Other News

July 30, 2002

Citigroup, JP Morgan CEOs unaware of the offshore deals with Enron

In an affidavit to US lawmakers today, the Chairman and Chief Executive of Citigroup Inc., Mr. Sanford Weill said that he was unaware of the transactions done by Citigroup with an offshore entity DELTA and Enron Corp. The affidavit was sent today to the Senate Permanent Subcommittee on Investigations.

Carl Levin, chairman of the Subcommittee, last week requested CEOs of both Citigroup and JP Morgan to give explanations regarding the secretive deals with Enron through offshore companies that helped in hiding the loans to Enron.

Mr. Harrison, CEO of JP Morgan too signed a similar affidavit today saying that the bank did not control MAHONIA, another offshore entity that is also subject to investigations for its deals with Enron.

Weill said that he had already directed the CFO of Citigroup's Corporate and Investment Bank, Barbara Yastine, to investigate the matter further and provide detailed information to the subcommittee.

The subcommittee is of the view that Citigroup used DELTA registered in the Cayman Islands and JP Morgan used MAHONIA to help Enron in facilitating the hidden $100 million loans.

According to the investigators of the subcommittee, Enron obtained $4.8 billion from Citigroup with 14 transactions through DELTA.

July 26, 2002

Chiefs of Citigroup, J.P.Morgan Chase asked to clarify the deals with Enron

Senator Carl Levin, D-Mich., who is investigating the ties of leading investment banks with bankrupt Enron Corp., has asked J.P.Morgan Chase and Citigroup to give a clarification on using offshore companies in their deals with Enron.

The letter was sent on Thursday to the chairman and chief executive officer of Citigroup, Sanford Weill and J.P. Morgan Chase president and CEO William Harrison giving them a deadline of Monday to provide the information personally.

Mr. Levin is the head of the Senate Governmental Affairs Committee’s investigative panel. A committee investigator, at a hearing of the panel Tuesday, testified that several Wall Street investment banks including J.P.Morgan and Citigroup had lend billions of dollars to Enron and helped the company mask its true financial position. The banks were also aware that the company was getting loans by using misleading accounting. In return of big fees and favors, some banks even helped Enron in its deceptive accounting.

Meanwhile the officers of Citigroup and J.P. Morgan Chase denied any offense in testimony at the hearing.

According to the investigators, the banks used intricate financial transactions to enhance Enron's weak cash flow to match profit growth on paper.

July 11, 2002

Inflow and Silicon Valley Bank sign agreement

Inflow Inc., managed Web hosting and IT service provider and Silicon Valley Bank (SVB) announced signing of an agreement in which customers of SVB will receive preferential pricing for Inflow’s Outsourced IT Services and Web Hosting.

According to Inflow, the agreement will include all clients of SVB in Arizona, Arkansas, Colorado, Louisiana, Montana, New Mexico, Oklahoma and Texas.

June 5, 2002

Merger between 2 private Swiss banks announced

Lombard Odier and Darier Hentsch, the two esteemed names in the Swiss banking industry have announced their merger putting an end to weeks of rumour. The merger would combine their businesses into a single institution with the name Lombard Odier Darier Hentsch & Cie. (LODH) with assets worth $90 billion under its management.

In recent times, private banks are facing competition from giants like UBS and CSFB, who are also eying high-net-worth individual clients having CHF1 million ($637,000) to invest. Another major problem is an assault on Swiss banking secrecy laws by the European Union (EU). The EU is demanding that information on clients be given to the tax-authorities of neighbouring countries. This would be a major setback to private banks, which rely on discretion as an important competitive advantage.

The Swiss private banks are known to be struggling with earnings having fallen by 25-50% last year.

But a planned partnership limits the scope of private banks to achieve economies of scale or to afford sophisticated technology needed to serve overseas clients.

Layoffs are expected in the wake of the merger, which will combine Lombard's staff of 1,530 with 560 at Darier into a single work force of about 1,800. The new bank will have branch offices and 20 subsidiaries across the world when it comes into being on July 1 and will remain a private partnership.

