Monsanto to pay US$80m to resolve SEC accounting claims

FEB 10, 20161:30 PM

[NEW YORK] Monsanto Co will pay US$80 million to settle a US regulator's claims that the company improperly accounted for certain expenses tied to customer rebates for weed-killer Roundup.

The world's biggest seed company booked revenue from the discount program without properly recognizing all of its costs, the Securities and Exchange Commission (SEC) said in a statement Tuesday.

Three accounting and sales executives also agreed to pay penalties to settle allegations against them, the agency said.

SEC chair Mary Jo White made enforcing accounting rules a priority when she joined the agency in 2013 after the number of such cases declined in previous years.

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In June, the regulator fined Computer Sciences Corp US$190 million for manipulating financial results and clawed back pay from former executives.

"Monsanto devised rebate programs that elevated form over substance, which led to the booking of substantial amounts of revenue without the recognition of associated costs," said Scott Friestad, associate director in the SEC's enforcement division.

Also in connection with the settlement, chairman and chief executive officer Hugh Grant, and former chief financial officer Carl M. Casale reimbursed the company for cash incentives and some stock awards they received in the company's 2009 and 2010 fiscal years, Monsanto said in a separate statement.

After losing market share to generic competitors, Monsanto's sales force told retailers that if they maximized Roundup purchases in the fourth quarter of 2009, they could participate in a new rebate program the following year, according to the SEC.

While the incentive led to higher sales, Monsanto delayed recording the costs associated with it until 2010, the agency said.

"Corporations must be truthful in their earnings releases to investors and have sufficient internal accounting controls in place to prevent misleading statements," Ms White said in the statement.

The St Louis-based company, which settled with the SEC without admitting or denying wrongdoing, agreed to hire a consultant to examine its accounting controls and policies.

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Australian coal baron quits CEO job after being declared bankrupt

Former Australian coal baron Nathan Tinkler on Wednesday resigned as chief executive of Anglo Pacific Coal Ltd after losing a legal battle over money he owed from the sale of a luxury jet and being declared bankrupt. 

PHOTO: BLOOMBERG

FEB 10, 20161:55 PM

[SYDNEY] Former Australian coal baron Nathan Tinkler on Wednesday resigned as chief executive of Anglo Pacific Coal Ltd after losing a legal battle over money he owed from the sale of a luxury jet and being declared bankrupt.

Tinkler - who rode the mining boom to become Australia's youngest billionaire before losing it all when coal prices collapsed - in October was appointed chief executive of Australian Pacific Coal, which has agreed to acquire the majority of a coal mine from Anglo American.

The bankruptcy was declared in Australia's Federal Court on Tuesday and stems from a complaint from GE Commercial Australasia Pty, which claimed he owed US$2.25 million on a Dassault Falcon 900C he once owned.

Mr Tinkler, who resides in Singapore, was not immediately available for comment and it was unclear if he would appeal the ruling. Under Australian law, bankrupt individuals are barred from holding corporate directorships.

The bankruptcy order had been stayed for 21 days.

A statement from Anglo Pacific Coal announcing the resignation, also said Mr Tinkler would continue to act as a technical advisor to the company and that the deal with Anglo American was not affected by the bankruptcy ruling.

The one-time electrician who was ranked as Australia's 26th-richest person by Forbes in 2012, made an initial attempt at a comeback two years ago. But a deal to buy a mine from Peabody Energy fell through when he failed to make a A$70 million (S$68.8 million) closing payment.

As coal prices plummeted, Mr Tinkler was forced to sell an array of assets purchased with the proceeds from his coal businesses, including a beloved thoroughbred horse farm and a professional soccer club to repay debts.

Under the judgment, the bankruptcy is retroactive to July 16, 2015, the date of the original claim by GE Commercial.

REUTERS

    
 

Taiwan developer grilled over collapse of quake building

Taiwan prosecutors were Wednesday questioning the developer of an apartment complex that collapsed during an earthquake as prosecutors detailed flaws in construction of the building where nearly 100 people remain trapped. 

PHOTO: EPA

FEB 10, 201612:34 PM

[TAINAN] Taiwan prosecutors were Wednesday questioning the developer of an apartment complex that collapsed during an earthquake as prosecutors detailed flaws in construction of the building where nearly 100 people remain trapped.

Prosecutors in the southern city of Tainan have launched an investigation into Saturday's disaster after photos showed cans and foam had been used to fill parts of the complex's concrete framework.

The district court took the developer, identified as Lin Ming-hui, and two other people into formal custody late Tuesday after they were grilled initially at the prosecutors' office.

So far 43 people have been confirmed dead and 95 are still missing after the collapse of the 16-storey Wei-kuan building.

It was the only high-rise in Tainan to crumble completely when the 6.4 magnitude quake struck before dawn Saturday.

The three were taken into formal custody on charges of professional negligence resulting in death.

"The suspects are being questioned further today, but as it is underway, details are not likely to be made public," Tainan court spokeswoman Kuo Jen-shiow told AFP Wednesday while the prosecutors were not immediately available for comment.

The other two suspects were Chang Kui-pao and Cheng Chin-kui, who some local media said were architects while others said they were employees of Lin's firm.

According to a statement released by the court, prosecutors found the beams and pillars of the first five floors on the east side of the building had too few steel bars, and the bars were thinner than they were supposed to be.

It said samples taken from the third floor of the site also showed that the main steel bars were shorter than required.

"Apparently in this case, there were indeed flaws in the construction of the building," it said.

Rescuers were using diggers and other heavy equipment to remove giant concrete slabs to access the deeper layers of rubble where scores of people are feared buried.

The 72-hour "golden window" for finding survivors passed early Tuesday but near midnight, Tainan mayor William Lai offered fresh hope after rescuers detected signs of life.

"After detecting signs of life, the rescue team then banged in the direction of the signs three times, and they got a response three times. This shows there's a living person within," the mayor told a press conference.

But more than 10 hours later, the person has not been pulled out.

Some 175 people have already been rescued, including an eight-year-old girl and three others pulled from the rubble Monday.

Cranes, drills, ladders, sniffer dogs and life detection equipment are being used to locate those buried, with emergency workers and soldiers shoring up the rubble to avoid further collapses.

The weekend quake struck two days before Lunar New Year, when many people would have been visiting relatives for the biggest celebration of the Chinese calendar.

Taiwan lies near the junction of two tectonic plates and is regularly hit by earthquakes.

The island's worst tremor in recent decades was a 7.6 magnitude quake in September 1999 that killed around 2,400 people.

AFP

    
 

Philippine central bank lifts ban on establishing new banks

FEB 10, 201611:44 AM

[MANILA] The Philippine central bank has approved the gradual lifting of a 16-year-old moratorium on the granting of new bank licenses, further opening up an industry that has drawn interest from some of the world's largest lenders.

The ban will be fully lifted by Jan 1, 2018, the central bank said in a statement.

It has been imposed since 1999 to encourage the creation of larger and stronger financial institutions through local mergers and acquisitions.

The initial phase of the approval involves a two-year transition during which existing thrift banks can apply for a license to convert into a universal or commercial bank, it said.

"The initiative provides local businesses the avenue to explore opportunities in the banking sector amid the opening of the industry to foreign capital infusion," Bangko Sentral ng Pilipinas governor Amando Tetangco said on Wednesday.

"The two-year transition period also gives interested parties ample time to strategically position themselves in line with evolving policy reforms and regional integration efforts," he added.

A Philippine law passed in 2014 allowed more foreign banks to operate in the country, including taking full control of local lenders.

Following the legislation and with its rapidly growing economy, the Southeast Asian nation has attracted a number of foreign banks.

Japan's biggest bank Mitsubishi UFJ Financial Group recently bought a fifth of mid-sized Philippine lender Security Bank Corp for more than US$700 million, the biggest foreign financial sector equity investment in the Southeast Asian nation.

In 2014, Taiwan's Cathay Financial Holding Co Ltd acquired 20 per cent of the Philippines' Rizal Commercial Banking Corp for about US$400 million.

Last year the central bank also allowed foreign lenders in the Philippines to fully own local trust corporations.

REUTERS

    
 

HSBC sued for drug cartel murders after money-laundering probe

Families of US citizens murdered by drug gangs in Mexico sued HSBC Holdings Plc, claiming the bank can be held responsible for the deaths because it let cartels launder billions of dollars to operate their businesses. 

PHOTO: BLOOMBERG

FEB 10, 20167:26 AM

[NEW YORK] Families of US citizens murdered by drug gangs in Mexico sued HSBC Holdings Plc, claiming the bank can be held responsible for the deaths because it let cartels launder billions of dollars to operate their businesses.

The lawsuit brings fresh scrutiny to the Mexican activities of HSBC, which in 2012 paid US$1.9 billion to resolve a criminal investigation into whether it violated US sanctions laws and laundered at least US$881 million on behalf of drug cartels.

The new case, filed Tuesday in federal court in Brownsville, Texas, recounts a series of murders in 2010 and 2011 in horrific detail, arguing that the bank should be held to account for them under the US Anti-Terrorism Act. 

The 1996 law, amended in the wake of Sept 11, allows victims to seek compensation from organisations that provide material support to groups that commit terrorist acts. Although other violent drug-trafficking organizations, such as the Revolutionary Armed Forces of Colombia (FARC), have been designated by the US Government as terrorists, the Mexican drug cartels have so far avoided that official label. The Texas lawsuit seems to be the first that's based on the legal theory that the Mexican cartels are terrorist organizations.

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Lesley Redelfs was four months pregnant when she and her husband, Arthur, were shot by the Juarez cartel after leaving a children's birthday party hosted by the US Consulate in Ciudad Juarez, where she worked. Jaime Zapata and Victor Avila Jr were special agents for Immigration and Customs Enforcement, driving to Mexico City when they were run off the road by two vehicles filled with hit men from the Los Zetas cartel, who then opened fire. Avila survived. Rafael Morales Jr was abducted on his wedding day, as were his brother and uncle, and the three died of asphyxiation after members of the Sinaloa cartel wrapped duct tape around their heads.

The lawsuit, filed by Richard Elias of Elias Gutzler Spicer LLC, draws on documents made public in 2012 as part of a US Senate investigation. The suit alleges HSBC's internal controls were ignored and that the bank was dubbed by one drug lord as "the place to launder money." The suit also alleges bank employees aided the cartels' laundering.

Mr Zapata's death drew particular public attention after it emerged that an automatic pistol used in the assault was traced to a gun-trafficking ring targeted by a US operation known as Fast and Furious, in which agents from the Bureau of Alcohol, Tobacco, Firearms and Explosives allowed guns to slip into Mexico in an effort to trace the flow of weapons.

HSBC already is among banks facing a lawsuit from families of US soldiers killed or injured by attacks in Iraq on accusations that the firms helped Iran process transfers and finance Hezbollah and other militant groups. Attorneys for banks including HSBC have denied wrongdoing.  The plaintiffs in that case are pushing for the release of a report by HSBC's court-appointed monitor, Michael Cherkasky, detailing the bank's uneven efforts to fix its controls. A federal judge in Brooklyn last month said a redacted version of that document should be made public.

The bank and the government have appealed that order, and the judge said Tuesday he is not likely to make the report public until a higher court weighs in. 

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