The Bank of England is set to freeze its key interest rate at a record-low 0.50 percent at a meeting Thursday, when its incoming governor appears before parliament for the first time.

The BoE, which will be led by Canadian central bank chief Mark Carney from July, will give an update of its monetary policy following a two-day meeting and amid growing concern that Britain is heading for a third recession in five years.

The bank’s nine policy members must decide whether to alter the level of its emergency cash stimulus, known as quantitative easing (QE) used to prop up the economy after it surprisingly contracted in the final quarter of 2012.

Prior to Thursday’s decisions, governor-elect Carney appears before parliament’s Treasury Select Committee of lawmakers who will quiz him over his monetary policy stance.

“With the BoE widely expected to leave monetary policy on hold on Thursday, future governor Mark Carney giving evidence at parliament on the UK monetary policy framework on the same day may gain more market focus,” said Bank of America economist Nick Bate.

“With the economic outlook broadly unchanged since its last forecasts in November … the bank is widely expected to leave interest rates and QE on hold at 0.50 percent and £375 billion, respectively.”

British borrowing costs have stood at the record-low level for almost four years, in which time the BoE has pumped £375 billion ($589 billion, 436 billion euros) of new cash into the economy under the stimulus programme.

Under QE, the Bank of England creates cash that is used to purchase assets such as government and corporate bonds with the aim of increasing lending by retail banks and boost economic activity.

Lawmakers are meanwhile likely to ask Carney whether the British central bank should continue to set interest rates with a view to maintaining its 2.0-percent annual inflation target.

Carney, who will take the reins from current BoE chief Mervyn King, had suggested in a recent speech that economic output might be a better target measure.

“Carney has recently advocated nominal GDP targeting as a way of committing the central bank to act aggressively against economic weakness, and to manage expectations of policy more effectively,” said Barclays analyst Simon Hayes.

“However, there are important practical limitations to the policy and we do not expect Mr Carney to press for a change in the UK framework.”

Recent official data showed that British gross domestic product — the total value of goods and services produced in the economy — shrank 0.3 percent in the final quarter of 2012 from the previous three months.

It flatlined over 2012 as a whole with zero growth.

A second consecutive quarter of contraction, in the three months to March, would see Britain suffering a “triple-dip” recession.

Finance minister George Osborne had named Carney as the new BoE governor late last year, picking a foreigner to lead the institution for the first time in its 318-year history amid radical changes to financial sector regulation.

Carney takes the helm with the BoE due to take over banking regulation from the Financial Services Authority (FSA) later this year, as part of a regulatory revamp aimed at avoiding a repeat of the devastating global financial crisis.

Copyright AFP (Agence France-Presse), 2013

Barclays finance chief to step down

Chris Lucas Chris Lucas has been on the board of Barclays since 2007 The finance director of Barclays is to step down from the company.

Chris Lucas has decided to retire but will remain in his role until a successor takes over, the firm said.

It comes after Barclays was hit by insurance mis-selling scandals and other issues, and fines of £290m by UK and US regulators.

Mr Lucas was the only one of the bank’s top executives who had stayed at the company since last June’s Libor rate-fixing scandal.

Chief executive Bob Diamond, chairman Marcus Agius and chief operating officer Jerry del Missier all left the bank after it was accused over the attempted manipulation of Libor and Euribor interbank rates between 2005 and 2009 and given the fines.

Mr Lucas has been on the board of Barclays since April 2007.

He is one of four current and former Barclays executives who are the subject of an investigation into payments between the bank and Qatar Holding, which is part of the state investment authority in Qatar.

Qatar Holding invested £5.3bn in Barclays in June and October 2008.

Barclays has said it is confident that it disclosed everything it had to at the time.

Barclays also announced group general counsel Mark Harding would also be retiring after nearly 10 years with the company.

Barclays chief Antony Jenkins said: “Chris and Mark both expressed to me late last year that they were considering stepping down from their roles at Barclays.

“The rationale which each shared with me was consistent and, typically, grounded in wanting to do what is best for the bank. Their decision to retire was theirs alone.”

In a statement, Barclays said a search for replacements had started.

It added: “Chris and Mark have agreed to remain in their roles until their successors have been appointed and an appropriate handover completed…

“Given the seniority of the roles, and the importance of securing the right candidates, we expect that process to take a considerable time to complete.”

Israel central bank chief resigns

Stanley Fischer Prof Fischer was appointed Bank of Israel governor in 2005 Stanley Fischer, governor of the Bank of Israel is to step down on 30 June, two years before his term ends.

No reason has yet been given for his resignation.

Mr Fischer had previously served as chief economist of the World Bank and deputy managing director of the International Monetary Fund.

He is due to hold a news conference on Wednesday, but said in a statement that he had already informed prime minister Benjamin Netanyahu.

Prof Fischer is known to generations of economics students as the author along with David Begg and Rudiger Dornbusch of one of the standard text books in the subject.

He also advised Federal Reserve chairman Ben Bernanke on his thesis and taught European Central Bank governor Mario Draghi.

He was appointed Bank of Israel governor in 2005 and was appointed to a second and final five-year term in 2010.

The 69-year-old economist was credited with helping the Israeli economy through the financial crisis in better shape than many other countries.

Barclays chief to waive his bonus

Antony Jenkins Last month Antony Jenkins told staff to sign up to a new code of conduct The chief executive of Barclays bank, Antony Jenkins, is to waive his bonus for last year.

He said it would be wrong for him to receive a bonus, given what had been a “difficult” year for Barclays.

It is thought Mr Jenkins was in line to receive about £1m of a potential maximum entitlement of £2.75m.

Mr Jenkins took over as chief executive last August, just as Barclays was being rocked over mis-selling scandals and other issues.

He said in a statement: “To avoid further unnecessary public debate on this matter, I wish to make clear that I concluded early this week that I do not wish to be considered for a bonus award for 2012 and I have communicated that decision to the board.

“The year just past was clearly a very difficult one for Barclays and its stakeholders, with multiple issues of our own making besetting the bank.

George Osborne says bankers need to be “sensible” about their pay

“I think it only right that I bear an appropriate degree of accountability for those matters and I have concluded that it would be wrong for me to receive a bonus for 2012 given those circumstances.”

Mr Jenkins’ total potential pay package, including pension, basic salary, and incentives, was £8.6m.

Banks are currently reviewing the size of bonuses for senior staff, and there were reports this week that Royal Bank of Scotland (RBS), which is 82% owned by the government, will set aside £250m for payments. Last year, RBS’s chief executive, Stephen Hester, waived his bonus for 2011 and in June said he would not take a bonus for 2012.

Chancellor George Osborne told the BBC chief economics correspondent, Hugh Pym, that he welcomed Mr Jenkins’ announcement.

Mr Osborne said: “All the banks need to understand it is a very difficult economic environment out there, that they have to be very sensible about their pay this year given that.”

Commenting on the bonus situation for senior employees at RBS, the chancellor added: “Stephen Hester, the chief executive of RBS, has already decided not to take his bonus.

“I think RBS need to pay attention to the times we live in, and I’m confident they will.”

Sign up, or resign

Barclays hit trouble last June, when it was fined £290m by British and US regulators for attempted manipulation of Libor and Euribor interbank rates between 2005 and 2009.

The scandal sparked the resignations of three Barclays senior board members, including ex-chief executive Bob Diamond. He was replaced by Mr Jenkins, who was formerly head of retail and business banking.

Barclays has also set aside £2bn to compensate customers for the mis-selling of payment protection insurance.

On Friday, Barclays faced new claims that UK financial regulators were investigating the bank over money received from Qatar.

The Financial Times alleged that Barclays lent Qatar money to invest in the bank in 2008. Barclays was not immediately available for comment.

Last month, Mr Jenkins ordered all Barclays staff to sign up to a new ethical code of conduct or quit.

Premier Foods chief steps down

Loaf of Hovis bread Hovis is one of Premier’s key brands Shares in Premier Foods – the firm behind brands such as Hovis, Bisto and Oxo – closed down 12% after its chief executive resigned.

Premier Foods said Michael Clarke would step down from the board with immediate effect.

Mr Clarke has led the firm for 18 months, during which time he has overseen the sale of several brands in order to cut the firm’s debt burden.

His replacement is Gavin Darby, the former Cable & Wireless Worldwide head.

Mr Darby will take up his new post on 4 February.

Continue reading the main story Premier said Mr Clarke had indicated that he was “potentially considering moving on to pursue other business opportunities”.

It added he had agreed to “remain available” to the company until mid 2013 to help with the handover.

Change ‘unhelpful’

Premier has been selling off top name brands which it says it does not consider “core” ones, in order to cut its debts of more than £1bn.

Well-known brands that have been sold include the Branston range of pickles and sauces, Robertson’s jam and Sarson’s vinegar.

In November last year, Premier also said it would be cutting 900 jobs at its bread division and closing two bakeries.

Premier Foods’ chairman David Beever said: “Michael Clarke and the team have done a first class job in stabilising the business, strengthening its balance sheet, divesting non-core businesses and generating momentum.”

Shares in Premier Foods were down 14.75 pence, or 12.2%, at 105.75p in afternoon trade.

“We see the surprise change of leadership as unhelpful to Premier’s stability and organic growth prospects,” said Martin Deboo, an analyst at Investec, in a research note.

“With its financial restructuring complete, we think that consistency and longevity of leadership was going to be critical to its prosperity. We now anticipate a further period of uncertainty.”

Local market gives warm reception to Rio’s new chief

A financial market analyst says investors are embracing the choice of Rio Tinto’s iron ore chief, Sam Walsh as the company’s new chief executive.

Rio Tinto’s share price had climbed 2.8 per cent to $66.41 by 3:24pm (AEDT), despite $US14 billion in asset writedowns being announced after the Australian share market closed yesterday.

Despite the big hit to profits from the writedowns, it appears investors are pleased with the replacement of Tom Albanese as chief executive.

IG Markets’ strategist Evan Lucas says there is a strong impression Rio Tinto will be in more disciplined hands with Australian Sam Walsh at the helm.

“Rio Tinto obviously has unfortunately had two very public failed acquisitions,” he observed.

“The Alcan acquisition back at the top of the market in 2007, which really has been quite a poor performer, considering that China has come in and been the largest aluminium producer in the world.

“The other one was obviously the Riversdale acquisition here in Australia back in 2011 for a little bit smaller amount.”

Mr Lucas says more chief executives may resign over similar issues in the near future, as companies look for more conservative management.

“A lot of CEOs over probably the next 18 months to two years that have found themselves being a little bit sort of whimsical with funding during the boom time – particularly between 2004 and 2007 – may actually start taking the lead from Tom Albanese and stepping down,” he said.

“Sam Walsh’s steady hand will now probably move towards that kind of CEO rather than probably what Tom Albanese was.”

Topics: business-economics-and-finance, corporate-governance, iron-ore, mining-industry, management, australia, wa

First posted January 18, 2013 15:37:01

Rio Tinto chief executive resigns

  The chief executive of mining giant Rio Tinto has resigned after the company announced a $14bn (£8.7bn) write-down.

The write-down relates to the company’s aluminium and coal-mining businesses.

Chief executive Tom Albanese stepped down by mutual agreement with the board, Rio Tinto said, and has been replaced by Sam Walsh, chief executive of the miner’s iron ore business.

In a statement, Rio Tinto Chairman Jan du Plessis said the scale of the write-down was “unacceptable”.

White House chief of staff to head Treasury

Updated January 11, 2013 07:34:54

US president Barack Obama has confirmed he is nominating White House chief of staff Jack Lew as America’s new Treasury secretary.

Mr Obama wants Mr Lew to replace Timothy Geithner, who does not want to serve a second term in the post.

“Jack has my complete trust,” Mr Obama said at a White House ceremony.

He has called on the Senate to confirm his position as soon as possible.

Topics: world-politics, business-economics-and-finance, united-states

First posted January 11, 2013 06:20:25

Rio Tinto chief quits after heavy writedowns

Mining company Rio Tinto has announced the sudden resignation of its chief executive Tom Albanese.

