Daily Archives: February 24, 2015

Brazil shipbuilder OSX says CFO steps down, CEO to take role

Feb 24 (Reuters) – OSX Brasil SA
Chief Financial Officer Claudio Antônio da Silva Zuicker is
stepping down, and Chief Executive Officer Vladimir Kundert
Ranevsky will add the role of CFO, the troubled Brazilian
shipbuilder said in a statement on Tuesday.

OSX is the shipbuilding arm of the EBX conglomerate started
by fallen tycoon Eike Batista, who was once Brazil’s richest man
but lost almost everything as his companies failed under
mounting debt and missed targets.

(Reporting by Stephen Eisenhammer; Editing by David Gregorio)


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Britain becomes first nation to legalize three-parent babies

(Reuters) – Britain will become the first nation to legalize a “three-parent” IVF technique which doctors say can prevent inherited incurable diseases but which critics fear will lead to “designer babies”.

After more than three hours of debate, lawmakers in parliament’s upper house voted on Tuesday for a change in the law to allow the treatments, echoing a positive vote in the lower house earlier this month.

The treatment, called mitochondrial transfer, is known as “three-parent” in vitro fertilization (IVF) because the babies, born from genetically modified embryos, would have DNA from a mother, a father and from a female donor.

It is designed to help families with mitochondrial diseases, incurable conditions passed down the maternal line that affect around one in 6,500 children worldwide.

(Reporting by Kate Kelland; Editing by Catherine Evans)


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Former New York Assembly speaker pleads not guilty to corruption

Former New York Assembly speaker Sheldon Silver arrives for his arraignment hearing, at the U.S. Federal Courthouse in the Manhattan borough of New York
(Reuters) – Former New York State Assembly Speaker Sheldon Silver, one of the state’s most powerful politicians for two decades, pleaded not guilty to federal corruption charges on Tuesday.

 

Silver, 71, who resigned as speaker after his arrest last month but remains the assemblyman for Manhattan’s Lower East Side, is charged with mail fraud, wire fraud and using his office for extortion.

Silver entered his plea in U.S. District Court in Manhattan, where one of his defense attorneys, Steven Molo, said they planned to file a motion to dismiss the indictment.

The defense claims Preet Bharara, U.S. Attorney for the Southern District of New York, made several public prejudicial statements against Silver that would have tainted the grand jury weighing the case.

“These were statements where the U.S. Attorney excoriated the defendant, basically deprived him of the assumption of innocence and extolled his guilt,” Molo said in court before U.S. District Judge Valerie Caproni.

Prosecutors called Molo’s allegations “baseless.”

Following his court appearance, Silver told reporters: “I’m confident I will be vindicated in the courtroom.”

A lawyer, Silver became speaker in 1994, with considerable influence over New York state’s budget and lawmaking processes.

Silver long listed the New York City law firm of Weitz & Luxenberg on financial disclosure forms as a source of income for representing its clients.

The grand jury indictment said he used that position to mask bribes and kickbacks, including more than $3 million earned for referring asbestos sufferers to the firm from a doctor whose medical research secretly received $500,000 in state funds at Silver’s direction, as well as other benefits.

Silver kept secret from Weitz & Luxenberg the state funding he had organized for the doctor, according to the indictment, handed down last week.

Prosecutors say Silver also received $700,000 in kickbacks by steering real estate developers with business before the state legislature to another law firm.

(Editing by Ellen Wulfhorst, Bill Trott and Eric Walsh)


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Fed’s Yellen flags rate hikes on ‘meeting-by-meeting’ basis

Janet Yellen testifies on Capitol Hill in Washington
(Reuters) – The Federal Reserve is preparing to consider interest rate hikes “on a meeting-by-meeting basis,” Fed Chair Janet Yellen told a congressional committee on Tuesday, a subtle shift of emphasis that helps lay the groundwork for the Fed’s first rate hike since 2006.

