UAL Approved, Meat Mergers, BP Fund: Compliance

UAL Corp.’s United Airlines and Continental Airlines Inc. await shareholder approval next month for their $3 billion all-stock merger creating the world’s largest carrier, after the U.S. government cleared the deal.

The companies won Justice Department backing by agreeing to give up rights for 18 daily round-trip flights at Newark airport in New Jersey to Southwest Airlines Co., the agency said Aug. 27 as it closed its antitrust review.

The Justice Department’s action moved UAL and Continental toward their goal of completing their merger by Oct. 1. Newark Liberty International Airport will be a new destination for Southwest, the largest discount airline. Continental operates a hub at Newark for domestic and international flights.

UAL and Houston-based Continental announced plans May 3 to merge in a stock swap valued on Aug. 27 at $3 billion, based on data compiled by Bloomberg. Each Continental share will be exchanged for 1.05 shares of Chicago-based UAL. The European Union approved the merger on July 27.

“We are pleased to have achieved this critical milestone and look forward to our respective stockholders’ votes next month,” United Chief Executive Officer Glenn Tilton said in a statement.

Compliance Policy

Holder Says Law Not Cure-All in Packer Consolidation

U.S. antitrust laws are not a “cure-all” for consolidation in the meatpacking industry that has resulted in a shrinking number of farms, U.S. Attorney General Eric Holder said.

Holder and U.S. Agriculture Secretary Tom Vilsack met with ranchers, meatpackers and feedlot owners Aug. 27 at a workshop on monopolies in agriculture in Fort Collins, Colorado. The number of U.S. cattle and hog farms has shrunk by 55 percent since 1980 as the top four meatpackers’ control of output rose to 80 percent from 36 percent.

Antitrust laws, “in conjunction with other laws and other regulations specifically designed to protect rights of individual farmers,” said Holder, “can be very effective.”

The meeting was the fourth in a series of five that centered on livestock and meatpacking.

From the perspective of the Justice Department, “fairness is key to making sure there’s a level playing field for competitors, whatever their side.”

At a press conference, Vilsack said the trend in consolidation should not be allowed to continue.

S. Korea to Ease Lending Rules to Spur Housing Market

South Korea will ease mortgage lending rules and extend tax breaks to encourage buyers back to the property market after home sales slumped to the lowest level in almost a year and a half. Shares of builders and banks surged.

Banks will be allowed to ease restrictions on mortgage loans for first-home buyers and owners of one residence until the end of March, the government said in an e-mailed statement yesterday. The waiver for taxes on home sales will be extended by two years until the end of 2012, the government said.

The measures are the government’s second effort in four months to revive the market, after a program to buy unsold houses failed to spur property transactions. The number of homes sold dropped 7.3 percent from a year earlier in the first seven months of 2010, and the number of transactions in July was the lowest since February 2009, according to statistics compiled by the land ministry.

For more, click here.

German Regulator to Review S-Group Request for Stake in TUI

Germany’s Federal Cartel Office has received a request for clearance from S-Group Travel Holding GmbH to raise its stake in TUI AG to more than 25 percent and will decide on the matter by Sept. 27, Kay Weidner, a spokesman at the Bonn-based regulator, said today in a phone interview.

Compliance Action

Tessera Solar Project Backed by California Regulatory Panel

Tessera Solar’s proposed $1.14 billion solar-thermal electricity project east of San Diego received a recommendation for approval from a committee of the California Energy Commission.

The 709-megawatt facility in Imperial County, California, would have no significant environmental effects and complies with laws and regulations, the committee said in a filing Aug. 26. The decision starts a 30-day public comment period before the full commission takes a final vote on the proposal.

Approval will aid Tessera in seeking a grant under a U.S. Treasury Department clean-energy financing program created by President Barack Obama’s economic stimulus plans. Tessera, a unit of the closely held, Dublin-based utility NTR Plc, expects state and federal permitting to be completed by early October, a spokeswoman, Janette Coates, said in an interview last month.

The project will use 28,360 Stirling Energy Systems- manufactured mirrored dishes and receivers called SunCatchers.

