US official hopeful on US-China audit negotiations
* PCAOB’s Doty has warned time to reach deal running shortBERLIN, Oct 18 (Reuters) - A top U.S. securities regulator
on Tuesday said he is optimistic about negotiations for joint
U.S.-Chinese inspections of auditors in China, and downplayed
officials’ inability to so far set a date for a second round of
talks.Ethiopis Tafara, director of the Office of International
Affairs at the Securities and Exchange Commission, said
regulators have not yet scheduled a Chinese delegation visit to
Washington. A meeting had been expected in October.”These typically are large delegations, and coordination of
views and schedules takes time,” Tafara told Reuters on the
margins of a regulatory conference.”The talks have been good so far and lay the foundation for
further discussions about the manner in which we can
cooperate.”There has been growing U.S. concern over accounting
practices at some U.S.-listed Chinese companies.An SEC review of accounting problems at foreign-based stock
issuers sharpened its focus earlier this year when dozens of
China-based companies began disclosing auditor resignations or
book-keeping irregularities.For example, Deloitte Touche Tohmatsu CPA Ltd in May
resigned as auditor of Chinese software company Longtop
Financial Technologies Ltd , saying it had found
falsified financial records and bank balance confirmations.The SEC, Justice Department and Federal Bureau of
Investigation are investigating the accounting methods of
certain U.S.-listed Chinese companies.At the same time, the SEC and the Public Company Accounting
Oversight Board, which regulates corporate auditors, are
negotiating with Chinese authorities to create a protocol for
future joint inspections of Chinese audit firms.U.S. and Chinese officials held an initial round of talks
in Beijing in July.Earlier this month, PCAOB Chairman James Doty warned that
time to reach a deal may be running out.If the Chinese do not agree to joint inspections, “we will
have to consider using the tools we have at our disposal, and
which the Congress gave us for this purpose, to protect
investors,” Doty said at a speech in Washington in early
October.Regarding international accounting standards, Tafara said
the SEC will decide by the end of this year on whether to adopt
International Financial Reporting Standards. However, he said
there is no specific date set for that decision.International accounting officials have been pressuring the
SEC to make a decision soon, arguing a single global standard
would reduce companies’ cost of capital.
Abu Dhabi’s IPIC lends unit Aabar $2 bln - document
Aabar bought Abu Dhabi Commercial Bank’s 25
percent stake in Malaysian group RHB Capital earlier
this year. Sources told Reuters this month that Aabar would get
a $1.9 billion loan through its parent IPIC from ADCB to pay for
the deal.The prospectus also showed that Aabar has raised its stake
in Virgin Galactic to 37.8 percent from 31.8 percent after
investing a further $110 million in the company.IPIC, which has a mandate to invest in the energy sector,
made a profit of $1.16 billion for the six months to June 30.
Its revenues in the same period totalled $8.63 billion. Total
debt was $31.8 billion.
($1 = 3.673 UAE Dirhams)
Company says SEC wrong about stock data exposure
The statement by Financial Tracking Technologies, issued early Saturday morning, came after Reuters reported that the Securities and Exchange Commission was offering free credit monitoring to employees over concern that FTT had shared staffers’ personal brokerage account information without the SEC’s permission.FTT was hired by the SEC in 2009 to operate the ethics program, which tracks employee trades to help prevent potential conflicts of interest, such as insider-trading.The SEC sent a letter to employees on October 7 saying FTT had violated a term in its contract by giving the stock account data to a subcontractor and consultant without telling the SEC.Because those firms had not been vetted, the SEC said employees’ data may have been compromised. While no data was misused, the SEC urged employees to be cautious and consider placing a fraud alert on their accounts.But in its statement, FTT Managing Principal Tony Turner denied the SEC’s assertions, saying the subcontractor’s access to the data “was authorized and was subject to our supervision and monitoring at all times.”He said his company’s use of a third-party vendor was also disclosed to the SEC in various documents, including the formal bound proposal and subsequent business continuity plans.”No data left our system and, as the SEC indicated, there is no evidence of any misuse of any data,” Turner added.Turner also expressed disappointment that a former FTT consultant had gone to the SEC with concerns about the data security, saying it is “unfortunate” this person “created an incident where none ever existed.”SEC spokesman John Nester declined to comment on FTT’s statement.