 

In remarks to the Senate Banking Committee, Yellen described how the Fed’s rate-setting policy committee will likely proceed in coming months – first by removing the word “patient” in describing its approach to rate hikes, then entering a phase in which rate hikes are possible at any meeting.

That approach could open the door to an interest rate increase as early as June, though investors interpreted Yellen’s testimony overall as likely indicating a later date for liftoff. By the end of her two-hour appearance before the Senate Banking Committee, short-term rate futures contracts showed traders had shifted their expectations of an initial rate hike from September to October, according to data collected and analyzed by CME FedWatch.

Yellen, however, said that even as the Fed refines its language in coming weeks, investors should not construe that as a sign the central bank is wed to a rate hike at any particular meeting. Rather, she said, when the word “patient” disappears it means the Fed will merely have full flexibility to act if its judges the economic data warrant it.

The Fed has been struggling in recent months to move away from the sort of forward guidance it has relied on through the crisis to influence market behavior, without at the same time triggering a market overreaction with each tweak to its policy statement. Yellen’s comments on Tuesday marked another step in that process.

“If economic conditions continue to improve, as the committee anticipates, the committee will at some point begin considering an increase in the target range for the federal funds rate on a meeting-by-meeting basis,” Yellen said.

“Before then, the committee will change its forward guidance. However, it is important to emphasize that a modification of the forward guidance should not be read as indicating that the committee will necessarily increase the target range in a couple of meetings.”

Yellen’s discussion of forward guidance was part of prepared testimony that included a broad overview of a U.S. economy that appeared to be surging forward with strong job growth and a continued post-financial crisis expansion – conditions largely consistent with a rise in interest rates later this year.

Analysts said the testimony did little to nail down the likely date of a rate hike, with her testimony and answers to questions veering between confidence in a “solid” recovery and continuing concerns about weak wages and other signs the labor market is not fully healthy.

“I would suggest that Yellen is still keeping a very open mind, still in no hurry to give a signal that a rate hike is imminent,” said Brian Dolan, head market strategist at New Jersey-based Drivewealth LLC.

LACK OF INFLATION A CONCERN

Alabama Republican Senator Richard Shelby, the chair of the Senate Banking Committee, led a discussion that confronted Yellen with a broad set of concerns – from currency manipulation among U.S. trading partners to whether Congress should delve more deeply into the Fed’s affairs. Shelby has scheduled a separate hearing next week on Fed oversight, and challenged Yellen on the issue in his opening statement.

With a more than $4 trillion balance sheet from its various crisis-fighting efforts, “many question whether the Fed can rein in inflation and avoid destabilizing asset prices,” Shelby said. “I am interested to hear whether the current Chair … believes the Fed should be immune from any reforms.”

Yellen was adamant.

Pending legislation that would let the Government Accountability Office review monetary policy “would politicize monetary policy,” Yellen said, and “beyond a shadow of a doubt” make the Fed less effective.

On Wednesday she will testify before a House of Representatives committee.

Just completing her first year as Fed chief, Yellen said she felt U.S. labor markets and other key economic indicators “have been increasing at a solid rate.” However, she said she still feels the job market is not fully repaired, and that the U.S. outlook remains somewhat clouded by a weaker-than-hoped-for global economy, stalled wage growth, and falling inflation.

None of those factors on their own may be enough to keep the Fed from raising interest rates later this year. Rates have been near zero since the financial crisis hit in 2008, part of a record effort by the central bank to repair the damage of the Great Recession.

But the lack of inflation has made some Fed policymakers hesitant to commit to raising rates until they are more certain the United States is not headed down the same path as Europe or Japan, mature industrial economies that are struggling to maintain growth.

The Fed considers a steady 2 percent annual inflation rate a sign of overall economic health – consistent with its own ability to return interest rates to a normal level, and not so high or low that it distorts household and business spending and investment decisions. Though the current weak prices are considered likely to be a temporary result of the collapse in oil prices, doubts remain.

