Business news in brief

Tuesday, December 11, 2012

— QUOTE OF THE DAY

“The tax strategy of Google and other multinationals is a deep embarrassment to governments around Europe.” Richard Murphy, an accountant and director of Tax Research LLP in Norfolk, England Article, 1D

Murphy Oil speeds up buyback plan

Murphy Oil Corp. has accelerated its plan to buy back some of its common stock, the El Dorado-based company said Monday.

Murphy said in a news release that it has entered a $250 million share repurchase transaction with J.P. Morgan Securities LLC.

The company said in November that it would sell notes totaling $1.5 billion to fund its recently announced special dividend of $2.50 per share and the stock repurchase.

Murphy announced its repurchase plan in October, when it said it would separate its retail and marketing business, including its Murphy USA gas stations, from its exploration and production operations next year. The company said then that it would repurchase up to $1 billion of its stock.

The company said the transaction announced Monday will be completed “no later than approximately five months following execution.” - Jessica Seaman

HSBC faces $1.9 billion in penalties

HSBC Holdings Plc will pay at least $1.9 billion in a deferred prosecution agreement that settles U.S. probes of money laundering tied to Europe’s largest bank, a person familiar with the matter said Monday.

HSBC, whose top executives were accused of lax oversight by a U.S. Senate subcommittee in July, will forfeit $1.25 billion - potentially the biggest forfeiture ever by a bank - said another person familiar with the matter.

It will also pay $665 million in civil penalties, the person said.

In a deferred prosecution agreement, the government allows a target to avoid charges by meeting certain conditions - including the payment of fines or penalties - and by committing to specific changes. The HSBC agreement is set to be announced today, said the people, both of whom asked not to be identified because the matter isn’t public.

HSBC Chief Executive Officer Stuart Gulliver’s attempts to reduce costs and improve profitability at his bank have been hurt by the U.S. investigations and compensation claims from U.K. clients. The Senate committee said that failures in HSBC’s money-laundering controls allowed terrorists and drug cartels access to the U.S. financial system.

Treasury spokesman John Sullivan declined to comment on the agreement, as did Barbara Hagenbaugh, spokesman for the Federal Reserve.

Robert Sherman, a spokesman for London-based HSBC, also declined to comment on the settlement. The bank had earlier said that it was cooperating with the various investigations.

BERLIN - General Motors Co.’s Opel unit said Monday that it plans to end car production at one plant in Germany in 2016, but a slimmed-down factory may continue to make components.

Employees at the Bochum plant in northwestern Germany, one of four in the country, were told that vehicle production will end when the company stops making the current Zafira model. That was widely expected after the company announced a turnaround plan in June, and “despite intensive efforts, this situation could not be changed,” Opel said.

Opel has been struggling amid economic gloom in Europe and overcapacity in the auto industry. The turnaround plan envisions cost cuts, new models and efforts to win new export sales.

The Adam Opel GmbH unit is based in Germany, where the automaker has more than 20,000 employees - a bit more than half the total European work force of Opel and sister brand Vauxhall. About 3,000 people work at the Bochum plant, and it wasn’t clear how many jobs might remain after car production ends.

Opel said GM is negotiating with employee representatives to move component production to the Bochum plant.

Employee representatives said they still hoped to get the decision reversed. “We have at least four years to make clear that we want to continue building cars in the following years,” said Rainer Einenkel, the head of the factory’s employee council.

KINGSTON, Jamaica - Antigua and Barbuda will pursue trade sanctions against the United States as a result of its online-betting ban.

Antigua Finance Minister Harold Lovell said Sunday that the Caribbean country has had its “back pushed right up against the wall.” He said it intends to pursue $21 million in annual sanctions on U.S. goods unless a last-minute settlement is reached.

Antigua’s access to the U.S. gambling market was effectively blocked by a 2006 U.S. law barring banks and credit card companies from processing payments to online-gambling sites outside the country.

In 2007, the World Trade Organization awarded Antigua the right to target U.S. services, copyrights and trademarks.

The WTO ruling capped the annual trade sanctions at $21 million per year.

Japan growth revised, in recession

TOKYO - Japan’s economy is technically in recession after authorities said revised figures for the April-June quarter showed the economy shrank for two straight quarters.

The Cabinet Office said Monday that gross domestic product for the July-September quarter shrank 0.9 percent from the previous quarter, unchanged from the preliminary release.

Going back to the April-June quarter, however, GDP was revised to a 0.03 percent decline from the previous quarter, or a 0.1 percent contraction at an annualized pace.

Previously, the Cabinet had said second-quarter GDP grew 0.1 percent from the previous quarter.

A widely accepted definition of a recession is two consecutive quarters of economic contraction.

Business, Pages 24 on 12/11/2012