Company says SEC wrong about stock data exposure
The statement by Financial Tracking Technologies, issued early Saturday morning, came after Reuters reported that the Securities and Exchange Commission was offering free credit monitoring to employees over concern that FTT had shared staffers’ personal brokerage account information without the SEC’s permission.FTT was hired by the SEC in 2009 to operate the ethics program, which tracks employee trades to help prevent potential conflicts of interest, such as insider-trading.The SEC sent a letter to employees on October 7 saying FTT had violated a term in its contract by giving the stock account data to a subcontractor and consultant without telling the SEC.Because those firms had not been vetted, the SEC said employees’ data may have been compromised. While no data was misused, the SEC urged employees to be cautious and consider placing a fraud alert on their accounts.But in its statement, FTT Managing Principal Tony Turner denied the SEC’s assertions, saying the subcontractor’s access to the data “was authorized and was subject to our supervision and monitoring at all times.”He said his company’s use of a third-party vendor was also disclosed to the SEC in various documents, including the formal bound proposal and subsequent business continuity plans.”No data left our system and, as the SEC indicated, there is no evidence of any misuse of any data,” Turner added.Turner also expressed disappointment that a former FTT consultant had gone to the SEC with concerns about the data security, saying it is “unfortunate” this person “created an incident where none ever existed.”SEC spokesman John Nester declined to comment on FTT’s statement.
Carlyle, Cerberus, Platinum eye Cooper Standard-sources
* Cooper has been valued at over $1.5 bln-sourcesBy Soyoung KimNEW YORK, Oct 12 (Reuters) - Carlyle Group, Cerberus
Capital Management and Platinum Equity are among the private
equity firms interested in buying U.S. auto parts maker Cooper
Standard , but tough financing markets make a deal
uncertain, people familiar with the matter said.Cooper Standard, which has hired JPMorgan Chase and
Lazard Ltd to explore a sale, is in the second round of
the auction, which has been moving slowly in a volatile
financing market, one of the people said.While financing remains relatively cheap for companies with
strong credit ratings, buyout deals typically need leveraged
loans and high-yield bonds — the riskier form of lending that
carries some of the highest interest rates and often is the
first financing to be withdrawn when credit tightens.Representatives for Carlyle, Cerberus and Platinum Equity
all declined to comment. Cooper was not immediately available
for comment.Wall Street banks are becoming more selective about what
financing deals they commit to or are stiffening lending terms,
making buyout deals like Cooper Standard more costly for buyers
and therefore limiting their ability to pay.The company emerged from bankruptcy in May of 2010 under
the control of a handful of hedge funds, including Silver Point
Capital and Oak Hill Advisors. The Novi, Michigan-based
company, which makes body sealing systems and fluid handling
systems for the automotive industry, could be valued at more
than $1.5 billion, several people told Reuters previously.Meanwhile, Carlyle is also bidding for another auto parts
supplier TI Automotive, which competes with Cooper Standard in
the fluid system segment and has been considering a sale since
early this year, people familiar with the matter said on Sept.
29. Bain Capital and London-based buyout firm Pamplona Capital
Management are the other remaining bidders for TI Automotive,
the people said at that time.TI Automotive and Cooper Standard are the world’s two
largest suppliers of systems that control, sense and deliver
fluids and vapors in vehicles. But TI has greater exposure to
the fast-growing Asian markets, drawing roughly a quarter of
its revenue from China and other Asian markets.
UPDATE 1-Bank Austria CFO sees limited read-across from Erste
* Erste warned of 2011 loss after writedowns* UniCredit shares erase losses, gain 1.2 percent
(Adds quotes and background)By Michael ShieldsVIENNA, Oct 12 (Reuters) - UniCredit unit Bank
Austria sees limited parallels with rival Erste Group Bank
, which warned on profit this week after taking big
writedowns in Hungary and Romania, its chief financial officer
said.Bank Austria, emerging Europe’s leading lender, continues to
look at goodwill on its balance sheet, especially for operations
in places like Ukraine and Kazakhstan, CFO Francesco Giordano
told Reuters on Wednesday on the sidelines on a financial
conference.”This is something we continue to evaluate. For the rest (of
countries in the region) I think this should be a specific topic
for them,” he said when asked about potential parallels to
Erste’s writedowns.Erste, the region’s second-biggest lender, said on Monday it
could lose up to 800 million euros ($1.1 billion) this year and
skip its annual dividend after big writedowns in Hungary and
Romania and taking hits on its sovereign debt holdings.”The Hungarian situation which was the other big topic is
something that we already disclosed quite recently what our
exposure is, which — by luck rather than anything else — is a
bit more moderate than others so we expect the impact to be
visible but very much under control,” Giordano said.Hungary is forcing banks to take losses on foreign-currency
loans to consumers who can now repay at below-market rates.