Yellen’s statement could set the stage for the Fed to remove the “patient” reference as soon as its next meeting in March, a step policymakers began discussing in January according to recently released Fed minutes. Several policymakers, including some centrists on the committee, have said they feel an interest rate increase should be on the table by June, after the intervening Fed policy meeting in April.

The discussion of forward guidance in Yellen’s testimony is an effort to extricate the Fed from a perhaps unforeseen constraint it created when the word “patient” was put in its statement in December. Yellen defined patient as a “couple” of meetings, and policymakers soon became concerned, according to the most recent Fed minutes, that investors would view any removal of “patient” as a sign that interest rates would definitely rise two meetings later.

(Reporting by Howard Schneider and Michael Flaherty; Editing by Andrea Ricci and Paul Simao)


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Obama vetoes Keystone pipeline approval bill

A depot used to store pipes for Transcanada Corp's planned Keystone XL oil pipeline is seen in Gascoyne North Dakota

A depot used to store pipes for Transcanada Corp’s planned Keystone XL oil pipeline is seen in Gascoyne, North Dakota November 14, 2014.

Credit: Reuters/Andrew Cullen


(Reuters) – President Barack Obama on Tuesday swiftly delivered on his vow to veto a Republican bill approving the Keystone XL oil pipeline from Canada, leaving the long-debated project in limbo for another indefinite period.

 

The Senate received Obama’s veto message and Senate Majority Leader Mitch McConnell immediately countered by announcing the Republican-led chamber would attempt to overturn the veto by March 3.

Obama rejected the bill hours after it was sent to the White House. Republicans passed the bill to increase pressure on Obama to approve the pipeline, a move the president said would circumvent a State Department process that will determine whether the project is in the U.S. national interest.

(Reporting by Richard Cowan and Susan Cornwell; Editing by Peter Cooney)


Source: Newsjyoti Politics

Ukraine rebels show weapons pullback; Kiev rejects ’empty words’

Trucks of the separatist self-proclaimed Donetsk People's Republic army towing mobile artillery cannons, are seen as they pull back from Donetsk
(Reuters) – Pro-Russia separatists brought reporters on Tuesday to witness the withdrawal of heavy weapons from the front line in east Ukraine under a ceasefire deal, but Ukraine said the rebels were using the cover of the truce to reinforce for another advance.

 

Fighting has eased in eastern Ukraine in recent days, raising hope that a ceasefire due to start on Feb. 15 can finally take effect after the rebels initially ignored it to storm a government-held town last week.

The prospect that the ceasefire will fail has fueled a rout in the Ukrainian hryvnia, which plunged 11 percent to close at 31.63 to the dollar. The currency has already lost half its value since the start of this year after halving during the whole of 2014. Dollar bonds issued by Ukrainian companies sold off heavily after authorities tightened currency controls.

A feud over natural gas, which appeared to have been settled for the winter by an agreement late last year, has also resurfaced, with Moscow threatening to cut off Kiev’s supplies in two days unless Kiev pays more money.

Since taking the railway hub of Debaltseve in one of the worst defeats of the war for Kiev, the Moscow-backed rebels have indicated they now want to abide by the truce. Kiev says the rebels are still shooting, which they deny.

Reuters journalists in rebel-held territory watched 10 trucks carrying howitzers roll through Makiyvka, near rebel-held Donetsk. Rebels said the guns were on their way from Donetsk toward Amvrosiyvka, a town far from the front and close to the Russian frontier.

Near Amvrosiyvka, Reuters journalists saw a second convoy carrying 14 howitzers, also heading toward the Russian border.

Rebel commander Eduard Basurin said there were no plans for any further military advances. “That’s it. We are going no further,” he said.

He said the rebels still aimed to gain control of the entire territory of east Ukraine’s two rebellious provinces, including the government-held port of Mariupol, but would seek this through “negotiations with the Ukrainian side”.

Basurin said late on Tuesday that 100 artillery pieces had been pulled back during the course of the day, and the rebels intended to complete the entire withdrawal of all heavy weapons as required under the truce, despite an announcement by Kiev that it was not yet ready to start.

