Finance & Business World

India’s Cabinet decided Thursday to allow more direct foreign investment in the nation’s huge retail industry, a move that could strengthen the country’s food supply chain and open India to giant global retailers such as Wal-Mart.

The Cabinet approved 51 percent foreign direct investment in multibrand retail and increased the FDI cap in single-brand retail to 100 percent despite resistance from both allies and opposition parties.

India currently allows 51 percent foreign investment in single-brand retailers and 100 percent for wholesale operations.

Top retailers like Wal-Mart, Carrefour, Tesco and IKEA have long lobbied to free the policy further. Foreign multibrand retailers have Indian partners in wholesale operations now but have no retail presence in the country of 1.2 billion people.

The spokesman for the ruling Congress party, Abhishek Manu Singhvi called the decision “centrist and reasonable.” He was speaking to NDTV news channel.

The main opposition, the rightwing Bharatiya Janata Party, decried the move.

“The government has clearly bowed to international pressure,” Chandan Mitra, a spokesman told the same TV channel.

Wal-Mart, British-based Tesco PLC and French-based retailer Carrefour welcomed the decision.

“We believe that allowing 51 percent FDI in multi-brand retail is a first important step,” Raj Jain, president of Walmart India, said in an e-mailed statement. “However, we will need to study the conditions and the finer details of the new policy and the impact that it will have on our ability to do business in India,” the statement added.

“Allowing foreign direct investment in retail would be good news for Indian consumers and businesses, and we await further details on any conditions,” Tesco said in its statement.

Tesco currently has a franchise arrangement with Tata Group’s Star Bazaar hypermarket chain, supplying merchandies to outlets in India.

Carrefour opened a New Delhi store last year and would not say what explansion plans might lie ahead.

“This legal evolution should contribute to modernize the Indian food supply chain and to fight against food inflation for the benefit of Indian customers,” its statement said. It added the decision would help India’s farmers and the nation’s general economic development.

Ashish Sanyal, managing director of AMP Retail Services Pvt. Ltd, said, “It’s a good decision that will benefit everyone.” He is a consultant who helps retailers enter India.

More details on the Cabinet decision were not immediately available.

India’s $400 billion retail market is the nation’s second-largest employer, after agriculture, according to consulting firm Deloitte.

Advocates see the move as a way to strengthen India’s almost absent food supply chain _ which is so beset by spoilage, poor infrastructure, hoarding and middlemen that the government estimates some 30 percent of produce rots in a nation with soaring food costs and tens of millions who go to bed hungry each night.

If companies like Wal-Mart and Tesco are allowed to open shops of their own, they may invest billions in improving farming techniques and getting produce into stores more efficiently, bringing down food inflation _ which has averaged 10.5 percent over the last year _ and possibly improving rural incomes.

The Ministry of Commerce says it will cost 76.9 billion rupees ($1.7 billion) to build the additional 35 million metric tons of food storage India needs.

In a July paper, it suggested that loosening restrictions on foreign investment in India’s retail sector could be the best way to get more storage space built.

Yet the country has struggled to find consensus because of concerns about what it would mean millions of small shopkeepers as well as the poor.

Sanyal said small businesses had nothing to fear.

“At the end of the day this is like the high tide. All boats will rise. We will learn from the big retailers.”

Political deadlock on long-promised reforms like this has helped cool foreign investor interest in India. Policymakers are under acute pressure to find ways to attract foreign currency to help strengthen the rupee, which hit an all-time low against the dollar this week.

Traders say the central bank has been buying rupees in recent days but those measures are unlikely to reverse the currency’s plunge absent more far-sighted policy reform.

In July, this year a government committee studying multi-brand retail had cleared the idea and suggested $100 million as minimum investment for foreign companies.

The discussions on opening up India’s retail sector have been going on for 10 years.

“There is a limit to how much time we can spend on a decision,” Singhvi said.

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Walmart has already posted maps online showing where low-priced laptops and Xbox 360 consoles will be placed throughout its stores on Black Friday.

Old Navy is handing out a limited number of free digital cameras to customers who spend at least $40. And Best Buy is playing the movie “Harry Potter and the Deathly Hallows: Part 2″ on a big screen and offering free kettle corn and energy drinks to folks waiting in line outside of its Fairview Heights store.

And yes, many stores and shopping malls are opening earlier than ever

The millions that Jon Corzine amassed as head of Goldman Sachs have become an alluring target for investors who were crushed by the collapse of MF Global, the brokerage firm he led until earlier this month.

And Corzine isn’t the only one who may be financially vulnerable after the eighth-largest bankruptcy in U.S. history. Others include MF Global’s other top executives; its auditor, PricewaterhouseCoopers; and some big Wall Street banks.