The company says Mr Albanese is stepping down after Rio made a $13.3 billion writedown on its coal division in Mozambique and a writedown of $10.5 billion on its aluminium assets.

The projects were two of Mr Abanese’s most significant acquisitions, and Rio Tinto chairman Jan du Plessis has described the results as “unacceptable”.

“I would like to pay tribute to Tom for his considerable contribution to Rio Tinto over more than 30 years of service and for his integrity and dedication to the company,” he said in a statement.

Mr Albanese, who became chief executive in 2007, says his resignation is effective immediately.

“While I leave the business in good shape in many respects, I fully recognise that accountability for all aspects of the business rests with the CEO,” he said in a statement.

Mr du Plessis says the head of Rio’s iron ore division, Sam Walsh, will step into the role.

“He is ideally placed to cast a fresh eye over how we address the challenges and opportunities in the business and derive greater value from it,” he said.

Until now, Mr Albanese had largely survived the consequences of his damaging $US38 billion acquisition of aluminium group Alcan in 2007, a top-of-the-market deal when Rio was under pressure from rivals to bulk up or be acquired.

The group has since seen years of losses in aluminium and took a $8.9 billion charge a year ago.

It had planned to shrink the division by hiving off most of its Australian and New Zealand assets for sale, but buyers have not flocked.

Rio bought Mozambique-focused coal miner Riversdale in 2011.

Doug Ritchie, who led the acquisition and integration of the Mozambique coal assets, has also stepped aside.

Rio says the non-cash impairments in its 2012 results include a charge of around $3 billion relating to the Mozambique business, as well as reductions in the carrying values of Rio’s aluminium assets in the range of $10 billion to $11 billion.

The group also expects to report a number of smaller asset write-downs in the order of $500 million.

The final figures will be included in Rio Tinto’s full year results on February 14.

“The Rio Tinto Board fully acknowledges that a writedown of this scale in relation to the relatively recent Mozambique acquisition is unacceptable,” Mr du Plessis said.

“We are also deeply disappointed to have to take a further substantial writedown in our aluminium businesses, albeit in an industry that continues to experience significant adverse changes globally.”


Topics: mining-industry, industry, business-economics-and-finance, company-news, australia, united-states, wa

First posted January 17, 2013 18:50:26

Google chief arrives in North Korea

Updated January 08, 2013 09:02:13

The chairman of search giant Google, Eric Schmidt, has arrived in North Korea for a private visit, alongside former New Mexico governor Bill Richardson.

The North’s official KCNA news agency announced their arrival in Pyongyang as “a US Google delegation headed by former governor of New Mexico Bill Richardson”.

Mr Richardson, who is also a former US ambassador to the United Nations says he and Mr Schmidt would be travelling as private citizens, representing neither the US government nor Google, he said.

“This is a private humanitarian mission, not connected to the US government,” he said.

“We’re going to be in Pyongyang, probably for two-and-a-half days. We may go outside the city. We will find out when we arrive”

Also on the trip were Mr Richardson’s long-time aide on North Korea, K.A. “Tony” Namkung, Jared Cohen, director of Google Ideas – a think-tank run by the California-based Internet giant – and some staff, according to a statement from Mr Richardson’s office.

The visit comes as Kenneth Bae, an American of Korean descent, is being held in North Korea after entering the country as a tourist in November.

KCNA says Mr Bae had admitted to committing a crime against the state.

Mr Richardson, who has visited North Korea several times over the past two decades, said last week he had been contacted by Mr Bae’s son, who asked for his help.

North Korea has in the past agreed to hand over detainees to high-profile delegations led by the likes of former US president Bill Clinton, and some observers suggested it may have requested Schmidt’s participation in this case.

But the US State Department has voiced concerns about the trip, saying it was ill-timed in the wake of Pyongyang’s widely condemned rocket launch last month.

State Department spokeswoman Victoria Nuland said on Monday Washington’s opinion had not changed, but hinted the two men might be asked to brief US officials about the trip afterwards.

“We are always open to hearing from Americans who’ve been in North Korea,” she said.

North Korea last month angered the US and others by launching a long-range rocket. It said the purpose was to put a scientific satellite into orbit but Washington and other nations called it a disguised ballistic missile test.


Topics: internet-technology, world-politics, media, korea-democratic-people-s-republic-of, asia, united-states

First posted January 08, 2013 07:59:11

Honda chief hopes for end to China, Japan dispute

Honda chief Takanobu ItoDETROIT: Honda chief Takanobu Ito expressed hope Monday that China and Japan will resolve their row over disputed islands given the key economic ties between the two countries.

“There is a lot of trust in the private sector between Japan and China. We’re each counting on each other in the business world,” Ito said, noting that he toured Honda facilities in December in the wake of the tensions.

“The Japanese and Chinese government I know are aware of this very large, very important economic relationship between our two countries and I hope they can proficiently carry out diplomacy.”

Japan’s ties with China have remained tense for months as the two nations repeatedly stage maritime standoffs in waters around the isles, called the Senkakus in Japan and the Diaoyus in China.

Japan’s hawkish new prime minister took aim at Beijing again Friday, accusing China of deliberately allowing Japanese businesses to suffer due to the dispute and on Monday Tokyo said it would send two more patrol ships to boost its defense of the islands.

The outbreak of the tensions following Japan’s decision to nationalize the East China Sea islands in September — which sparked riots and a boycott of Japanese good in China — has led to a slowdown in sales for Japan’s second largest carmaker, Ito said.

But dealership traffic in China has now returned to about 90 percent of what it once was and about 70 percent of those customers end up buying a car, Ito said.

“I definitely feel our customers there are waiting for our products,” Ito told reporters on the sidelines of the Detroit auto show.

While Ito said he did not feel comfortable evaluating the new Chinese or Japanese leadership, he said “it’s common sense that this is important and I hope the politicians are aware of how important this is.”

“There have been some problems, but there is a strong desire to return to that kind of growth that they’ve seen,” he said through a translator.

Copyright AFP (Agence France-Presse), 2013

Chief Minister wants tourist death investigation

The Northern Territory Chief Minister has called for an investigation into the high number of Australian deaths in South-East Asia, so travellers can be better prepared.

Two Australian men from Darwin, Kane Scriven and Nicholas Parkin, died from suspected drug overdoses just days apart in Laos last week.

Their deaths will not be investigated by local authorities.

The Chief Minister Terry Mills says the deaths of travellers in Asia should not only be looked at individually, but as a broader issue.

“It could be alcohol that has been illicitly brewed,” he said.

“In some cases they are proposing that it may be a form of insecticide poisoning.

“We’re not certain but there are a number of them and that’s the striking aspect of this.

“There needs to be broader consideration so that travellers better understand.”

Topics: death, tourism, darwin-0800

First posted January 14, 2013 11:41:28

HSBC names new private banking chief

Wednesday, 05 December 2012 19:15 Posted by Shoaib-ur-Rehman Siddiqui

HSBCLONDON: Europe’s biggest bank HSBC has named a new chief executive for its private banking arm to take over from Krishna Patel who is resigning having taken on the role in September 2011.

Peter Boyles, the bank’s chief executive officer for Continental Europe since 2010, was named by the bank as the new head of HSBC Private Bank on Wednesday.

Patel will leave the group at the end of January following a transition period.

Copyright Reuters, 2012

Tourism Australia backs chief in Qantas row

Sydney: Australia’s official tourism agency on Thursday threw its full support behind its boss Geoff Dixon despite claims by national carrier Qantas that he is trying to unseat the airline’s management.

Dixon ran Qantas from 2001 until 2008 when current chief Alan Joyce took over and their relationship has descended into a bitter feud over the direction the airline is taking.

On Wednesday, Qantas severed its 40-year relationship with Tourism Australia, cancelling an Aus$50 million (Dh191 million) deal “due to a potential conflict of interest of the agency’s chairman”.

It claimed Dixon was a member of a syndicate “committed to unravelling Qantas’ structure and direction”.

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But Tourism Australia said Dixon had previously declared his interest in Qantas, in line with governance requirements and as far as it was concerned, there was no “unmanageable conflict of interest”.

“As per regular Board protocols, having declared the interest, chairman Geoff Dixon will continue to absent himself from all matters relating to the Qantas Group,” Tourism Australia deputy chair Kate Lamont said following a board meeting on the issue.

Tourism Australia stressed that, “while important”, its partnership with Qantas represented about six per cent of its total marketing spending and “we are confident that our future spend won’t be compromised in any way”.

Tourism Australia “will continue to aggressively market Australia to overseas consumers”, said managing director Andrew McEvoy.

“Tourism Australia works with many commercial partners, including 20 international airlines as well as the States and Territories, Australian industry and international travel distributors.”

Media reports said Tourism Minister Martin Ferguson had also backed Dixon, a long-time friend, satisfying himself there was no breach of governance rules.

Dixon’s consortium is said to include retail entrepreneur Gerry Harvey, advertising guru John Singleton and another former Qantas executive Peter Gregg.

Media reports say the group has been buying up Qantas shares and scouting for global investors, mainly from China, to support a takeover and stymie Qantas’ planned 10-year tie-up with Emirates.

The proposal was unveiled in September but has yet to be cleared by the competition regulator.

In August, Qantas posted its first loss since privatisation in 1995, plunging Aus$244 million into the red due to intense competition in the region, rocketing fuel costs and the strong Australian dollar.

HSBC appoints new retail chief

London: HSBC said its strategy and planning boss John Flint is to take over as head of retail banking and wealth management (RBWM) next year to replace veteran banker Paul Thurston, who is retiring.

Europe’s biggest bank said Flint will become chief executive on January 1 of RBWM, one of the bank’s four global businesses. Previously known as personal financial services, RBWM has more than 50 million customers and made an operating profit of $4.3 billion last year, a fifth of the group.

Flint, 44, joined HSBC in 1989 and has worked in Hong Kong, Singapore, Indonesia, Thailand, India, Bahrain, the United States and Britain. He has been head of strategy and planning and chief of staff to the CEO since the start of this year.

Guilherme Lima, who joined two years ago from McKinsey as group head of strategy, will take Flint’s role.

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Stuart Gulliver, group chief executive, is restructuring HSBC to cut costs and axe unprofitable areas to lift returns, which has seen several changes in senior management.

Gulliver said Thurston, 59, had wanted to retire two years ago but stayed on to manage RBWM during the reorganisation, which aimed to make it more of a global business.

Thurston joined HSBC in 1975 and has run its retail banking in Hong Kong and Asia-Pacific and held top roles for Mexico, Latin America and UK retail banking.

News Corp Int’l news chief to step down

London: Tom Mockridge, the chief executive of Rupert Murdoch’s British newspapers who was parachuted in to steady an organization swamped in scandal, is leaving the company at the end of the year.

Mockridge was appointed CEO of News International in July 2011, following the resignation of Rebekah Brooks in the wake of the phone hacking scandal at the defunct Sunday tabloid, News of the World.

He is leaving News International to pursue outside opportunities, parent company News Corp. said in a statement on Sunday. Mockridge joined News Corp. in Australia in 1991, and headed the Sky Italia broadcasting operation in Italy from 2003 to 2011.

News Corp. Chairman and CEO Rupert Murdoch says that Mockridge’s “decision to step down is absolutely and entirely his own.”

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The conglomerate announced plans this summer to split into two public companies, one for its newspaper and book publishing business and the other for its fast-growing movie and TV operations. The Wall Street Journal said on Saturday that its current managing editor Robert Thomson is being named CEO of the new, unnamed publishing company.

Murdoch will be chairman of both companies.

In an interview last week with BBC radio, Mockridge said UK newspapers needed more effective regulation but argued against any legislative involvement by the government — the course recommended by Lord Justice Brian Leveson, who led a yearlong inquiry into the British press.

Mockridge said News Corp. would not consider closing The Sun, Britain’s largest circulation newspaper, if members of its staff were convicted of crimes.

“One of the striking things about the troubles of the last 18 months is how quickly support, evidenced by people’s purchase decisions, has come back to our newspaper titles and to other newspaper titles,” he said.

News International chief to leave

 Tom Mockridge Tom Mockridge was appointed last year amid the fallout from the phone-hacking scandal News International chief executive Tom Mockridge is to leave his role at the end of December.

