Friday, May 31, 2013

Reuters: Regulatory News: UPDATE 1-UBS France put under formal investigation -judicial source

Reuters: Regulatory News
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UPDATE 1-UBS France put under formal investigation -judicial source
May 31st 2013, 23:52

Fri May 31, 2013 7:52pm EDT

PARIS, June 1 (Reuters) - Swiss bank UBS's French unit was put under formal investigation on Friday in Paris for alleged complicity in suspected illegal business practices in France, a judicial source said.

UBS France is being investigated by the French judiciary on whether it offered potential French clients investments that were allegedly designed to evade taxes.

Three UBS France executives already have been put under investigation, which means under French law there is serious or consistent evidence pointing to implication of a suspect in a crime.

The judicial source, who spoke on condition of anonymity, said an administrator has been designated to look into the bank's business practices and how bonuses are given out.

UBS France CEO Jean-Frederic de Leusse was recently questioned by judges who had to decide whether to formally place the bank under investigation.

Cash-strapped governments around the world are cracking down on tax evasion and money laundering in the wake of the financial crisis.

The issue took on particular importance in France after former budget minister Jerome Cahuzac quit over allegations that he had an undeclared Swiss bank account, which he later acknowledged.

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Reuters: Regulatory News: Barrick pays $11.6 mln fine for environmental harm in Chile

Reuters: Regulatory News
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Barrick pays $11.6 mln fine for environmental harm in Chile
May 31st 2013, 21:58

SANTIAGO | Fri May 31, 2013 5:58pm EDT

SANTIAGO May 31 (Reuters) - Barrick Gold Corp has paid a discounted $11.6 million fine for serious environmental violations at its suspended Pascua-Lama gold project, a spokesperson for the company said on Friday.

Last Friday, Chile's new environmental regulator ordered the controversial $8.5 billion project be halted and fined the world's biggest gold miner around $16 million.

Chilean law provides a 25 percent discount if the fine is paid within five working days.

The project will likely be reactivated in one to two years at the earliest, given the infrastructure that needs to be built to avoid water pollution, the regulator told Reuters on Thursday.

A Chilean court in April had already temporarily halted the unpopular project, which straddles the border of Chile and Argentina, to weigh claims by indigenous communities that Barrick has damaged pristine glaciers and harmed water supplies.

The fine imposed by the regulator stems from one "very serious breach" and four "serious breaches." Given the infractions, Greenpeace said the fine was "laughable."

Barrick shares closed down 13 cents at $21.58 on Friday in Toronto.

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Reuters: Regulatory News: UPDATE 2-U.S. Medicare outlook improves as healthcare costs ease

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UPDATE 2-U.S. Medicare outlook improves as healthcare costs ease
May 31st 2013, 18:56

Fri May 31, 2013 2:56pm EDT

* Improved outlook could make Congress complacent

* Social Security budget outlook largely unchanged

* Disability insurance changes needed by 2016 -report

By David Lawder and Margaret Chadbourn

WASHINGTON, May 31 (Reuters) - Slower growth in U.S. healthcare costs improved the budget outlook for the Medicare program for the elderly from last year, but the fortunes of the Social Security pension program have not changed despite a better economy, trustees of the programs said on Friday.

The trustees repeated warnings to Congress to pass reforms that will enable the programs to meet all of their long-term obligations, but their report adds to recent evidence of an easing in U.S. budget pressures, and could help encourage a sense of complacency in Washington.

The main trust fund that supports the Medicare healthcare program will be depleted in 2026, two years later than forecast last year, the trustees said in their annual status report.

The trustees attributed the improvement to lower projected spending for most treatment categories, especially in skilled nursing homes, an assumption in keeping with recent signs of slower healthcare inflation.

They also said the implementation of key parts of President Barack Obama's healthcare reform law next year will reduce costs by more than previously projected.

The report said the Social Security fund for retirees will be depleted in 2033, the same as forecast last year. But a much more pressing need is the 2016 depletion date for the Social Security's trust fund that pays benefits to people with disabilities.

While this is also unchanged from last year's report, it means that Congress now only has three years to agree on new funding or reforms that would avoid reduced payments to beneficiaries.

Depletion of the Medicare and Social Security trust funds does not mean that all benefits would stop. At the current rate of payroll tax collections, Medicare would be able to pay about 87 percent of costs after 2026, declining to 71 percent by 2047. Social Security would be able to pay about three quarters of its benefits through 2087, according to the report.

REFORM ENTHUSIASM DIMS

The programs represent the two largest federal expenditures and account for about one-third of all U.S. fiscal outlays. The reports will feed into bitter arguments between Democrats and Republicans over how to reform the programs to keep them solvent and able to support the needs of the massive Baby Boom generation that is now starting to retire.

The healthcare improvements cited by the trustees in the report could dampen enthusiasm, particularly among Democrats, for any reforms to entitlement programs. The report comes on the heels of other signs showing a quick, if only temporary, reduction in the U.S. budget deficit.

"It reinforces a consensus in this city that the crisis isn't imminent," said Greg Valliere, chief political strategist at Potomac Research Croup, a firm that advises investors on Washington politics. "A mood of complacency is intensifying over entitlement reform. There's no sense of urgency."

U.S. Treasury Secretary Jack Lew said the report supports Democrats' approach of protecting the basic structure of Social Security and Medicare, while reducing healthcare costs and excessive drug subsidies and asking wealthier seniors to contribute more.

While the Obama administration wants to work on bipartisan reforms to strengthen the programs' financial footing, Lew said "changes to Social Security and that involve deep cuts in benefits or privatization will be unacceptable."

Senator Bernard Sanders, a liberal Independent from Vermont, said the report shows that Social Security "is not going broke" and argued against Obama's proposal to limit future cost-of-living increases by applying a less-generous measure of inflation.

Sanders in a statement said the report showed the wealthy should pay more into the pension program. "We must lift the cap on Social Security payroll taxes and make the wealthy contribute the same percentage of their income as other workers," he said. "Today, someone making $10 million a year contributes the same amount of money as someone making $113,700. That is absurd."

Republicans in the House of Representatives, meanwhile, have proposed massive long-term changes to Medicare that would effectively convert the popular fee-for-service program into a voucher-like system that provides a subsidy to seniors to buy private health insurance.

"Today's report is yet another reminder that Medicare and Social Security are in great danger," said a spokesman for House Budget Committee Chairman Paul Ryan of Wisconsin, the leading Republican fiscal voice. "We need to protect and strengthen these critical programs."

Republicans also want to repeal Obama's healthcare reforms. But the report said the "modest improvement" in the Medicare finance outlook came from lower projected spending for most service categories "that reflect recent data suggesting that certain provisions of the Affordable Care Act will reduce growth in these costs by more than previously projected."

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Reuters: Regulatory News: Monsanto backing away from GMO crops in Europe

Reuters: Regulatory News
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Monsanto backing away from GMO crops in Europe
May 31st 2013, 17:16

Fri May 31, 2013 1:16pm EDT

May 31 (Reuters) - Monsanto Co is not pushing for expansion of genetically modified crops in most of Europe as opposition to its biotech seeds in many countries remains high, company officials said on Friday.

European officials for the St. Louis, Missouri-based Monsanto told the German daily "Taz" that they were no longer doing any lobby work for cultivation in Europe and not seeking any new approvals for genetically modified plants.

"We've come to the conclusion that this has no broad acceptance at the moment," Monsanto Germany spokeswoman, Ursula Lüttmer-Ouazane, told Taz.

Monsanto corporate spokesman Thomas Helscher said on Friday that the company is making it clear that it will only pursue market penetration of biotech crops in areas that provide broad support.

"We're going to sell the GM seeds only where they enjoy broad farmer support, broad political support and a functioning regulatory system," Helscher told Reuters. "As far as we're convinced this only applies to a few countries in Europe today, primarily Spain and Portugal."

The company has been focusing lately on gaining market share in the conventional corn market in Ukraine, and Monsanto Vice President Jesus Madrazo, who oversees international corporate affairs, said Eastern Europe and South America are key growth areas for the company now.

Unlike Europe, South America has largely been welcoming of Monsanto's crop biotechnology, but the company is also facing hurdles there as it is awaiting approvals by China, which is a large buyer of soybeans from Brazil.

Monsanto's wants to launch its new bioengineered, worm-resistant soybean seed called Intacta RR2 Pro for planting in Brazil next season, but a successful launch depends on approval from China, according to Monsanto officials.

Monsanto is under fire this week after an experimental biotech wheat that the company said it shelved several years ago was found growing in an Oregon farm field. The discovery, announced by the U.S. Department of Agriculture on Wednesday, has roiled exports markets for U.S. wheat as Asian buyers have backed away from U.S. wheat purchases.

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Reuters: Regulatory News: UPDATE 1-China Inc's Smithfield bid expected to pass Washington test

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UPDATE 1-China Inc's Smithfield bid expected to pass Washington test
May 31st 2013, 18:23

Fri May 31, 2013 2:23pm EDT

By Michael Erman, Olivia Oran and Greg Roumeliotis

May 31 (Reuters) - Washington may still be digesting news of China Inc's latest bold move into America with the nearly $5 billion takeover of Smithfield Foods Inc, but early indications are the deal will not inflame enough nationalistic opposition to kill it, and success could pave the way for more Chinese purchases.

Shuanghui International Holdings' agreement to buy Smithfield would be the largest ever acquisition of a U.S. company by a Chinese one. The bid - an effort to feed a growing Chinese appetite for U.S. pork - has stirred some concern among U.S. politicians and will face review by a Treasury committee.

To many dealmakers and executives, that review is procedural and should not set off alarms.

"I don't think the Smithfield deal will have problems," said David Marchick, who leads private equity firm Carlyle Group LP's government, public and regulatory affairs and was not involved in the deal. "It's not a sensitive sector. They are keeping American management. And the U.S. agricultural community would love to export more to China."

Carlyle, which has done several deals involving China, did not encounter any problems last year when it sold one of its portfolio companies, U.S. movie theater operator AMC Entertainment, to Chinese conglomerate Dalian Wanda Group, Marchick said. The $2.6 billion deal was the fifth largest M&A transaction by a Chinese company in the United States, according to Thomson Reuters data.

"Most Chinese acquisitions in the U.S. will not encounter regulatory or political challenges. Three or four deals a year do encounter problems - and garner all the attention," said Marchick, who has co-authored a book on U.S. national security and foreign direct investment.

The Smithfield deal could certainly still face opposition on Capitol Hill. Congress is out of session right now, and foreign policy hawks such as Senator Charles Schumer of New York and Senator John McCain of Arizona have yet to weigh in. Last week both Senators expressed concerns about the takeover of Sprint Nextel Corp by Japan's SoftBank Corp, due mainly to security concerns related to telecom equipment from China.

Chinese companies have become more comfortable looking to do deals in the United States, in spite of the 2005 rejection of China National Offshore Oil Corp's $18.5 billion attempt to buy U.S. energy company Unocal. CNOOC's bid was thwarted by fierce political opposition because of national security concerns.

With over $10.5 billion of deals by Chinese companies in the United States so far, 2013 is on pace to be the largest year ever for inbound M&A by Chinese companies, according to Thomson Reuters data. There were $11.5 billion worth of deals by Chinese companies in the United States in 2012, which was itself a significantly higher figure than in any year other than 2007.

"I do think it's helpful to get a large transaction with a Chinese buyer through," said Adel Aslani-Far, global co-chair of the M&A practice at Latham & Watkins. "It's a shot in the arm to the deal economy and to attitudes about Chinese deals. Something sizable like this could be a very good sign to the market that the conditions are right here and will encourage further Chinese investment into the U.S."

Smithfield shares were trading at around $32.94 on Friday, 3.1 percent below the $34 a share offered by Shuanghui.

NATIONAL SECURITY QUESTIONS

Shuanghui's acquisition of Virginia-based Smithfield Foods will face scrutiny by the Treasury's Committee on Foreign Investment in the United States, known as CFIUS. Congress has no authority to block the deal but can exert political pressure.

The Smithfield deal has generated limited response from Congress so far with only a handful of lawmakers - notably Charles Grassley, Republican Senator from Iowa, the largest U.S. hog producing state - expressing doubts.

"No one can deny the unsafe tactics used by some Chinese food companies. And, to have a Chinese food company controlling a major U.S. meat supplier, without shareholder accountability, is a bit concerning," Grassley said in a statement.

Some China skeptics, including Democratic Senator Sherrod Brown of Ohio, have supported the deal in principal, and Randy Forbes, the Republican who represents Smithfield's Congressional district in Virginia, was measured in his response.

Forbes said the potential takeover "warrants robust analysis and review to ensure the safety and security of America's citizens as well as the preservation of national economic interests, food safety, and environmental standards. I look forward to following that review process closely."

Mark McMinimy, a policy analyst with Guggenheim Securities in Washington, said the deal "is not likely to face serious U.S. government-related roadblocks," and also is not likely to run into resistance when it is reviewed by CFIUS.

The interagency government panel reviews transactions that would bring U.S. businesses under foreign-owned control and is comprised of the heads of a number of departments, including Treasury, State, Justice, Commerce and Homeland Security. Its deliberations are tightly guarded.

"CFIUS's scrutiny of this acquisition is vitally important. How might this deal impact our national security? What role does the Chinese government play in Shuanghui, like it does in so many other 'private' companies? These are important questions for CFIUS to get answered," Grassley said.

Aaron Schock, an Illinois Republican and a member of the House subcommittee on trade whose district includes several hog farms, raised concerns about food safety. "We have to be cautious that a Chinese-run firm wouldn't result in Chinese standards here in the U.S.," he said. "The safety of the consumer is the utmost concern and if that can't be dealt with, then this deal might be for naught."

The National Farmers Union, which mostly represents family farms and co-ops, said it opposed the deal out of concerns about concentration in the agricultural markets. "Now, in one fell swoop, 26 percent of U.S. pork processing and 15 percent of domestic hog production will be controlled by a foreign company," it said in a statement.

Given that the company is not focused on defense, energy, or infrastructure, approval seems likely, according to Charles Skuba, a business professor at Georgetown University.

Shuanghui has promised not to close or move any of Smithfield's operations and will keep current management, including CEO Larry Pope, in place.

"We may have some CFIUS concerns in relation to exactly what land Smithfield owns and what its proximity is to sensitive national security installations. But for the most part, I think they can work around that," said Skuba.

Paul Marquardt, a partner at Cleary Gottlieb who works on cross-border deals, said that CFIUS review is a concern for Chinese companies looking to expand in the United States since they often say they find the process opaque and unfair.

"I think a successful deal will help convince Chinese firms that they can get a fair shake in the U.S. They need to see that just because a deal is Chinese doesn't mean it will be blocked," Marquardt said.

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Reuters: Regulatory News: DEALTALK-China Inc's Smithfield bid expected to pass Washington test

Reuters: Regulatory News
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DEALTALK-China Inc's Smithfield bid expected to pass Washington test
May 31st 2013, 17:11

By Michael Erman, Olivia Oran and Greg Roumeliotis

Fri May 31, 2013 1:11pm EDT

May 31 (Reuters) - Washington may still be digesting news of China Inc's latest bold move into America with the nearly $5 billion takeover of Smithfield Foods Inc, but early indications are the deal will not inflame enough nationalistic opposition to kill it, and success could pave the way for more Chinese purchases.

Shuanghui International Holdings' agreement to buy Smithfield would be the largest ever acquisition of a U.S. company by a Chinese one. The bid - an effort to feed a growing Chinese appetite for U.S. pork - has stirred some concern among U.S. politicians and will face review by a Treasury committee.

To many dealmakers and executives, that review is procedural and should not set off alarms.

"I don't think the Smithfield deal will have problems," said David Marchick, who leads private equity firm Carlyle Group LP's government, public and regulatory affairs and was not involved in the deal. "It's not a sensitive sector. They are keeping American management. And the U.S. agricultural community would love to export more to China."

Carlyle, which has done several deals involving China, did not encounter any problems last year when it sold one of its portfolio companies, U.S. movie theater operator AMC Entertainment, to Chinese conglomerate Dalian Wanda Group, Marchick said. The $2.6 billion deal was the fifth largest M&A transaction by a Chinese company in the United States, according to Thomson Reuters data.

"Most Chinese acquisitions in the U.S. will not encounter regulatory or political challenges. Three or four deals a year do encounter problems - and garner all the attention," said Marchick, who has co-authored a book on U.S. national security and foreign direct investment.

The Smithfield deal could certainly still face opposition on Capitol Hill. Congress is out of session right now, and foreign policy hawks such as Senator Charles Schumer of New York and Senator John McCain of Arizona have yet to weigh in. Last week both Senators expressed concerns about the takeover of Sprint Nextel Corp by Japan's SoftBank Corp, due mainly to security concerns related to telecom equipment from China.

Chinese companies have become more comfortable looking to do deals in the United States, in spite of the 2005 rejection of China National Offshore Oil Corp's $18.5 billion attempt to buy U.S. energy company Unocal. CNOOC's bid was thwarted by fierce political opposition because of national security concerns.

With over $10.5 billion of deals by Chinese companies in the United States so far, 2013 is on pace to be the largest year ever for inbound M&A by Chinese companies, according to Thomson Reuters data. There were $11.5 billion worth of deals by Chinese companies in the United States in 2012, which was itself a significantly higher figure than in any year other than 2007.

"I do think it's helpful to get a large transaction with a Chinese buyer through," said Adel Aslani-Far, global co-chair of the M&A practice at Latham & Watkins. "It's a shot in the arm to the deal economy and to attitudes about Chinese deals. Something sizable like this could be a very good sign to the market that the conditions are right here and will encourage further Chinese investment into the U.S."

Smithfield shares were trading at around $32.94 on Friday, 3.1 percent below the $34 a share offered by Shuanghui.

NATIONAL SECURITY QUESTIONS

Shuanghui's acquisition of Virginia-based Smithfield Foods will face scrutiny by the Treasury's Committee on Foreign Investment in the United States, known as CFIUS. Congress has no authority to block the deal but can exert political pressure.

The Smithfield deal has generated limited response from Congress so far with only a handful of lawmakers - notably Charles Grassley, Republican Senator from Iowa, the largest U.S. hog producing state - expressing doubts.

"No one can deny the unsafe tactics used by some Chinese food companies. And, to have a Chinese food company controlling a major U.S. meat supplier, without shareholder accountability, is a bit concerning," Grassley said in a statement.

Some China skeptics, including Democratic Senator Sherrod Brown of Ohio, have supported the deal in principal, and Randy Forbes, the Republican who represents Smithfield's Congressional district in Virginia, was measured in his response.

Forbes said the potential takeover "warrants robust analysis and review to ensure the safety and security of America's citizens as well as the preservation of national economic interests, food safety, and environmental standards. I look forward to following that review process closely."

Mark McMinimy, a policy analyst with Guggenheim Securities in Washington, said the deal "is not likely to face serious U.S. government-related roadblocks," and also is not likely to run into resistance when it is reviewed by CFIUS.

The interagency government panel reviews transactions that would bring U.S. businesses under foreign-owned control and is comprised of the heads of a number of departments, including Treasury, State, Justice, Commerce and Homeland Security. Its deliberations are tightly guarded.

"CFIUS's scrutiny of this acquisition is vitally important. How might this deal impact our national security? What role does the Chinese government play in Shuanghui, like it does in so many other 'private' companies? These are important questions for CFIUS to get answered," Grassley said.

Given that the company is not focused on defense, energy, or infrastructure, approval seems likely, according to Charles Skuba, a business professor at Georgetown University.

Shuanghui has promised not to close or move any of Smithfield's operations and will keep current management, including CEO Larry Pope, in place.

"We may have some CFIUS concerns in relation to exactly what land Smithfield owns and what its proximity is to sensitive national security installations. But for the most part, I think they can work around that," said Skuba.

Paul Marquardt, a partner at Cleary Gottlieb who works on cross-border deals, said that CFIUS review is a concern for Chinese companies looking to expand in the United States since they often say they find the process opaque and unfair.

"I think a successful deal will help convince Chinese firms that they can get a fair shake in the U.S. They need to see that just because a deal is Chinese doesn't mean it will be blocked," Marquardt said.

Timothy Dattels, a senior partner in buyout firm TPG Capital and former head of Asian investment banking at Goldman Sachs Group Inc, said Chinese buyers were typically different from other foreign investors focused more on "trophy assets."

"My view is that the Chinese will be much more strategic and sophisticated, investing in industries where they want to gain domain knowledge, build expertise and add to their supply chain and global connectivity," he said.

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Reuters: Regulatory News: UPDATE 3-Financier Hands' EMI lawsuit vs Citigroup revived

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UPDATE 3-Financier Hands' EMI lawsuit vs Citigroup revived
May 31st 2013, 18:29

Fri May 31, 2013 2:29pm EDT

* New trial ordered over Terra Firma's 2007 EMI buyout

* U.S. appeals court says jury instructions erroneous

* Citigroup defends actions, confident will prevail

By Jonathan Stempel

May 31 (Reuters) - A U.S. appeals court has revived British financier Guy Hands' lawsuit accusing Citigroup Inc of defrauding him into overpaying for music company EMI Group Ltd, a disastrous purchase that reflected the risk of buying debt-laden companies during the buyout bubble.

Ordering a new trial, the 2nd U.S. Circuit Court of Appeals in Manhattan threw out a November 2010 jury verdict against Hands' private equity firm, Terra Firma Capital Partners, over its 4 billion pound purchase of EMI in 2007 - now US$6.1 billion.

The court said a new trial was needed because U.S. District Judge Jed Rakoff in Manhattan had instructed jurors improperly on English law, which both sides agreed governed the case.

Citigroup seized EMI in February 2011 and eventually sold it in pieces after Terra Firma had defaulted on some loans and was unable to support EMI's debt load.

Hands initially sought $8 billion in damages, though Rakoff later reduced a potential award to roughly $2 billion.

EMI's catalog of artists has included the Beatles, Pink Floyd, Queen and Tina Turner as well as newer stars like Coldplay, David Guetta and Katy Perry.

BURDEN OF PROOF

Terra Firma won EMI at a May 2007 auction and New York-based Citigroup agreed to provide much of the financing.

Hands later claimed that David Wormsley, a top Citigroup banker in Europe and one-time friend, had told him a high bid was needed to top one by private equity firm Cerberus Capital Management LP, when in fact Cerberus had decided to withdraw.

Hands said he did not learn until September 2007 that Cerberus did not bid for EMI, leaving Terra Firma as the only bidder. Citigroup has denied wrongdoing, and argued at trial that Hands sued because of buyer's remorse.

The jury found that Citigroup was not liable to Terra Firma for fraudulent misrepresentation, and awarded nothing to Hands.

A three-judge 2nd Circuit panel, however, said Rakoff did not adhere to English law by instructing jurors that Terra Firma had to prove it relied on Wormsley's misrepresentations and that the misrepresentations were a substantial factor in the overbid.

"Absent fundamental error, we are loath to overturn a jury verdict in a civil case," Circuit Judge John Walker wrote for the panel. "Because the jury instructions incorrectly shifted the burden of proof from Citi to Terra Firma on the reliance element, they were prejudicial and require reversal."

CITIGROUP CONFIDENT WILL PREVAIL

Citigroup on Friday defended its actions.

"We are confident we will again prevail at trial as Citi's conduct in the EMI transaction was entirely proper," spokeswoman Danielle Romero-Apsilos said. "The original verdict made clear that Terra Firma's baseless accusations of fraud were simply an attempt to gain leverage in debt restructuring negotiations."

A Terra Firma spokesman said: "We continue to believe that we have a strong claim, and with the jury instructions now resolved in our favor, we expect to prevail in any subsequent trial."

David Boies, a partner at Boies, Schiller & Flexner representing Hands, said he was "looking forward to a new trial with new jury instructions."

After seizing EMI, Citigroup sold the company's recorded music business to Vivendi SA's Universal Music Group for about $1.9 billion, and its music publishing business to a group including Sony Corp and the estate of singer Michael Jackson for about $2.2 billion.

Citigroup and Terra Firma agreed that English law applied to the case because that country had the most significant relationship. England was where EMI was based and publicly traded, the alleged misrepresentations were made, and the financing was arranged.

The case is Terra Firma Investments (GP) 2 Ltd et al v. Citigroup Inc et al, 2nd U.S. Circuit Court of Appeals, No. 11-126.

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Reuters: Regulatory News: New Gold to acquire exploration company Rainy River

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New Gold to acquire exploration company Rainy River
May 31st 2013, 11:28

TORONTO | Fri May 31, 2013 7:28am EDT

TORONTO May 31 (Reuters) - New Gold Inc agreed on Friday to acquire gold exploration company Rainy River Resources Ltd for about C$310 million ($301 million) in a bid to expand its asset base in Canada.

New Gold is offering 0.5 of a New Gold common share for each Rainy River share tendered, or C$3.83 in cash. It said the offer represents a premium of 42 percent over Rainy River's closing price on the Toronto Stock Exchange on Thursday.

Toronto-based Rainy River owns the gold project of the same name located in northwestern Ontario. The project has about 4 million ounces in proven and probable gold reserves and some 6.2 million ounces in measured and indicated gold resources.

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Reuters: Regulatory News: RPT-U.S. discovery of rogue GMO wheat raises concerns over controls

Reuters: Regulatory News
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RPT-U.S. discovery of rogue GMO wheat raises concerns over controls
May 31st 2013, 10:59

Fri May 31, 2013 6:59am EDT

By Carey Gillam and Julie Ingwersen

May 31 (Reuters) - For global consumers now on high alert over a rogue strain of genetically modified wheat found in Oregon, the question is simple: How could this happen? For a cadre of critics of biotech crops, the question is different: How could it not?

The questions arose after the U.S. Department of Agriculture announced Wednesday that it was investigating the mysterious appearance of experimental, unapproved genetically engineered wheat plants on a farm in Oregon. The wheat was developed years ago by Monsanto Co to tolerate its Roundup herbicide, but the world's largest seed company scrapped the project and ended all field trials in 2004.

The incident joins a score of episodes in which biotech crops have eluded efforts to segregate them from conventional varieties. But it marks the first time that a test strain of wheat, which has no genetically modified varieties on the market, has escaped the protocols set up by U.S. regulators to control it.

"These requirements are leaky and there is just no doubt about that. There is a fundamental problem with the system," said Doug Gurian-Sherman, a scientist at the Union of Concerned Scientists who served on a biotech advisory subcommittee for the Food and Drug Administration from 2002 to 2005.

The discovery instantly roiled export markets, with Japan canceling a major shipment of wheat, a quick reminder of what is at stake - an $8 billion U.S. wheat export business.

Many fear the wheat most likely has been mixed in with conventional wheat for some time, but there are no valid commercial tests to verify whether wheat contains the biotech Roundup Ready gene.

"A lot of people are on high alert now," said Mike Flowers, a cereal specialist at Oregon State University. "We can't really say if it is or isn't in other fields. We don't know."

A month has passed since U.S. authorities first were alerted to the suspect plants in Oregon, yet it remains unclear how the strain developed. Monsanto officials said it is likely the presence of the Roundup Ready genetic trait in wheat supplies is "very limited." The company is conducting "a rigorous investigation" to find out how much, if any, wheat has been contaminated by their biotech variety. U.S. regulators are also investigating.

Bob Zemetra, one of the Oregon State University wheat researchers who first tested the mystery wheat when an unnamed farmer mailed a plant sample, said there is no easy way to explain the sudden appearance of the strain years after field tests ended.