Even MF Global itself, which can’t be sued while in bankruptcy protection, could sue its former executives.

Corzine and other senior executives likely share a liability insurance policy to cover potential lawsuits against them. But experts say potential damages sought could well exceed the limits of their policy.

Corporate bankruptcy is a “litigation nightmare: Everyone ends up suing everyone,” said Charles Elson, a professor and director of the Weinberg Center for Corporate Governance at the University of Delaware. “The officers and directors are in for a lot of litigation.”

Private litigation has already begun. At least two class-action lawsuits on behalf of MF Global shareholders have been filed against Corzine and three other top executives. They accuse the firm and its top executives of making false and misleading statements about MF Global’s financial strength, internal controls and cash balances.

MF Global filed for bankruptcy protection on Oct. 31 after a disastrous bet on European government debt. In just a week, stock investors lost about $585 million, the shareholders say.

More than $600 million in clients’ money is still missing. Regulators say MF Global moved the money out of client accounts within days as the firm’s cash dried up.

No one at MF Global has been charged with a crime or civil violation. But regulators and the FBI and other criminal investigators are investigating MF Global’s failure, and Corzine has hired a prominent white-collar defense attorney.

A public relations firm hired by Corzine declined to comment Monday. An MF Global spokeswoman had no immediate comment. And Corzine’s lawyer didn’t immediately a return call.

It isn’t clear just how much money Corzine is worth. He spent roughly $100 million of his fortune to win a U.S. Senate seat and the New Jersey governorship. In 2005, the last full year that he was a U.S. senator, he was estimated to be worth between $125 million and $175 million.

Corzine’s disclosure filings as governor, through 2009, provide less detail on his finances. They do show he held interests in real estate partnerships, investment companies, hedge funds and private equity funds.

After the MF Global bankruptcy, Corzine declined to take his $12 million severance pay.

Legal experts say Corzine could be held personally liable for misrepresenting to investors the risks that the firm had taken payday advance online.

MF Global didn’t list the European debt on its balance sheet for all to see. Instead, those holdings were shifted to the company’s “off-balance sheet,” deep in its financial statements. Some separate filings with regulators excluded the European debt entirely.

Under a 2002 anti-corporate fraud law _ which Corzine co-wrote as a U.S. senator _ CEOs of public companies must personally certify the accuracy of their company’s financial statements.

If client money was used by the firm for its own purposes, Corzine could be held responsible, said Thomas Ajamie, an attorney who specializes in financial fraud cases.

“That would be the house gambling with customers’ money,” Ajamie said.

Other top MF Global executives also could face legal jeopardy, experts say. And members of the board of directors could be accused of failing to properly oversee Corzine’s trading strategy and the firm’s risk management.

PricewaterhouseCoopers, MF Global’s auditors, could be targeted, too. So could the Wall Street banks that put up money for floating the firm’s own bonds.

With MF Global in bankruptcy, new potential litigants could step forward, in addition to civil and criminal authorities and shareholders. The trustee the bankruptcy court appointed will conduct an investigation and could sue top executives on behalf of the company to recover money for creditors.

“Anyone who has a deep pocket gets sucked in,” Elson said.

Major companies typically provide liability insurance for top executives and their directors. The insurance covers the legal costs in case they’re sued by shareholders or others and the damages they might have to pay.

The insurance provides a single pot of money for executives and board members, usually in the hundreds of millions of dollars. Companies offer the insurance as a perk to recruit executive talent, experts say. The insurance kicks in if executives or directors are accused of breaches of duty and “wrongful acts” that stop short of fraud, such as misstatements to investors.

Experts say the damages or penalties that could be sought in MF Global’s case could far outstrip executives’ insurance coverage. That’s because multiple parties could sue each executive or director for tens of millions. The payouts could exceed each official’s share of the coverage.

Craig Welin, a lawyer at Frandzel Robins Bloom & Csato, which specializes in bankruptcy and financial litigation, said he thinks Corzine could be tied up in litigation for five to 10 years.

“They’ll be looking under every rock,” Welin said. “And if that rock has deep pockets, they’ll look even closer.”

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One of the St. Louis area’s leading medical practices for urologists owes more than $338,000 in delinquent property taxes, interest and penalties, St. Louis County records show. 

Five years ago, Metropolitan Urological Specialists announced its plan to invest about $15 million in three outpatient centers, including a sexual medicine clinic, and to take on additional urologists as private physician shareholders. The firm, which is based in Chesterfield, also planned to invest heavily in laboratory and imaging equipment.

Dunard Morris, the medical firm’s former chief executive, said at the time that Metropolitan’s expansion would help meet the growing needs of the baby boomer generation. A large proportion of the firm’s business involves Medicare patients. Morris recently left the firm for unknown reasons. 

