Category Archives: Business

economy and business news

Malaysian Ex-PM Slapped with New Charge Over 1MDB Scandal

Former Malaysian Prime Minister Najib Razak was charged Wednesday with tampering with the final audit report into a defunct state investment fund, adding to a long list of corruption allegations against him since his ouster in May elections.

Najib was charged along with Arul Kanda Kandasamy, the former head of the 1MDB fund, which is being investigated in the U.S. and other countries for alleged cross-border embezzlement and money laundering.

Najib pleaded not guilty to abusing power to order the modification of the report in February 2016 before it was presented to the Public Accounts Committee, in order to protect himself from disciplinary and legal action. Kandasamy, who was detained overnight by anti-graft officials, pleaded not guilty to abetting Najib.

​The charges came after the auditor-general revealed last month that some details had been removed from the 1MDB report. Kandasamy led 1MDB from 2015 until he was terminated in June. The two men were released on bail, and face up to 20 years in prison if found guilty.

Najib set up 1MDB when he took power in 2009 to promote economic development, but the fund amassed billions in debts. U.S. investigators say Najib’s associates stole and laundered $4.5 billion from the fund, including some that landed in Najib’s bank account. 

Public anger over the scandal led to the defeat of Najib’s long-ruling coalition in May 9 elections and ushered in the first change of power since Malaysia gained independence from Britain in 1957.

The new government reopened the investigations stifled under Najib’s rule. Najib, his wife and several top-ranking former government officials have been charged with multiple counts of corruption, criminal breach of trust and money laundering. 

Najib, 65, has accused the new government of political vengeance.

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Malaysian Ex-PM Slapped with New Charge Over 1MDB Scandal

Former Malaysian Prime Minister Najib Razak was charged Wednesday with tampering with the final audit report into a defunct state investment fund, adding to a long list of corruption allegations against him since his ouster in May elections.

Najib was charged along with Arul Kanda Kandasamy, the former head of the 1MDB fund, which is being investigated in the U.S. and other countries for alleged cross-border embezzlement and money laundering.

Najib pleaded not guilty to abusing power to order the modification of the report in February 2016 before it was presented to the Public Accounts Committee, in order to protect himself from disciplinary and legal action. Kandasamy, who was detained overnight by anti-graft officials, pleaded not guilty to abetting Najib.

​The charges came after the auditor-general revealed last month that some details had been removed from the 1MDB report. Kandasamy led 1MDB from 2015 until he was terminated in June. The two men were released on bail, and face up to 20 years in prison if found guilty.

Najib set up 1MDB when he took power in 2009 to promote economic development, but the fund amassed billions in debts. U.S. investigators say Najib’s associates stole and laundered $4.5 billion from the fund, including some that landed in Najib’s bank account. 

Public anger over the scandal led to the defeat of Najib’s long-ruling coalition in May 9 elections and ushered in the first change of power since Malaysia gained independence from Britain in 1957.

The new government reopened the investigations stifled under Najib’s rule. Najib, his wife and several top-ranking former government officials have been charged with multiple counts of corruption, criminal breach of trust and money laundering. 

Najib, 65, has accused the new government of political vengeance.

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Avianca Brasil Airline Declares Bankruptcy

Cash-strapped Avianca Brasil, the country’s fourth-largest airline, on Tuesday sought bankruptcy protection from creditors but reassured passengers that flights will continue.

“Due to resistance from the lessors (of their aircraft) to reaching a friendly settlement, we have filed seeking protection from creditors, to protect clients and passengers,” a company statement said.

Operations are not expected to be affected and “passengers can have complete peace of mind to make reservations and buy tickets, since all sales will be honored and flights will be operating,” it said.

The airline has debts of almost 493 million reais ($127 million) with multiple creditors, the business daily Valor reported.

Avianca Brasil, a brand of Oceanair Linhas Aereas SA (Oceanair), is not part of the group Avianca Holdings S.A, based in Colombia.

But both are parts of a holding company led by the same investor, German Efromovich.

Brazilian media said the carrier is in debt to creditors including state oil giant Petrobras and Sao Paulo’s Guarulhos Airport.

Avianca Brasil serves domestic and international routes with 60 jets. The company is facing lawsuits for the return of 26 planes and 52 engines, Valor said.

The airline recorded net losses in the first half of the year of 175.6 million reais, up 24.4 percent from the same period last year.

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Avianca Brasil Airline Declares Bankruptcy

Cash-strapped Avianca Brasil, the country’s fourth-largest airline, on Tuesday sought bankruptcy protection from creditors but reassured passengers that flights will continue.

“Due to resistance from the lessors (of their aircraft) to reaching a friendly settlement, we have filed seeking protection from creditors, to protect clients and passengers,” a company statement said.

Operations are not expected to be affected and “passengers can have complete peace of mind to make reservations and buy tickets, since all sales will be honored and flights will be operating,” it said.

The airline has debts of almost 493 million reais ($127 million) with multiple creditors, the business daily Valor reported.

Avianca Brasil, a brand of Oceanair Linhas Aereas SA (Oceanair), is not part of the group Avianca Holdings S.A, based in Colombia.

But both are parts of a holding company led by the same investor, German Efromovich.

Brazilian media said the carrier is in debt to creditors including state oil giant Petrobras and Sao Paulo’s Guarulhos Airport.

Avianca Brasil serves domestic and international routes with 60 jets. The company is facing lawsuits for the return of 26 planes and 52 engines, Valor said.

The airline recorded net losses in the first half of the year of 175.6 million reais, up 24.4 percent from the same period last year.

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Protesters Disrupt US Fossil Fuel Event at Climate Talks

Protesters disturbed a U.S.-sponsored event promoting fossil fuels on the sidelines of U.N. climate change talks on Monday.

The event called “U.S. innovative technologies spur economic dynamism,” touting the benefits of burning fossil fuels more efficiently, infuriated campaigners and many government delegations who want the talks to focus on moving away from coal, oil and gas.

Some 100 protestors in the audience at the event seized a microphone and interrupted opening remarks by Wells Griffith, the man President Donald Trump appointed as senior director for energy at the National Security Council.

They waved banners and chanted: “keep it in the ground.”

“I’m 19 years old and I’m pissed,” shouted Vic Barrett, a plaintiff in the “Juliana vs U.S.” lawsuit filed in 2015 by 21 young people against the government for allowing activities that harm the climate.

“I am currently suing my government for perpetuating the global climate change crisis… Young people are at the forefront of leading solutions to address the climate crises and we won’t back down.”

Before the interruption, Griffiths said it was important to be pragmatic in dealing with climate change in a world still heavily reliant on fossil fuels.

“Alarmism should not silence realism… This administration does not see the benefit of being part of an agreement which impedes U.S. economic growth and jobs,” he said.

The conference, in Katowice, Poland, aims to work out the rules for implementing the Paris Agreement, the global pact on combating climate change.

The United States, the world’s top oil and gas producer, is the only country to have announced its withdrawal from the accord.

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Protesters Disrupt US Fossil Fuel Event at Climate Talks

Protesters disturbed a U.S.-sponsored event promoting fossil fuels on the sidelines of U.N. climate change talks on Monday.

The event called “U.S. innovative technologies spur economic dynamism,” touting the benefits of burning fossil fuels more efficiently, infuriated campaigners and many government delegations who want the talks to focus on moving away from coal, oil and gas.

Some 100 protestors in the audience at the event seized a microphone and interrupted opening remarks by Wells Griffith, the man President Donald Trump appointed as senior director for energy at the National Security Council.

They waved banners and chanted: “keep it in the ground.”

“I’m 19 years old and I’m pissed,” shouted Vic Barrett, a plaintiff in the “Juliana vs U.S.” lawsuit filed in 2015 by 21 young people against the government for allowing activities that harm the climate.

“I am currently suing my government for perpetuating the global climate change crisis… Young people are at the forefront of leading solutions to address the climate crises and we won’t back down.”

Before the interruption, Griffiths said it was important to be pragmatic in dealing with climate change in a world still heavily reliant on fossil fuels.

“Alarmism should not silence realism… This administration does not see the benefit of being part of an agreement which impedes U.S. economic growth and jobs,” he said.

The conference, in Katowice, Poland, aims to work out the rules for implementing the Paris Agreement, the global pact on combating climate change.

The United States, the world’s top oil and gas producer, is the only country to have announced its withdrawal from the accord.

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Global Stocks Buoyed by US-China Trade Talks

Stock markets around the world spiked higher Tuesday after Wall Street rebounded amid hopes the U.S. and China are back negotiating over their trade dispute.

KEEPING SCORE: In Europe, Germany’s DAX was up 2 percent to 10,831 while France’s CAC 40 was up 2 percent at 4,837. Britain’s FTSE 100 was up 1.7 percent at 6,834. Wall Street was set to open higher too, with Dow futures and the broader S&P 500 futures up 0.9 percent.

 

U.S.-CHINA RELATIONS: U.S. Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He have spoken by phone about “the promotion of the next economic and trade consultations,” a statement by China’s Commerce Ministry said Tuesday. It did not elaborate. This indicates that the detention of Meng Wanzhou, the chief financial officer of Chinese telecommunications giant Huawei, in Canada may not derail trade talks. Meng is wanted in the U.S. for allegedly misleading banks about the company’s business dealings in Iran. China has protested her arrest and a bail hearing for Meng is underway in Vancouver, British Columbia. Still, traders fear a 90-day tariffs cease-fire may not be enough for the countries to resolve deep-seated issues.

