ongoing

FILE PHOTO: Romanian Prime Minister Dancila attends a debate at the European Parliament in Strasbourg
FILE PHOTO: Romanian Prime Minister Viorica Dancila attends a debate on the priorities of the Romanian presidency of the E.U. for the next six months, at the European Parliament in Strasbourg, France, January 15, 2019. REUTERS/Vincent Kessler/File Photo

April 24, 2019

BUCHAREST (Reuters) – Romania’s lower house of parliament approved changes to the criminal codes on Wednesday that could shut down several ongoing high-level graft cases, but opposition politicians plan to challenge the bills at the Constitutional Court.

The bills are the latest in a series of legal and personnel changes made by the ruling Social Democrats since they came to power in 2017 that are seen as threats to judicial independence and have raised concerns in the European Union, the U.S. State Department and among thousands of Romanian magistrates.

One of the changes approved on Wednesday shortens the statute of limitations covering some offences, a move that would automatically shut down a number of ongoing cases. Other amendments include lower sentences for some offences and decriminalizing negligence in the workplace.

“Romania today becomes a state in which criminals are basically in a legal haven, encouraged … by changes that overall ease and simplify the impact of the law on criminals,” opposition Save Romania Union leader Dan Barna told reporters.

Barna’s party and the main opposition Liberals both said they would challenge the changes at the Constitutional Court.

Social Democrat lawmakers initially overhauled Romania’s criminal codes last year. The European Commission said the proposed changes were a reversal of a decade of democratic and market reforms in the former communist country.

The Constitutional Court struck down many of the changes following challenges by opposition lawmakers. On Wednesday, the ruling coalition approved the codes after removing the articles already struck down by the Court.

Prosecutors have secured a spate of convictions in recent years against lawmakers, ministers and mayors, including Social Democrat leader Liviu Dragnea. Their investigations have exposed conflicts of interest, abuse of power, fraud and awarding of state contracts in exchange for bribes.

Dragnea, who has a suspended jail term in a vote-rigging case and an ongoing appeal against a second conviction for inciting others to commit abuse of office, could be among the politicians to benefit from the changes.

The Social Democrats have said their legal initiatives are aimed at aligning legislation with EU norms and address abuses allegedly committed by magistrates.

Transparency International ranks Romania, which currently holds the EU’s rotating six-month presidency, among the bloc’s most corrupt states.

(Reporting by Luiza Ilie; Editing by Gareth Jones)

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FILE PHOTO - The Twitter logo displayed on a screen on the floor of the NYSE
FILE PHOTO: The Twitter logo is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., September 28, 2016. REUTERS/Brendan McDermid/File Photo

April 24, 2019

By Foo Yun Chee

BRUSSELS (Reuters) – U.S. social media company Twitter will launch a new tool next week to make it easier for users to flag deliberate attempts to mislead voters taking part in key European Parliament elections next month.

Twitter, together with Google and Facebook, are under pressure to be more proactive in tackling fake news aimed at eroding democratic processes and stoking social and political tensions.

The European Commission in its March report on the three tech giants on Tuesday said the companies still fell short of their pledge to curb the spread of fake news.

“Today, we are further expanding our enforcement capabilities in this area by creating a dedicated reporting feature within the product to allow users to more easily report this content to us,” Twitter said in a blog.

Users who see a tweet with misleading information can report this by clicking on a drop down menu, select “It’s misleading about voting”, choose an option that explains how the tweet is misleading and submit the report to Twitter.

Examples of misleading information include telling voters to vote via a text message, email or phone call, identification requirements, the announced date or time of an election.

The new tool will be available from April 29 to a week after the May 23-26 European Parliament elections. It will be rolled out in India, where general elections are now ongoing, on Thursday.

(Reporting by Foo Yun Chee)

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Actors Robert Downey Jr., Chris Evans, Mark Ruffalo, Chris Hemsworth, Scarlett Johansson, Jeremy Renner and Marvel Studios President Kevin Feige place their handprints in cement at a ceremony at the TCL Chinese Theatre in Hollywood
Actors Robert Downey Jr., Chris Evans, Mark Ruffalo, Chris Hemsworth, Scarlett Johansson, Jeremy Renner and Marvel Studios President Kevin Feige pose on the stage after placing their handprints in cement at a ceremony at the TCL Chinese Theatre in Hollywood, California, U.S. April 23, 2019. REUTERS/Mario Anzuoni

April 24, 2019

By Lisa Richwine

LOS ANGELES (Reuters) – The final chapter in a decade-long superhero saga and the remake of a big-screen classic could topple box-office records during a summer movie season expected to be dominated by Walt Disney Co.