Mr Mockridge, who replaced Rebekah Brooks in July 2011, is stepping down to “pursue outside opportunities”, News Corporation announced.

Rupert Murdoch, chairman and chief executive of News Corp, said Mr Mockridge’s decision was “absolutely and entirely his own”.

BSkyB chief operating officer Mike Darcey will replace Mr Mockridge.

The announcement comes as News Corp plans to split into two businesses, separating its newspaper and book publishing interests from its now dominant TV and film enterprises.

The BBC’s media correspondent Torin Douglas said Mr Mockridge was understood to have been passed over in the restructuring.

Robert Thomson, a former editor of the Times and now managing editor of the Wall Street Journal and editor-in-chief of Dow Jones, will head the publishing company, News Corp said.

News International publishes newspapers including the Sun and the Times.

‘Steadfast leadership’

In a statement, Mr Murdoch said: “For nearly 22 years it has been my pleasure to have Tom Mockridge as a colleague.

“Whether it was his early days with our newspaper group in Australia, his incredible work building Sky Italia, or his steadfast leadership of News International, Tom has always been a skilled executive and a trusted friend.

“His decision to step down is absolutely and entirely his own. I am sorry to see him leave us but I know he will be a great success wherever he goes.”

Mr Mockridge replaced Mrs Brooks last year when she resigned after another News International newspaper, the now closed News of the World, became embroiled in the phone-hacking scandal.

‘World-class’ replacement

Mr Mockridge was previously in charge of News Corp’s Italian broadcasting operation, Sky Italia.

At the time of Mr Mockridge’s appointment as News International chief executive, Mr Murdoch praised him as “a highly respected and accomplished media executive”, who had shown “leadership and integrity” in creating Sky Italia.

Mr Mockridge, who was born in New Zealand, started his career in newspapers and launched the Sky Italia 24-hour news channel in Italy in 2003.

His replacement, Mr Darcey, has been chief operating officer at BSkyB since 2006.

Mr Murdoch described Mr Darcey as “a world-class executive with unprecedented strategic and commercial experience”

“His broadcasting background will provide important leadership in the development of our already impressive suite of digital products at News International,” Mr Murdoch said.

Separately, News Corp announced that it was closing its tablet newspaper The Daily later this month. The product launched in February 2011 for the iPad and there were persistent rumours about the size of losses and possible closure.

“From its launch, The Daily was a bold experiment in digital publishing and an amazing vehicle for innovation,” said Mr Murdoch. “Unfortunately, our experience was that we could not find a large enough audience quickly enough to convince us the business model was sustainable in the long-term.”

Hungary central bank chief calls for caution at Dec rate meeting

BUDAPEST: Hungarian central bank policy makers should take a “deeper breath” at the December rate meeting after lowering official rates by a combined 100 basis points over the past four months, Governor Andras Simor said on Thursday.

“The December meeting is going to be even more important as we will be reviewing the new inflation report that is being prepared by the staff,” Simor told a briefing with foreign journalists.

“So we need to probably take a deeper breath before making decisions because there will be a lot of information on our table.”

Copyright Reuters, 2012

Adia’s infrastructure chief departs

Dubai: The Abu Dhabi Investment Authority (Adia), one of the world’s biggest sovereign wealth funds, confirmed on Monday that the global head of its infrastructure investments group had left the fund for personal reasons.

Chris Koski joined Adia in 2007 from the Canadian Pension Plan Investment Board to set up its infrastructure team, and became the go-to person for bankers and funds pitching infrastructure-related investments to the Abu Dhabi fund, sources familiar with the matter said.

Under Koski, Adia picked up minority stakes in some of the world’s leading infrastructure projects by co-investing with large institutional investors such as pension funds and other sovereign institutions.

“Adia’s infrastructure team was very active and Koski was spearheading the show,” one banking source said, speaking on condition of anonymity because he was not authorised to talk to media about the issue.

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A spokesman for ADIA said a search process was underway to find a replacement for Koski.

In its 2011 annual review, Adia said the focus of its infrastructure team was mainly in developed markets. It was looking for assets in sectors including utilities, such as water, gas and electricity distribution and transmission companies, as well as transport infrastructure, such as toll roads, ports, airports and freight railroads.

The fund allocates between 1 and 5 per cent of its portfolio to infrastructure investments. It does not disclose the size of its total assets but is widely believed to hold assets of $400-$600 billion.

In 2011, one of Adia’s subsidiaries was part of a consortium that agreed to acquire a 24.1-per cent stake in Gassled — Norway’s gas transmission pipeline system. Among listed equities, the team acquired slightly more than 5 per cent of MAp Airports, now known as Sydney Airport Holdings Ltd, an Australian company which owns stakes in the Sydney, Brussels and Copenhagen airports.

Adia also agreed to buy a 9.9-per cent stake in Thames Water, Britain’s largest water and waste water firm, from a consortium of investors led by Australian investment bank Macquarie.

In the review, ADIA said it combined its infrastructure and real estate teams as one unit to improve efficiency and better align investment teams and resources. Majed Salem Khalifa Al Romaithi is the executive director in charge of the division.

Adia returned 6.9 per cent on an annualised basis over a 20-year period as of December 31, 2011, a slight drop from the 7.6 per cent it posted in 2010. On the same basis, the fund returned 8.1 per cent over a 30-year period, similar to 2010.

New tourism chief

Posted November 23, 2012 11:52:39

The former head of the Northern Territory’s tourism authority has been named Tourism Tasmania’s new chief executive.

John Fitzgerald moves into the role in January.

He will replace Tony Mayell who is leaving to take up a job with the Northern Territory Government.

Topics: states-and-territories, tourism, tas, hobart-7000, launceston-7250

PAC tightens the noose around NESPAK chief

Inquir­y establ­ishes that MD author­ised illega­l promot­ions, misuse­d powers.  21 promotions were made without recommendations by the heads of the respective divisions or the board of management

ISLAMABAD: The findings of an inquiry committee have established that the managing director of National Engineering Services Pakistan (Nespak) Asad Khan misused authority, tightening the noose around the ‘well-connected’ Khan.

The report of the four-member inquiry committee was tabled and deliberated upon on Wednesday in a meeting of Public Accounts Committee’s (PAC) special panel. The findings showed that since 2008 many questionable promotions were made by the Nespak MD.

Despite pressure from all ‘relevant quarters’, the PAC has been investigating malpractices in Nespak for the last few months. The committee members including panel chairperson Yasmeen Rehman have revealed time and again that they were approached with requests to soften their stance on the issue.

The PAC panel had constituted the inquiry committee to investigate allegations of misuse of authority by Khan in making promotions including the merits in the appointment of the MD.

The Special Secretary Water and Power Hamiyatullah Khan, who was also part of the inquiry committee, said that 21 promotions from grade 11 to 12 were made without being recommended either by the heads of the respective divisions or by the board of management of Nespak. He said that the committee had recommended that at least ten promotions were questionable and needed to be redone. The Nespak’s service structure is different than the government’s service structure.

“The MD exercised his discretion beyond permissible limits”, said the special secretary.

The PAC panel decided to formally fix the responsibility for making irregular promotions and expanded the inquiry committee by bringing in the Federal Investigation Agency. The initial inquiry committee included officials of the National Accountability Bureau (NAB), Establishment Division, Ministry of Water and Power and the Auditor General of Pakistan.

The NAB’s member on the inquiry committee, Zahir Shah said that he had attached a separate note in the report and his findings were that the MD was using vast discretionary powers and ‘playing with the careers of the officials’. “In Nespak the relationship between the MD and the rest of the organisation was that of a master and slaves”, said Shah, NAB’s Director of Operations.

After being pressured by the PAC panel, the convener of the board of management of Nespak, admitted that there were cases where people were promoted in violation of the criteria but added that the criterion for promotions was fluid and changed every year according to the “ground realities”.

On the issue of appointments of vice presidents, the PAC panel expressed dissatisfaction over the inquiry committee’s findings. It was revealed in the meeting that the minutes of the selection board meeting were “forged”. While reading the official documents, Sardar Ayaz Sadiq of Pakistan Muslim League – Nawaz (PML-N) said that the then secretary water and power Imtiaz Kazi did not attend one meeting of the selection board but the minutes had his signatures.

Hamiyatullah said these documents were not provided to the inquiry committee during the probe.

Regarding appointment of the MD, the inquiry committee concluded that Asad Khan was not the senior most vice president before he was appointed as MD.

Moreover,Pakistan Engineering Council’s (PEC) by-laws say that an architect cannot take over the position of MD, said Hamiyatullah.

Published in The Express Tribune, November 22nd, 2012.

View the original article here

BBC chief quits amid sex abuse turmoil

Updated November 11, 2012 11:25:18

BBC director-general George Entwistle has dramatically quit just 54 days into his role after the broadcaster’s flagship news program wrongly implicated a British politician in child sex abuse.

In a televised statement outside the BBC’s London headquarters, Mr Entwistle said he decided “the honourable thing to do” was to step down.

Mr Entwistle, who only took over as director-general in September, said he decided to resign “in the light of the fact that the director-general is also the editor-in-chief and ultimately responsible for all content”.

“The wholly exceptional events of the past few weeks have led me to conclude that the BBC should appoint a new leader,” he added.

“To have been the director-general of the BBC even for a short period, and in the most challenging of circumstances, has been a great honour.”

In light of the unacceptable journalistic standards of the Newsnight film broadcast on Friday November 2, I have decided that the Honourable thing to do is to step down from the post of director-general.

Earlier on Saturday (local time), Mr Entwistle had said it had been “fundamentally wrong” of the BBC’s current affairs program Newsnight to broadcast an interview with a man claiming he was repeatedly abused by a senior Conservative Party figure at a children’s home in the 1980s.

The program did not identify the politician, but he was widely named on the internet as former Tory party treasurer Alistair McAlpine.

Lord McAlpine went public on Friday to strongly deny the allegations, and hours later his accuser Steve Messham retracted his claims, saying he had only just seen a picture of Lord McAlpine and he was not the man who abused him.

Mr Entwistle’s resignation comes just weeks after a storm of allegations that the late BBC presenter Jimmy Savile, one of the corporation’s biggest names, sexually abused hundreds of children over four decades.

Both Mr Entwistle and Newsnight were already under scrutiny after the show dropped an investigation into the Savile abuse claims last year.

The chairman of the BBC trust, Lord Christopher Patten, said Mr Entwistle’s resignation was “one of the saddest evenings” of his public life.

“George Entwistle has worked for the BBC for 23 years. He exemplifies the finest values of public service broadcasting,” he said.

“George has very honourably offered us his resignation because of the unacceptable mistakes, the unacceptable shoddy journalism which has caused so much controversy.”

Lord Patten said the acting director-general would be Tim Davey.


Topics: media, sexual-offences, united-kingdom

First posted November 11, 2012 08:31:36

Intel chief executive to retire

  Mr Otellini joined Intel in 1974 Intel has announced that its chief executive Paul Otellini is going to retire from the company.

Mr Otellini had been with the business, which is the world’s biggest maker of microprocessors, for almost 40 years and has been chief executive for the past eight years.

He will step down after the chip company’s annual shareholders’ meeting in May next year.

Mr Otellini was the fifth chief executive in Intel’s 45-year history.

“I’ve been privileged to lead one of the world’s greatest companies,” he said in a statement.

“After almost four decades with the company and eight years as CEO, it’s time to move on and transfer Intel’s helm to a new generation of leadership.”

The company will now begin the process of looking for his successor.

France bank chief urges European banking union

MADRID: Bank of France governor Christian Noyer called Friday on European powers to set up a banking union as an urgent response to the region’s financial crisis.

European leaders agreed in October to establish a regional banking supervisor in 2013, the first step towards a banking union that would allow the European Union to directly help troubled banks.

“We are moving towards a banking union, which was missing in the monetary union,” Noyer said in a speech to the annual assembly of Spain’s Association of Financial Markets.

“It is a crucial and urgently needed answer to the crisis,” the French central bank chief said.

Noyer called for the banking union to be established “swiftly” to as to allow a long-term return of confidence and stability.

