Archive for February 3rd, 2009

Worker says rat dry roasted with peanuts

| 03/02/2009 | 0 Comments

(CBS): A former employee of the Georgia peanut plant at the center of a criminal investigation in a nationwide salmonella outbreak says he saw a rat dry-roasting in a peanut area. Jonathan Prather was one of 50 people who lost their jobs last month when the Peanut Corporation of America shut down its plant in Blakely. The outbreak is blamed in as many as eight deaths and has sickened some 500 people, authorities say. Many products made with peanut paste from the plant have been recalled. Go to article

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Walkers predicts the transformation of private equity

| 03/02/2009 | 0 Comments

(CNS): The private equity market may re-emerge after the recent volatility transformed so say experts at local legal firm Walkers. The private equity team says following a wave of consolidation the business will be completely reinvented with a brand new model for doing business. Some of the most popular asset classes for private equity in the next twelve months are likely to be infrastructure, emerging markets, and distressed banks.

One sector that will struggle in 2009 the team predicted is the secondary market, which has slowed down considerably since last year. Richard Addlestone, a private equity partner at Walkers said while further weakness can be expected in the short term, there are hopes for a return to pre-credit crunch levels of investment and returns within 18 months

"A number of factors point towards a more optimistic longer term position for private equity. Flexibility within financing structures should provide some refuge from current market difficulties for private equity firms,” he said. “The silver lining is that, with asset prices at current lows, 2009 could be a great year for acquisitions, but first banks need to start lending to each other and to businesses."

In addition to good deals on assets, there are a number of other areas within private equity which present opportunities for investors, according to Walkers. Heavy markdowns of between 40-60% can currently be achieved on the cost of senior debt, although there is some risk if the underlying corporations that own the debt fail. "These discounts are likely to be short-lived, so interested parties need to act quickly," Addlestone explained.

Infrastructure funds, which have not been as severely impacted by the credit crisis, are earmarked for further growth in 2009, due to their role in bridging the funding gap in government budgets and their inclusion in some of the stimulus and job-growth plans of the new Obama Administration.

The US$12.8 billion bid to lease and operate the Pennsylvania Turnpike is a case in point. If approved by legislators, it would be the largest highway privatisation in U.S. history.

"In the current climate, investors are responding positively to an asset class which offers both strong income flows and brick and mortar assets," Addlestone added. "Infrastructure funds also fit in very well with the medium-to-long term horizons of investors."

After some astounding growth in 2008, emerging markets are now generally accepted as a mainstream class in private equity. Emerging markets will remain attractive to investors, although perhaps not to the same extent as in recent years since their growth is slowing, though not as quickly as other markets. As an example, the Brazilian private equity market is forecasted to grow just 10% in 2009 compared to the 50% rate that has been recorded since 2004, according to Bloomberg.  Some firms have also had some difficulties disposing of emerging market assets as weak stock markets complicate exit opportunities. For example, CVC Capital Partners recently failed to dispose of Singapore metal stamping company Amtec Engineering.

Interest in distressed banking assets by private equity participants and a desperate need for fresh capital from the financial sector has resulted in significant speculation about what role private equity might take in reshaping the post-credit crunch environment. With some US$320 billion of cash ready to deploy and private equity’s traditional strength in adding value and management expertise, struggling financial institutions are seen as particularly suitable investment targets. U.S. Treasury Secretary Henry Paulson said in November that concerted action between the private equity industry and the U.S. federal government, using its Troubled Assets Relief Program (TARP), represents a possible solution to the faltering commercial banking system in the U.S.

"In addition to the regulatory obstacles which require significant investors in U.S. banks to register as a bank holding company, the unfortunate events surrounding recent banking ventures from the likes of TPG in WaMu have made private equity firms cautious about investing in the sector," said Vicki Hazelden, private equity partner. "Potential conflicts between private and public agendas can complicate partnerships with governments, while any problematic deals could generate significant negative publicity, as Cerberus has seen as the owner of Chrysler."

Secondary market activity has ground to a virtual halt and Richard May, a private equity partner in Walkers’ British Virgin Islands office said the credit crisis has left certain over-allocated investors looking to transfer their entire commitments in some funds.

“This clearly demonstrates what the industry is up against and how cautious investors are being," he said. "Expectations of both buyers and sellers need to realign for the secondary market to begin functioning again, but there might be some bargains in the meantime."

Hazelden added that as the crisis continues the private equity industry will undergo significant change. “Whether we will see a wave of consolidation and/or the emergence of a completely new model will not be clear until after the dust has settled. By demonstrating in these difficult times that it can make a difference by bringing management expertise to the table, private equity has a key role to play in reshaping the financial landscape," she noted.