“Avengers: Endgame” from Disney’s Marvel Studios kicks off Hollywood’s parade of potential blockbusters on Wednesday, and it is expected to start with a bang. Industry experts say “Endgame” will likely deliver the biggest opening weekend ever in the United States and Canada.

Then in July, a new version of Disney hit “The Lion King” has a shot at dethroning “Avatar” as the highest-grossing film in Hollywood history, according to box office analysts.

Those movies and others are giving theater owners hope for a turnaround after a sluggish start to 2019. Ticket sales so far are running 16 percent below last year’s bonanza, data from measurement company Comscore showed.

Studios used to reserve their big-budget films for summer, making it Hollywood’s most lucrative season, but now spread them throughout the year.

“I counted over 30 huge movies coming out this year,” said Adam Aron, chief executive of AMC Entertainment, the world’s largest theater operator. Aron said he now considers summer film season to be “March 1 to December 31.”

Possible heavy hitters include “Detective Pikachu” and “Godzilla: King of the Monsters” from AT&T Inc’s Warner Bros, “The Secret Life of Pets 2” from Comcast Corp’s Universal Pictures, and Sony Corp’s “Spider-Man: Far from Home.”

STRONGEST FILM SLATE

But Disney’s lineup is seen as the most formidable. The company’s other 2019 releases include “Toy Story 4,” a remake of “Aladdin,” “Frozen 2” and “Star Wars: The Rise of Skywalker.”

“Disney has probably the strongest film slate in the history of the industry this year,” Cowen & Co analyst Doug Creutz said.

The new “Lion King” tells the well-known story of the plucky cub Simba through computer-generated imagery designed to look like live action. A trailer released at Thanksgiving generated 224.6 million views within 24 hours, a Disney record.

Even so, it will not be easy for the king of the jungle to reach the top of the box office mountain. “Avatar” grossed $2.8 billion after its 2009 release and is one of only four movies ever to cross $2 billion.

“Lion King” boosters noted the original film hauled in $968.5 million way back in 1994, with lower ticket prices. This time, it will play in a booming Chinese movie market that has grown to the world’s second-largest, positioning it to take in far more than the original’s $5 million in the country.

Plus, the story of Simba’s challenges and triumphs has wide appeal.

“That is a movie that will travel very, very well,” said Vue International cinemas CEO Tim Richards. “It has common themes that hit a chord with all of our audiences internationally. It’s for all ages.”

‘ENDGAME’ IS CULMINATION

“Endgame,” the culmination of 22 Marvel films since 2007, also has generated huge buzz. Website Fandango said “Endgame” sold five times as many tickets as last year’s “Avengers: Infinity War” over its first seven days of advance sales. Theaters were adding show times to meet demand.

“Infinity War” in 2018 holds the current opening weekend record, generating $257.7 million domestically over its first three days. The movie ended with an epic cliffhanger that will lure fans back to theaters in droves for “Endgame,” said Paul Dergarabedian, senior media analyst at Comscore.

He predicts between $250 million and $275 million for “Endgame,” which will wrap up the story started by Iron Man, Thor and four other Avengers.

“I don’t see how anticipation could be any higher,” Dergarabedian said. “Audiences have developed an ongoing relationship with these characters and these stories. It’s a must-see movie.”

(Reporting by Lisa Richwine; Editing by Cynthia Osterman)

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FILE PHOTO: Ukrainian presidential candidate Zelenskiy reacts during a news conference in Kiev
FILE PHOTO: Ukrainian presidential candidate Volodymyr Zelenskiy reacts during a news conference at his campaign headquarters following a presidential election in Kiev, Ukraine April 21, 2019. REUTERS/Valentyn Ogirenko/File Photo

April 24, 2019

By Marc Jones and Tom Arnold

LONDON (Reuters) – Ukraine has entered uncharted political waters by choosing Volodymyr Zelenskiy, a comedian with no previous political experience and few detailed policies, as its new president.