“However many there are, they will all be withdrawn. The mission of the OSCE will monitor all the sectors and confirm whether or not we are lying,” he told reporters in Donetsk, referring to the European security body tasked with verifying the truce.

The Kiev military said rebel assertions they were pulling back guns were “empty words”.

“On the contrary, the terrorist groups, making use of the ceasefire period, are reinforcing their units and building up ammunition.”

NOT GIVING UP

Western countries have not given up on the ceasefire deal to end fighting that has killed more than 5,600 people, although they remain suspicious of the rebels and their presumed patron, Russian President Vladimir Putin.

Foreign ministers of Russia, Ukraine, France and Germany met in Paris on Tuesday and backed the ceasefire, pledging more resources to enable the OSCE to monitor it.

The rebels say they have observed the truce despite their massive assault last week, arguing that the ceasefire never applied to their target, the town of Debaltseve. Kiev and its Western allies say the operation was a brazen violation of the truce.

European countries have warned of new economic sanctions against Moscow if the rebels advance deeper into territory the Kremlin calls “New Russia”. Washington says it could arm Kiev.

Britain said it would deploy military personnel to Ukraine in the next month to help train the Ukrainian army, warning that Moscow would destabilize other countries if left unchallenged.

SOLE SIGNAL

Kiev’s military said one of its soldiers had been killed and seven wounded in the past 24 hours, and repeated that it would not start pulling back weapons until shooting stopped.

“As soon as the fighters implement the ceasefire for two full days, that is the sole signal to start the withdrawal,” military spokesman Andriy Lysenko said in a briefing, noting however that fighting had diminished.

Separatist press service DAN reported 10 incidents of government shelling near Donetsk.

However, Basurin denied Kiev’s assertions that there were serious clashes in villages near Mariupol, saying there had been provocations from the Ukrainian side but no major incidents. Kiev fears Mariupol, with its 500,000 people, could be the next major rebel target.

Kiev and its Western allies say the rebels are funded and armed by Moscow, and backed by Russian military units. Moscow denies aiding sympathizers in Ukraine, and says heavily armed Russian-speaking troops operating without insignia there are not its men.

Asked if Moscow is lying when it denies sending men and material, U.S. Secretary of State John Kerry said: “Yes.”

Putin, who has mainly struck a conciliatory tone since the rebels captured Debaltseve, said in a television interview he did not think Russia and Ukraine would go to war.

“I think that such an apocalyptic scenario is unlikely and I hope this will never happen,” he said.

(Additional reporting by Natalia Zinets, Pavel Polityuk, Alessandra Prentice and Peter Graff in Kiev, Katya Golubkova and Vladimir Soldatkin in Moscow and John Irish in Paris; Writing by Peter Graff; Editing by Giles Elgood and Mark Trevelyan)


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Sony taps Tom Rothman of ‘Titanic’ fame to head movie studio

A logo is pictured outside Sony Pictures Studios in Culver City

A logo is pictured outside Sony Pictures Studios in Culver City, California December 19, 2014.

Credit: Reuters/Mario Anzuoni


(Reuters) – Sony Pictures Entertainment on Tuesday named veteran film executive Tom Rothman, a force behind all-time top-grossing blockbusters “Titanic” and “Avatar,” to head its movie studio in a shuffle prompted by the fallout from a cyberattack.

 

Rothman, 60, takes over for Amy Pascal, who suffered public embarrassment after hackers leaked emails she had written to other Hollywood executives.

Rothman, who brings expertise in both blockbusters and art-house films, will probably push for more franchise development as he did at Fox, where he launched the “X-Men,” “Planet of the Apes” and “Ice Age” movies.

Sources close to the company said Rothman would start his new job in the next week or so.

Rothman was known for financial discipline when he co-led Fox Filmed Entertainment from 2000-2012. In 2013, he became chairman of TriStar Productions, a joint film and television venture with Sony, and has pulled together a slate of films with directors like Jodie Foster and stars George Clooney and Meryl Streep.