Cross-pollination seems unlikely, Zemetra said, because the field where the plants were discovered was growing winter wheat, while Monsanto had field tested spring wheat. There hadn't been any test sites in the area since at least 2004, making it unlikely the new genetic strain would have been carried on the wind.

"I don't know that we are ever going to get a straight answer, or a satisfactory answer, on how it got there," Zemetra said.

'RIGOROUS TESTING PROTOCOL'

Government records show Monsanto conducted at least 279 field tests of herbicide-resistant wheat on over 4,000 acres in at least 16 states from 1994 until the company abandoned its field testing of wheat in 2004.

Zemetra participated in Monsanto wheat trials a decade ago, while working as a wheat breeder at the University of Idaho. When Monsanto decided to halt the testing, he said, the company had strict rules about handling test materials.

"Pretty much all that seed, and any program that was using it, either buried it, burned it or shipped it back to Monsanto, as part of the instructions for doing the field testing," he said. "It was a very rigorous testing protocol."

Researchers were requested to watch the plots for "volunteer" growth for at least two years after conclusion of the tests, Zemetra added.

Zemetra first became aware of the wheat found in Oregon when a farmer brought in what he described as several isolated wheat plants that had emerged after he sprayed Roundup on a fallow field in eastern Oregon. The farmer had last harvested a crop of white winter wheat from the field in 2012.

A report by the U.S. Government Accountability Office in 2008 highlighted several gaps in regulations designed to prevent genetically altered crops from escaping test plots.

The report's conclusions were based on USDA data that there were 712 violations of its regulations from 2003 to 2007, including 98 that could lead to a possible release of unauthorized crops.

The GAO study said the USDA lacked the resources to conduct routine testing on areas adjacent to the GMO crops. Instead, the report found, the government relied on biotechnology companies to voluntarily provide test results.

A 2005 report by the Office of Inspector General for the USDA was critical of government oversight of field tests of GMO crops. The report said there was a risk "that regulated genetically engineered organisms... will inadvertently persist in the environment before they are deemed safe to grow without regulation."

While the reports noted problems with government oversight, USDA itself lists 21 "major incidents of noncompliance" from 1995 through 2011. Five of those involved Monsanto and included a failure by the company to properly monitor test fields, a failure to follow certain test planting protocols and a failure to properly notify regulators about test activities.

'CAN'T GET RID OF IT'

Developers of biotech crops say testing shows they are safe for humans, animals and the environment, and farmers like Roundup Ready corn, soybeans and other crops because genetic alterations enable them to survive dousings of the herbicide.

But critics of the so-called "Franken foods" point to scientific studies that claim links to health problems, while raising other environmental concerns connected to biotech crops that require close scrutiny.

Many international buyers will not accept genetically modified grain, and several U.S. food companies also reject GMOs. When Monsanto in 2004 shelved its Roundup Ready wheat research, the move came amid a backlash from foreign buyers who said they would reject U.S. wheat if DNA-altered wheat was commercialized.

Still, Alan Tracy, president of U.S. Wheat Associates, said despite the contamination problem, the wheat industry was supportive of continued research into biotech traits for wheat.

Farmers are planting less wheat and more of other crops that have been genetically altered in ways that can help farmers grow more grain, Tracy said.

"Our industry remains strongly supportive of continued research and development of biotech traits for wheat," he said.

But finding ways for conventional grain and biotech grain to co-exist will continue to fall short if regulators don't force crop developers to contain their products, critics said.

"This whole idea of co-existence, that has been the No. 1 theme  at USDA. But you can't have co-existence when you can't control contamination," said Andrew Kimbrell, executive director at the Center for Food Safety, which has sued the U.S. Department of Agriculture to try to force tighter regulation of genetically modified crops.

In the meantime, the search is on for the source of the mystery wheat.

Jim Shroyer, a wheat agronomy expert at Kansas State University, said it was likely the Roundup Ready wheat has grown for years in eastern Oregon only to be discovered recently.

"Probably what happened is it got mixed in with a farmer's field eight years ago and has been there ever since," Shroyer said. "That is the main reason we here in the top wheat state did not want Roundup Ready. You can't get rid of it.

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Reuters: Regulatory News: BRIEF-Janssen says received European commission approval for hepatitis C drug Incivo

Reuters: Regulatory News
Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com
BRIEF-Janssen says received European commission approval for hepatitis C drug Incivo
May 31st 2013, 08:36

LONDON | Fri May 31, 2013 4:36am EDT

LONDON May 31 (Reuters) - Johnson & Johnson : * Janssen - incivo gets European commission approval for twice daily dosing for

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Reuters: Regulatory News: EU agency calls for curbs on GSK, Valeant epilepsy drug

Reuters: Regulatory News
Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com
EU agency calls for curbs on GSK, Valeant epilepsy drug
May 31st 2013, 09:44

LONDON | Fri May 31, 2013 5:44am EDT

LONDON May 31 (Reuters) - Use of an epilepsy drug developed by GlaxoSmithKline and Valeant Pharmaceuticals should be restricted to patients for whom other anti-epileptic medicines have proved inadequate or not tolerated, EU regulators said on Friday.

The European Medicines Agency said the move followed cases of abnormal colouring of the skin, nails, lips and eye tissues, including the retina, in some patients who took Trobalt.

It recommended a comprehensive eye examination should be performed at the start of treatment and at least every six months during treatment. Among 55 patients receiving Trobalt in long-term studies examined so far, 15 had retinal pigmentation, the agency added.

Abnormal colouring of the retina can result in impaired vision.

The Food and Drug Administration issued a similar warning about the drug - which is sold in the United States as Potiga - last month.