Zelenskiy is the latest anti-establishment figure to unseat an incumbent leader, both in Europe and further afield, but he has a lot to get to grips with. Below are five big questions investors and the international community have.

1/STRIKE WHILE THE IRON IS HOT?

Zelenskiy is expected to take office next month and his ability to work with Ukraine’s parliament, the Rada, will be crucial to meeting the expectations of his voters.

The president appoints the head of the state security service, the head of the military, the general prosecutor, the central bank governor and the foreign and defense ministers. But parliament must confirm each appointment — and there’s the rub.

While Zelenskiy beat incumbent Petro Poroshenko decisively in Sunday’s presidential vote, parliamentary elections are not due until October and opinion polls suggest he is unlikely to win an outright majority.

That means he would need to ally with at least one other party if he is to get many of his policies and appointments through. The other alternative is to try to bring the elections forward in order to capitalize on the momentum from his presidential victory.

2/TEAM BUILDING EXERCISE

With no political experience himself, investors want Zelenskiy to build a team with enough know-how to avoid any policy missteps.

He does not actually have a full slate of policies yet but he brought in two former ministers as advisers for his campaign: former finance minister Oleksandr Danylyuk and former economy minister Aivaras Abromavicius.

Danylyuk is rumored to be in line to become either foreign minister or the head of the presidential administration, which would give him a powerful gatekeeper role.

“Zelenskiy might be inexperienced in foreign affairs but I think he will have plenty of choice of experienced individuals to serve as foreign minister, and will receive plenty of support, advice from Western governments,” wrote Timothy Ash of BlueBay Asset Management.

3/IMF

International Monetary Fund aid has kept Ukraine’s economy above water so its ongoing support is seen as crucial, especially with around $3 billion (about 2 percent of GDP) of external debt obligations, including interest, coming due in the remainder of 2019. Another $5.5 billion (about 4 percent of GDP) must be repaid in 2020.

But Ukraine’s patchy reform efforts led to repeated delays in its previous IMF program that ended up disbursing only $8.7 billion of a planned $17.5 billion.

That was replaced by a new $3.9 billion Stand-By Arrangement (SBA) in December. While Kiev hopes for another tranche of that money as early as next month, investors will want to see a fuller program put back in place soon.

It could be an interesting negotiation. Zelenskiy already wants to talk the IMF about reversing some gas price rises the Fund saw as crucial to mending Kiev’s finances.

Ukraine’s economic backdrop has improved in recent years though, with much smaller twin deficits (2-3 percent of GDP), lower public sector debt (just over 60 percent) and a stable currency. It also has over $20 billion in FX reserves, which is over four months of import cover, according to S&P Global.

4/PRIVATBANK PROBLEMS

One concern is Zelenskiy’s ties to oligarch Igor Kolomoisky, the former owner of Ukraine’s biggest lender PrivatBank, which was nationalized in 2016.

With the international community already concerned about corruption and influence, some have raised questions about what their relationship might mean for the future of PrivatBank and other interests of Kolomoisky in Ukraine.

A court ruling last week could threaten to overturn the nationalization of PrivatBank.

The central bank has said it will appeal — in fact there could be many appeals as well as other legal manoeuvres — but any sign that Zelenskiy might be in Kolomoisky’s camp on this could do serious damage, not least to relations with the IMF.

5/RUSSIA RELATIONS

As world leaders clamored to offer their congratulations to Zelenskiy, one notable name was absent: Russian President Vladimir Putin. How the Russian-speaking Zelenskiy handles Ukraine’s relationship with Moscow will go a long way to determining the success of his term in office.

He has already suggested taking a fresh perspective to try to secure peace with Moscow, while pushing ahead with European Union-friendly moves. That could prove a difficult path to tread.

For its part, Russia has signaled it intends to respect the vote of the Ukraine people, although Putin is not planning talks with Zelenskiy.

Also rumbling in the background is a legal dispute between the two surrounding Ukraine’s $3 billion Eurobond, which Moscow wants repaid in full but which Kiev argues should have been written down along with most of its other debt in 2015.

