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Chase Bank Limits Cash Withdrawals, Bans International... Before you read this report, remember to sign up to for 100% free stock alerts Chase Bank has moved to limit cash withdrawals while banning business customers from sending...

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Richemont chairman Johann Rupert to take 'grey gap... Billionaire 62-year-old to take 12 months off from Cartier and Montblanc luxury goods groupRichemont's chairman and founder Johann Rupert is to take a year off from September, leaving management of the...

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Cambodia: aftermath of fatal shoe factory collapse... Workers clear rubble following the collapse of a shoe factory in Kampong Speu, Cambodia, on Thursday

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Spate of recent shock departures by 50-something CEOs While the rising financial rewards of running a modern multinational have been well publicised, executive recruiters say the pressures of the job have also been ratcheted upOn approaching his 60th birthday...

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UK Uncut loses legal challenge over Goldman Sachs tax... While judge agreed the deal was 'not a glorious episode in the history of the Revenue', he ruled it was not unlawfulCampaign group UK Uncut Legal Action has lost its high court challenge over the legality...

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FTSE 100 climbs to new five year highs as mining shares gain on central bank moves

Category : Business

Equities lifted by Australian interest rate cut and hopes of further action from ECB after Draghi comments

Mining stocks are among the main gainers as leading shares rose to a new five year high.

Hopes of further central bank action to boost the global economy have been fuelling share price rises, and with the Reserve Bank of Australia cutting rates and ECB boss Mario Draghi hinting on Monday of more to come if things get no better, that mood is continuing.

Rebecca O’Keeffe, head of investment at Interactive Investor, said:

In recent weeks, every piece of bad news has been tempered by the knowledge of unlimited central bank support, whilst every piece of good news has heralded a wave of new money. So far in May we’ve had the Fed, the ECB and now the RBA, who cut rates overnight, making all the right noises sending markets the multi-year and all time highs, providing investors with continued positive momentum.

With the central bank safety net in place and alternative asset classes unattractive, equities have reaped the rewards, but questions are now starting to be asked about how long equities can continue to provide such stellar returns – in particular during the historically volatile month of May. With some markets, including the Dow, reaching psychological barriers, alongside the period when the weight of new money typically slows, these constraints may well limit the ability of the markets to make significant further gains over the next few weeks.

Controversial Kazakh miner Eurasian Natural Resources Corporation has climbed 19.3p to 312p, Rio Tinto has risen 73p to 3095.5p and Glencore Xstrata has added 7p to 350.95p.

Randgold Resources missed out, dropping 163p to £49.42 as brokers including Numis and Investec cut their target prices following a biggest than forecast fall in earnings reported last week.

HSBC is 21.3p higher at 735.2p after better than expected results but G4S slid 37.3p to 268.2p after the security company warned on margins following a difficult first quarter in Europe.

J Sainsbury is down 2p at 388.9p as it confirmed reports it was in advanced talks with Lloyds Banking Group, up 0.64p to 54.69p, to take full ownership of their joint venture.

Overall the FTSE 100 has climbed 22.02 points to 6543.48.

Glencore traded with Iranian supplier to nuclear weapon’s programme

Category : Business

Company says it ‘ceased transactions prior to EU sanctions’ when it learned of links with Atomic Energy Organisation of Iran

One of Britain’s biggest companies has made millions of pounds selling goods to Iran, including to a state-owned firm that supplies the regime’s nuclear programme.

Glencore, a commodity trading house run by the billionaire Ivan Glasenberg, traded $659m (£430m) of goods, including aluminium oxide, to Iran last year, the Guardian has established.

The company, which is one of the biggest businesses in the FTSE 100 and has a market value more than three times that of Marks & Spencer, has admitted that some of its aluminium oxide ended up in the hands of Iranian Aluminium Company (Iralco).

Trafigura, another commodity trading house, has also admitted to trading an unspecified aluminium oxide (also known as alumina) with Iralco in the past.

The International Atomic Energy Agency has named Iralco as supplying aluminium to Iran Centrifuge Technology Company (Tesa), which is part of the Atomic Energy Organisation of Iran (AEOI). Aluminium oxide is an important material in gas centrifuges used to enrich uranium.

At the time of the Glencore and Trafigura trades with Iralco, it was not illegal or a breach of sanctions to supply Iran with alumina. It is unknown whether Glencore or Trafigura’s alumina passed from Iralco to Tesa, or whether it was used in centrifuge construction.