Spain’s eurozone’s partners agreed in June this year to extend an emergency rescue loan of up to 100 billion euros ($129 billion) to help its stricken banks.

The government says it expects to use about 40 billion euros of the available funds, money that will be added to its bulging public debt unless the EU is empowered to intervene directly to support the banks.

Now, Spain is pondering whether to apply to the eurozone’s bailout fund for a sovereign rescue, which would open the way for the European Central Bank to buy Spanish bonds so as to curb its borrowing costs.

The ECB’s offer to make unlimited purchases of stricken states’ bonds if they accept strict conditions has brought down Spain’s interest rates even before Madrid decides whether to seek the help.

The ECB mechanism amounted to a “massive and effective backstop”, Noyer said, after what he described as an unjustified rise in the extra return investors demanded to lend to Spain over Germany.

Copyright AFP (Agence France-Presse), 2012

NBAD Chief executive named “Banker of the Year” by ABA

Abu Dhabi/London: Arab Bankers Association chose Michael Tomalin, the Group Chief Executive of the National Bank of Abu Dhabi (NBAD), as the first recipient of the distinguished service award to Arab Banking and as such the Arab Bankers Association (ABA) “Banker of the Year”. Arab Bankers Association, founded in 1980 in London, represents and promotes the interests of Arab banks and financial professionals who work with Arab banks. This is particularly important with the very strong and significant banking and trade links between the UK and the Arab world.

NBAD launched its London branch in 1977. It provides private banking, trade finance, corporate banking, and treasury products.

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Europe, China don’t need trade war, says EU trade chief

 Image Credit: AFPEuropean Commissioner for Trade Karel De Gucht speaks during the presentation of his book ‘Vrijheid. Liberalisme in tijden van cholera’ (Freedom. Liberalism in the Time of Cholera), on October 17, 2012, in Brussels.

Brussels: The European Union will not back down from protecting its industries against Chinese competition it sees as unfair, but mutual self-interest will prevent a damaging trade war, the EU’s trade chief Karel De Gucht said.

Disputes with Beijing have taken on a bigger scale in recent months and Brussels brought its biggest ever trade case against Beijing in September after European companies accused China of dumping solar panels in Europe.

The EU is also gathering evidence to see whether Chinese telecoms companies Huawei Technologies and ZTE are dumping or receiving illegal subsidies.

“We are not going to shy away from what we have to do,” De Gucht told Reuters in an interview. “But we are not interested in escalating tensions. I believe that the Chinese also realise that this has to be kept within limits,” he said from his office in the European Commission.

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The growing trade spats come at a dangerous time. Europe’s economy is hardly growing and the continent is suffering from record unemployment, while China’s much-faster growth is cooling. Both downturns raise the spectre of social instability.

De Gucht, who first got to know China during his term as Belgium’s foreign minister between 2004 and 2007, sees the tensions persisting precisely because China is seeking to produce sophisticated products that will compete with Europe.

“China is facing a tremendous challenge: how to get a larger share of the value-added pie, as it otherwise can’t possibly take the next step in economic development, which Japan, Taiwan, South Korea, Singapore and Hong Kong have already taken,” De Gucht wrote in a book published this month called “Freedom: Liberalism In A Time of Cholera”.

There he cites a Chinese curse: “May you live in interesting times.”

Trade between China and the European Union has doubled since 2003, rising to €428 billion ($558 billion) in 2011, making the EU China’s biggest trading partner. China is the second biggest destination for European goods after the United States.

But ongoing disputes range from metal tubes to China’s restrictions of exports of rare earth metals.

In the solar panel case, European makers want duties placed on Chinese imports amid a sharp drop in prices, something the United States has already implemented.

EU diplomats say De Gucht could be using the solar panel dispute in Europe as leverage over Beijing to push the Communist government to cut what they see as illegal subsidies to Huawei and ZTE and avoid another formal trade case with Brussels.

De Gucht declined to go into details about either case, but said he hoped solutions could be found.

“You can imagine that: a mushrooming of problems between China and Europe,” said De Gucht, one of Europe’s most powerful commissioners and who leads trade policy on behalf of the EU’s 27 countries. “Both parties realise that this would be a very bad thing for the whole of the world economy.”

The US ambitions of Huawei and ZTE were stopped in their tracks earlier this month as a congressional report urged American companies to stop doing business with the firms, raising fears of retaliation from China.

The US House of Representatives’ Intelligence Committee warned industry that Beijing could use equipment made by the two companies to spy on certain communications and threaten vital systems through computerised links.

Europe’s dealings with Beijing lack the geo-political dimensions of China’s relations with its other big trading partners, such as Japan, which is in a tussle over the ownership of some islands, and the United States, which has a naval fleet based in Japan to wield influence over the region.

That means Europe lacks leverage beyond trade defence instruments, but also makes the partnership less complicated.

“That fact deprives us of a number of possible levers, but on the other hand also facilitates a more rational discussion on a number of trade issues,” De Gucht said.

Trade has always been a fundamental aspect of the European Union and is one of the few things that still unite eurosceptic Britain with EU enthusiasts such as De Gucht’s Belgium.

The European Union implemented a landmark free-trade deal with South Korea in 2011, which went beyond tariff reductions and took in regulation and services. Now it is seeking to forge similar pacts with Japan and the United States.

While a free-trade pact between China and Europe is unlikely even in the medium term, Brussels and Beijing could agree on an investment pact that would lay down rules for companies expanding in both regions, something De Gucht said was gaining momentum. “It is of prime interest for us,” he said.

As things stand, burdens on European investors in China — including rules requiring companies to share their know-how with Chinese firms — makes deepening investment links problematic.

“They are much more ready than in the past to put these topics, which are rather sensitive for them, on the negotiating table,” he said. “That doesn’t mean that China is suddenly an easy partner, but they realise they have to engage.”

Volvo Cars names chief executive

  Investors and rivals wonder whether new chief Mr Samuelsson will carry on where Mr Jacoby left Chinese-owned carmaker Volvo has appointed a new chief executive to replace Stefan Jacoby.

Former MAN chief Haakan Samuelsson was appointed after it became clear that Mr Jacoby would not return to his post following a mild stroke in September.

Investors and rivals will be keen to see whether Mr Samuelsson will continue to pursue Mr Jacoby’s strategy of moving the brand upmarket.

The goal would be to grow sales and bolster profits.

Mr Samuelsson said he was ready for the challenge, although “no other business is as demanding, complex and full of challenges as the automotive industry”.

New definition of luxury

Mr Jacoby, who is said to be recovering from the stroke which limited mobility in his right arm and leg, had hoped to re-invent the Swedish brand by focusing on functional, elegant minimalist Scandinavian design.

In addition, he believed a sense of environmental responsibility was at the forefront of the minds of many buyers of luxury cars, hence he was eager to move away from what he saw as an old fashioned tendency in the motor industry to laud cars with lots of horse power and cylinders.

Mr Jacoby had been trying to make Volvo a credible premium brand

His hope had been that this strategy would establish Volvo as a serious, yet distinct, rival to German premium brands Audi, BMW and Mercedes.

So far there has been little evidence that the strategy is working. Volvo has cut production this year in response to sharp downturn in car sales in Europe, and its plan to start production in China has proven challenging.

Mr Jacoby’s vision was backed by a whopping $11bn investment programme during the 2011 to 2016 period.

The investment far exceeds the $1.8bn price the Chinese carmaker Geely paid for Volvo when Ford sold the marque in spring 2010.

‘Worst may be ahead’ – Bank chief

17 October 2012 Last updated at 17:07 GMT  Paul Tucker was one of a number of high-profile speakers at the BBA conference The “worst may still be ahead” for the banking system, the Bank of England’s deputy governor has told a gathering of leading bankers.

Paul Tucker said reserves held by banks were still not calibrated for the “end-of-the-world risks” that remained a possibility.

He added that bank bosses should be paid in debt, so they had a stake in the survival of their institutions.

Mr Tucker is a leading contender to be the Bank of England’s next governor.

Speaking at the British Bankers’ Association’s (BBA’s) annual conference in London, Mr Tucker said that the most important issue ahead was ensuring that banks could be allowed to fail in an orderly way.

This should be done without taxpayer support, he said. This would also make it easier for new, smaller entrants to the banking sector and encourage competition in a UK market dominated by a small number of institutions.

However, he also sounded a positive note for the City of London, saying that the Bank believed – if the correct structure was in place – that the financial centre would prosper in the future.

Separately, Paul Volcker, a former chairman of the US Federal Reserve and author of banking reforms in the US, voiced scepticism about plans in the UK to ring-fence banks’ retail operations from their investment banking operations.

The UK government hopes to have final legislation on this change, proposed by the Vickers report on banking, in place by 2015.

Mr Volcker’s proposals in the US, known as the Volcker rule, aim to ban banks’ proprietary trading – taking speculative risks on the markets with their own rather than clients’ money – and limit banks investing in hedge funds or private equity funds. Banks will have until July 2014 to comply with the rule.

“If you impose the ring-fence right now it will be effective to a considerable extent – compared to where we are now,” he told the UK’s Parliamentary Commission on Banking Standards.

“There will be holes in the fence, but that doesn’t mean it won’t be effective the day after you impose it… but over time they will get bigger.”

He also said that banks raising their capital standards to meet Basel III requirements was still “subject to uncertainties and political pressures”.

Customer protection

At the BBA conference, Mr Tucker was one of a number of speakers from the top table of regulators and UK banks; representatives from politics and consumer groups were also speaking.

Continue reading the main story image of Kevin Peachey Kevin Peachey BBC personal finance reporter at the BBA conference

Top bankers gathering in London are fully aware of how unpopular they are among the UK public.

If they needed reminding, then protesters greeted their arrival with placards, and the conference catchline was “restoring trust”.

Then every speaker (with not a single woman among them) made reference to the trust and reputation issue.

So did they come up with a solution?

There were plenty of suggestions – including branches offering one-stop-shop banking and easier switching for customers.

Overall, greater competition in an industry facing up to a raft of new regulation was the major focus.

And competition, said the Bank of England’s deputy governor, meant banks being allowed to fail.

Yet, you can’t imagine that allowing their bank to fold would be a particular ambition of anyone in this room.

The deputy governor said that banks could be like the rest of the market economy by being allowed to fail.

He said that by paying banks’ leadership in IOUs from their own banks, they would have a “powerful incentive” to ensure they are run safely.

Such a proposal was put forward earlier this month by a European Union advisory group, who suggested that bankers should accept bonds as part of their bonus, the value of which would fall if risky trades or lending lost money.

Mr Tucker said customers were becoming increasingly aware of the system of deposit protection that meant the first £85,000 of their savings, per person and per institution, was guaranteed if a bank went bust.

This was changing retail banking in a significant way, but in slow motion, he said.

There was an argument, he added, for more of the burden of this deposit guarantee to be taken on by the failing bank, rather than the rest of the industry.

Other speakers at the conference included Martin Wheatley, who will lead the new regulatory body called the Financial Conduct Authority.

On Tuesday, the government confirmed that it was accepting the recommendations of Mr Wheatley’s review of Libor in full.

His report concluded that the system for setting the Libor inter-bank lending rate was broken and needed complete overhaul, including criminal prosecutions for those who try to manipulate it.

He told the conference that, to anyone who was nervous about how to operate under the new regime, “The answer is simple: don’t lie.”

Bankers will have to submit their real borrowing costs to the new authority which will oversee the setting of the Libor rate. Previously, they provided estimates, which left Libor open to abuse and dishonesty, he said.

Mr Wheatley called on bankers to stay involved so that they could benefit from a new and improved Libor.

“All we are asking is that banks continue in that process in good faith,” he said

Collapsed standards

The conference also heard from Sir Nigel Wicks, who was named as the new chairman of the BBA. He was once an aide to former Prime Minister Margaret Thatcher.

“In this country and at this time, this vitally important industry is working to rebuild its reputation with its customers and to play its full part in restoring the UK’s financial stability and helping to drive its economic recovery,” Sir Nigel said after his appointment was announced.

He told the conference that everyone had to take personal responsibility for the restoration of trust in banking.