Any repairing of ties could also bring rewards for Ukraine. Improved relations could help it regain control over the separatist-controlled east, as well as cheap gas and major investment, a Kremlin ally in Ukraine said last week.

(Additional reporting by Matthias Williams in Kiev, Graphics by Karin Strohecker, Editing by Catherine Evans)

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FILE PHOTO: People walk past a flower arrangement set up to mark the upcoming Belt and Road Forum in Beijing
FILE PHOTO: People walk past a flower arrangement set up to mark the upcoming Belt and Road Forum in Beijing, China April 19, 2019. REUTERS/Thomas Peter

April 24, 2019

By Brenda Goh and Michael Martina

BEIJING (Reuters) – China is expected to promote a recalibrated version of its Belt and Road initiative at a summit of heads of state this week in Beijing, seeking to allay criticism that its flagship infrastructure policy fuels indebtedness and lacks transparency.

The policy championed by Chinese President Xi Jinping has become mired in controversy, with some partner nations bemoaning the high cost of projects. Western governments have tended to view it as a means to spread Chinese influence abroad, saddling poor countries with unsustainable debt.

While most of the initiative’s projects are ongoing, some have been caught up by changes in government in countries such as Malaysia and the Maldives. Projects that have been shelved for financial reasons include a power plant in Pakistan and an airport in Sierra Leone, and Beijing has in recent months had to rebuff critics by saying that not one country has been burdened with so-called “debt traps”.

Xi launched the Belt and Road initiative in 2013, and according to data from Refinitiv https://apac1.apps.cp.extranet.thomsonreuters.biz/Apps/BRI, the total value of projects in the scheme is at $3.67 trillion, spanning countries in Asia, Europe, Africa, Oceania and South America.

A draft communique seen by Reuters said that 37 world leaders attending the April 25-27 summit will agree to project financing that respects global debt goals and promotes green growth.

Visiting leaders will be headlined by Russia’s Vladimir Putin, as well as Prime Minister Imran Khan of Pakistan, a close China ally and among the biggest recipients of Belt and Road investment, and Prime Minister Giuseppe Conte of Italy, which recently became the first G7 country to sign on to the initiative.

The United States, which has not joined the Belt and Road, is expected to send only a lower-level delegation, and nobody from Washington.

Some Belt and Road projects “are going through a period of rationalization and evaluation,” said Li Lifan, deputy director general of the Centre for Belt and Road Initiative Studies at the government-backed Shanghai Academy of Social Sciences.

The summit “will be a time for reflection and to talk about the hopes for the future,” he told Reuters.

RHETORIC SHIFT

Industry insiders and diplomats say that there has been a shift in the way Beijing has been pushing Belt and Road overseas since the first such summit two years ago.

“The political part is handled by the foreign ministry now, not the National Development and Reform Commission (NDRC),” said a senior Western diplomat in China, referring to the country’s state planner which drafted the initiative’s official outline in 2015. That shift occurred last year, he said.

Other analysts said there was a noticeable change in China’s overseas efforts to market the policy in the second half of 2018. In an unusual move, at least 10 of China’s ambassadors and diplomats in countries such as Mexico and Kenya published letters in local media outlets to defend the initiative.

Wu Ken, China’s new ambassador in Germany, acknowledged in his first speech on the job that there were “deep doubts” about Belt and Road.

“I hope relevant people can overcome the ‘allergies’ they have towards the Belt and Road as soon as possible so China and Germany can cooperate to jointly tap the benefits from it,” he said earlier this month.

German Economy Minister Peter Altmaier, a confidant of Chancellor Angela Merkel, will attend the summit.

William Klein, minister counselor for political affairs at the U.S. embassy in Beijing, told a forum earlier this month that the United States continued to have concerns about the Belt and Road.

“These concerns, for example, are opaque financing practices, poor governance and a failure to adhere to internationally accepted norms and standards.”

Andrew Davenport, chief operating officer at Washington-based consultancy RWR Advisory, which has been tracking Belt and Road investment, said China has become more reactive in its positioning of the initiative since the last forum.

“It’s relatively clear that the Belt and Road narrative being put forward by Beijing over the past several months is designed to counter the criticism and push back,” he said.

SUBDUED

While the number of foreign leaders due at the summit is up from 29 last time, the run-up to the event has been subdued compared with the 2017 meeting.

