Citigroup, the US bank caught in an industry-wide stock analysis scandal, will set up a new unit to drive a wedge between stock analysts and investment bankers. The world's biggest bank said it wanted to restore wounded confidence among investors. Citigroup and other financial powerhouses on Wall Street are accused of giving glowing analytical reports about weak firms to secure the firms' investment banking business.
Small investors invested vast sums in the companies, relying on the misleading advice. Under the new structure, Citigroup set up a separate business unit, to be known as Smith Barney, which would include only equity research and private client brokerage operations, Citigroup said in a statement. (AFP)
Wholesale electricity sales fall
The amount of electricity being bought from the ESB by independent wholesalers has fallen. At the last auction - held on Tuesday by the energy regulator, Mr Tom Reeves - 530 megawatts were sold compared to 600 megawatts at the last auction.
The power is generated by the ESB but acquired by wholesalers which sell it on to industrial users. The wholesalers are Bord Gáis, former Northern Ireland monopoly Viridian, US group Duke Energy, and an ESB subsidiary, ESB Independent Energy.
The auctions are an interim measure to introduce an element of competition into the market ahead of a number of independent power stations coming on stream. The reduction in the power auctioned is believed to reflect the commissioning of a Viridian plant in north Dublin which is currently under way. When complete, the company's supply arm, Energia, is expected to cease sourcing power from the ESB.
Smurfit unit reports profits rise
Carton de Colombia, a subsidiary of Smurfit Group plc, has reported an increase in net profits for the nine months to September 30th to 44.54 billion pesos (€16.3 million) from 36 .79 billion pesos during the same period last year. Carton is Colombia's biggest producer of cardboard and paper pulp. Operating income in the period under review rose to 344 billion pesos from 323.4 billion pesos previously.
EU tackles corporate governance
Firms listed in the EU face a new set of tough corporate governance rules aimed at preventing an Enron-style scandal in Europe. The rules are a sign of the EU's determination to increase investor protection and prevent corporate fraud in the wake of the crisis that rocked US markets. The rules, to be proposed to the Commission by legal experts next week, could lead to a shake-up in corporate governance in several EU member-states, including Germany, France, Italy and Spain. But they stop short of an EU-wide binding corporate governance law similar to the US Sarbanes-Oxley Act, which had been feared by many European companies.
After a six-month study, the Commission's high-level group of company law experts is expected to recommend new measures to strengthen and harmonise the EU's widely diverging corporate governance rules.
(Financial Times Service)