While the Sony studio came under pressure a few years ago from activist investor Daniel Loeb because of its flops and high costs, Hudson Square Research analyst Daniel Ernst said the motion picture division was “doing rather well.”

Ernst said the entertainment arm of Sony Corp would probably not have changed the studio leadership if not for the cyberattack.

Rothman will report to Michael Lynton, who will continue to run the Japanese corporation’s global entertainment business. His contract was extended for an undisclosed number of years, Sony said in a statement.

Lynton had several choices inside Sony for Pascal’s replacement, including her deputy, Doug Belgrad, and Columbia Pictures production president Michael De Luca.

“Tom’s creativity, strong talent relationships and track record of enduring films and commercial success are unparalleled in this industry and exactly what we are looking for to grow our film business,” Lynton said in the statement.

Pascal and Lynton announced this month that she was stepping down as studio chief and moving to a production deal on the lot with Sony’s financial backing.

The executive shuffle comes after hackers launched a devastating cyberattack on the studio in November, angered by the Sony Pictures comedy “The Interview.” The movie, championed by Pascal, mocks North Korean leader Kim Jong Un.

(Editing by Lisa Von Ahn)


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Brazil judge in Batista case seen driving tycoon's seized Porsche

Feb 24 (Reuters) – The Brazilian judge
presiding over criminal proceedings against charismatic
entrepreneur Eike Batista, once Brazil’s richest man, was seen
on Tuesday driving a Porsche belonging to the fallen tycoon that
had been seized by the court.

Flavio Roberto de Souza, who is overseeing Batista’s trial
for insider trading, was seen driving the white Porsche Cayenne
by reporters for Estado de S.Paulo’s news agency after a tip-off
from Batista’s lawyer.

The car was one of a number of luxury vehicles confiscated
by police earlier this month following a court order.

Local media said investigators had seized the cars because
of concerns Batista had been selling or donating assets that
were frozen as part of the insider trading case.

When asked why he was driving the Porsche, Souza told local
business daily Valor Economico: “The Federal Police did not have
a safe place for the car and it was exposed to sun, rain and
possible damage. As I want the car to be preserved in good
condition, I took it to a covered parking space (in the building
where I live).”

“I did not take it to use, just to look after it… It is a
normal situation,” he said.

The cars were meant to be put up for auction this Thursday,
but Batista’s lawyer secured an injunction halting the sale.

Batista lost almost everything as his EBX conglomerate fell
apart and his flagship oil firm OGX filed for Latin America’s
largest bankruptcy in 2013. The business magnate, whose rise and
fall have mirrored Brazil’s own fortunes, recently resigned as
chairman of Oleo E Gas Participações SA, as OGX is
now known.

Prosecutors accuse Batista of selling 236 million reais ($85
million) of OGX stock based on privileged information that its
offshore oil fields would miss production forecasts. Batista
denies selling the stock based on insider information, and says
he was legally obliged to sell it to pay off debt.

The Porsche incident is likely to give further ammunition to
Batista’s lawyer, Sergio Bermudes, who has been trying to get
judge Souza taken off the case. Bermudes has argued that Souza
has a bias against Batista, pointing to comments the judge made
on the first day of trial in November.

Souza told reporters at the time that Batista’s career had
been a “megalomaniac dream.”

(Reporting by Stephen Eisenhammer; Editing by Todd Benson and
Gunna Dickson)


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NJ’s Christie strikes teachers’ pension deal, seeks broader pact

New Jersey Governor Chris Christie (R-NJ) attends the New Jersey Chamber of Commerce 78th annual "Walk to Washington and Congressional Dinner"

New Jersey Governor Chris Christie (R-NJ) attends the New Jersey Chamber of Commerce 78th annual ”Walk to Washington and Congressional Dinner” in Washington February 19, 2015.

Credit: Reuters/Yuri Gripas


(Reuters) – New Jersey Governor Chris Christie struck a deal with the state’s teachers on a “roadmap” for pension reform while warning of a dire future if other unions do not make similar commitments to cut the surging cost of workers’ retirement benefits.