Since 2006, AEOI has been subject to UN sanctions designed to prevent Iran’s nuclear armament ambitions. Trading with Tesa has been specifically banned under US, EU and UK sanctions since July 2010. Iralco was added to the EU sanctions list in December 2012.

Glencore said it “ceased transactions” with Iralco immediately when it learned of its links with Tesa, and the last trade was in October 2012. “Prior to EU sanctions in December 2012, we were not aware of a link/contract between Iralco and Tesa,” the company said in a statement.

Glencore said it is “reliant on the relevant regulatory bodies/governments to advise us on developments in who we can/can’t do business with”.

Tehran, which some experts say already has enough enriched uranium to make several nuclear weapons, is in the middle of upgrading its stock of more than 10,000 centrifuges. The IAEA said Iran is replacing outdated centrifuges with thousands of more powerful IR-2m models.

Experts at the Institute for Science and International Security (Isis) in London said: “Iran is trying to replace maraging [super-strong] steel end-caps with high strength aluminium end-caps.”

Mark Fitzpatrick, director of Isis’s nonproliferation and disarmament programme, said the new centrifuges could enrich uranium four to five times faster than the existing ones. Iran insists its enriched material is for peaceful use, not for nuclear weapons, but it has refused to allow IAEA inspectors into several of its atomic facilities.

The question surrounding Glencore’s role in unintentionally potentially helping arm a nuclear Iran comes as Obama ramps up pressure on Tehran to end its atomic weapons programme. This month, the US secretary of state, John Kerry, said: “We understand the nature of the threat of Iran. And as the president has said many times – he doesn’t bluff. He is serious. We will stand with Israel against this threat and with the rest of the world, who have underscored that all we are looking for is Iran to live up to its international obligations.”

Mark Wallace, a former US ambassador to the UN, said Glencore’s dealings with Iran were “completely unacceptable”, adding: “We might expect this from a Russian or Chinese company, but the truth is that even those companies usually stay away from this sort of exposure.”

Glencore said it “complies with applicable laws and regulations, including applicable sanctions. We closely monitor all new legal developments to ensure that we continue to be in compliance with applicable laws and regulations, including applicable sanctions.”

Details of the firm’s dealings with Iralco were leaked to the media in February, but the company declined to specify how much the deals were worth.

The Guardian has learned that Glencore traded $659m worth of metals, wheat and coal with Iranian entities during 2012. Buried deep in its annual report, one of Glencore’s US affiliates, Century Aluminium, 46% owned by Glencore, states: “During 2012 non-US affiliates of the largest stockholder of the company [Glencore] entered into sales contracts for wheat and coal as well as sale and purchase contracts for metal oxides and metals with Iranian entities, which are either fully or majority owned by the GOI [government of Iran].”

Glencore declined to state how much of the $659m it dealt with Iran in 2012 was related to alumina/aluminium. The trades were not illegal or against sanctions at the time. It is not the first time Glencore’s activities have attracted controversy. Last year the head of its food trading business said the worst drought to hit the US since the 1930s would be “good for Glencore” because it would lead to opportunities to exploit soaring prices. It has also attracted attention by selling more than £50m worth of wheat to the World Food Programme.

Trafigura, which came to global political attention when it was revealed that a licensed independent contractor of a ship it had chartered dumped tonnes of toxic oil slops in Ivory Coast, said: “We can confirm that Trafigura has traded with Iralco in the past. In October 2011, a physical swap agreement was reached whereby Trafigura provided alumina to Iralco in return for aluminium for Trafigura to export worldwide. No deliveries have been made or exports received since new EU sanctions were published in December 2012. Trafigura Group companies are compliant with national and international law where applicable.”

China approves Glencore Xstrata deal

Category : World News

China approves the merger of commodities trader Glencore and mining group Xstrata, clearing the final big hurdle in completion of the deal.

Read more here: China approves Glencore Xstrata deal

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New Xstrata-Glencore merger delay

Category : Business, World News

Xstrata and Glencore once again push back the date for when they expect to complete their merger, after Chinese concerns.

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Glencore supplied firm that provided aluminium to Iran nuclear programme

Category : Business

Commodities trader says it immediately ‘ceased transactions’ with Iralco after learning of its deal with Iranian programme

The commodities trader Glencore supplied thousands of tonnes of alumina to an Iranian firm that has provided aluminium to Iran’s nuclear programme, intelligence and diplomatic sources have told Reuters.

