Headlines

The Serious Fraud Office has arrested and laid six Crimes Act charges against one current and one former director of failed finance company Capital + Merchant in relation to $14.5 million worth of related party lending dating back to 2002, BusinessDay.co.nz reported. The two men charged at Neal Nicholls and Wayne Douglas, the founding directors and beneficial owners of the company which went into receivership in November 207 owing 7000 investors $167 million. Nicholls remained as a director until the company went under but Douglas had resigned a few months earlier in February of that year.

May Wang is set to appeal a bankruptcy ruling over a $22 million debt, while the company she is fronting considers whether it will proceed with its bid to purchase the Crafar farms, The New Zealand Herald reported. Ms Wang lost her year-long battle with Westpac at the High Court at Auckland yesterday, leaving the future of the deal between Hong Kong-listed company Natural Dairy and the New Zealand-based UBNZ group hanging in the balance. Ms Wang is the director and sole shareholder of UBNZ's trustee.

The head of the International Monetary Fund on Tuesday urged European countries to find a comprehensive solution to the region's debt crisis, faulting their approach to date as ad hoc and too slow, The Wall Street Journal reported. Dominique Strauss-Kahn spoke as European finance ministers met in Brussels to debate enlarging the temporary fund for euro-zone members in need of emergency loans, as well as how to set up a permanent funding vehicle. But those talks so far have been marred by sharp disagreements among various euro-zone governments over the details of future bailouts.

The Serious Fraud Office (SFO) will make an arrest tomorrow in a case that involves tens of millions of dollars of investor losses, The National Business Review reported. News of the arrest came as SFO chief executive Adam Feeley appeared before Parliament's Law and Order select committee. Asked to explain how the SFO pursues its investigations and uses other organisations and contractors, he dramatically gave the arrest tomorrow as an example.

A metaphor for Ireland's financial humiliation would be harder to find than the hearing held Tuesday morning in the airy boardroom of a downtown Boston law firm, Reuters reported. On the same day that Dublin's government was unveiling a deeply unpopular austerity budget in the wake of the country's banking crisis, former chief executive of Anglo Irish Bank David Drumm was forced to testify under oath for the first time about his holdings as part of a complex bankruptcy process that puts at risk his remaining properties, vehicles and even his ability to buy gifts for his children.

EU finance ministers have resolved to conduct a new round of more stringent stress tests on Europe’s banks, a decision that reflects lingering dissatisfaction with the first pan-European examination of the sector only five months ago, the Irish Times reported. After the failure of the first test to take account of liquidity pressures, economics commissioner Olli Rehn said the new stress tests would be based on new financial architecture. “We need to opt for fullest possible transparency when conducting the bank stress test,” he told reporters in Brussels.

Ireland took the first crucial step Tuesday on an expected four-year road to financial recovery by securing support for a budget that will make €6 billion ($7.99 billion) in cuts across all sectors of society, from the most vulnerable welfare recipients to the country's political elite, The Wall Street Journal reported. Despite pressure from some quarters of the international community, Minister for Finance Brian Lenihan pledged to maintain Ireland's corporate tax rate, one of the lowest in Europe.

Bahrain's Awal Bank BSC is withdrawing its request to withhold financial details and now plans to comply with Chapter 11 disclosure requirements, Dow Jones Daily Bankruptcy Review reported. Awal's U.K.-based administrator had previously asked the U.S. Bankruptcy Court in Manhattan for permission to follow the protocol of reorganizations in Bahrain, allowing the company to withhold information typically made public in U.S. cases, such as the exact amounts owed to the 20 largest creditors. Bahraini authorities placed Awal into administration in July 2009.

Begbies Traynor, the corporate insolvency specialist, expects interim profits to be £700,000 below the £4.3m ($6.8m) reported for the previous first half as fewer-than-expected companies have gone bust, the Financial Times reported. Ric Traynor, executive chairman, said the recession and its aftermath was proving to be different to previous downturns in the 1970s, 1980s and 1990s, which ended with a material increase in insolvencies. However, he expected more companies to fail in the first half next year.

The Icelandic economy showed its first growth for two years in the third quarter, helped by rising household consumption, the Irish Times reported. Iceland's top three banks were hit hard by the global credit crisis in late 2008 after expanding rapidly across Europe and the crash triggered a deep recession and the island's gross domestic product (GDP) fell 6.8 per cent in 2009. But, helped by an IMF-led bailout, the economy and currency have stabilised.