Two years ago, the weeks before the summit’s opening day were marked by a series of music and explanatory videos published by state media to advertise the Belt and Road initiative while the government announced the dates publicly roughly a month before.

There has been no such media blitz this year besides a handful of documentaries and advertisements, and Beijing only confirmed the dates last Friday, less than a week before the opening.

In events held to talk about Belt and Road before the summit, Chinese officials stressed that the initiative remained a “win-win” and an attractive opportunity for countries willing to become partners.

On Monday, NDRC official Xiao Weiming told a media briefing that Chinese companies had invested $90 billion in countries benefiting from Belt and Road and handed out between $200 billion-300 billion worth of loans between 2013 and 2018.

“The Belt and Road initiative is an open and inclusive idea,” he said. “As long as any country is willing to work with China, we will all have gardens along the Belt and Road.”

(Reporting by Brenda Goh and Michael Martina; Additional reporting by Cate Cadell and Ben Blanchard in Beijing, and John Ruwitch and Shanghai Newsroom; Editing by Tony Munroe and Raju Gopalakrishnan)

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FILE PHOTO: U.S and China trade talks in Beijing
FILE PHOTO: Chinese staffers adjust U.S. and Chinese flags before the opening session of trade negotiations between U.S. and Chinese trade representatives at the Diaoyutai State Guesthouse in Beijing, Thursday, Feb. 14, 2019. Mark Schiefelbein/Pool via REUTERS

April 23, 2019

WASHINGTON (Reuters) – A top White House economic adviser said on Tuesday he was “cautiously optimistic” the United States would strike a trade deal with China and that a lot of progress was being made in negotiations.

Speaking at a luncheon at the National Press Club, National Economic Council Director Larry Kudlow said the two nations still had issues to address and were discussing a “visitation exchange” as part of their ongoing talks.

(Reporting by Alexandra Alper and David Alexander; Editing by Doina Chiacu)

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The Airbus logo is pictured at Airbus headquarters in Blagnac near Toulouse
FILE PHOTO: The Airbus logo is pictured at Airbus headquarters in Blagnac near Toulouse, France, March 20, 2019. REUTERS/Regis Duvignau

April 23, 2019

PARIS (Reuters) – A management shake-up at Europe’s Airbus accelerated on Tuesday as Nicolas Chamussy was replaced as the head of Space Systems.

Airbus said the 51-year-old space engineer would have an unspecified future role, while his job as head of space activities including the company’s 50 percent share of the ArianeGroup rocket venture will be taken by Jean-Marc Nasr.

The move comes less than four months after Nasr, 57, was named head of Asia-Pacific, responsible for group strategy and industrial issues and regional sales for Airbus Defence & Space.

Chamussy is a former chief of staff to Tom Enders, who stepped down earlier this month to make way for planemaking chief Guillaume Faury, and has been facing mounting competition from a new breed of private U.S. and other space contractors.

Companies such as Elon Musk’s SpaceX, LeoSat Enterprises, and Canada’s Telesat are working to enable data networks with hundreds or even thousands of tiny satellites that orbit closer to Earth than traditional communications satellites, a radical shift made possible by leaps in laser technology and computer chips.

Faury, 51, has implemented a tighter structure designed to simplify Europe’s largest aerospace group, while sidelining a number of executives previously close to Enders or former planemaking boss Fabrice Bregier, according to company watchers.

La Tribune, which first reported the changeover at space systems, said the reorganization could lead to other departures, accelerating a sweeping management overhaul already driven partly by an ongoing corruption probe and scheduled retirements.

An Airbus spokesman said Chamussy would stay inside Airbus and declined further comment on management changes.

The Space Systems division makes up 27 percent of Airbus Defence & Space revenues, which grew 4.4 percent last year to 11.1 billion euros ($12.5 billion). Space spending is rising but established players face increase competition within the United States, China, Japan and India.

Airbus is seeking to shore up its position by prioritizing a fledgling market for constellations of tiny satellites designed to broaden internet access and support new services. It launched six mini-satellites in February, the first of at least 600 to be launched in the next two to three years together with partner OneWeb.

