Home > Uncategorized > Business this week: 9th – 15th September 2006

Business this week: 9th – 15th September 2006

In an effort to take some of the heat out of a boardroom spying scandal at Hewlett-Packard, Patricia Dunn announced she would step down as chairman in January (in favour of the company’s chief executive Mark Hurd). Ms Dunn, who will remain on the board, has been criticised for her handling of the affair, which revolves around the dubious methods used by outside investigators in uncovering the source of a series of boardroom leaks. California’s attorney-general said he now has enough information to bring charges in the case. See article

Dell revealed that the Justice Department has joined a widening investigation into the company’s accounting. Michael Dell, the computer-maker’s chairman, threw his support behind Kevin Rollins, the chief executive.

It emerged that a Russian state-owned bank has taken a 5% stake in EADS, making it the biggest investor in Airbus’s parent company outside its “core” group of shareholders. It is thought the holding was bought on behalf of a state company set up to co-ordinate strategy in Russia’s aerospace industry. An aide to President Vladimir Putin fuelled speculation about how deep a partnership Russia is seeking with EADS by implying that the bank might raise its holding to acquire a blocking stake.

Meanwhile, Mike Turner, the chief executive of BAE Systems, which is selling its 20% stake in Airbus to EADS, said he would be “surprised” if there were no more delays to the A-380 super-jumbo. Airbus is assessing the project after a series of hold-ups.

Bristol-Myers Squibb dismissed both its chief executive and general counsel for their conduct in negotiations with Apotex, a Canadian maker of generic drugs, in a patent lawsuit. The decision to sack the pair was made on the recommendation of a federal judge who is monitoring corporate governance at Bristol-Myers as part of a deferred prosecution deal, struck with investigators last year, over a separate accounting scandal.

The Internal Revenue Service settled the largest-ever tax dispute in its history. America’s taxman reached an agreement with GlaxoSmithKline, a British drugs company, in which it will pay $3.4 billion to resolve charges that it tried to minimise its tax bill by underreporting its American profits through a system of transfer pricing. GSK will also drop its claim that it is owed $1.8 billion by the IRS.

Two big Wall Street banks cheered investors by reporting better-than-expected quarterly earnings. Goldman Sachs recorded a net profit of $1.6 billion for the three months ending August 25th, down slightly from a year ago (and reversing a trend of stellar increases in earnings), but the bank beat estimates thanks to its investment-banking operations. Lehman Brothers said its net income for the quarter ending August 31st had risen by 4% to $916m.

Nationwide agreed to take over Portman, the biggest merger yet among Britain’s mutually owned building societies, creating the country’s second-largest mortgage lender after HBOS.

Gold Fields struck a $2.5 billion deal to take control of the South Deep mine near Johannesburg, one of the world’s biggest and deepest gold mines. The South African miner’s gold reserves will increase by half as a result, taking it closer in size to rivals such as Newmont Mining.

Telecom Italia caused a political storm when it unveiled a plan to spin off its fixed-line and mobile arms in two separate enterprises, hinting that both are up for sale. TI completed the merger of its mobile-phone unit only last year, but now wants to direct its attention to broadband and media services. Any potential sale would help reduce the company’s euro41 billion ($52 billion) debt, which almost exceeds its market value. See article

Apple Computer unveiled its latest service, films which can be downloaded from its iTunes website. Only Disney titles are available. Amazon introduced a similar service last week, Unbox, which offers films from seven Hollywood studios. See article

News Corporation agreed to buy 51% of Jamba, which specialises in ringtones for mobile phones, for $188m. The deal gives Rupert Murdoch control of a firm that last year recorded sales of $500m, having unleashed the “Crazy Frog” ringtone on the world.

The price of oil continued to retreat from recent highs, falling to the level it reached in early spring. One factor that affected trading was OPEC‘s decision not to lower its production quotas (for the time being). However, the head of the IMF warned that oil prices would remain high by comparison with recent years. See article

Categories: Uncategorized
  1. No comments yet.
  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: