India Telecom, Olympus Audit, Liquid Crystal: Compliance

India’s telecommunications commission approved increases in available wireless spectrum, sharing and trading of airwaves and steps to make it easier for mobile phone companies to buy rivals.

The National Telecom Policy would increase the maximum market share for a merged phone company to 60 percent from 40 percent, R. Chandrashekhar, Telecom Commission chairman, told reporters in New Delhi Dec. 26. The commission, the Department of Telecommunications’ top policy-making body, will submit its draft to Communications Minister Kapil Sibal for review within a week, he said.

The new regulations may lead to consolidation in a market where competition among 15 carriers including Bharti Airtel Ltd. (BHARTI) and local ventures of Vodafone Group Plc (VOD), Telenor ASA (TEL) and NTT DoCoMo Inc. (9437) drove call charges to less than one penny a minute, eroding profitability.

The proposals would allow spectrum auctions and would limit a merged company to holding 25 percent of the available airwaves in a region, said Jagannadham Thunuguntla, strategist at SMC Global Securities Ltd. in New Delhi. The country has 22 telecommunications zones.

Mergers between carriers that would have a combined market share of 35 percent or less would no longer need anti-monopoly approval under the proposed rules. Combined companies that would control between 35 percent and 60 percent of a zone’s wireless phone market would require such approval, according to the policy draft approved.

The National Telecom Policy, initially unveiled in October, would need cabinet clearance, with some portions requiring parliamentary approval.

Carriers need more spectrum to serve customers that reached 626 million in October.

The proposals may get final approval by June, according to a Dec. 23 review by the Department of Telecommunications.

Compliance Policy

Medvedev Says Russia May Consider Jury Trial for Economic Crimes

Russia may consider introducing jury trials for economic crimes, President Dmitry Medvedev said at a meeting at his residence outside Moscow yesterday.

The president received a report prepared by the Kremlin’s human rights council on former Yukos Oil Co. owner Mikhail Khodorkovsky’s second conviction.

China’s Courts to Clarify Insider Trading Rules, Xinhua Says

Chinese rules governing insider trading cases are under review by the nation’s judiciary, the state run Xinhua News Agency reported, citing an official with the country’s securities and futures watchdog.

A judicial interpretation will focus on the investigation and burden of proof in such cases, said Gui Minjie, vice chairman of the China Securities Regulatory Commission, according to Xinhua. Such rulings are binding and typically given by the Supreme People’s Court, Xinhua said.

The ruling would come soon, it said, without elaborating.

Singh’s Graft Bill Faces Final Hurdle as Hazare Ends Fast

Prime Minister Manmohan Singh is one hurdle away from creating the anti-corruption agency that has been repeatedly rejected by Indian lawmakers over four decades as he bids to end a year of protests against graft.

The bill to set up the body is expected to be debated in parliament’s upper house tomorrow, where the government faces a tough fight with the ruling coalition 28 seats short of a majority and needing to win the support of independents and regional lawmakers. It passed in the lower house yesterday.

Amid concerns over his health and dwindling crowds, anti- corruption activist Anna Hazare, 73, ended his public fast in Mumbai a day early. Hazare, who has dismissed the graft bill as too weak and whose 13-day hunger strike in August roiled the government, vowed his team would campaign against those who had “betrayed the nation” and target Singh’s Congress party ahead of elections in five states early next year.

“It looks like Hazare is losing support among the general population,” said Sudha Pai, a professor at the Centre for Political Studies at Jawaharlal Nehru University in New Delhi. “They have lost a lot of credibility because of the way that they have behaved trying to hold parliament to ransom.”

The government is looking to pass the bill, known as the Lokpal, as it seeks to cap the damage done by graft scandals including those linked to a 2008 sale of mobile-phone airwaves and the hosting last year of the Commonwealth Games in New Delhi. It needs to end demonstrations on the streets and in parliament that have stalled policy making and focus on reviving India’s slowing $1.7 trillion economy.

If the government is defeated in the upper house it will either have to shelve the legislation or call a rare joint session of parliament to forge a consensus. If the bill is passed with some changes, Singh will need to take it back to the lower house for approval. The specially extended session of parliament is due to end tomorrow.

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Compliance Action

Olympus Auditor ‘Still Investigating’ Gyrus Share Purchase

An Ernst & Young ShinNihon LLC committee said it’s still investigating whether the audit of Olympus Corp. (7733)’s accounting was appropriate after the Japanese camera maker admitted hiding investment losses.

Olympus’s purchase of Gyrus Group Plc has complicated links to the company’s overall cover-up and will require more time to probe, the panel said yesterday in a statement.

ShinNihon, which signed off on Olympus’s 2010 results, formed the committee this month to verify an internal investigation that earlier found nothing wrong in its audit of the endoscope maker. Olympus, reeling from a $1.7 billion accounting fraud, restated more than five years of past earnings on Dec. 14, wiping out 70 percent of its net assets.

Olympus’s cover-up started “way before” ShinNihon took over the audit, Toshifumi Takada, a panel member and economics professor at Tohoku University in Miyagi, northern Japan, said in Tokyo yesterday. The panel is probing whether “it was possible to point out issues” related to Gyrus before Olympus admitted to the 13-year cover-up, he said.