The previous chairman, Marcus Agius, resigned in the wake of the Libor scandal, along with his role as chairman of Barclays.

Andrew Tyrie, chairman of the Commons Treasury Committee, told the conference that standards had collapsed and trust in banks broken down.

Later, Greg Clark, financial secretary to the Treasury, said that regulation in the last decade had been found wanting and had been done through the rear-view mirror.

Chris Leslie, shadow financial secretary to the Treasury, said that the time had come to look at the portability of bank accounts.

This would allow consumers to take their account number with them when they moved banks, encouraging them to switch between institutions and prompting more competition in the industry.

He also argued against moving away from the model of free banking. At present, many consumers do not pay for a current account, but are charged for going overdrawn or for some other services.

China steel surge has peaked: BHP chief

SYDNEY: BHP Billiton chief Marius Kloppers said on Wednesday that China’s steel surge had peaked and iron ore and steel growth was likely to decline, as the miner delivered a mixed quarterly production report.

BHP produced 39.77 million tons of iron ore in the three months to September 30 — just one percent higher than a year earlier and three percent lower than the preceding quarter as China’s slowdown hit commodities.

Metallurgical coal, another key steelmaking ingredient, was down four percent on-year at 8.94 million tons.

Kloppers said the China steel boom had peaked, with supply shortages all but met and the Asian giant entering a new phase in its modernisation that would see average annual growth of around eight percent for the next decade.

“Steel intensity per unit of GDP will continue to moderate and growth rates for iron ore and coal are likely to decrease,” Kloppers said in a speech after the release of BHP’s September quarter production report.

“The record prices we experienced over the past decade, driven by the demand shock, will not be there to support returns over the next 10 years,” he added.

“What we can instead expect is demand growth at more predictable and sustainable levels and more moderated pricing.’

As a result Kloppers said it was “difficult to envisage” further investment in its Australian coal operations, where recent increases in state government royalties and a bullish exchange rate have compounded profitability issues.

BHP suspended some Australian coal projects and put expansion plans on hold this year as falling commodity prices saw its annual net profit dive 35 percent to US$15.42 billion. Other major miners have taken similar steps.

“While our resource base in Queensland (state) is very high quality the heavy cost of taxes, royalties, declining productivity and a strong Australian dollar means that further investment to grow these operations is much less likely,” Kloppers said.

However, he remained upbeat on the mining industry’s broader outlook, with the global iron ore market set to grow by 650 million tons by 2020 — down from 800 million tons between 2000-2010 but still “significant”.

“At the same time the progressive transition into a consumption-based economy implies increased demand for commodities other than steel, such as copper, energy, aluminium and so on,” added Kloppers.

“As the middle class continues to grow, better diets will also imply a higher demand for commodities such as potash.”

Melbourne-based BHP reported a 24 percent jump in quarterly copper output from the September quarter last year, reflected by higher grade ore at its Escondida mine in Chile and record quarterly production at Antamina in Peru.

There was a significant bounce in petroleum products — which Kloppers said was key to BHP’s resilience — up 19 percent from the previous corresponding period, including a 30 percent surge in gas output.

Zinc production was up 11 percent from the previous September quarter, uranium up four percent, silver production was steady while lead output dropped six percent.

New Citi chief is jack-of-all-trades

New York: Michael L Corbat inherited one of Wall Street’s most thankless jobs after the financial crisis. As head of Citigroup’s “bad bank”, a segregated unit of unwanted investments, he was asked to haul the bank back from the brink.

But after years of shedding troubled assets and forging ties with regulators and board members, that once-grim position has now led Corbat to the top job at the company. Citigroup on Tuesday announced that Corbat would succeed Vikram S Pandit, who stepped down after five years as chief executive.

“I am both humbled by the confidence the board has placed in me, and excited by the prospect of working closely with our management team and the board to take our company forward,” he said in a memo to employees Tuesday. In a conference call, he added that “I look forward to taking on the challenge of continuing what Vikram started.”

Corbat, 52, has been a Citigroup lifer. He began his career at Salomon Bros, which was taken over by Travelers in 1998, shortly before the merger with Citicorp that created a financial services behemoth. He began as a bond salesman in Atlanta, before climbing to managing director for high yield and derivatives.

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“He is a great guy – knows clients and products well,” said Robert Wolf, the former UBS executive who worked with Corbat for about 10 years at Salomon Brothers and now runs the consulting firm 32 Advisors.

At Citigroup, executives portray Corbat as a jack-of-all-trades. His work has spread across Citi’s many divisions, including both commercial and retail banking. When the bank ousted Sallie L Krawcheck at the height of the 2008 financial crisis, Corbat took over as head of the global wealth management unit.

His resume also includes stints overseas, an important element at a firm that often crows about its overseas footprint. Citi dispatched Corbat to London in January to become chief executive of Citigroup’s broad operations in Europe, Africa and the Middle East.

“From his nearly three decades at the company he brings deep and varied operating experience across a broad spectrum of the financial services industry,” Michael E O’Neill, chairman of the Citigroup board, said in a statement Tuesday.

In perhaps his most important role, Corbat helped steer the bank through the financial crisis. At the helm of Citi Holdings – the “bad bank” created in the aftermath of the crisis – he oversaw Citigroup’s disastrous mortgage portfolio and the sale of some $600 billion in noncore businesses like its student-lending operation.

The bank on Monday disclosed that the assets in Citi Holdings dwindled 31 per cent in the third quarter compared with the same period a year earlier, significant progress for a unit that was once the albatross of the firm.

Some analysts have questioned why Corbat has not moved more rapidly to unwind the bad bank. Others wondered why Corbat offered little in the way of specifics about his approach to running the firm.

But Corbat, who made $9 million in 2010, said that the record of Citi Holdings was one that “few can criticise”.

As Citigroup slowly regained its footing after repaying $45 billion in taxpayer bailout funds, Corbat became a potential heir to Pandit. The Citi Holdings position afforded him close access to O’Neill, who ran the Citi Holdings Oversight Committee since 2009.

The Citi Holdings job also exposed Corbat to regulators, who kept a close eye on the unit and have had a strained relationship with the bank since the crisis.

“It is critical for this firm and all firms to have strong relationships with our regulators, and I think we do,” O’Neill said on the conference call. But “things can always be improved,” he said.

The bank built some modest good will with regulators Monday evening, people briefed on the matter said, when O’Neill personally called top officials to inform them of the management shuffle.

Pandit had a mixed track record in Washington. While he embraced much of the Dodd-Frank regulatory overhaul law, drawing private praise from some officials, Pandit also incurred the ire of regulators when the bank failed to acquire Wachovia, which was flailing during the 2008 crisis. Tensions boiled over after a Citigroup executive called the Federal Deposit Insurance Corp. a “tertiary regulator”, Wachovia was acquired by Wells Fargo.

Corbat, by contrast, has somewhat cosier ties in Washington. He has made occasional trips to Washington, including last October when he met with Daniel K Tarullo, the Federal Reserve board governor, and has donated to Democratic and Republican causes, including Mitt Romney’s presidential campaign.

“He was involved in several meetings with us,” said Sheila C Bair, former head of the FDIC who knows Corbat from meetings during the financial crisis. “He was prepared and he knew his stuff,” she said in an interview.

Corbat is active in the Swedish-American Chamber of Commerce and is a board member of the US Ski and Snowboard Team Foundation.

While a student at Harvard, he was an all-conference lineman on the football team. The 230-pound Corbat seemed poised for a career in the NFL. But he earned an economics degree in 1983 and set off for Wall Street.

Referring to his college career at the time, Corbat told The Harvard Crimson, “It has given me everything that I would have hoped for.”

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Omnicom chief worries about US ‘fiscal cliff’ and concerns over China

Omnicom Group Inc, the largest US advertising company, said the looming “fiscal cliff” in the US and the leadership transition in China are creating uncertainty among clients, making it difficult to forecast the next few quarters. However, the company said it was benefiting as customers spread their advertising budgets among fewer agencies.

“With China being off a little bit, Europe not solved yet and the uncertainty with the fiscal cliff as people await the election, there’s conservatism,” chief executive John Wren said on a conference call. “We’re not certain yet what the outcome is going to be in the fourth quarter or into the first quarter of next year.”

The “fiscal cliff” refers to the $500 billion (Dh1.8 trillion) or so of tax hikes and the more than $100 billion in government spending cuts that will automatically start on January 2 unless politicians agree on a budget deal.

Omnicom shares were down nearly 3 per cent at $50.95 on the New York Stock Exchange on Tuesday.

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Analysts on average are expecting fourth-quarter revenue of $3.97 billion and annual revenue of $14.29 billion, according to Thomson Reuters I/B/E/S.

Wren said the company’s teams in Europe have been facing the “most challenging conditions” in its global footprint.

Revenue from Eurozone fell 14.4 per cent during the third quarter. Third-quarter growth in Germany, France and the Netherlands was negative, the company said.

Wren said the modest reduction in revenue growth in China was temporary and growth will return after the leadership transition is completed.

Omnicom, home to advertising, media and public relations agencies such as BBDO Worldwide, DDB Worldwide, TBWA Worldwide and Fleishman-Hillard, said it was benefiting from the account consolidation in the advertising industry.

PepsiCo Inc, a longtime Omnicom client, said in February it reduced the number of advertising agencies in North America, while raising marketing spend between $500 million and $600 million this year.

“I think this (account consolidation) trend will only continue because most of the major companies around the world are under some degree of pressure to become more efficient. That’s where we are today, and I think, as we go into 2013,” Wren said.

Evercore Partners analyst Douglas Arthur said Wall Street’s growth expectations from Omnicom for 2013 are too high.

“Nothing in this quarter tells me that I am wrong on that,” he said.

Analysts’ estimates for annual revenue for 2013 are $14.93 billion, while Arthur expects revenue of $14.80 billion.

Order to arrest Kingfisher chief

12 October 2012 Last updated at 12:58 GMT Vijay Mallya Legal experts say Vijay Mallya is unlikely to be arrested soon A court in the southern Indian city of Hyderabad has issued an arrest warrant for Vijay Mallya, owner of the cash-strapped Kingfisher Airlines.

The warrant relates to a case brought by Hyderabad International Airport after cheques, worth 103m rupees ($1.9m; £1.2m), bounced.

Kingfisher has struggled to repay its debts. The money owed in this case was reportedly to cover airport charges.

Legal experts say it is unlikely that Mr Mallya will be arrested imminently.

They say Mr Mallya will probably be summoned to court at an agreed future date and is likely to get bail.

This arrest warrant was only issued when Mr Mallya failed to appear in court, despite a summons issued to him after the cheques bounced.

Mr Mallya, the crisis-hit airline’s flamboyant owner, is also an MP in the Rajya Sabha, the upper house of the Indian parliament, as well as the chairman of the United Breweries group, India’s largest brewing company, which makes Kingfisher beer.

The UB Group, Kingfisher Airlines’s parent company, said in a statement that it had “not been served with any warrants”.

Meanwhile, Kingfisher has extended its shutdown until 20 October after failing to persuade its striking staff to return to work.

The airline grounded its fleet on 1 October after some workers went on strike protesting against months of unpaid wages.

Kingfisher has been struggling with a cash shortage and has reported losses for five years in a row.

In July, the airline was forced to cancel 40 flights after staff went on strike, again over the airline’s failure to pay months of wages.

After the government relaxed investment rules last month allowing foreign airlines to buy up to a 49% stake in domestic carriers in India, Mr Mallya said discussions were taking place which could allow overseas operators to invest in the airline.

But analysts say that the current disruption and safety concerns could hurt efforts to win the investment that could save the airline from collapse.

Xstrata chief talks up Glencore merger

Updated October 04, 2012 12:15:16

The head of Xstrata’s Queensland copper mining operations says the merger of his company with the global commodities giant Glencore is good news for local operations.

The Swiss mining group and Glencore have agreed on new terms for their tie-up, to create a massive company worth about $90 billion.

Xstrata chief operating officer Steve de Kruijff says the merger would shore up Xstrata’s interests in central and north-west Queensland.

“It’s still in the earlier stages of discussion,” he said.