Intel Share Rebound Triggered Circuit Breaker Halt

Trading in Intel Corp. was halted Aug. 27 under circuit breakers designed to limit price volatility after the shares plunged and then rebounded following the company’s sales forecast.

Intel, the world’s biggest chipmaker, was paused twice, first at 9:58 a.m. for news, then after the stock jumped 10 percent moments after the first halt concluded. The second pause came after a two-second period in which more than 680,000 shares changed hands -- including three trades totaling 1,100 shares that occurred about 8 percent below the rest.

The circuit breaker halt followed the rebound from those trades, which set the low price of the day at $16.55 and were later canceled. The transactions were on the NYSE Arca exchange. The first halt coincided with the release of news about an expected report of sales of sales of $11 billion plus or minus $200 million, compared with a previously forecast range of $11.2 billion to $12 billion, according to a statement Aug. 27.

Wema Bank Nigeria to Cut Share Sale as Amcon to Buy Bad Loans

Wema Bank Plc, a Nigerian lender bailed out by the central bank, said it will cut the amount it wants to raise in a local share sale by 40 percent on plans to sell some of its bad debt to state-owned Asset Management Corp.

Wema will probably reduce the capital increase to 9 billion naira ($59 million) from 15 billion naira announced in May after “the window of opportunity to sell debts to Amcon became available,” Oluwole Ajimisinmi, Wema’s company secretary, said by phone from Ilorin, Kwara state, in central Nigeria. The company gave the market regulator a list of bad loans it plans to sell to the asset company known as Amcon. The Central Bank of Nigeria has verified the list “and largely approved it,” Ajimisinmi said.

The central bank used 620 billion naira to bail out Wema and nine other lenders last year, after rising bad loans threatened the banking industry. It gave Wema and Unity Bank Plc a June 30 deadline to recapitalize and extended this to September. Wema has so far recovered 25 billion naira of non- performing loans, Ajimisinmi said.

EU Clears Banco Santander’s Acquisition of SEB Bank Unit

The European Commission granted antitrust clearance to Banco Santander’s acquisition of the German retail banking business of SEB.

The commission, the European Union’s antitrust regulator, announced the decision in a statement issued in Brussels Aug. 27.

Feinberg Challenged by Attorneys General on BP Fund

Kenneth Feinberg’s effort to pick among claims on BP Plc’s $20 billion fund for victims of its oil spill has attracted a group of self-described watchdogs: attorneys general from affected Gulf Coast states.

“I’m certainly not going to give it my Good Housekeeping seal of approval,” Mississippi Attorney General Jim Hood, a Democrat, said in an interview.

Feinberg, a Washington lawyer, took over operations of the BP fund on Aug. 23. Backing from the attorneys general may be crucial to winning broad participation in the fund that BP and the Obama administration created to minimize protracted legal fights, according to Jon Mills, director of the University of Florida’s Center for Governmental Responsibility in Gainesville.

“If Feinberg’s work is viewed as inadequate by a large group of legal officials, including AGs, then people will seek alternatives,” Mills, a former Democratic speaker of the Florida House of Representatives, said in an interview yesterday. “Then we start to lose the fundamental benefit of this, which is speed.”

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China Plans to Regulate Cosmetics, Skin Products, Xinhua Says

China’s State Food and Drug Administration is drawing up plans to monitor the safety of cosmetics and skin-care products, Xinhua News Agency said, citing an unidentified official at the regulator.

The government body has a draft plan for a product-testing system, is evaluating the qualifications of agencies that approve cosmetics, and is screening candidates for a safety commission, Xinhua reported.

Courts

Northwest’s $38 Million Price-Fix Plea Deal Approved

Northwest Airlines Inc.’s plea agreement over price-fixing in the air-cargo market, requiring the airline to pay a $38 million fine, was approved Aug. 27 by U.S. Judge John D. Bates in Washington.

Northwest Airlines Cargo, which is no longer operating and is now part of Delta Air Lines Inc, conspired to fix air-cargo rates in the U.S. and overseas from July 2004 through February 2006, prosecutors charged. Northwest Airlines Cargo earned more than $80 million from Japan-to-U.S. air cargo services during the time covered by the plea agreement, the Justice Department said.

