Global Scene

Sixty arrested over melamine issue

SHIJIAZHUANG — Sixty suspects have been arrested over the melamine-tainted Sanlu milk powder that caused urinary problems such as kidney stones in thousands of babies in China last year.

“Twenty-one of them went on trial between December 26 and 31, including four executives of Sanlu Group,” said Zhang Deli, chief procurator of the Hebei Provincial People’s Procuratorate.

“The court will announce the verdicts soon,” Zhang told the ongoing annual session of the Hebei Provincial People’s Congress.

Tian Wenhua, Sanlu’s former board chairwoman and general manager, stood trial in the provincial capital Shijiazhuang on December 31, alongside the group’s former deputy general managers Wang Yuliang and Hang Zhiqi, and Wu Jusheng, a former executive in charge of the firm’s milk source division. The four were arrested on September 26.

Prior to these four, 17 people were on trial on charges of producing, adding melamine-laced “protein powder” to milk or selling the tainted milk to Sanlu or other dairies.

From August 2 to September 12, Sanlu Group produced 904 tonnes of melamine-tainted baby formula powder and sold 813 tonnes of the tainted products, making 47.5 million yuan ($6.9 million ).

The Ministry of Health said it was likely the tainted milk scandal with Sanlu Group at its center killed at least six babies. Another 294,000 infants suffered kidney stones and other urinary problems.

Sanlu Group, partly owned by New Zealand dairy product giant Fonterra, stopped production on September 12.

A bankruptcy petition for Sanlu has been filed in the face of a 1.1 billion yuan debt.

On December 19, the group borrowed 902 million yuan to pay the medical fees of children sickened by its melamine-tainted baby formula and to compensate the victims.

In his report to the provincial legislature, Zhang Deli said the procuratorate system would “live up to its obligation, handle the milk scandal properly, and crack down on all crimes that disrupt market order and economic development”.

He said such crimes included frauds, tax evasion, illegal fund-raising, production and sales of counterfeit goods and commercial bribes.

Last year, 1,173 suspects in Hebei Province were arrested over these charges, he said.

Meanwhile, 1,244 government employees were investigated on corruption accusations.

The province’s total arrests last year were put at 43,000.

(China Daily )

Rio postpones Brazil mine expansion

Rio Tinto PLC, the world’s second-largest iron ore producer, said Monday it would postpone a $2.15 billion expansion of its iron ore mine in Corumba, Brazil, because of the global financial crisis.

The London-based company, which is listed in Britain and Australia, said in July it wanted to boost production of iron ore, a key ingredient in steel production, at Corumba more than sixfold, from 2.2 million tons (2 million metric tons) to 14.1 million tons (12.8 million metric tons).

“It is in response to the severe market downturn, which has clearly impacted on our iron ore demand,” Rio Tinto spokesman Gervase Greene said of the postponement.

“It is important to note that we retain the option to pursue that expansion when credible signs of the market recovery are seen, but until such time, we have postponed it.”

SYDNEY, Australia, AP

Listed firms allowed to buy back shares:

ordinance amended

The Securities and Exchange Commission of Pakistan (SECP) has allowed listed companies to buy back their own shares and hold them as treasury shares, which may be re-issued under the regulations being prescribed by the Commission. The SECP on Saturday amended section 95A of the Companies Ordinance 1984 through Companies (Amendment) Ordinance, 2009.

Details showed that the declining trend in the securities market and the consequent reduction in the value of the shares of listed companies had made these shares quite attractive.

Among others, this provides an opportunity to the listed companies, also, to buy back their own shares. Therefore, on an initiative and proposal of the SECP, section 95A of the Companies Ordinance, 1984 has been amended vide Companies (Amendment) Ordinance, 2009 to enable the listed companies to buy back their own shares and hold them as treasury shares.

Previously, the Companies Ordinance permitted the listed companies to buy back their own shares.

However, the purchased shares had to be cancelled forthwith resulting in reduction of the paid-up capital of the company.

As a result of latest amendment, the listed companies can buy back their own shares and hold them as treasury shares, which can then be re-issued/resold in the prescribed manner by SECP in the regulations.

According to the amended section 95A, the decision to buy back the shares decision is required to be taken by the board of directors as well as three-fourth of the members who are present and entitled to vote in a general meeting of the company.

The decision shall have to clearly specify the number of shares proposed to be purchased, purpose of purchase ie cancellation or holding the shares as treasury shares, the purchase price, period within which purchase shall be made, source of funds, justification for the purchase and effect on the financial position of the company.

The shares can be purchased either through tender process or through the stock exchange in the manner to be prescribed by the regulations.

The law also provides that the purchase shall always be made in cash and only out of the distributable profits or reserves specially maintained by the company.

Importantly, it also provides that the voting rights and the right to receive dividend of the shares purchased shall remain suspended as long as they are held as treasury shares by the company itself.

A hefty fine, of up to Rs 30 million, has been provided for violation of the law, in addition to liability for any losses or damage caused by such violation.

Courtesy. Business Recorder, 2009

Glaxo to curb U.S. TV ads

GlaxoSmithKline plc (GSK.L) Chief Executive Andrew Witty said Friday the drug company is cutting back on its U.S. television advertising as it tries to avoid the criticism aimed at heavy drug advertising, the Wall Street Journal reported.

In an interview with the Journal, Witty declined to say by how much the company reduce the spending but said he believes consumer advertising still helps the public in many cases.

Glaxo spent $279.1 million on consumer advertising in the United States in the first half of 2008, ranking it second behind Pfizer Inc. (PFE.N), which spent $462.5 million, the Journal reported, citing data from The Nielsen Co. Glaxo will continue to advertise where “appropriate,” he told the Journal, for instance promoting drugs for sexually transmitted diseases.

A spokesperson for Glaxo could not be reached for comment. (Reporting by Phil Wahba; Editing by Lincln Feast)

WSJ NEW YORK, Jan 9, Reuters