“A shareholder meeting is planned for the next few weeks – I’m not sure exactly when – but hopefully there’s a positive outcome on the merging of the two groups.

“It would be a great outcome – let’s hope that it goes ahead.”

Mr de Kruijff says he expects strong growth in Asia to keep prices for the commodity buoyant.

He says comments by Reserve Bank Governor Glenn Stevens earlier this week that resources investment will peak next year, only apply to commodities like coal.

Mr de Kruijff says demand for copper remains strong in China and is recovering in the US.

“We see some strengthening still occurring in India as well,” he said.

“If you look at Japan it went through cycles of growing and stabilising and then growing again, so I don’t really see any difference in the new, developing countries of China and India.

“I think we’ll see the same processes.”

Chief admits smart phone delay cost Vodafone

Posted October 14, 2012 11:56:33

Vodafone Australia’s chief executive says his company made mistakes by not anticipating the fast roll-out of smart phones.

Bill Morrow says the Vodafone network crashed in 2010, and customers were let down because of a lack of investment in infrastructure to support its network.

“I think if you look at the way the market has evolved here in Australia, Aussies clearly love their mobile phones, they like smart phones in particular,” he told Inside Business.

“That drove a different kind of demand on to the network and that’s got ahead of the company and the investment wasn’t there at the time.”

Mr Morrow says the company has been playing catch-up since the crash.

“It wasn’t that long ago Vodafone was at the top of the mark, we had one of the highest brand preference scores among consumers,” he said.

“I think the reality is that the market got ahead of the Vodafone company.

“We now see that, we know exactly what the root causes are, we are investing a lot of money into the company be able to bring that back so the customers can have that choice.”

He says the network should be up to scratch by the end of next year.

“Already some of our customers are telling us that they feel the difference but it’s not there yet. I want to be really clear we have a ways to go to meet the needs of our customers,” he said.

“We’re going to get the network fixed but I often tell many of the employees as we’re talking, as opposed to death by a thousand cuts, how about brand resurrection by a thousand improvements.

“Every time someone interacts with us – whether it’s online, calling a call centre, using our network or actually walking into one of our retail stores – they have to have a very consistent, personal experience and those are the things we have to do and that’s what’s going to lift our brand back up.”

He says changes have also been made on a management level.

“Management is like a tool, you use it depending on the application that you have,” he said.

“In our case of actually rebuilding the brand, rebuilding the trust with the consumer, building out the network, changing the IT systems, launching into a whole new set of services, we need a team of specialists in the area.

“If I look at my direct ports for example, two-thirds of them will have been replaced, not that the people before weren’t good people, it’s just that the type that we need now are different.”

Goldman Sachs metals chief to retire post LME sale

Posted by Shoaib-ur-Rehman Siddiqui

goldman-sachsSINGAPORE: Stephen Branton-Speak, the head of metals trading at Goldman Sachs, is set to retire after 15 years and after playing a key role in steering the 1.4 billion pound ($2.25 billion) sale of the London Metal Exchange, sources told Reuters on Friday.

London-based Branton-Speak will step down from Goldman Sachs at the end of the year, said the sources who have direct knowledge of the staffing situation at the investment bank. Branton-Speak could not be reached for comment.

His exit comes at a time when investment banks are facing tough times with brokerage margins squeezed by electronic trade, and fewer large scale funds interested in metals as the growth boom in top metals consumer China fades.

The sale of the 135-year old LME to Hong Kong Exchanges and Clearing Ltd 0388.HK (HKEx) was sealed in July and is set to complete later this year.

In addition to Branton-Speak, Goldman is losing London-based Managing Director Rohan Khurana who was at the bank for more than 13 years, said the sources, who could not be identified because they were not authorised to talk to the media. Khurana will relocate with Macquarie to Asia, they added.

Two base metals traders, Ben Green and Liam Brown, quit Goldman in January to join Mercuria, one of the world’s top five energy traders.

After joining Goldman Sachs in 1997 as a metals trader, Branton-Speak became a managing director in 2006 and a partner in 2008.

He presided over the creation of a physical metals trading desk at Goldman Sachs in the aftermath of the 2008 financial crisis, and as banks made a bid to offset the loss of income from the forced closure of proprietary trading desks due to stricter regulatory reforms.

Branton-Speak has been a board member of LME since 2009. He was also on the management committee of the London Bullion Market Association (LBMA). Prior to joining Goldman, Branton-Speak worked as a precious metals trader with Engelhard.

Copyright Reuters, 2012

BofA chief sees further job losses

Bank of America Corp Chief Executive Officer Brian Moynihan will cut more jobs as the US’s second-largest lender works through mortgage losses and global economic growth sputters.

“I think we continue to reduce our headcount, you can see it in our patterns, it’s really based on demand,” Moynihan, 53, said in an interview with Bloomberg Television in Tokyo on Thursday. “As we continue to get through the mortgage issues at Countrywide you’ll see the headcount come down substantially.” BofA is among banks cutting jobs and other expenses to restore profitability after the 2008 financial crisis sent borrowers into delinquency and the global economy into the deepest slump in at least seven decades. Moynihan announced $3 billion of cuts at BofA’s investment bank, trading and wealth- management units in July.

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WH Smith chief Swann to step down

11 October 2012 Last updated at 07:51 GMT Kate Swann Kate Swann previously worked at Homebase and Argos Kate Swann is to step down on 30 June 2013 after nine years as chief executive of WH Smith.

Mrs Swann, who took over at one of the toughest times in the company’s history, will be replaced by Steve Clarke, previously managing director of WH Smith’s High Street business.

The announcement came with firm’s results. Pre-tax profits for the year to the end of August rose 10% to £102m.

It said it was well positioned to grow despite the “challenging” conditions.

Kate Swann took charge of the business in 2003 at a time when it was rapidly losing market share, before presiding over one of the biggest losses in the retailer’s history in her first year.

In the retail business she concentrated on core sales of books, stationery, newspapers, magazines and greetings cards. She also separated the news distribution business from the shops and expanded into airports and railway stations.

The retailer’s shares fell 7% in early trading in London.

Continue reading the main story “The chief executive is seen as having done a fantastic job over the past nine years and she’s leaving some very big shoes for her successor to fill,” said Keith Bowman at the stockbrokers Hargreaves Lansdown.

“We’ve seen slow but steady progress from WH Smith, which is not something we’re seeing a lot of in the retail sector at the moment.”

The company has raised its dividend for the full year, making it 20% above last year’s level.

Its statement to the stock exchange said that fiction sales had been weak in the first half of the year, before picking up thanks to the Fifty Shades erotic trilogy.

It has announced an additional £12m of cost-saving measures, bringing its total cost-cutting target to £25m over the next three years.

The increase in profits for the year was mainly due to cost-cutting, with like-for-like sales, which exclude new store openings, falling 5%.

“The worry is that Swann’s departure signals that the retailer’s strategy of cutting costs is beginning to run out of steam, making it a good time for her to exit on a high,” said Matt Piner at the retail consultants Conlumino.

“If this is the case, then it means that the business will have to instead rely on sales growth to boost profits; something which seems a fairly daunting prospect for new chief executive Steve Clarke.”

Novartis chief sees sales dip until mid-2013

Geneva: Swiss pharmaceutical company Novartis said Sunday the expiry of a US patent for its leading hypertension drug Diovan caused a drop in turnover that could last into the first half of 2013. The fall in sales of the company’s best-selling drug was “significant” in the United States since the end of September, when the patent ended, Novartis chief executive Joseph Jimenez told Swiss weekly SonntagsZeitung. Sales of competing generic equivalents to the Novartis drug already caused a $2-billion (Dh7.3-billion €1.5-billion) drop in demand for Diovan, which registered sales of $6 billion in a single year, the report added.

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Expo Pakistan signs deals worth $350m till third day: TDAP chief

KARACHI: The seventh Expo Pakistan entered into deals of around $350 million till Saturday while further deals of nearly $300 million are expected by the end of the exhibition on Sunday, Tahir Raza Naqvi, chief executive of the Trade Development Authority of Pakistan (TDAP) said in a news conference on Saturday.

TDAP has organised the 7th Edition of Expo Pakistan being held at the Karachi Expo Center from October 4 to 7, 2012.

On the invitation of the exhibitors, various delegates are visiting factories located in Lahore, Sialkot, and Faisalabad to further finalise the deals after inspecting the quality of production, he said. “It is expected that Expo Pakistan 2012 would be able to generate business worth $690 million upon finalisation of deals,” he added.

Naqvi further informed the media that a Hong Kong-based company had met with a project team of Khairpur Special Economic Zone in the presence of the Sindh Board of Investment and negotiated to set-up a power plant with the estimated investment of $20 million.

The TDAP CE said they were highly grateful to the fullest cooperation extended by Federation of Pakistan Chamber of Commerce and Industries (FPCCI), and Karachi Chamber of Commerce and Industries (KCCI). Their presidents and other office bearers held meetings with delegates from all around the world, he added.

TDAP has set up a dedicated secretariat at the Karachi Expo Centre where separate halls have been allocated to KCCI and FPCCI for back-to-back meetings with foreign delegations and for signing of memorandum of understandings (MoUs), he said.

He said around 1,912 business meetings were held between the buyers and the Pakistani exhibitors/ manufacturers, while foreign buyers made 1,648 visits to different products stalls and the KCCI signed MoUs with the US, Malaysian, Russian, Hong Kong and Chinese organisations till the third day of the event.

The Sindh Board of Investment also signed a MoU with Japanese delegation for investment in Japan Special Economic Zone in Sindh, he said.

Overall 356 exhibitors, who are some of the leading exporters of Pakistan, have setup their stalls at the Expo Pakistan as compared to last year’s 295 exhibitors. Over 710 foreign buyers/ importers from 67 countries visited Expo Pakistan 2012, he added.

Naqvi said that TDAP had also facilitated the foreign buyers with services of interpreters in Chinese, Japanese, French, Spanish, Arabic, German and Russian.

During Expo Pakistan 2012, Federal Minister for Commerce Makhdoom Amin Fahim met with high level delegations from India and Nigeria while Naqvi and the Secretary TDAP Kabir Kazi had meetings with the delegations from Hong Kong, Russia, Egypt, France, Bahrain, South Africa, Japan, Brazil, Kuwait, Afghanistan, Korea and China.

PRGMEA chief

KARACHI: Sajid Saleem Minhas has been elected unopposed as the central chairman of Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) for the year 2012-13 and Mir Muhammad Farooq Meyer and Shaikh Shafiq Rafiq were elected unopposed as the chairmen, North and South zones, respectively, according to a statement on Friday.

Minhas after assuming the charge stressed the need for a long-term vision in the garment industry.

China, Japan too important for row: IMF chief

TOKYO: The shaky global economy needs Japan and China to be fully engaged, the head of the International Monetary Fund (IMF) said, warning the world could not afford to have the two countries distracted by their bitter territorial dispute.

The warning came as the Asian Development Bank (ADB) slashed its growth estimates for the continent, saying the days of double-digit expansion were over.

Speaking to Japanese media ahead of the annual IMF meeting in Tokyo next week, Christine Lagarde said two of the world’s biggest economies needed to show a bit of neighbourly tolerance for the good of everybody.

“Both China and Japan are key economic drivers that do not want to be distracted by territorial division,” Kyodo News agency quoted Lagarde as telling reporters in Washington, in an interview published Wednesday.

“The current status of the economy and the global economy needs both Japan and China fully engaged,” she said.

Meanwhile the ADB cautioned Wednesday that developing Asia was seeing a slowdown in its previously blistering growth.

The bank said China’s gross domestic product (GDP) would expand just 7.7 percent this year, well below the 9.3 percent achieved last year.

Fellow regional standout India would see GDP growth cut to 5.6 percent.

“Developing Asia is slowing down much more than we expected,” ADB chief economist Changyong Rhee told reporters in Hong Kong.

“The years of two-digit growth in Asia are coming to an end,” he said.

China and Japan, the world’s second and third largest economies, have been at loggerheads for months over a group of uninhabited islands in the East China Sea.