(Reporting by Tim Hepher, editing by Louise Heavens)

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FILE PHOTO: A BT (British Telecom) company logo is pictured on the side of a convention centre in Liverpool northern England.
FILE PHOTO: A BT (British Telecom) company logo is pictured on the side of a convention centre in Liverpool northern England, April 9, 2016. REUTERS/Phil Noble

April 23, 2019

By Emilio Parodi

MILAN (Reuters) – A criminal investigation into accounting fraud inside British Telecom’s Italian unit has uncovered more evidence of what prosecutors say was the involvement of senior executives in artificially inflating the division’s financial performance.

Emails seized by the police and reviewed by Reuters show for the first time why Italian prosecutors allege that top BT employees were at the heart of the problem, contrary to the company’s assertions that managers at head office knew nothing about the misconduct.

“A series of emails between the top financial executives of BT Plc and managers of the (Italian) unit point to the existence of ‘insistent’ requests by the leadership of the parent company aimed at achieving ambitious economic targets, even using aggressive, anomalous and knowingly wrong accounting practices,” Italy’s financial police said in a 353-page report.

The report has not been made public and its contents have not previously been reported.

The report contains emails from Brian More O’Ferrall, currently finance director at BT Wholesale, the company’s business-to-business division, in which he asks colleagues in Italy to find ways of adjusting their accounts to boost profits.

At the time, O’Ferrall was chief financial officer (CFO) for BT Europe, the European part of Global Services, one of the company’s biggest businesses.

O’Ferrall did not respond to Reuters’ requests for comment. BT declined to make O’Ferrall or group Chief Executive Philip Jansen available for interview.

“We cannot comment on ongoing legal proceedings,” spokesman Richard Farnsworth said.

In the past, BT has blamed former executives in Italy for the bookkeeping irregularities, saying they had kept their bosses in London in the dark about what was going on. The scandal required the company to take a 530 million pound charge in early 2017. For a timeline click on.

In a complaint filed in April 2017 with Milan prosecutors against the conduct of its former managers, BT said the company itself was a victim of any fraud found to have taken place.

Italian prosecutors named three top BT executives among an expanded list of 23 suspects allegedly involved in the debacle, Reuters exclusively reported in February. O’Ferrall was not on that list.

Prosecutors are not investigating O’Ferrall because he was not on BT Italy’s board and did not sign off on the division’s accounts in the four years, 2013-2016, under scrutiny, according to a source familiar with the probe.

O’Ferrall was appointed chairman of BT Italy in February 2017, taking up the post after an internal investigation was launched into the unit’s bookkeeping. He stepped down from that role in November 2018.

Prosecutors in Milan allege that three former senior BT executives, Luis Alvarez, Richard Cameron and Corrado Sciolla, set unrealistically high business targets and were complicit in false accounting at BT Italy.

Alvarez and Cameron, were respectively the former chief executive and former chief financial officer of BT Global Services and Sciolla was the former head of continental Europe for BT. The three men, two of whom were based in London, left the company in 2017.

Reuters tried to contact Alvarez and Cameron via social media and email but they did not respond to those requests for comment. Sciolla declined to comment.

“AN URGENT REQUEST”

Allegations of fraudulent bookkeeping are part of a range of suspected wrongdoing at BT Italy. Italian prosecutors allege that a network of people at the unit exaggerated revenues, faked contract renewals and invoices and invented bogus supplier transactions in order to meet bonus targets and disguise the unit’s true financial performance.

The company has publicly disclosed that it uncovered a complex set of improper sales, leasing transactions and factoring at the division. Factoring is a way in which firms sell future income to financiers for cash.

Several BT shareholders have filed a class-action lawsuit in the United States alleging the group misled investors and failed to promptly disclose the financial irregularities. BT has moved to have the case dismissed.

In their report, Italy’s financial police reference an email dated Aug. 5, 2016, from O’Ferrall in which he says that Cameron wanted operating profit to increase by 700,000 euros and suggests to Luca Sebastiani, then CFO at BT Italy, along with other colleagues across Europe, that they capitalize labor costs as a solution.

“All, I have an urgent request from Richard to find another €700K,” O’Ferrall wrote to Sebastiani and his counterparts in Germany, Benelux, France, Spain, Hungary as well as Simon Whittle, then finance manager, reporting and consolidation, at Global Services Europe.

