Welcome to ESL Business News for April 2, 2007. ESL Business News gives you a podcast and script of international business news every week in slow, clear English. Find us on the web at eslbusinessnews.com, where you can follow along with the podcast script as you listen.
An executive board member of the German technology company Siemens has been arrested as part of a bribery investigation. Johannes Feldmayer is accused of paying €34 million to Wilhelm Schelsky, the former head of the AUB trade union who is now in jail for tax evasion. Siemens has no record of Schelsky performing any services for them, but AUB was known to be much friendlier about Siemens corporate decisions than other German trade unions such as IG Metall, the German Metalworkers Union. In a separate investigation, Munich prosecutors are looking into the disappearance of €200 million from accounts in Siemens' telecommunications business, because the investigators feel that the money may have been used as bribes to win contracts outside of Germany.
After four minutes of bidding against BP subsidiary TNK-BP, Russian state oil company Rosneft won the auction for 9% of their former competitor, Yukos Oil Company. Rosneft's winning bid was $7.59 billion, which some analysts estimate to be less than 90% of the market value of the Yukos assets they purchased. Yukos was a private company, and went bankrupt after the company's founder was sent to jail in Siberia. Some people accuse the Russian government of using seemingly legal processes to put more and more private oil wealth infrastructure under government control; former prime minister Mikhail Kasyanov described the Yukos asset auction by saying, "This is just an illusion, an imitation of process."
TJX, the parent company of discount clothing chains TJ Maxx and Marshall's, revealed in their annual report that hackers had stolen information from 45.6 million credit and debit cards. This breaks the 2005 record of 40 million credit card numbers stolen from credit card processing company CardSystems Solutions. The TJX cards had data for both American and British customers, and the transactions covered went back to 2002. TJX said that three quarters of the numbers were either expired or encrypted, although they also believe that the hackers used decryption software customized to work with TJX's encryption software. No arrests have been made in connection with the data theft.
German sports car maker Porsche exercised an option on 3.6% of stock in German car maker Volkswagen. Because this puts their ownership in VW over 30%, German law required Porsche to make a takeover offer to other VW shareholders, so they did: €101 per share, which is the average price of VW stock over the last three months and therefore the minimum bid they were allowed to make. Because the current VW share price is €114, Porsche knew that the shareholders would not accept the offer. Porsche recently led the campaign that resulted in a European court of justice ruling against Germany's "VW law," which guarantees the German government a certain amount of control over the company. The court ruled that the law breached EU laws on the free flow of capital.
International pharmaceutical company GlaxoSmithKline was fined $217,000 dollars by a New Zealand court for false advertising when some scientific research found that their Ribena product had no detectable amount of vitamin C, despite claims that the blackcurrants in the Ribena syrup had four times the vitamin C of oranges. The scientific research was carried out in 2004 by two 14 year old girls. After finding none of the vitamin when performing the test for a science fair, the girls repeated the test ten more times and then told the company about their findings. The company ignored them, but New Zealand consumer group the Commerce Commission did not. According to one of the girls, "It's incredible to think you can have this sort of impact as a consumer and as a kid."
Thanks for listening to this week's summary of international business news, and hello to Ibrahim Mohamed's class at Swinburne University, in Melbourne, Australia. What kinds of stories and businesses do you like to hear about in our weekly report? E-mail us at suggestions@eslbusinessnews.com and let us know your name and where you're writing from. Watch for a summary of next week's news on eslbusinessnews.com on Monday, April 9.
Copyright 2007 ESL Business News.