The agreement is part of a Justice Department investigation of price-fixing in global air-cargo shipments that has netted more than $1.6 billion in fines.

The case is U.S. v. Northwest Airlines LLC, 10cr204, U.S. District Court for the District of Columbia (Washington).

Allen Stanford Committed No Crimes, Expert Testifies

R. Allen Stanford didn’t lead a Ponzi scheme that fleeced investors of $7 billion, a former federal prosecutor who reviewed evidence against him testified Aug. 27 at a Houston trial in which the indicted financier seeks to force Lloyd’s of London underwriters to pay for his criminal defense.

Lloyd’s is arguing that Stanford’s companies’ alleged criminal conduct voids the directors’ and officers’ insurance coverage they carried.

Investors bought more than $7 billion in certificates of deposit from the Antiguan bank, which Stanford controlled as sole shareholder until the U.S. Securities and Exchange Commission sued the financier in February 2009, and seized his businesses.

Stanford and three other executives were indicted by a federal grand jury in Houston in June 2009 on charges they had run fraud scheme centered on the certificates of deposit. They pleaded not guilty.

The case is Laura Pendergest-Holt v. Certain Underwriters at Lloyd’s of London, 4:09-cv-03712, U.S. District Court, Southern District of Texas (Houston).

The criminal case is U.S. v. Stanford, 09-cr-00342, U.S. District Court, Southern District of Texas (Houston). The SEC case is Securities and Exchange Commission v. Stanford International Bank, 09-cv-00298, U.S. District Court, Northern District of Texas (Dallas).

SEC Sues Former Dell Accountants Over Earnings Manipulation

The U.S. Securities and Exchange Commission sued Dell Inc.’s former assistant controller and former chief accounting officer for accounting fraud, a month after the computer maker settled with the regulator.

Randall Imhoff, the former assistant controller and Robert W. Davis, the former chief accounting officer, each took part in “improper accounting” that led to the restatement of Dell’s financial results from 2003 through 2006, the SEC said in separate lawsuits filed Aug. 27 in federal court in Washington.

Dell, based in Round Rock, Texas, agreed on July 22 to pay $100 million to resolve the SEC’s accounting fraud allegations as part of an accord that allows founder Michael Dell to stay on as chief executive officer.

Davis, 51, and Imhoff, 48, maintained a variety of so- called cookie jar reserves to meet earnings shortfalls, the SEC said. The manipulations misrepresented Dell’s financial results and caused additional misstatements in Dell’s annual and quarterly results, the regulator said.

Attorneys for Imhoff and Davis didn’t immediately return calls after regular business hours seeking comment on Aug. 27.

The cases are SEC v. Davis, 10-cv-01464, and SEC v. Imhoff, 10cv1465, U.S. District Court, District of Columbia (Washington).

Interviews

Blinder Says Fed Reluctant to Ease Further in Near Term: Video

Alan Blinder, a Princeton University economist who served as vice chairman of the Federal Reserve, discusses his reaction to Federal Reserve Chairman Ben S. Bernanke’s speech on Aug. 27.

Blinder, talking with Bloomberg’s Kathleen Hays at the Fed’s annual symposium in Jackson Hole, Wyoming, says Bernanke may be reluctant to ease monetary policy further with unconventional steps in the near term.

To watch the video, click here.

Comings and Goings

Country Group’s CEO to Resign; Thai Regulator Probes Contract

Country Group Securities Pcl’s Chief Executive Officer Bee Taechaubol said he will resign from his position in the second- biggest Thai brokerage.

The Thai securities regulator said Aug. 27 it investigated Bee’s involvement in a contract dispute at a company where he was a director. The probe on the contract with International Engineering Pcl was handed over to the justice ministry for further investigation, the Securities and Exchange Commission said in an e-mailed statement.

Bee, who has been CEO of Country Group since June 2009, said in a phone interview he hasn’t received a formal notification from the regulator on the investigation. Executives violating Thai securities laws are barred from holding management positions at brokerages, the regulator said.

To contact the reporter on this story: Carla Main in New Jersey, at Cmain2@bloomberg.net; Michael Bathon in Wilmington, Delaware, at mbathon@bloomberg.net.

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