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Reuters: Regulatory News: EUROPE'S PULSE-A daily note from our Economics Editor

Reuters: Regulatory News
Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com
EUROPE'S PULSE-A daily note from our Economics Editor
May 31st 2013, 06:55

Fri May 31, 2013 2:55am EDT

May 31 (Reuters) - Euro zone unemployment figures will emphasize just how far the currency bloc is from recovery while inflation data due at the same time could push the European Central Bank closer to new action. If price pressures drop further below the target of close to but below two percent we're moving into territory where the ECB has a clear mandate to act, although the consensus forecast is for the rate to push up to 1.4 percent, from 1.2 in April.

Market attention is focused on the ECB cutting its deposit rate - the rate banks get for parking funds at the ECB - into negative territory to try and get them to lend. But will that do much?

Despite being in a world awash with central bank money, the fact safe haven bond markets such as Bunds and U.S. Treasuries haven't sold off much - and are now starting to climb after Ben Bernanke's hint that the Federal Reserve could soon start slowing its money-printing programme -- denotes ongoing nervousness among banks and investors. Data this week showed bank loans to the euro zone's private sector contracted for the 12th month in a row in April.

Despite the (now waning?) European market euphoria - started by the ECB's pledge to do whatever it takes to save the euro and given a further shot in the arm by Japan's dash for growth - the economic numbers look grim. Euro zone unemployment is forecast to edge up to 12.2 percent of the workforce.

Last night, official data showed French unemployment hit a new record. Consumer spending, just out, dropped 0.3 percent in April.

Germany is in better shape but even it will barely eke out any growth this year. Retail sales posted a 0.4 percent fall in April. Britain, however, could just be starting to turn a corner. It skirted a return to recession in the first quarter and the Bank of England has signalled modestly better times ahead. The UK GfK consumer confidence hit a six-month high in May, while the British Chambers of Commerce revised up its growth forecasts for the first time since the financial crisis.

French President Francois Hollande takes to the television airwaves this afternoon, a day after he met Germany's Angela Merkel, a meeting which laid bare Berlin's alarm at the sluggish pace of French reform and the Elysee's irritation at Brussels telling it what to do - not on the face of it a recipe for smooth progress.

Hollande pledged to meet his target of balancing the structural budget in 2017 but said it was up to him, not the Commission, how to get there. Merkel said the two extra years Paris has been given to meet its debt-cutting target had to go "hand in hand" with structural change. In France's case, that means relaxing labour laws and overhauling the pensions system first and foremost. Back in Berlin, some of Merkel's acolytes were much more blunt about perceived French shortcomings.

Where the two leaders did agree was on the need for a full-time president of the euro zone finance ministers' forum and more frequent summits to coordinate economic policy, as well as the need to shell out 6 billion euros in EU funds to fight youth unemployment. That will feed into next month's EU summit. The thrust for greater integration is alive and well but not necessarily in crucial areas such as banking union of which there was barely a mention.

Italy was taken off the EU's debt warning list this week but will need more slack than that if tax cuts being argued over within a fractious coalition government are to be delivered. EU Council President Herman Van Rompuy meets President Giorgio Napolitano and Prime Minister Enrico Letta in Rome later. The Commission forecasts Italy's budget deficit at 2.9 percent of GDP this year, just a fraction below the 3 percent ceiling, offering no room for manoeuvre unless rules are changed to allow Rome to exclude some new spending from its deficit calculations.

Greek sentiment appears to be picking up but the bald numbers suggest it is unlikely to get back on its feet without a further debt writedown at some point, which this time will mean a hit for fellow euro zone governments (i.e. taxpayers). Dutch Finance Minister Jeroen Dijsselbloem, who chairs the meetings of euro zone finance ministers, is due in Athens for talks with the finance minister and Prime Minister Antonis Samaras.

German Bund futures have edged up at the open. European stock futures are pretty flat. Nine days on, Bernanke's QE comment continues to cast a pall. Since then, peripheral euro zone bond yields have started creeping up and the index of top European shares has shed about 2.5 percent.

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Reuters: Regulatory News: EU mergers and takeovers (May 31)

Reuters: Regulatory News
Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com
EU mergers and takeovers (May 31)
May 31st 2013, 10:31

BRUSSELS | Fri May 31, 2013 6:31am EDT

BRUSSELS May 31 (Reuters) - The following are mergers under review by the European Commission and a brief guide to the EU merger process:

APPROVALS AND WITHDRAWALS

None

NEW LISTINGS

-- U.S. food and grain-handling companies ConAgra Foods , Cargill and CHS to combine their North American flour milling businesses to be called Ardent Mills (notified May 28/deadline July 2/simplified)

EXTENSIONS AND OTHER CHANGES

None

FIRST-STAGE REVIEWS BY DEADLINE

MAY 31

-- Canada Life, which is a subsidiary of Canadian life insurer Great-West Lifeco, to acquire Irish Life (notified April 22/deadline May 31)

JUNE 4

-- Brazilian investment fund 3G Capital, and Berkshire Hathaway to acquire joint control of U.S. ketchup maker H.J. Heinz Co (notified April 24/deadline June 4)

-- Syral China Investment, which is part of Tereos International, and Wilmar China New Investments, which is a unit of the Wilmar group, to acquire joint control of Liaoning Jinxin Biology & Chemistry which is now solely owned by Wilmar (April 24/deadline June 4/simplified)

JUNE 6

-- Swiss chocolate maker Barry Callebaut to buy the cocoa business of Singaporean group Petra Foods (notified April 26/deadline June 6)

-- Austrian chemical company Borealis to buy French oil giant Total's GPN fertiliser business and a majority stake in Belgium-based Rosier (notified April 26/deadline June 6)

JUNE 7

-- Russian dairy producer OJSC Unimilk Co, which is controlled by French food group Danone Group, and French logistics company NDL International, which is controlled by French transport group Norbert Dentressangle, to form a logistics joint venture (notified April 29/deadline June 7/simplified)