 

ANALYST TAKE: “We’re now seeing daily commentary it seems about the progress of talks between the U.S. and China but the reality is that this is going to be a process that moves at a glacial pace but the fact that talks are happening are a reason to be optimistic,” said Craig Erlam, senior market analyst at OANDA.

 

BREXIT AND THE POUND: A day after the pound tanked to 20-month lows against the dollar after British Prime Minister Theresa May pulled a vote on her Brexit deal with the European Union, the currency recovered somewhat after figures showed wages rising at their fastest rate in a decade. The pound was up 0.3 percent at $1.2610.

 

IPHONE BAN IN CHINA: On Monday, U.S. chipmaker Qualcomm said it won an order in a Chinese court banning sales of some Apple phones in China. This is part of a lengthy dispute over two Qualcomm patents allowing users to format photos and manage phone apps using a touch screen. Although Qualcomm said the ban applies to models of the iPhone 6S through X, Apple said all iPhones will remain available for customers in China. Qualcomm shares jumped 2.2 percent to $57.24 on the news.

 

ASIA’S DAY: Softer economic data from Japan and China weighed on some Asian indexes on Tuesday. Japan’s benchmark Nikkei 225 lost 0.3 percent to 21,148.02 and South Korea’s Kospi dropped less than 0.1 percent to 2,052.97. But Hong Kong’s Hang Seng edged 0.1 percent higher to 25,771.67. The Shanghai Composite rose 0.4 percent to 2,594.09.

 

ENERGY: Oil prices recovered a sharp decline overnight that erased gains from news of a production cut by OPEC countries and other major oil producers. U.S. benchmark crude was up 67 cents at $51.67 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, used to price international oils, rose 59 cents to $60.56 a barrel.

 

CURRENCIES: The euro was up 0.2 percent at $1.1378 while the dollar dropped 0.2 percent to 113.12 yen.

 

 

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Global Stocks Buoyed by US-China Trade Talks

Stock markets around the world spiked higher Tuesday after Wall Street rebounded amid hopes the U.S. and China are back negotiating over their trade dispute.

KEEPING SCORE: In Europe, Germany’s DAX was up 2 percent to 10,831 while France’s CAC 40 was up 2 percent at 4,837. Britain’s FTSE 100 was up 1.7 percent at 6,834. Wall Street was set to open higher too, with Dow futures and the broader S&P 500 futures up 0.9 percent.

 

U.S.-CHINA RELATIONS: U.S. Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He have spoken by phone about “the promotion of the next economic and trade consultations,” a statement by China’s Commerce Ministry said Tuesday. It did not elaborate. This indicates that the detention of Meng Wanzhou, the chief financial officer of Chinese telecommunications giant Huawei, in Canada may not derail trade talks. Meng is wanted in the U.S. for allegedly misleading banks about the company’s business dealings in Iran. China has protested her arrest and a bail hearing for Meng is underway in Vancouver, British Columbia. Still, traders fear a 90-day tariffs cease-fire may not be enough for the countries to resolve deep-seated issues.

 

ANALYST TAKE: “We’re now seeing daily commentary it seems about the progress of talks between the U.S. and China but the reality is that this is going to be a process that moves at a glacial pace but the fact that talks are happening are a reason to be optimistic,” said Craig Erlam, senior market analyst at OANDA.

 

BREXIT AND THE POUND: A day after the pound tanked to 20-month lows against the dollar after British Prime Minister Theresa May pulled a vote on her Brexit deal with the European Union, the currency recovered somewhat after figures showed wages rising at their fastest rate in a decade. The pound was up 0.3 percent at $1.2610.

 

IPHONE BAN IN CHINA: On Monday, U.S. chipmaker Qualcomm said it won an order in a Chinese court banning sales of some Apple phones in China. This is part of a lengthy dispute over two Qualcomm patents allowing users to format photos and manage phone apps using a touch screen. Although Qualcomm said the ban applies to models of the iPhone 6S through X, Apple said all iPhones will remain available for customers in China. Qualcomm shares jumped 2.2 percent to $57.24 on the news.

 

ASIA’S DAY: Softer economic data from Japan and China weighed on some Asian indexes on Tuesday. Japan’s benchmark Nikkei 225 lost 0.3 percent to 21,148.02 and South Korea’s Kospi dropped less than 0.1 percent to 2,052.97. But Hong Kong’s Hang Seng edged 0.1 percent higher to 25,771.67. The Shanghai Composite rose 0.4 percent to 2,594.09.