“Please can you look at all opportunities and come back to me and Simon asap. Labour capitalization? Regards Brian,” says the email, whose subject line reads “Another €700K EBITDA needed in P4.”

P4 refers to the month of July.

Reuters tried to reach Whittle via social media but he did not respond to requests for comment. The other finance officers O’Ferrall contacted did not respond to Reuters requests for comment.

Sebastiani’s lawyers, Giammarco Brenelli and Federico Riboldi, told Reuters the email was significant because “along with many others, it shows the constant and unrelenting pressure the parent company was putting on European subsidiaries with regards to accounting policies.”

Sebastiani is among the 23 suspects in the case.

In another email, dated April 8, 2016 and sent to Sebastiani’s predecessor Alessandro Clerici and Rosa Ronda Andres, CFO for BT Global Services in Spain, O’Ferrall says he has received a request “to find another €1 million of capitalization for 15/16.

“Can either of you accommodate this? €500K each?” the e-mail says.

Clerici and Andres did not comply with the request, according to a source familiar with the matter.

Andres did not respond to Reuters’ requests for comment. Clerici declined to comment. He is among the 23 suspects in the case.

Capitalizing costs is an accounting method that allows companies to amortize a cost related to an asset over time as opposed to book it as an expense in the income statement when the cost was incurred. The technique allows companies to smooth out expenses over time, and therefore boost profits.

“You can’t capitalize labor costs to improve earnings ex post (after the event), just to boost your accounts,” said Gian Gaetano Bellavia, an accounting expert who has in the past worked as a consultant for the Milan prosecutors. He is not involved in the BT Italy investigation.

Bellavia said it was common for top executives of a parent company to ask managers of subsidiaries to “always do more.” But he said some of the BT emails, which Reuters showed him a copy of, constituted “significant evidence” of wrongful accounting.

“EBITDA measures how much a company is earning. But to go up it needs actual income.”

Bellavia said another email, dated September 2016, in which Sebastiani says he has been told that Cameron would not accept an earnings estimate for the fiscal year 2016/17 below a certain amount, was less problematic because it could be interpreted as an aspiration and not a forecast communicated to investors.

The police report says the alleged accounting irregularities could have had an impact on the price of BT shares and this may justify adding market manipulation to the list of alleged crimes being investigated.

However, Milan prosecutors decided not to take this step on jurisdiction grounds, a source with direct knowledge of the probe said, since BT shares are listed in London and such allegations would have to be investigated by UK authorities.

Britain’s Serious Fraud Office (SFO) which investigates and prosecutes complex and often multinational fraud and corruption, declined to comment on whether it was investigating BT.

Britain’s accounting regulator, the Financial Reporting Council (FRC), said it was continuing to investigate PricewaterhouseCoopers’ (PwC) audits of BT from 2015 to 2017. BT dropped PwC as its auditor in 2017.

A spokesman for the accounting firm said it would continue to cooperate fully with the FRC in its enquiries.

(Additional reporting by Paul Sandle and Kirstin Ridley in London. Writing by Silvia Aloisi, editing by Carmel Crimmins.)

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A rescuer assists a search dog as they try to reach survivors at a collapsed four-storey building in Porac town
A rescuer assists a search dog as they try to reach survivors at a collapsed four-storey building following an earthquake in Porac town,, Pampanga province, Philippines, April 23, 2019. REUTERS/Eloisa Lopez

April 23, 2019

PORAC, Philippines (Reuters) – Rescue teams in the Philippines searched for signs of life beneath the rubble of a collapsed four-storey commercial building on Tuesday after a strong earthquake shook the country’s biggest island, killing at least 11 people.

Heavy lifting equipment and search dogs were used as dozens of firefighters, military and civilian rescue teams raced to shift piles of concrete in the town of Porac, about 108 km (67.1 miles) northeast of Manila, where a 6.1 magnitude earthquake destroyed several buildings on Monday.

During the night, seven people were rescued and four dead bodies were pulled out of the rubble of the commercial building, which had caved in on a ground floor supermarket, officials said.

“The rescue is ongoing, they are still hearing a sound, no one can say how many were still trapped,” Pampanga provincial governor Lilia Pineda said in a radio interview.