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Chimps use politics to lead

| 03/02/2009 | 0 Comments

(ScienceDaily): With most mammals, the biggest and most aggressive male claims the alpha male role and gets his choice of food and females. But a new study from the University of Minnesota suggests that at least among chimpanzees, smaller, more mild-mannered males can also use political behavior to secure the top position. The finding was gleaned from 10 years of observing dominant male chimpanzees in Gombe National Park, Tanzania, looking at behaviors they used to compete for alpha male status relative to their size. Go to article

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Scholarship recipient finds her place at HSBC

| 03/02/2009 | 0 Comments

(CNS): A scholarship award from HSBC Bank (Cayman) Limited enabled Laura McLaughlin to pursue her goal of being qualified as a managerial accountant. Now the recent graduate has returned home to begin her career with HSBC Cayman. McLaughlin began full time employment with HSBC Cayman in January 2009 as an Account Manager in the Insurance Division, after achieving the Master of Science degree in Managerial Accounting from the University of North Texas.

She received her Bachelor of Science degree in Accounting Control Systems from the same university in May 2007, on a scholarship funded by HSBC Cayman.

In welcoming Ms. McLaughlin to the Bank as a member of staff, Chief Executive Officer, Gonzalo Jalles stated: “HSBC Cayman is committed to the development of its Caymanian workforce and we hope, through our scholarship programme, to attract young Caymanians of the calibre of Ms. McLaughlin. She will be an excellent addition to our talented and committed employees, who are making a difference at the Bank. I wish her a long and successful career at HSBC Cayman.”

As a student at Triple C School, Ms. McLaughlin distinguished herself as a consistent high achiever who became the salutatorian of her graduating class in 2003.

Throughout her undergraduate and graduate studies, Ms. McLaughlin worked at HSBC Cayman during summer and Christmas holidays while on island.

“Completing my studies and returning home to full time employment at HSBC is a proud moment for me,” Ms. McLaughlin said. “I am in an environment that I know is fully supportive of my career and personal development and I am looking forward to growing with the bank,” she added.

Head of Human Resources, Walling Whittaker, noted that HSBC Cayman’s scholarship programme is currently supporting another scholarship recipient who is pursuing a Bachelor’s degree in finance at the University of South Florida. She is expected to complete her studies in December 2009.

Like Ms. McLaughlin, this student has also been employed to the Bank during holidays and will receive permanent place upon successfully completing her studies.

“HSBC Cayman is focused on the training and development of its employees and we are especially keen to recruit and nurture young Caymanians who wish to pursue a career in thefinancial services sector. We offer an environment where continuous training is encouraged and where the efforts of our staff are always recognised,” Mr. Whittaker said.

HSBC Bank (Cayman) Limited, which last year launched retail banking products in corporate banking and personal financial services, employs some 95 persons. The Bank has a policy to hire locally whenever possible, with currently some 70% of its employees being Caymanian.

HSBC has been operating in the Cayman Islands for more than 20 years, previously focusing on captive insurance management and trust management.

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HSBC steps in to help Brac youth centre

| 03/02/2009 | 1 Comment

(CNS): When the Department of Youth Service’s popular radio programme “Youth Flex” appealed last December for community support to assist young people on Cayman Brac, HSBC Bank (Cayman) Limited (HSBC Cayman) readily answered the call. Through an all-day radiothon on December 19, the Youth Flex appealed for funds to repair the Cayman Brac Youth Centre, one of the many casualties of damage from Hurricane Paloma, which hit Cayman Brac on 8 November 2008.

According to a HSBC release, damage to the centre meant the loss of the main meeting place for young people on Cayman Brac and the Youth Flex team was determined to restore it in the quickest possible time. Although the Youth Flex radio appeal was seeking individual and company donations of $100 each to make up the $1,100 needed to repair the centre, HSBC Cayman agreed to take on the full cost of repairs.

“We recognised that this was a project worthy of our full support, given the importance of the Brac Youth Centre to the young people of Cayman Brac. HSBC Cayman was keen to ensure that with our support, the Centre could quickly be repaired and restored to full use for the benefit of everyone on the Sister Island,” stated HSBC Cayman’s Chief Executive Officer, Gonzalo Jalles.

He noted that from the time Paloma devastated Cayman Brac, everyone at the bank showed concern for being part of the recovery effort. In the first few days after the hurricane, HSBC donated some $4,000 of relief supplies to Cayman Brac.

An in-house donation drive among staff netted $3,225, which was matched by the Bank and donated to the relief effort. In addition, HSBC Cayman has committed US$100,000 to the Cayman Islands National Recovery Fund for the housing rebuilding programme on Cayman Brac.

With HSBC Cayman’s sponsorship of CI$1,100 to repair the Brac Youth Centre, the Youth Flex team travelled to Cayman Brac on Saturday 17 January, where they spent the day patching the roof, painting, cleaning and restoring the building to pre-hurricane conditions.