But the firm, which still lists 14 physicians on its website, now struggles to pay its taxes. The county has sought to collect the back taxes by filing liens on the firm’s property.

The medical firm’s affiliate, Metropolitan Urological Properties LLC, owes state and local tax authorities $338,224 in delinquent taxes, interest and penalties from 2009 and 2010 on its medical office buildings at 10296 Big Bend Boulevard in Crestwood and at 215 Dunn Road in Florissant, according to St. Louis County Department of Revenue.

Metropolitan Urological Properties also owes state and local property taxes for 2011 totaling $172,652 on those two parcels and improvements to those sites. That amount is due by Dec. 31, and becomes delinquent if not paid or postmarked before Jan. 1, 2012 faxless payday loans.

If the firm’s 2009 tax bill remains unpaid on its medical office complex in Crestwood, whose market value has been appraised at $4.9 million, county authorities are prepared to auction the property next August.

It is unclear when exactly Metropolitan started falling behind on its taxes or what specifically may have caused any related financial troubles. As shareholders, Metropolitan’s physicians could be on the hook if the firm defaults on any of its financial obligations.   

Metropolitan’s property affiliate was able to pay a $29,481 tax bill on its Dunn Road parcel for 2009, but not a larger tax bill on its Big Bend parcel for that year. It did not pay its 2010 tax bills on either parcel.

Bob Lawson, the medical firm’s newly hired interim chief executive, did not return calls requesting comment. Several doctors affiliated with Metropolitan Urological Specialists also did not return phone calls.

Morris, who left the medical practice this fall, returned phone calls placed to one of his residences by leaving a voicemail message that said he was “out of state,” without saying exactly where.

“I have a lot to tell regarding health care and other things. I won’t talk with you if you run your story,” Morris said in the voicemail message. “I got sick of what I see in health care, and specifically in our group. And it’s a much wider story than me or anyone else.”

 

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Tropical Storm Rina battered Mexico’s Caribbean coast and the island of Cozumel with winds and rain Friday, as the navy forcibly evacuated some residents who refused to leave a low-lying island north of the storm.

Rina was a far cry from the Category 3 hurricane that some had feared would hit the resort-studded region and many tourists abandoned Cancun and the Riviera Maya ahead of its arrival. The storm was expected to weaken further on Friday.

Playa de Carmen, a resort town across from Cozumel, was left without electricity and streets were largely empty as Rina swept the coast just 20 miles (30 kilometer) west of Cozumel with winds of about 60 mph (95 kph). The storm was moving north at about 7 mph (11 kph).

The Mexican Navy took mandatory evacuation orders so seriously that it sent boats to Holbox island, about 100 miles (160 kilometers) north of where the storm was expected to hit, to haul out by force about 80 residents who had refused to leave the island during an earlier evacuation of about 2,300 people.

At least eight cruise ships changed itineraries away from the storm’s path.

Lines snaked from ticket counters in Cancun’s crowded airport as airliners heading to Canada and Europe waited in pouring rain. State Tourism Director Juan Carlos Gonzalez Hernandez estimated 10,000 tourists had left by Wednesday night.

NASA cut short an undersea laboratory mission near Key Largo, Florida, bringing the crew back to land.

Schools were ordered closed in communities along the coast and on Cozumel in anticipation of the storm.

Ports also closed to navigation for recreational, fishing and small boats in the state of Quintana Roo, home to Cancun, and neighboring Yucatan state, while the island of Cozumel was closed to larger vessels, including the ferry that connects the island and Playa del Carmen.

But some decided to ride out the weakened Rina. Early Thursday in Playa del Carmen, tourists and residents strolled along the promenade and the beach Thursday under cloudy but not-yet-rainy weather. At the beach, lifeguards were placing red flags warning people not to swim.

“We would prefer to lie on the beach and get in the ocean, but right now all we can do is walk around and go shopping,” said Vera Kohler, a 27-year-old tourist from Frankfurt, Germany, who arrived Wednesday and planned to stay in the area until Sunday.

Domenico Cianni, a retired restaurateur from Vancouver, Canada, said he also prepared for a hurricane by buying extra food and beer and putting shutters on the windows of his rental home. But after hearing Rina had been downgraded to a tropical storm he decided to join tourists in Playa del Carmen’s pier.

“We were curious about what’s happening. We wanted to be part of the action,” Cianni said.

A tropical storm warning was in effect for the Caribbean coast from Punta Allen to San Felipe.

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Air Canada has filed an unfair labour practice complaint against the union representing flight attendants who are now barred from walking off the job pending a labour board hearing.