The quake, which struck at 5 p.m. local time on Monday, was initially reported as being of 6.3 magnitude and later revised down to 6.1 magnitude, the U.S. Geological Survey and Philippines seismology authorities said.

The Philippines is prone to natural disasters, located on the seismically active Pacific “Ring of Fire”, a horse-shoe shaped band of volcanoes and fault lines that arcs round the edge of the Pacific Ocean.

The earthquake was felt strongly in key business areas of Manila, with residential and office buildings evacuated after being shaken for several minutes. Train services were halted and roads and sidewalks were clogged by the sudden exodus of workers.

The government declared Tuesday a holiday for civil servants in Metro Manila to allow for safety inspections of buildings.

The international airport in Clark, a former U.S. military base in Pampanga, remained closed for repairs, while parts of a one corner of a historic church in the province collapsed.

(Reporting by Eloisa Lopez and Peter Blaza; Additional reporting by Neil Jerome Morales and Karen Lema in MANILA; Writing by Martin Petty; Editing by Simon Cameron-Moore)

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FILE PHOTO: Gas flares from an oil production platform are seen at the Soroush oil fields.
FILE PHOTO: Gas flares from an oil production platform at the Soroush oil fields in the Persian Gulf, south of the capital Tehran, July 25, 2005. REUTERS/Raheb Homavandi

April 23, 2019

By Henning Gloystein

SINGAPORE (Reuters) – Oil prices hovered near 2019 peaks in early trading on Tuesday after Washington abruptly moved to end all Iran sanctions waivers by May, pressuring importers to stop buying from Tehran.

Brent crude futures were at $74.33 per barrel at 0051 GMT, up 0.4 percent from their last close and not far off 2019 highs of $74.52 reached on Monday.

U.S. West Texas Intermediate (WTI) crude futures were at $65.79 per barrel, up 0.4 percent from their previous settlement, and also just a notch below their $65.92 2019 peak from Monday.

The United States on Monday demanded that buyers of Iranian oil stop purchases by May 1 or face sanctions, ending six months of waivers which allowed Iran’s eight biggest buyers, most of them in Asia, to continue buying limited volumes.

Before the reimposition of sanctions last year, Iran was the fourth-largest producer among the Organization of the Petroleum Exporting Countries (OPEC) at almost 3 million barrels per day (bpd), but April exports have shrunk well below 1 million bpd, according to ship tracking and analyst data in Refinitiv.

(GRAPHIC: Iran crude oil & condensate shipping departures link: https://tmsnrt.rs/2IBQF06)

Barclay’s bank said in a note following the announcement that the decision took many market participants by surprise and that the move would “lead to a significant tightening of oil markets”.

The British bank added that Washington’s target to cut Iran oil exports to zero posed a “material upside risk to our current $70 per barrel average price forecast for Brent this year, compared with the year-to-date average of $65 per barrel”.

ANZ bank said in a note on Tuesday that “the decision is likely to worsen the ongoing supply woes being felt with Venezuelan sanctions, the OPEC supply cut, and intensifying conflict in Libya”.

The move to tighten Iran sanctions comes amid other sanctions Washington has placed on Venezuela’s oil exports and also as producer club OPEC has led supply cuts since the start of the year aimed at tightening global oil markets and propping up crude prices.

Ellen Wald, non-resident senior fellow at the Global Energy Center of the Atlantic Council, said the United States “seem to expect” Saudi Arabia and the United Arab Emirates to replace the Iranian oil, but she added “that this is not necessarily the way Saudi Arabia sees it”.

Saudi Arabia is the world’s biggest exporter of crude oil and OPEC’s de-facto leader. The group is set to meet in June to discuss its output policy.

Meanwhile, the Atlantic Council said the U.S. move would hurt Iranian citizens.

“We’re going to see their currency collapse more, more unemployment, more inflation,” said Barbara Slavin, director for the Future of Iran Initiative at the Atlantic Council, adding that the U.S. sanctions were “not going to bring Iran back to the (nuclear) negotiating table”.

(Graphic: Iran’s oil exports are plunging: https://tmsnrt.rs/2IyFzZT)

(Reporting by Henning Gloystein in SINGAPORE; Additional reporting by Humeyra Paumuk in WASHINGTON; Editing by Joseph Radford)

Source: OANN


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