 

The agreement between Christie, a Republican weighing a bid for the White House in 2016 and the New Jersey Education Association, marked a dramatic turn in a long-bitter relationship.

“If we do not reform, next year we would be asked to spend nearly $8 billion on pension and health benefits,” said Christie, in his annual budget address on Tuesday afternoon in Trenton, the state capital. “Health costs alone consume nearly 10 percent of the budget.”

Christie and the teachers’ union have had an acrimonious relationship since he was elected governor in 2009, repeatedly clashing over his efforts to curtail benefits and overhaul tenure rules.

Under proposals documented in a report on the state’s website, the union’s existing pension plan would be frozen and replaced by a new one. Christie said he hoped other unions would follow suit.

The union said it would work in good faith at arriving at a solution but had not agreed on details.

“Some of what will be proposed is not feasible, and some of it unfairly burdens public employees and retirees,” it said in a statement. “While we believe some of the concepts in the report are worth exploring further, we have not yet agreed to anything in the report and we will not agree to some of what it contains.”

The tentative pact comes a day after Christie was dealt a setback by a state court judge, who ruled that his plan to cut $1.6 billion of contributions to the state retirement system violated its constitution. The cuts were one of the lynchpins in his effort to close a $2.7 billion budget gap projected through fiscal 2015.

(Reporting by Luciana Lopez; Writing by Megan Davies; Editing by Dan Grebler and Christian Plumb)


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Kleiner firm was not level playing field for women, jury told

Ellen Pao walks to the courtroom before the start of her trial at San Francisco Superior Court in San Francisco
(Reuters) – Kleiner Perkins Caufield & Byers, the investment firm that has backed tech companies from Google to Amazon, fired a woman junior partner after she complained of gender discrimination, her lawyer said at trial on Tuesday.

 

Former Kleiner partner Ellen Pao accuses the firm of denying her promotions after she complained about harassment by a male partner. The case helped spark a broad discussion in Silicon Valley about sexism.

In San Francisco Superior Court on Tuesday, Pao’s lawyer Alan Exelrod said in his opening statement that Kleiner had promoted only one woman to senior investing partner by 2011, despite more than 40 years in business.

“Was there a level playing field for Ellen Pao at Kleiner Perkins?” Exelrod said to the jury. “We will prove to you in this case that there was not.”

Kleiner attorney Lynne Hermle said, however, that the firm excels at recruiting female executives and investing in businesses founded by women. The reason Pao was not promoted, Hermle said, is because she did not have the skills to be an investing partner.

“She did not come close,” Hermle said.

Since Pao filed her lawsuit in 2012, women employees at Pantheon Ventures Ltd and CMEA, two other venture firms, and a co-founder at Tinder filed similar suits that were later settled.

In her lawsuit, Pao, now interim chief executive at social news service reddit, said her standing at Kleiner deteriorated after she ended a brief affair with a colleague, Ajit Nazre, who has also since left the firm.

Nazre could not be reached for comment and has not spoken publicly about the case.

In court, Exelrod said Nazre subsequently lured another female Kleiner advisor, Trae Vassallo, to New York for a purported business meeting. Nazre eventually propositioned Vassallo, appearing at her hotel door in a bathrobe, but Vassallo rebuffed him and then told Pao. Vassallo is scheduled to testify.

But Hermle said Kleiner partner John Doerr, a Google board member, has been “on a mission” to advance women in tech. Pao tries to “twist facts, circumstances and events” to support her contention of a conspiracy of gender bias at Kleiner, Hermle said.

Pao is seeking as much as $16 million from the firm, a lawyer for Kleiner Perkins has said. Kleiner could cite Pao’s current compensation at reddit to rebut her claim that she missed out on income by not moving upward at the venture firm.

The case is Pao v. Kleiner Perkins Caufield & Byers LLC, CGC-12-520719, in California Superior Court, in the County of San Francisco.

(Editing by Grant McCool)


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