Erste faces a 500 million euro loss in Hungary this year and
plans to inject up to 600 million euros into its unit there.Erste cited a slower-than-expected economic recovery in
Romania for 700 million euros in writedowns in that country.”In Romania our presence is smaller and is very old…I
think in Romania in particular we have much less of a heavy
(presence),” Giordano said.UniCredit shares reversed losses after his comments and were
up 1.2 pecent by 1110 GMT.Austrian peer Raiffeisen Bank International also
plans to inject capital into its Hungarian unit as a result of
the controversial law, its CFO said last week.Raiffeisen said on Monday it still expected a 2011 profit
given scant goodwill in Hungary and low exposure to troubled
euro zone sovereign debt.But RBI needs to add around 100 million euros to provisions
due to the new Hungarian loan law and faces “an additional
significant provisioning need because of the difficult market
environment in Hungary”, it had said.Bank Austria is committed to central and eastern Europe but
would consider offers for businesses in markets it does not see
as essential, regional chief Gianni Franco Papa told a newspaper
in a separate interview.
($1 = 0.733 Euros)
JGBs flat after shares rebound, Europe woes support
By Akiko TakedaTOKYO, Oct 12 (Reuters) - Japanese government bond futures
trimmed earlier gains to end Wednesday flat as a rebound in
Chinese shares negated a slight drop in Japan stocks, with
continued concern over Europe’s debt crisis providing firm
underlying support.While investors took comfort after Germany and France
pledged to deliver a plan to protect Europe’s banks, many still
doubt that risk assets have much room for further gains, given
concerns over whether euro zone policymakers will be able to
form a united response to the debt crisis.”Capital injections into banks by governments or the EFSF
(European Financial Stability Facility) mean using tax money and
that is not something that’s easy to get agreement on, so we
still need to watch arguments at meetings such as the EU
summit,” said Makoto Yamashita, chief Japan interest rate
strategist at Deutsche Securities.Germany and France, the leading powers in the 17-nation euro
zone, have promised to propose a comprehensive strategy to fight
the debt crisis at an EU summit delayed until Oct. 23.The Nikkei stock average lost 0.4 percent on
Wednesday, after Alcoa Inc’s earnings suggested that
Europe’s debt crisis was set to hurt U.S. corporate profits.December 10-year JGB futures closed flat at 142.48,
after rising above their 20-day moving average of 142.57.In cash bonds, the 10-year yield edged down
0.5 basis point to 0.985 percent, but stayed in the middle of a
range near 1 percent that has been in place since last month.
There was little reaction in the JGB market to a retreat in
prices of U.S. bonds on Tuesday.”If the 10-year Treasury yield rises above 2.5
percent, I don’t think the 10-year JGB yield will stay at 1
percent … but at the moment it is staying around that level
because European and U.S. yields remain in recent ranges. It is
hard for worries about the economy and the financial system to
just disappear,” Yamashita said.JGBs have also been well supported by demand from investors
who have been looking to purchase JGBs on dips to meet their
investment plans for the second-half of the fiscal year that
started this month, market participants said.BROKER HEDGINGThe yield curve steepened as superlongs such as 20- and
30-years underperformed other maturities, with broker hedging
and position squaring weighing ahead of Thursday’s 700 billion
yen ($9.1 billion) 30-year auction. The 20-year yield
inched up 0.5 basis point to 1.700 percent, while
the 30-year yield climbed 1 basis point to 1.905
percent.The yield spread between 20- and 30-year bonds stood at
roughly 20.5 basis points, inching down from last week’s high
near 21 basis points, which was the widest since October 2010.Although new bonds looks expensive in terms of absolute
value, analysts said they are likely be supported by their
relative cheapness on the yield curve and by easing concerns
about additional debt sales to finance an extra budget for
reconstruction from the March earthquake.