Olympus is also investigating about 70 executives to answer queries over losses and transactions for acquisitions, including $687 million in payments to advisers in the purchase of Gyrus in 2008 and stake writedowns in three other takeovers. In March 2010, $620 million was paid to buy back Gyrus preferred shares given to its advisers as part of fees.

Japan’s Financial Services Agency is looking into any role the auditors may have played in the Olympus cover-up, Minister Shozaburo Jimi said earlier this month.

Gazprom Neft Is Fined $31 Million by Russian Antitrust Watchdog

OAO Gazprom Neft (SIBN) was fined 979 million rubles ($31 million) in a “third wave” of cases into “monopolistically high prices” for diesel and jet fuel at the end of 2010 and beginning of this year, Russia’s Federal Anti-Monopoly Service said yesterday on its website.

Courts

Sharp, Samsung Agree on $539 Million to End Antitrust Cases

Sharp Corp., Samsung Electronics Co. (005930) and five other makers of liquid crystal display panels used in computers and televisions agreed to pay $538.6 million to settle antitrust claims by indirect purchasers.

Earlier this month, the panel makers agreed to pay $388 million to settle price-fixing claims by direct buyers of the products as part of a series of cases consolidated in federal court in San Francisco. Under the new agreement, about $501 million will be available for partial refunds to consumers and about $37 million to compensate governments and other public entities for damages, according to a court filing dated Dec. 23.

The companies allegedly fixed prices of thin-film liquid crystal display panels, driving up prices for purchasers of televisions, notebook computers and monitors from 1999 to 2006, according to a class action, or group, lawsuit filed in 2007. The attorneys general of eight states, including Florida, California and New York, were part of the settlement agreements with the manufacturers. Besides the $538.6 million settlement of the antitrust claims, five of the companies also agreed to pay more than $14 million in civil fines and penalties to New York, according to the statement from the state’s attorney general, Eric Schneiderman.

Trials against companies that didn’t settle are expected to go forward in California and Florida.

Lawyers representing Samsung and Sharp didn’t immediately return messages seeking comment on the settlement.

The case is In Re TFT-LCD (Flat Panel) Antitrust Litigation, 07-01827, U.S. District Court for the Northern District of California (San Francisco).

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SEC-Citigroup Lawsuit Halted While Settlement Rejection Appealed

The U.S. Securities and Exchange Commission’s suit against Citigroup Inc. (C) will remain on hold while a federal appeals court considers whether to review a judge’s rejection of a $285 million settlement in the case.

The U.S. Court of Appeals in Manhattan yesterday agreed to the SEC’s request to delay the case until at least Jan. 17. The agency is challenging U.S. District Judge Jed Rakoff’s refusal last month to approve an accord resolving claims that New York- based Citigroup misled investors in a $1 billion financial product linked to risky mortgages. The agency said halting the case was necessary because Rakoff told Citigroup to respond to the SEC’s complaint next week.

“The commission seeks a stay on an emergency basis because the Jan. 3 deadline for Citigroup to answer creates an exigency that threatens the commission with additional irreparable harm,” the regulator said in court papers.

The court said the SEC’s request to stay the case in the lower court and to expedite the appeal will be submitted to a motions panel of the court Jan. 17. The case will be kept on hold until the panel decides whether to grant the requests, the court said in a two-sentence order.

In his Nov. 28 ruling, Rakoff criticized the agency’s practice of settling without requiring the subject of the allegations to admit wrongdoing. The Manhattan judge said the Citigroup settlement didn’t provide him with “any proven or admitted facts” to inform his judgment.

The SEC said it wanted to preserve agency resources by putting the case on hold while the appeals court considers Rakoff’s ruling.

Earlier yesterday, Rakoff issued an order denying a request from the SEC and Citigroup that he halt the case during the appeal.

The case is U.S. Securities and Exchange Commission v. Citigroup Global Markets Inc., 11-05227, U.S. Court of Appeals for the Second Circuit (New York). The district court case is 11-cv-7387, U.S. District Court, Southern District of New York (Manhattan).

Interviews/Speeches

Liu Says Tougher Clawbacks Would Restore Confidence

New York City Comptroller John Liu talked about the need for banks to toughen so-called clawbacks, which allow the firms to reclaim pay awarded to employees who acted improperly.

Liu, who spoke with Scarlet Fu on Bloomberg Television’s “InBusiness With Margaret Brennan,” also discussed a federal investigation into campaign fundraising practices.

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Cato’s Calabria Says Dodd-Frank Has Made Things Worse

Mark Calabria, director of financial-regulation studies at the libertarian Cato Institute in Washington, said the next financial crisis “will be worse” because of Dodd-Frank legislation. Calabria talked with Bloomberg’s Ken Prewitt on Bloomberg Radio’s “Bloomberg Surveillance.”

They were joined by Josh Rosner, a banking analyst with New York-based Graham Fisher & Co.

For the audio, click here.

To contact the reporter on this story: Carla Main in New Jersey at cmain2@bloomberg.net.

To contact the editor responsible for this report: Michael Hytha at mhytha@bloomberg.net.

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