Tokyo administers the chain under the name Senkakus, but they are claimed by Beijing, which calls them the Diaoyus.

Chinese government ships regularly venture into waters around the islands, routinely ignoring orders to leave from Japanese coastguard vessels. Three vessels were in the area on Wednesday.

Increasingly vitriolic diplomatic exchanges, including at the United Nations in New York last week, and mass anti-Japanese protests in several Chinese cities have further unsettled the already fractious relationship.

Japanese firms operating in China were forced to shutter or scale back their operations when mobs attacked factories and shops.

Some companies also complained of tightened customs inspections and difficulties obtaining visas for their foreign staff.

Lagarde said neighbouring countries must display “a certain degree of tolerance” if they were to rub along effectively.

The IMF managing director was speaking ahead of her trip to Japan next week when Tokyo hosts meetings of the IMF and the World Bank, in what will be the world’s largest single gathering of finance officials, bankers and non-government organisations.

Dow Jones Newswires reported late Tuesday several big Chinese banks had cancelled their participation in events connected to the meetings, in what it said was a sign of the row spreading into the broader economic realm.

Most of the banks have not given a reason for their last-minute pullouts but one unidentified person was explicit.

“Quite frankly, it’s Japan-China relations,” Dow Jones quoted an official at the Tokyo branch of the Agricultural Bank of China as saying.

The bank will withdraw from both IMF-related events and another financial industry conference planned in the western Japanese city of Osaka at the end of October.

The global economy has struggled to shrug off the effects of the sovereign debt crisis in Europe, slowing growth in China and lingering concerns over the faltering US economic recovery.

Lagarde said European countries “have made huge progress” already on the road to recovery but “more needs to be done”, according to Kyodo.

She said the “fiscal cliff” in the United States — the anticipated termination of income tax cuts and a massive spending reduction in early 2013 — also poses a threat to the global recovery.

“My dearest objective is that the countries participating in the IMF annual meeting in Tokyo would be prepared to come together, act together and try to go beyond the crisis to sustain the recovery,” she was quoted as saying.

Bana new PAAPAM chief

LAHORE: Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) has elected Munir Karim Bana, chief executive of Loads Limited, as its new chairman and Usman Aslam Malik as vice chairman for the year 2012-13, according to a statement on Tuesday.

Muhammad Saleem, chief election commission, made this announcement at the 13th annual general meeting of the association, it said.

In addition, Aslam Rayaz, Muhammad Wasim Khalid, Agha Qasim Raza, Mashood Ali Khan, Taufiq A Sherwani, Ahmer Afzal Khan, Mirza Shafqat Sohail and Mehmood Alam Sherani were elected as members of the managing committee.

Earlier, Syed Nabeel Hashmi, outgoing chairman, highlighted the events and activities undertaken by PAAPAM last year.

He congratulated Bana on his election as chairman and welcomed the newly-elected managing committee, according to the statement.

Bashir takes charge as APTMA chief

KARACHI: Ahsan Bashir took over the charge of the office of central chairman of All Pakistan Textile Mills Association (APTMA) for 2012-13, according to a statement on Saturday.

This was announced in the 54th annual general meeting of All Pakistan Textile Mills in Karachi, Lahore, Peshawar and Faisalabad over video conferencing, it said.

Bashir enjoys multiple portfolios and holds interest in the industrial units, particularly in the textile and power generation.

Previously, he has served this association as regional chairman for the years 2010-11 and 2011-12.

Other office-bearers included central vice chairmen Mian Wisal Ahmed Monnoo, Asif Inam and Mohammad Taimoor Shah, representing all three regions; Punjab, Sindh-Balochistan and Khyber-Pakhtunkhwa, respectively.

Raghib Abbas appointed new WAPDA chief

He faces daunti­ng task of comple­ting delaye­d water projec­ts. The new chairman will be facing a daunting task of speeding up work on major dams, which has been delayed for the last several years.

ISLAMABAD: Prime Minister Raja Pervez Ashraf has approved the appointment of Syed Raghib Abbas Shah as chairman of Water and Power Development Authority (Wapda). The incoming chairman will face a daunting task of completing major water projects to deal with issues of scarcity.

Shah was working as Wapda’s member (water) and was also holding the slot of acting chairman after the tenure of former chairman Shakeel Durrani ended on September 7.

Shah hails from the province of Sindh while Durrani was from Khyber-Pakhtunkhwa.

Earlier in July, the Ministry of Water and Power sent a summary to the prime minister, seeking extension of one year for Durrani, who completed five years of service on September 7. However, the premier rejected the proposal.

The slot of Wapda chairman, believed to be very lucrative for retired bureaucrats, was for five years and an extension of one year was not possible. To implement this, the government needed to issue a presidential ordinance to amend the rules to grant extension to Durrani.

In October 2010, the Ministry of Water and Power had worked out a plan to reduce the term of Wapda chairman from five to three years to show the door to Durrani and pave the way for outgoing water and power secretary Shahid Rafi to take the helm after retirement. However, the plan did not materialise.

Shah, the new chairman, will be facing a daunting task of speeding up work on major dams, which has been delayed for the last several years. Among these, an important project is the 969-megawatt Neelum Jhelum hydropower project, which needs to be completed on time to secure water rights over Neelum Jhelum River. The delay in the project has taken its cost to Rs274.8 billion compared to earlier estimates of Rs84.5 billion.

Published in The Express Tribune, September 18th, 2012.

Greek central bank chief takes extra salary cut-source

Tuesday, 18 September 2012 20:47 Posted by Asad Naeem

greek bank 400ATHENS: Greece’s central bank chief George Provopoulos has decided to cut his salary by almost a third as part of cost savings at the Bank of Greece and efforts to make the economy more competitive, a banking source told Reuters on Tuesday.

The banking source said Provopoulos informed European Central Bank (ECB) President Mario Draghi of his decision in a letter outlining measures already taken to reduce operating costs and wages at the Greek central bank in the last years.

“I am determined to continue this process of cost rationalisation at the Bank of Greece. In this connection, I have decided to reduce my salary by an additional 30 percent following a cut of 20 percent in December 2009, bringing the cumulative decline since 2009 to 50 percent,” Provopoulos was quoted as saying in the letter to Draghi.

The central bank’s two deputy governors also agreed to cut their salaries by the same percentage.

Greece is striving to persuade its foreign lenders to accept a savings package of nearly 12 billion euros over the next two years, keen to unlock the aid payments it needs to avoid bankruptcy.

A Bank of Greece official confirmed the letter was sent to the ECB’s head.

Cuts in overtime pay and travel expenses and downsizing of the central bank’s branch network by 40 percent has helped to reduce its operating costs by 21 percent in the last two years despite an increased workload because of the debt crisis.

Schaeuble criticises Bundesbank chief over ECB stand

Saturday, 15 September 2012 18:36 Posted by Muhammad Iqbal

986 copyBERLIN: German Finance Minister Wolfgang Schaeuble has criticised the head of the German central bank for taking a stand against the European Central Bank’s plan to tackle the eurozone debt crisis.

Schaeuble told the Frankfurter Allgemeine Sonntagszeitung newspaper that public critiques by Bundesbank chief Jens Weidmann may be damaging to confidence in the ECB.

“People are very much confused and the central banks are fundamentally the institutions which should reassure the citizens,” he said in an interview to appear in Sunday’s edition.

ECB President Mario Draghi recently announced an open-ended plan to buy up the bonds of struggling eurozone countries, emphasising that only governments committed to far-reaching reforms would be eligible for help.

Germany was the only member of the ECB’s board to vote against the plan amid concerns that the unlimited nature of the programme could leave Germany, as Europe’s top economy and effective paymaster, on the hook for potentially huge losses.

Draghi did not announce who was the dissenting vote but Weidmann issued a statement explaining his view.

“If this plan leads to states pushing back the necessary reforms, that is going to again sap confidence in the capacity of political leaders to resolve the crisis,” Weidmann warned in the statement.

But Schaeuble took issue with that point of view, saying when facing strong critics, “I always find it interesting to ask them: and you, what would you do differently? And even the most sceptical answer me: in fact, nothing.

“Shouldn’t they also say that publicly,” he added.

Despite the Bundesbank chief’s action, the German government has given its support to the anti-crisis measures taken by the Frankfurt-based ECB.

German Chancellor Angela Merkel has said that the ECB has “clearly shown it was absolutely determined to defend” the stability of the euro.

Copyright AFP (Agence France-Presse), 2012

Chrysler chief confident about US but not Europe

Saturday, 15 September 2012 04:41 Posted by Abdul Ahad

chrysler.395DETROIT: The US economy continues to demonstrate underlying strength and contains the seeds of future growth for the auto industry, Chrysler’s top executive Sergio Marchionne said Friday.

But he blamed German officials for impeding a rationalization of the industry in Europe that could bring it back to health.

During presidential elections, he said, “the US goes through this year-long process that demolishes consumer confidence,” Marchionne told reporters after kicking off the annual fund raising drive for local community service organizations in Detroit.

“But the US economy is fundamentally sound,” Marchionne said.

“There hasn’t been enough job growth, but in the medium and long-term these numbers should work themselves out,” he said.

“I don’t think we’re seeing any great reversal in China,” he said, adding that he is also optimistic Asia’s economies will continue to grow.

“It’s a very different situation in Europe,” he said. The eurozone crisis “needs to be managed aggressively.”

Marchionne criticized “my German colleagues” for blocking a Europe-wide solution to the overcapacity in the auto industry there, where sales have steadily declined over the past five years.

But he said the Chrysler parent Fiat has no plans to close another plant, noting the Italian automaker had shuttered a factory in Southern Italy at the end of 2010.

“Fiat has already done a significant amount of rationalization,” he said.

Meanwhile Marchionne expressed concerns about stalled contract negotiations with the Canadian Auto Workers union, which has set a midnight Monday strike deadline.

“We’re going to have to move forward, not backward,” Marchionne said.

“The ability to change is essential. The CAW is going to have to accept that,” he said.

“It’s important for them to recognize any decision they make stretches beyond the boundaries” of these negotiations, he said.

The CAW’s contracts with Ford, Chrysler and General Motors all expire at 11:59 pm Monday.

The CAW represents about 4,500 workers at Ford, 8,000 workers at GM and another 8,000 at Chrysler and executives from all three Detroit companies have warned the future of automotive production in Canada is at stake.

Copyright AFP (Agence France-Presse), 2012

FBR chief gets allowance despite low tax collection

Perfor­mance allowa­nce is equal to 100% of basic pay. The allowance will be availed every month and is in violation of the basic criteria set by the finance ministry while uncapping the FBR’s allowance in June this year.

ISLAMABAD: Federal Board of Revenue (FBR) Chairman Ali Arshad Hakeem has awarded himself “performance allowance equivalent to 100% of basic pay” at a time when the FBR has not only missed the revenue target for the second month in a row but also the growth in tax collection has become negative.

According to a notification issued by the FBR on Thursday, “Ali Arshad Hakeem is granted performance allowance equivalent to 100% of basic pay with effect from 11-7-2012”.

The Public Accounts Committee (PAC) has also discouraged the practice of double salaries or special allowances for heads of departments.

The allowance will be availed every month and is in violation of the basic criteria set by the finance ministry while uncapping the FBR’s allowance in June this year. FBR employees are entitled to performance allowance provided they achieve their targets.

“The performance allowance will be granted only to those FBR employees who meet the laid-down criteria/guidelines and it will be distinct from the special allowance,” according to Finance Secretary Wajid Rana’s letter to the prime minister, written to seek uncapping of the allowance.

The government had restored the FBR’s allowance after employees went on strike before the close of the previous fiscal year.

Since Hakeem took over as chairman in July, the FBR has missed tax collection targets – a yardstick for assessment of performance. Compared to the combined target of roughly Rs293 billion for July and August, the FBR collected Rs229 billion, falling short by Rs64 billion. The collection was also about Rs4 billion or 2% less than the collection made in the corresponding period of last fiscal year.

This trend indicates that the FBR may not be able to meet the revenue target of Rs2.381 trillion for 2012-13. The State Bank of Pakistan (SBP) has already suggested to the government to revise the target.