May 07, 2002

BBL lends baht 6 bn to SMEs in Q1

According to Pansak Leelawannakulsiri, head of the SME division of Bangkok Bank (BBL), 6 billion baht have been lent to small and medium-sized enterprises (SME) during the first quarter of this year.

While the industrial sector obtained 40% of the total loan, the remaining went to the retail, wholesale and service sectors. The bank plans to lend 20 billion baht by the end of the year.

The bank sought to lend to small firms that held bad debts, in particular those having completed debt restructuring. The Small Enterprise Loan Guarantee Corporation will be acting as a guarantor for the SMEs, which do not have their own guarantors.

The bank has set up special loans divisions for the task and also plans to organise SME workshops nationwide, starting in Chiang Mai. The bank is working with many state agencies including SME Development Institute, the Industry Ministry and the National Office for Science and Technology Development toward the promotion of SMEs.

Chairman Kosit Punpiamrat stated the bank lent nearly 80-100 million baht per month to SMEs in the agricultural sector in the first quarter and has projected lending 1.4 billion baht by the end of the year.

April 01 , 2002

Branson offers half of V2 label to US bank

Sir Richard Branson has offered half of his loss-making V2 record label to a US investment bank. The move was aimed at reducing debt and strengthening finances.

The offer comes in the wake of losses amounting to £130 million incurred by Barfair, a holding company owned by Branson. Morgan Stanley Dean Witter has already taken over 47.5% of V2, through warrants attached to bonds issued for an earlier refinancing in 1998.

Under the new deal, the bank has agreed to lend the business an additional $20 million with Sir Richard lending the same amount. Competition from mobile phones, Internet and satellite television have landed record companies in trouble.

The value of V2 has fallen from £335-200 million over the past two years but costs continue to rise. The company has however, benefited from the reinvention of Welsh musician Tom Jones through his successful album, Reload, while the Stereophonics, led by Kelly Jones, produced Britain's biggest selling rock album last year.

March 30, 2002

Merrill Lynch, SSB, CSFB top US Underwriters

According to data collected by Thomson Financial Securities Data, companies have sold $245 billion of US debt, in spite of the recession. The companies wanted to take advantage of low borrowing costs before a rise in interest rates and extend debt maturities.

Analysts predict that the Federal Reserve may increase interest rates by June as the US economic situation shows signs of improvement. The corporate debt of $818 billion sold was slightly above estimates.

Citigroup’s Salomon Smith Barney unit, Credit Suisse Group’s Credit Suisse First Boston unit, and Merrill Lynch & Co, have retained their leading positions as the top 2001 investment-grade, junk and convertible securities underwriters respectively in the first quarter.

According to Thompson, Salomon gained a 22.8% share of the $196.8 billion market by arranging $44.8 billion of investment-grade bond sales. JP Morgan with $31.4bn of sales came in second and Lehman Brothers came in third.

Morgan Stanley was placed fourth, by selling $7.3billion of its own bonds while Banc of America Securities LLC held the 5th position.

In the junk market, Credit Suisse arranged $3.04bn of sales. It acquired 16.7% share of a $18.2-bn market. Deutsche Banc Alex Brown and Banc of America were placed second and third respectively.

In convertibles Merrill Lynch handled $8.7bn of sales, or 29.1 % of a $30-bn market. Followed by Goldman Sachs and Salomon.

February 09, 2002

Bank Governors & G-7 Finance Ministers to discuss economy recession

The G-7 finance ministers and governors of the World Bank, International Monetary Fund, and central banks of the European Union and Russia met to discuss the global recession and tracking down of terrorist financing. The IMF has suggested rescheduling of foreign debt and reduction in budget deficits. Argentina’s and Japan’s recession were also discussed in the gathering. The discussion even included financing poor countries, deflating terrorist financing and create an international practice to extend time to reorganise debt-ridden countries as in the case of corporations.

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