BP Plc is suing six former members of its energy team in Singapore claiming they misused confidential information to help rival Shenzhen Brightoil Group gain a “strategic advantage.”
The six, including Quek Chin Thean, formerly global head of residues trading, and legal manager Simon Cheong, had “access to and possessed intricate knowledge” of BP’s business and commercial strategies and trade secrets, according to papers filed with the Singapore High Court. Unauthorized disclosure of the information would harm BP “immeasurably” and create a “significant new competitor that is well aware of our trading strategies,” BP said in the court filing.
Quek, who was “widely respected on the trading floor” and seen “as one of the symbols for local leadership,” together with Cheong orchestrated the mass departures at BP by offering sign-on bonuses, according to court papers. Both men “actively assisted” Brightoil, a direct rival, in setting up a competing business while still in the London-based company’s employment, BP said in the papers.
The six including Paul John Bradshaw, head of operations eastern hemisphere, trading manager John Foo, regional marine sales manager Clarence Chang, and executive assistance Laura Kuan received a sign-on fee from Brightoil that constitutes a “secret profit” and breaches their fiduciary and fidelity duties and code of conduct to BP, the court papers showed.
The group had pledged not to compete with BP and act with honesty and loyalty when they signed on their employment contracts, BP said. Quek, who began working at BP in 1992, also recruited three U.S.-based colleagues to Brightoil, according to the lawsuit. Foo, Bradshaw and Kuan also made unauthorized downloads from BP’s computer networks, BP said.
“Investigations are ongoing,” said Lau Lu Ching, a Singapore-based spokeswoman at BP, declining to comment further. Quek and Foo didn’t answer calls to their mobile phones. Shirley Kwok at Brightoil’s investor relations department in Hong Kong declined comment. Brightoil isn’t named as a defendant in this lawsuit. The six have yet to file their defense as of July 23.
The case is BP Singapore Pte vs Quek Chin Thean & Anor S482/2010 in the Singapore High Court.
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BaWang Sues Next Magazine for Defamation Over Shampoo Report
BaWang International (Group) Holding Ltd., China’s largest herbal shampoo maker, filed a complaint against Next Magazine Publishing Ltd. over a report that said two of its products contain a substance that may cause cancer.
BaWang is seeking unspecified damages from the weekly for “defamation” and “malicious falsehood,” according to the complaint filed in Hong Kong’s High Court July 21. It’s also claiming compensation for loss of sales, it said.
Next Magazine Editor-in-Chief Lee Chi-ho wasn’t available for comment.
BaWang, which uses movie star Jackie Chan and Chinese pop singer Faye Wong to promote its products, slumped 23 percent from July 14 to July 16 after the report said two of the company’s products contain a substance that may cause cancer. The company’s market capitalization declined by HK$3.9 billion in those three trading days.
The herbal shampoo products don’t threaten consumers’ health, China’s State Food and Drug Administration said on July 16.
Madoff Trustee May Sue 1,000 Investors for Recovery, WSJ Says
Irving Picard, the lawyer appointed as trustee to recover money for the victims of Bernard Madoff’s Ponzi scheme, is preparing lawsuits against as many as 1,000 investors who, though they also were duped by the fraudster, were “net winners” in that they withdrew more from Madoff’s firm than the amount of principal they invested, the Wall Street Journal reported.
In an interview with the newspaper, Picard said such people “made money at the expense of those who didn’t.”
Picard must file “clawback” suits by December, the second anniversary of Madoff’s arrest and the filing of regulatory proceedings against him, the Journal said.
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BA Seeks Order to Add Air France, 31 Others to Cartel Case
British Airways made the request in the High Court in London to protect itself against payments it may be ordered to make in the case, according to a statement July 23 from Hausfeld & Co. LLP, the law firm for two flower importers who sued the airline. The importers are seeking a class-action status.
“We hope that this will be a positive move in that it will encourage airlines to recognize their European liability to shippers and to start the process of making sensible commercial settlements,” Anthony Maton of Hausfeld said in the statement.
British Airways in 2007 pleaded guilty to conspiring to set extra charges on passenger and cargo flights and was fined $300 million in the U.S. Dozens of carriers have been investigated by antitrust regulators worldwide since 2006, when the U.S. and the European Union started probing the industry.
“We will continue to contest any class actions brought by cargo customers,” spokeswoman Cathy West said July 23 in an interview. She declined to comment on the carrier’s request.
Air France spokeswoman Brigitte Barrand declined to comment. Elin Wong, a Cathay Pacific spokeswoman didn’t respond to an e-mail seeking comment, outside of regular office hours.
L’Oreal Heiress Loses Bid to Block Media Use of Butler’s Tapes
L’Oreal SA heiress Liliane Bettencourt lost her bid to block media use of recordings that sparked a political scandal and led police to seek to question a member of President Nicolas Sarkozy’s government.
The Paris court of appeals ruled July 23 that Bettencourt’s right to privacy wasn’t violated, upholding a lower-court ruling issued earlier this month.
The ruling noted the excerpts used by news website Mediapart and the magazine Le Point focused on the management of Bettencourt’s assets, a “legitimate” issue for public interest because she is “the biggest stakeholder in one of the biggest French companies,” according to the six-page ruling by Judge Alain Girardet. They touched on matters “which have been the object of a great number of public discussions.”
The recordings, made by Bettencourt’s former butler, provided a window into the life of Europe’s richest woman and sparked a political storm over alleged campaign-finance law violations, tax evasion and influence peddling that has reached both Sarkozy and Labor Minister Eric Woerth.
The tapes, made between May 2009 and May 2010, were turned over to Bettencourt’s only child, who gave them to police. Mediapart and Le Point published transcripts, audio files and articles about the recordings just before a trial on the daughter’s claims her mother was manipulated into giving away 1 billion euros ($1.28 billion) in gifts to a photographer friend.
“We are very disappointed,” Bettencourt’s lawyer Thierry Marembert said. “I believe the reasoning is erroneous” in not applying the protection of privacy to all private conversations.
Bettencourt was joined in her suit to block continued use of the recordings by Patrice de Maistre, general director of Thethys SAS. The company manages the Bettencourt family’s nearly 31 percent stake in L’Oreal, a cosmetics company founded by Bettencourt’s father.
Marembert said his client is “seriously considering” pursuing an appeal to France’s highest court.
Pascal Wilhelm, the lawyer for de Maistre didn’t return a call for comment on the ruling.
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Vodafone Pays 1.25 Billion Pounds to Settle U.K. Tax Lawsuit
Vodafone Group Plc, the world’s biggest mobile-phone company, agreed to pay 1.25 billion pounds ($1.93 billion) to the U.K. to settle a lawsuit over taxation of its European units based outside of Britain.
The deal with U.K. Revenue & Customs calls for 800 million pounds to be paid in the current financial year with the rest to be paid in installments over the next five years, Vodafone said July 23 in a statement about its first-quarter earnings.
Vodafone set aside 2.2 billion pounds to cover tax payments and interest in the case, the company said last year after it lost a Court of Appeal ruling. The dispute involved Vodafone’s Luxembourg unit and Britain’s so-called Controlled Foreign Companies laws relating to U.K. corporations that have units in European Union countries with lower tax rates.
“No further U.K. CFC tax liabilities will arise in the near future under current legislation,” Newbury, England-based Vodafone said in the statement. “Longer term, no CFC liabilities are expected to arise as a consequence of the likely reforms of the U.K. CFC regime.”
HMRC spokesman Patrick O’Brien didn’t return a call for comment.
Dell Pays $100 Million in SEC Accord That Lets Founder Stay
Dell Inc. agreed to pay $100 million to resolve a U.S. regulator’s accounting fraud claims in an accord that lets founder Michael Dell remain chief executive officer after paying a $4 million fine.
Dell, 45, and the personal-computer maker failed to tell investors about “exclusivity payments” received from Intel Corp. in exchange for not using products made by the chipmaker’s main rival, the Securities and Exchange Commission said in a complaint at federal court in Washington July 22. The payments allegedly helped Dell reach earnings targets from 2001 to 2006.