-- Dutch staffing company Randstad to acquire some of Dutch peer USG People NV's assets (notified April 29/deadline June 7)

-- Private equity firms Lion Capital and Avedon Capital Partners to acquire joint control of Dutch snack producer AD Van Geloven Holding (notified April 29/deadline June 7/simplified)

JUNE 11

-- Qatar Investment Authority and Qatar state-owned hotel group Kingdom Holding Company to acquire joint control of FRHI Holdings which owns hotels in Paris and Singapore (notified May 2/deadline June 11/simplified)

-- Private equity investor Nordic Capital to buy Unicorn which owns marine transport services company Unifeeder A/S (notified May 2/deadline June 11/simplified)

-- Private equity firm KKR to acquire indirect control of French clothing retailer SMCP (notified May 2/deadline June 11/simplified)

-- French construction group Vinci to buy Portuguese airports operator Aeroportos de Portugal (ANA) (notified May 2/deadline June 11)

JUNE 14

-- Diversified U.S. manufacturer Honeywell International Inc. to acquire mobile computing device maker Intermec For $600 million (notified Feb. 15/deadline June 14)

JUNE 17

-- U.S. media group Time Warner to acquire sole control of TV operator Central European Media Enterprises in which it currently holds a stake (notified May 8/deadline June 17)

-- Private equity firm CVC to acquire sole control of German energy services company ista GmbH (notified May 8/deadline June 17/simplified)

JUNE 18

-- U.S. group General Electric Co to buy the aviation business of Italian plane components maker Avio from private equity fund Cinven and Italian defence group Finmeccanica (notified May 13/deadline June 18)

JUNE 19

-- U.S. technology services company IBM's Italian unit to acquire a new company set up from a business owned by Unicredit Business Integrated Solutions S.c.p.a, part of Italian bank UniCredit S.p.A. (notified May 14/deadline June 19)

-- German investor Joh A Benckiser (JAB) to buy Dutch coffee and tea maker D.E. Master Blenders 1753 (notified May 14/deadline June 19/simplified)

JUNE 20

-- U.S. carrier Delta Air Lines to buy a 49 percent stake in British peer Virgin Atlantic (notified May 15/deadline June 20)

-- Dell Chief Executive Michael Dell and private equity firm Silver Lake Partners to buy out personal computer maker Dell Inc (notified May 15/deadline June 20)

JUNE 24

-- U.S. derivatives and exchange and clearinghouse operator IntercontinentalExchange Inc to buy New York Stock Exchange operator NYSE Euronext (notified May 17/deadline June 24)

-- Private equity firm Triton to buy recycling company Befesa from Spanish renewable energy and infrastructure company Abengoa (notified May 17/deadline June 24/simplified)

JUNE 26

-- Spanish book retailer Circulo, which is a joint venture between German media group Bertelsmann and Spanish company Planeta, to acquire joint control of its wholly-owned subsidiary book seller Yadican together with Spanish telecoms operator Telefonica (notified May 22/deadline June 26/simplified)

JUNE 27

-- Trading house Argos to buy French energy product retailer Etablissements Joseph Wallach S.A.S (notified May 23/deadline June 27)

-- Energy trading house Argos Group Holding B.V. to buy French petrol product retailer Etablissements Joseph Wallach S.A.S. (notified May 23/deadline June 27)

JUNE 28

-- Fonds Stratsgique d'Investissement S.A., which is controlled by French investment fund Caisse des Depots et Consignations, to acquire joint control of shipping services provider CMA CGM together with industrial group Yildirim Holding A.S. and holding company Merit Corporation (notified May 24/deadline June 28)

-- Private equity firms Bain Capital and Golden Gate Capital to acquire joint control of U.S. business software maker BMC Software Inc (notified May 24/deadline June 28/simplified)

-- Investment bank Goldman Sachs and financial services company Thomas H. Lee Partners to acquire joint control of processed food producer CTI Foods (notified May 24/deadline June 28/simplified)

-- Yamaha Motor Co Ltd and Kayaba Industry Ltd to set up a joint venture in Japan to make motorcycle suspension systems (notified May 24/deadline June 28/simplified)

JULY 2

-- Giant U.S. food and grain-handling companies ConAgra Foods Inc, Cargill and CHS Inc to combine their North American flour milling businesses into a new venture Ardent Mills, that would control more than a third of U.S. capacity (notified May 28/deadline July 2/simplified)

-- French private equity firm PAI Partners to buy R&R Ice Cream from rival Oaktree Capital (notified May 28/deadline July 2/simplified)

SEPT 3

-- Greek carrier Aegean Airlines to buy Olympic Air (notified Feb. 28/deadline extended for the second time to Sept. 3 from April 23 after the Commission opened an in-depth investigation)

SEPT 6

-- Swedish refiner Nynas to purchase certain assets from Royal Dutch Shell's Harburg refinery (notified Feb. 19/deadline extended for the second time to Sept. 6 from Aug. 8)

GUIDE TO EU MERGER PROCESS

DEADLINES:

The European Commission has 25 working days after a deal is filed for a first-stage review. It may extend that by 10 working days to 35 working days, to consider either a company's proposed remedies or an EU member state's request to handle the case.

Most mergers win approval but occasionally the Commission opens a detailed second-stage investigation for up to 90 additional working days, which it may extend to 105 working days.

SIMPLIFIED:

Under the simplified procedure, the Commission announces the clearance of uncontroversial first-stage mergers without giving any reason for its decision. Cases may be reclassified as non-simplified -- that is, ordinary first-stage reviews -- until they are approved.

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