The bad-faith bargaining complaint against the Canadian Union of Public Employees, which represents 6,800 flight attendants, comes after Labour Minister Lisa Raitt intervened in the dispute on Wednesday, asking the Canada Industrial Relations Board to rule on two matters.

Asking whether a deal between Air Canada and unionized employees is even possible and citing health and safety concerns for the nation because the airline offers essential services, Raitt asked the board for a ruling, thereby making a strike illegal.

Airline officials have repeatedly noted that two tentative agreements, both recommended by top union executives, were soundly rejected by the rank-and-file.

The complaint argues that

Tropical Storm Hilary is quickly strengthening in the Pacific south of Mexico and could soon become a hurricane.

Hilary’s maximum sustained winds early Thursday are near 70 mph (110 kph). The U.S. National Hurricane Center says Hilary could become a hurricane later in the day and could become a major hurricane by Saturday.

A tropical storm warning is in effect for Mexico’s coast from Lagunas de Chacahua to Punta San Telmo. A tropical storm watch is in effect for west of Punta San Telmo to Manzanillo.

Hilary is centered about 115 miles (185 kilometers) south-southeast of Punto Maldonado, Mexico, and is moving west-northwest near 9 mph (15 kph).

In the Atlantic, Tropical Storm Ophelia’s winds have increased to 65 mph (100 kph) but it’s expected to begin weakening.

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OTTAWA

The nation’s largest hot dog makers argued about the meaning of “100 percent pure beef” and the merits of ketchup Monday in a lawsuit over advertising claims stemming from their years of dog-eat-dog competition.

Attorneys for Sara Lee Corp., which makes Ball Park franks, and Kraft Foods Inc., which makes Oscar Mayer, superimposed giant hot dogs on a courtroom screen as they delivered opening remarks in a case that could clarify how far companies can go when boasting about their products.

“There’s never been anything of this scope . . . in the entire history of hot dogs,” Sara Lee’s attorney, Richard Leighton, said about what the company says is Kraft’s false and deceptive ad campaign that claimed Oscar Mayer wieners were the best-tasting franks.

U.S. Magistrate Judge Morton Denlow, who will decide if either company broke false advertising laws, couldn’t resist a note of levity as he cast his eyes at the attorneys and proclaimed, “Let the wiener wars begin.”

The legal dog fight began when Sara Lee filed a lawsuit in 2009, singling out Oscar Mayer ads that brag its dogs beat Ball Park franks in a national taste test. Leighton argued the tests were deeply flawed and gave as an example that the hot dogs were presented to participants without buns or any condiments, such as ketchup.

“They were served boiled hot dogs on a white paper plate,” he told Denlow. As a result, Leighton said, Sara Lee’s hot dogs may well have tasted too salty or smoky when consumed sans buns.

Among other flaws, he went on, was a rule barring anyone who ever worked in a factory from taking the test no fax payday loans.

“You may be excluding blue-collar workers,” he said. “And they’re big hot-dog eaters.”

Kraft filed a countersuit later in 2009, accusing Sara Lee of running ads for Ball Parks with the tagline “America’s Best Franks” based on an award from ChefsBest, a food-judging organization based in San Francisco.

The other focus of the trial is Kraft’s claim that its Oscar Mayer Jumbo Beef Franks are “100 percent pure beef.” Sara Lee says the claim is untrue, that it cast aspersions on Ball Park franks and damaged their sales.

But Kraft’s attorney, Stephen O’Neil, told the judge the 100 percent beef tag was never intended to suggest there weren’t other ingredients _ like water, salt and various spices. It was only meant to convey that the meat that was used was all beef, he said.

That stress was designed to counter lingering impressions that hot dogs contain suspect, “mysterious meats,” he added. And he said it defied common sense to argue that consumers might take the label as meaning that the one and only ingredient was beef.

“If there was nothing but beef, it wouldn’t be a hot dog,” he said, “It would be a hamburger.”

Denlow let slip that, according to his own personal tastes, neither Oscar Mayer nor Ball Park are top dog.

“I already have my favorite . . . and it’s none of the brands on trial,” he told attorneys. He said he may reveal which one it is _ but only after a ruling.

The trial is expected to last about two weeks.

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Europe’s top central banker says the bank’s “unconventional” moves to buy eurozone government bonds are aimed at restoring confidence to a financial system shaken by the worst crisis since World War II.

European Central Bank Chairman Jean-Claude Trichet says the bank “is in the secondary market” for eurozone bonds, but he said details on which bonds and how much of them the bank bought will only be disclosed on Monday.

Trichet spoke in an interview on French radio station Europe 1 Tuesday. Trichet declined to say how long the bank would continue buying bonds in the secondary market, insisting that it was up to governments to take over the job “as rapidly as possible.”

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