“Accuracy and completeness are the touchstones of public company disclosure under the federal securities laws,” SEC Enforcement Director Robert Khuzami said in the agency’s statement. “Michael Dell and other senior Dell executives fell short of that standard repeatedly over many years.”
The settlement helps Dell resolve inquiries about the role payments from Intel played in its financial results and those of other PC makers. The payments were at issue in a private antitrust lawsuit filed against Intel by chipmaker Advanced Micro Devices Inc., a New York state probe of Intel’s business practices, and a Federal Trade Commission lawsuit filed against Intel in December. Dell, based in Round Rock, Texas, said on June 10 that it had set aside $100 million for the settlement.
Dell’s former CEO, Kevin Rollins, 57, and James Schneider, 57, the company’s former chief financial officer, agreed to pay fines of $4 million and $3 million, respectively. Schneider was suspended from appearing or practicing before the SEC as an accountant for five years. The SEC, as urged by the company in its settlement proposal, spared Michael Dell similar punishment.
“We are pleased to have resolved this matter,” Michael Dell said in a statement. “We are committed to maintaining clear and accurate reporting of our periodic results, supporting our customers, and executing our growth strategies.”
Calls to Michael Mann, an attorney for Rollins, and Neil Eggleston, a lawyer for Schneider, weren’t returned.
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Billionaire Anschutz Loses Ruling Over $144 Million Tax Bill
Denver billionaire Philip Anschutz lost a fight with the Internal Revenue Service over a $143.8 million personal and company tax bill for 2000 and 2001.
The U.S. Tax Court in Washington found July 22 that Anschutz Co. was required to recognize built-in gains upon entering into an agreement to sell shares to an investment bank, while also lending the same shares to the bank.
Anschutz filed a petition after the IRS challenged his use of 13 transactions that he claimed deferred capital gains taxes related to his company’s merger of Union Pacific Corp. and Anadarko Petroleum Corp. in 2000. The transactions being challenged occurred from May 2000 to April 2001.
Anschutz Co. will appeal the court decision, the company said July 22 in an e-mailed statement.
The company, acting on legal advice, determined the capital gains taxes didn’t need to be paid until the agreements matured and the transactions settled 10 to 11 years from the time they were put in place, Anschutz Co. said.
The case tested a 2003 IRS ruling that pledging shares as collateral for a so-called variable prepaid forward contract doesn’t amount to a sale of assets for tax purposes.
A prepaid forward contract gives an investor an upfront payment in exchange for delivery of an asset in the future. The contracts have grown in popularity among corporate executives looking to lock in stock gains while delaying tax.
Qatari Diar Settles Chelsea Barracks Suit With CPC
The real-estate investment arm of Qatar’s sovereign-wealth fund settled a lawsuit with U.K. developer CPC Group Ltd. over a failed deal to redevelop London’s landmark Chelsea Barracks site.
CPC, controlled by entrepreneur Christian Candy, accused Qatari Diar of wrongfully backing out of the deal to avoid upsetting Prince Charles, who had complained about the plan’s design. Under the settlement, Candy dissolved his interest in the deal and apologized for “any offense” caused by bringing the Prince of Wales into the case, the companies said July 23.
CPC “will no longer have any interest in, or involvement with, the former Chelsea Barracks site,” the companies said in the statement. The site “is owned entirely by Qatari Diar.” Financial terms weren’t disclosed.
A joint venture of CPC and Qatari Diar paid 959 million pounds ($1.47 billion) for Chelsea Barracks in January 2008. In November of that year, Qatari Diar bought out CPC’s stake for an initial payment of about 38 million pounds and agreed to make 81 million pounds in deferred payments, CPC said.
Judge Geoffrey Vos ruled on June 25 that Qatari Diar had wrongfully backed out of the deal and said the parties’ suspicions of each other were “exaggerated.”
Candy also apologized to Qatar’s prime minister, Sheikh Hamad bin Jassim bin Jabr Al Thani, and Qatari Diar Managing Director Ghanim bin Saad Al Saad for “any offense” caused by the lawsuit, according to the statement.
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