Youth Services Coordinator, James Myles praised the young people’s efforts. “Everyone pitched in enthusiastically because they were determined that their peers on Cayman Brac should have a place to enjoy positive interaction with each other. This would not have been possible without the support of HSBC Cayman and both Youth Flex and the young people of CaymanBrac are extremely grateful for their support,” he stated.

Jalles stated: “We continue to support Cayman Brac’s recovery in any way we can. We commend the selfless efforts of some of Grand Cayman’s young people to help their counterparts on Cayman Brac by restoring the Youth Centre to full use and are pleased that our support will make this a special place once more for the Brac’s young people.”

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Mexico sends Cubans home under new accord

| 03/02/2009 | 0 Comments

(Daily News): Mexico is sending illegal Cuban migrants home for the first time under a new accord aimed at cutting off an increasingly violent human-trafficking route to the United States, an official said Thursday. Before Mexico signed the agreement with Cuba in October, authorities rarely sent migrants back to the communist island. The Cubans were being deported from the resort city of Cancun, said Luis Alberto Molina, an immigration official in Quintana Roo state, where Cancun is located. Go to article

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Nowhere to hide?

| 03/02/2009 | 0 Comments

(BBC): Her Majesty’s government is broke – a record £44bn in the red – and yet one estimate is that the taxman loses £18.5bn a year thanks to tax haven abuse. In the past, the political will in Westminster to move against British protectorates such as the Bounty Bar island tax haven of the Caymans in the Caribbean and the fish-and-chip tax havens closer to home like Jersey, Guernsey and the Isle of Man, has been feeble. Go to article.

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Lawyers amass for tribunal

| 03/02/2009 | 7 Comments

(CNS): The number of legal experts convening for Justice Priya Levers’ tribunal, to be heard in May, is steadily mounting. CNS has learned that not only has the tribunal itself engaged the services of Clifford Chance, a leading firm of solicitors based in London, the Chief Justice’s Office has also instructed local attorney’s Campbells to represent the witnesses, who will be called to give evidence against the Grand Court Judge. Priya Levers has confirmed that she has instructed three advocates to defend the accusations of misbehaviour made against her.

“The perception has been put out, obviously by someone who wishes to harm my case, that I have a large number of lawyers,” Levers stated. “I have three, Mr Wade DaCosta, Mr Anthony Akiwumi and Mr Stanley Brodie QC. While Mr James Eadie QC was previously working with me, he has been appointed First Treasury Council, Therefore, he can no longer deal with my case and I am working with Mr Brodie — but there was no overlap.”

In a recent statement Akiwumi confirmed that as Governor Stuart Jack had queried the liability of the Cayman government to fund Justice Levers’ costs, they were forced to make an application directly to the tribunal causing a change in date.

“The delay in proceedings was occasioned by the lack of consensus between Madam Justice Levers’ legal advisers and HE The Governor on the issue of his liability to fund the considerable costs incurred by Madam Justice Levers as a direct result of the proceedings initiated by the Governor on 12th September 2008,” Akiwumi stated.

“Given this lack of consensus, the issue of funding was referred to the Tribunal of Inquiry for resolution. On 12th January 2009 at a hearing held in London, the Tribunal of Inquiry resolved the issue in favour of Madam Justice Levers. This was an important issue because the costs of her legal representation in the Tribunal of Inquiry will be substantial and the unanimous decision of the Tribunal of Inquiry in Madam Justice Levers favour is significant.”

The CI Treasury will also be responsible for the costs incurred by the tribunal itself, chaired by Sir Andrew Leggatt, which will now included the fees of Clifford Chance, one of the most expensive law firms in the UK, as well as the three judges sitting on the Tribunal. Moreover, the recent revelation that the CJ’s office in the Department of Judicial Administration has also instructed its own counsel will add to the growing legal bill.

CNS asked the Judicial Administration for details of the number of lawyers involved and who they would be acting for. The office confirmed that Campbells would represent the interests of those staff members who may be called as witnesses at the tribunal. It could not confirm the number of attorneys that will be required as it is still not certain which staff members will be called, but the office stated that Campbells will be used to assist anyone who is called to the stand.

CNS also contacted Campbells for details on how they would be assisting those asked to give evidence against the judge, but were told that Campbells had no comment to make regarding the Justice Levers tribunal.

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When it comes to taxes, companies go for the cold

| 03/02/2009 | 0 Comments

(Reuters): Bermuda’s business climate is getting chillier, so some multinational companies are seeking more hospitable locales — like wind-swept Ireland and snowy Switzerland. In recent weeks, there has been an exodus of large companies incorporated in Bermuda and the Cayman Islands to Europe in search of more favorable tax treatment and other benefits. They’re looking to reincorporate ahead of U.S. legislation that could require companies based there to pay regular income tax. Go to article

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