Headlines

The European Commission Wednesday said it has started an investigation into a rescue package give to Latvia's JSC Parex Banka to ensure the aid will be followed by sufficient restructuring at the bank, Dow Jones reported. Parex was rescued from going bust by the Latvian State in November through state guarantees, liquidity support and cash injections. The Latvian state submitted a restructuring plan for Parex in May, and the commission is now looking at whether the plan will enable Parex to return to long-term viability without distorting competition.

Banks and lawyers are assessing new U.K. requirements that some senior managers and directors based outside Europe at companies with a "substantial" U.K. presence must pass a test to ensure the quality of management in the financial industry, The Wall Street Journal reported. They would also have to take on more responsibility for their U.K. operations within the next six months. The new rules devised by the Financial Services Authority require individuals employed outside Europe but with influence over a U.K.

Australian-based clothing company Pacific Brands has finally completed the closure of its New Zealand factories, with its Christchurch and Palmerston North plants permanently shutting down over the next two days, The National Business Review reported. The company, which produces labels such as Bonds and Jockey, first announced the closures in March as part of a new strategy which also saw seven Australian factories close. Last month, the clothing company revealed it had raised $326 million in a share offer, with Pacific Brands looking for working capital and money to pay off debt.

Executives at Avtovaz, the largest Russian carmaker, are reportedly considering laying off about 27,000 employees to improve performance at a factory that has been clobbered by the sharp drop in demand for cars, The New York Times reported. The factory, where Lada cars are built, is one of the least efficient in the industry, a behemoth built by the Soviets that was never fully reformed and had never, until now, contemplated laying off considerable numbers of its huge work force.

The insolvency administrator of German retail and tourism group Arcandor said on Tuesday that he had appointed two banks to assess separate restructuring solutions for the units Karstadt and Primondo. However, the move did not imply there would be a break-up of the German retailer, a spokesman for the administrator said. Arcandor filed for insolvency in June after its requests for state help failed. It has been Chief Executive Karl-Gerhard Eick's mantra to find a solution for the group as a whole.

The International Monetary Fund’s board on Tuesday approved disbursement of $3.3 billion in fresh financial support to Ukraine, one of the world’s economies hardest hit by recession, the Financial Times reported. This, the third tranche from a $16.4 billion standby loan programme, brings the total amount of funds disbursed to Kiev to $10 billion since the global financial crisis struck last autumn. To secure the fresh aid, Kiev’s government agreed to reduce expenditures and begin increasing natural gas prices this autumn for households to market levels.

Bank of America Corp. (BAC) said it will pay $100 million to settle a 2004 lawsuit which sought $10 billion regarding the 2003 bankruptcy of Parmalat SpA, Dow Jones reported. The Italian dairy company was plunged into chaos after an accounting fraud came to light. Bank of America was later sued by Parmalat's new management for allegedly helping former officials engage in one of Europe's biggest-ever corporate frauds. Further details of the settlement will be disclosed after it is filed in federal court in New York, where the case is being handled.

Temasek Holdings Pte, reeling from the aborted appointment of Charles “Chip” Goodyear, said the value of its assets slumped by more than S$40 billion ($27.7 billion) and that Singapore’s sovereign fund may allow public investment for the first time, Bloomberg reported. The company will seek “sophisticated co-investors” and won’t sell the “family jewels” for short-term gains, Chief Executive Officer Ho Ching, the wife of Singapore’s Prime Minister Lee Hsien Loong, said in a speech today in Singapore.

The $1.13 billion sale of Nortel Networks' prized wireless assets to Swedish telecoms equipment maker Ericsson received the blessing of Canadian and U.S. courts on Tuesday, with a U.S. bankruptcy judge praising the bidding process, Reuters reported. It remained unclear whether the Canadian government will intervene in the deal now that courts have allowed it to go ahead. Ericsson won an auction for the key CDMA and next-generation LTE wireless technology assets of Canada's bankrupt Nortel early on Saturday, beating out Nokia Siemens Networks NSN.UL and private equity firm MatlinPatterson.

The number of companies forced into liquidation jumped by 20 per cent in the 12 months to May, driven by the end of mining and property booms in Queensland and Western Australia, a report shows. The report by insolvency practitioners SV Partners based on Australian Securities and Investments Commission (ASIC) data shows there were 2934 court-ordered liquidations in the year to May 30, up from 2428 in the year to May 2008, The Australian reported on an AAP story.