When FBR spokesperson Riffat Shaheen Qazi was contacted for comments, she said, “the chairman is not getting performance allowance”. When her attention was drawn to the notification, Qazi said the notification had been withdrawn.

The notification was issued on Thursday and no further notification was placed on the FBR’s website for cancellation of the earlier announcement. The FBR has a standard practice of issuing notification that clearly states amendments or withdrawal of previous notifications.

Copies of the notification authorising grant of performance allowance to the chairman have already been sent to all relevant quarters including the Accountant General of Pakistan Revenues.

The issue of double salaries and performance allowance has created divisions in the bureaucracy as only about a dozen departments have been allowed double salaries. These include defence, judiciary, FBR, Prime Minister’s Secretariat, Presidency and Motorway Police.

AGPR employees have also been demanding either double salaries or withdrawal of the privilege from other departments. They have already staged a strike and given a two-month deadline to the government to resolve the issue.

The finance secretary has pointed out financial constraints, restricting the authorities from extending this facility to other departments. So far, eight departments have requested for double salaries. A Pay and Pension Commission is also reviewing the pay structure to bring an end to this anomaly.

Published in The Express Tribune, September 14th, 2012.

Multi-billion rupee tax scam: Not everyone is telling the truth, says PTA chief

Body formed to probe attemp­t to give tax relief to teleco­m firms.  Body formed to probe attempt to give tax relief to telecom firms.

ISLAMABAD: As a parliamentary panel constitutes a committee to probe whether there is any reality in giving Rs47 billion tax relief to telecom companies, the Pakistan Telecommunication Authority (PTA) chairman has said that the companies’ stance that the whole issue was mere ‘procedural irritant is incorrect’.

In a testimony to the National Assembly Standing Committee on Information Technology here on Tuesday, newly appointed PTA Chairman Farooq Awan said everybody was not saying everything true in the scam. He said even within the Federal Board of Revenue (FBR) there was dispute over granting the relief to the five telecom operators.

Headed by Chaudhry Barjees Tahir, the NA panel’s session had been convened to determine whether there was any reality in the National Accountability Bureau’s claim that it had stopped the FBR from giving the illegal tax concession while the companies claimed ‘innocence’. The concession was on account of sales tax on interconnect charges.

After blocking the move, NAB placed three FBR officials on the Exit Control List (ECL) including former chairman Mumtaz Haider Rizvi. Both the FBR and telecom companies insist that there was no loss to the exchequer as the collection would have to be refunded at the end of the day.

Awan said the FBR charges sales tax in the federal excise duty mode under the value-added tax (VAT) system, but there are no defined rules of VAT in the country. He suggested that there was a need to resolve the matter at the earliest and there should be a win-win situation for all the parties concerned.

He, however, was of the view that there was a need to look into why the FBR first issued a notification to waive the tax and then withdrew the notification on July 2. Awan made it clear that the PTA did never say that the companies had not evaded taxes.

Speaking for the first time since NAB unearthed the scam, sales tax chief Abdul Sattar Aora said, “interconnect charges were taxable but the mobile companies had not been paying the tax since 2007.”

However, Aora, whose name is also on the ECL, contended that the tax on interconnect charges was adjustable, thus, it would not cause an increase in state revenues. He said NAB’s claim that it had saved Rs47 billion in potential losses was untrue.

Aora pointed out that the matter of tax dodging on interconnect charges came to the FBR’s notice in 2010 and it issued show-cause notices to Mobilink and PTCL and audited their accounts. On the basis of the audit, the FBR demanded Rs2.2 billion from Mobilink and recovered the amount in June 2012 by freezing the company’s bank accounts.

He said the companies kept on negotiating with the FBR and eventually agreed to pay Rs6.7 billion in June this year. After that, the FBR decided to issue a notification waiving the remaining tax.

FBR’s Member Inland Revenue Shahid Hussain Asad said the FBR headquarters waived the tax on the advice of the director general of Large Taxpayer Unit Islamabad and withdrew the notification after the LTU DG issued another letter in which he opposed the tax concession.

“Members of the committee are of the view that the FBR wanted to take kickbacks, that was why it created this whole drama,” observed committee Chairman Chaudhry Barjees Tahir.

He said the committee had also reservations about the FBR’s decision to issue show-cause notices to only two companies in 2010 while no company was paying the tax.

The panel constituted a sub-committee, headed by Anusha Rehman of the PML-N with a mandate to find out the FBR officials who staged what it called a drama for vested interests. The sub-committee will also determine why only two companies were targeted and who sealed the office of Mobilink.

Published in The Express Tribune, August 8th, 2012.

TDAP chief selection: Garment exporters back man from public sector

Privat­e profes­sional may not be able to deal with comple­x bureau­cracy. The Ministry of Commerce, which is the administrative ministry of the TDAP, terminated the services of Puri as TDAP chief executive on July 6. PHOTO: TDAP


Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) Zonal Chairman Atiq A Kochra has said he is opposed to the idea of someone from the private sector replacing Tariq Puri as chief executive of the Trade Development Authority of Pakistan (TDAP).

The Ministry of Commerce, which is the administrative ministry of the TDAP, terminated the services of Puri as TDAP chief executive on July 6.

Commenting on the proposal floated by some exporters that a veteran of the private sector should lead the TDAP, whose objective is to ensure export growth through better coordination between many public and private-sector stakeholders, Kochra said an ‘outsider’ might not get the cooperation and interdepartmental support within the government required to carry out the authority’s mission effectively.

“The job requires a lot of government dealing and interaction with stakeholders, some of them operate with complex bureaucracies. Moreover, we’ve had a chief executive from the private sector in the past, whose tenure was quite unremarkable,” Kochra told The Express Tribune, adding that prior experience of working in the government sector was needed for the job.

For the top position, he proposed the name of Mujeeb Ahmed Khan, who is currently heading the World Trade Organisation (WTO) cell at the TDAP. “He has vast knowledge of issues related to international trade. He has worked diligently for the pending European Union trade concessions package for 75 products of Pakistan, and has up-to-date knowledge of the GSP Plus issue,” he said.

Published in The Express Tribune, July 20th, 2012.

Removing hurdles: Planning Commission carves way for chief economist

Hand-picked candid­ate Khalid Riaz likely to make the throne as PC fails to advert­ise post. Hand-picked candidate Khalid Riaz likely to make the throne as PC fails to advertise post. DESIGN: JAMAL KHURSHID


In yet another case of violating laid down procedures, the Planning Commission is pushing to appoint hand-picked Khalid Riaz as Chief Economist of Pakistan by seeking waivers of rules that are meant to ensure competent people fill the top slots through competition and a transparent procedure.

The candidate has been chosen by the top management of the Planning Commission (PC) without following the formal procedure of placing an advertisement for the post, an obligation for hiring top executives from the private sector.

Planning Commission is known to bypass rules when it comes to appointment of top executives. Current Member Infrastructure Ghulam Mohayuddin Marri, Member Science & Technology Dr Samar Mubarakmand, Member Implementation and Monitoring General (Retd) Shahid Niaz and Member Social Sector Saba Gul Khattak were all appointed after some guards were let down.

The Chief Economist of Pakistan seat has been lying empty for almost a year after Dr Jafer Qamar resigned as he remained alienated from domestic economic issues. Planning Commission Deputy Chairman Dr Nadeemul Haque was allegedly behind Qamar’s appointment who was brought from the US in August 2010. Qamar’s appointment was also made after some rules were removed from the hiring procedure. The move proved to be a mistake as he did not have economic policy making experience in Pakistan.

Historically, the chief economist position is a grade 22 post for the economist group of civil servants, however, the authorities are not interested to appoint any of the currently senior officials serving. One of the senior officials of the economist group is serving as cconomic adviser Finance Ministry, anotherhas been placed in the National Tariff Commission by former finance minister Shaukat Tarin to create space for his friend Sakib Sherani while another senior officer is serving in the Planning Commission as joint economic adviser.

“Riaz Khalid’s name is still at the proposal stage. A summary is pending with Finance Minister Dr Abdul Hafeez Shaikh for a decision,” said Ishfaqullah Khan, spokesperson for the Commission in a terse response. He said that since Pervez Tahir left the post of chief economist about six years ago, the economic section of the Commission has been directionless.

The Planning Commission has not advertised the post, said Asif Bajwa Secretary planning Commission while talking to The Express Tribune. No search committee was formed to find at least three suitable candidates for recommendation to Prime Minister Yousaf Raza Gilani, a followed practice.

Sources said the the Planning Commission has requested the Finance Minister to advise Prime Minister Yousaf Raza Gilani to exempt a few rules and make way for appointment of Riaz Khalid as chief economist.

The office of the Auditor General of Pakistan has framed numerous audit objections in familiar cases where appointments were made by bypassing rules. In cases where exemption was not granted by the premier, the audit recommended recovering the amount spent on pays and perks of irregular appointees.

The chief economist post requires diversified experience in the areas of economics, trade, poverty, inflation, fiscal and monetary policy making. The job becomes more challenging when the country is passing through critical times. Any mistake in choosing an inappropriate person could hurt the policy making, said a senior official of the Commission.

In a testimony to a parliamentary committee, Finance Minister Dr Abdul Hafeez Shaikh in a cautious policy statement said that the country was passing through difficult times, requiring careful management.

Since 2010 – when the incumbent deputy chairman decided to abandon five-year economic plan document – there is no economic policy paper suggesting broader economic policy guidelines. Last May, the National Economic Council approved New Growth Strategy but despite lapse of one year, the Planning Commission has failed to present a workable implementation strategy.

The involvement of the earlier hand-picked chief economist Dr Jafer Qamar can be gauged from the fact that his name is nowhere in the list of core members involved in preparing the New Growth Strategy document despite the fact that in May 2011 Qamar was serving as Chief Economist of Pakistan.

Published in The Express Tribune, May 19th, 2012.

Competent candidates ignored in OGRA chief selection: notes SC

Court sent notice­s and sought explan­ation from petrol­eum minist­ry. CUT SHORT: 9 was the number of candidates shortlisted for Ogra chairman slot


The appointment of new chairman of the Oil and Gas Regulatory Authority (Ogra) has sparked a controversy as the Supreme Court has noted that potential candidates having relevant experience in the oil and gas sector have been ignored in the process of selection.

According to a senior government official, the apex court has sent notices to the Ministry of Petroleum and Natural Resources and the Cabinet Division, seeking explanation about the appointment of Ogra Chairman Saeed Khan in violation of set procedures.

The chairman is said to have no experience of working in the oil and gas sector – a pre-condition for appointment as Ogra chief.

In the recent past too, the Supreme Court had declared the appointment of former Ogra chairman Tauqeer Sadiq as illegal and directed the government to follow set parameters that deal with relevant experience in the oil and gas sector.

The fresh move came after Nasir Muneer, who had vied for the post, complained to the court that the government had ignored competent candidates while selecting the Ogra chief.

Giving details, he told the court that the Cabinet Division advertised the post of Ogra chairman on December 14, 2011 and in response 120 applications were filed. Of these, nine candidates were shortlisted for appearance before the interviewing committee comprising Finance Minister Dr Abdul Hafeez Sheikh and officials of the cabinet and Establishment Division.

Of the nine candidates, seven gave interview to the committee. Only two candidates including petroleum ministry’s Additional Secretary Naeem Malik and Nasir Muneer had experience of working in the oil and gas sector.

“The committee dropped the name of Nasir Muneer and the Cabinet Division sent a summary to the prime minister containing three names including Naeem Malik, Saeed Khan and Itrat Razvi,” the court was told.

Only Naeem Malik had experience of regulating the oil and gas sector while Itrat Rizvi had been assistant secretary in Sui Southern Gas Company (SSGC) and had also been attached with the Securities and Exchange Commission of Pakistan (SECP).

However, the prime minister approved the appointment of Saeed Khan, who had no experience of regulating the oil and gas sector.

Muneer claimed that he had 32 years of experience in the oil and gas sector and had also worked with the Hydrocarbon Development Institute of Pakistan (HDIP). He has a PhD degree in economics and has specially focused on petroleum development and management.

Published in The Express Tribune, May 17th, 2012.