 

ENERGY: Oil prices recovered a sharp decline overnight that erased gains from news of a production cut by OPEC countries and other major oil producers. U.S. benchmark crude was up 67 cents at $51.67 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, used to price international oils, rose 59 cents to $60.56 a barrel.

 

CURRENCIES: The euro was up 0.2 percent at $1.1378 while the dollar dropped 0.2 percent to 113.12 yen.

 

 

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EU Will ‘Follow Closely’ French Deficit after Macron Measures

EU economics affairs commissioner Pierre Moscovici on Tuesday said Brussels will keep close watch over France’s new spending plans, a day after President Emmanuel Macron unveiled new measures to quell violent protests.

“The European Commission will closely monitor the impact of the announcements made by President Macron on the French deficit and any financing arrangements,” Moscovici told AFP.

“We are in constant contact with the French authorities,” added Moscovici, who was attending a plenary session of European Parliament in Strasbourg.

Meeting the EU’s three percent deficit limit has been a centrepiece of Macron’s European strategy in order to win the trust of powerful Berlin and its backing for EU reforms.

Before the “yellow vests” protests, the 2019 public deficit was expected to reach 2.8 percent of gross domestic product (GDP), just below the threshold.

Among the potentially costly measures Macron announced on Monday was a 100 euro ($113) monthly increase in the minimum wage as of next year paid for by the government, not employers.

The 40-year-old centrist also announced he would roll back most of an unpopular increase in taxes on pensioners introduced by his government.

And he called on all businesses “that can afford it” to give employees a one-off “end of year bonus” which would be tax free.

The EU rules on public spending are “binding for everybody that is clear,” said senior German MEP Manfred Weber, when asked by reporters about France’s new expenditure.

But he added that “what we should not do as the European Union is intervene in domestic policies so when a government in Italy is presenting its budget it is an Italian budget and in France it is the same.”

Italy’s budget for 2019 was the first in history to be rejected by Brussels for breaking bloc rules on spending.

 

 

 

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US Diplomat: Russia Gas Pipeline to Boost Grip on Ukraine, Europe

Russia is seeking to boost its power in Europe and grip over Ukraine with the proposed Nord Stream 2 natural gas pipeline, the top U.S. energy diplomat said on Monday, in a step-up of Washington’s rhetoric against the pipeline.

“Through Nord Stream 2, Russia seeks to increase its leverage of the West while severing Ukraine from Europe,” Francis Fannon, the U.S. assistant secretary for energy resources at the State Department, told reporters in a teleconference.

The pipeline has been opposed both by President Donald Trump, a Republican, and his Democratic predecessor Barack Obama as a political tool for Russia to consolidate power over Europe.

Much of the gas that Europe currently gets from Russia via pipeline goes through Ukraine, which collects billions of dollars in transit charges making up to 3 percent of its gross domestic product.

If Nord Stream 2, which aims to bring Russian gas to Western Europe via the Baltic Sea, and TurkStream, a pipeline to bring gas from Russia to Turkey, are completed it would mean transit revenues would evaporate, “It’s kind of just what’s left over that would be transited, potentially transited, through Ukraine,” Fannon said. “Even then that’s only based on whether we can trust (Russia President Vladimir) Putin, I don’t think the record should indicate anyone should.”

Putin has said that Nord Stream 2, a consortium of Russia’s state-controlled Gazprom and five European companies, is purely economic and not directed against other countries. Russian gas could continue to go through Ukraine if the pipeline is completed, Putin has said.

But Russia has stopped shipments of gas to Ukraine in winter in recent years over a series of pricing disputes. Critics of Nord Stream 2 say it could increase Russia’s ability to manipulate European energy markets. In an increase in tensions, Russia last month seized three Ukrainian naval ships off the coast of Russia-annexed Crimea in the Sea of Azov after opening fire on them.

Germany’s foreign minister, Heiko Maas, said this month that Berlin will not withdraw its political support for Nord Stream 2 and that German Chancellor Angela Merkel had secured a pledge from Putin in August allowing gas shipments across Ukraine’s territory.

Fannon made his comments after traveling to Eastern Europe to discuss projects that could offer Europe a more diverse natural gas supply. Those included a floating liquefied natural gas terminal on the Adriatic island of Krk that could one day receive gas imports from the United States, which is increasing its exports of the fuel, or the eastern Mediterranean.

Fannon said he expected Russia’s aggression in the Sea of Azov to boost support for several bills in the U.S. Congress that include new sanctions on Russia’s energy sector, though he refrained from commenting on any particular legislation.

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