The previously undisclosed barter arrangement between Glencore, the world’s biggest commodities trader, and the Iranian Aluminum Company (Iralco) illustrates how difficult it is for western powers to curb Iran’s ability to trade with the rest of the world. Even as the west imposes stringent restrictions on banks that do business with Iran, United Nations diplomats say that Tehran keeps finding new ways to do business with willing partners.

Reuters first learned about Glencore’s barter deal with Iralco, and an aluminium supply contract that Iralco had with Iran Centrifuge Technology Co (TESA), from a western diplomatic source in early November. That was about six weeks before the EU’s December 2012 decision to levy sanctions on Iralco for supplying aluminium to TESA, which is a subsidiary of the Atomic Energy Organisation of Iran. The source showed Reuters a western intelligence report concerning Glencore’s arrangement with Iralco. It described how Glencore, based in Baar, Switzerland, provided Iralco with thousands of tonnes of alumina last year in exchange for a lesser amount of aluminium metal. The report’s authenticity was confirmed by UN diplomats.

It is not known whether any of the aluminium produced by Iralco from Glencore’s alumina raw material actually ended up with TESA. As part of AEOI, TESA has been subject to UN sanctions in place since 2006.

In a statement to Reuters, Glencore said it first learned about the TESA-Iralco relationship in December and immediately “ceased transactions” with Iralco. It said its last trade as part of the barter arrangement was in October 2012, two months before the EU move.

Glencore acknowledged that it did sign the barter deal with Iralco in August 2011, saying it was legal, and denied wrongdoing or attempts to help Iran bypass sanctions.

It declined to provide details about the barter deal, the value of which is unclear.

Iralco did not respond to an emailed request for a comment. Iran’s UN mission said it was not in a position to comment.

Iran denies allegations by western powers and their allies that it is seeking atomic weapons and has refused to stop enriching uranium. As a result, in addition to four rounds of UN sanctions, Iran has faced much tougher US and EU measures, specifically targeting its financial and energy sectors.

Separately on Friday Glencore pushed back the date to complete its £50bn takeover of Xstrata for the third time, as it waits for regulatory approval from the Chinese authorities. The company warned shareholders on Friday that it would not now be possible to complete the deal by 15 March, which it said in January was the “long stop date” for finalising the deal.

Treasury keen to sell part of its stake in Lloyds Banking Group

Category : Business

Fancy financial footwork over the bailout suggests that the government is anxious to offload some of its shareholding

There is no fixed timetable for selling any shares in Lloyds and Royal Bank of Scotland, says the Treasury. Perfectly true, as far as it goes. But you can tell the government is champing at the bit, eager to offload a few, by the fancy financial footwork used on Friday to explain the price at which the state rescued Lloyds in 2009.

In the past, this territory has been straightforward. UK Financial Investments, the body that “manages” the state’s investments in the bailed-out banks, provides the arithmetic in its annual reports. Its text is clear: the Labour government invested in Lloyds in three tranches and “the gross cost of these investments is £20.3bn, at an average cost per share of 73.58p”. There’s even an admirably clear table to explain the workings.

So what’s this 61p figure that appeared on Friday? Apparently, it is “the average price at which the equity support provided to Lloyds Banking Group is recorded in the public finances”. But how can that be different from UKFI’s calculation?

It seems the Office for National Statistics used the average price in the market for Lloyds shares on the day of the investments, not the actual price paid by the state.

It calls the overpayment a “capital transfer”, explaining that it’s all to do with permanent and temporary effects and that £3.4bn of the £20.3bn has been booked on the national debt.

Forget the ONS’ weird methodology. Common sense says you only show a profit on an investment when you sell at a price higher than the one you paid. The threshold for a profit on the Lloyds shares therefore remains 73.6p.

Yes, the Labour government paid more than the market price at the time, but the Treasury shouldn’t ignore that fact.

Lloyds, to its credit, is not pushing the 61p figure. Indeed, it seems embarrassed that it has been obliged to use it in setting a condition for chief executive António Horta-Osório’s £1.5bn bonus – he’ll get his money if the state sells a third of its stake above that price. It was the Treasury’s idea to use 61p. The goalposts have started to move. So did Lloyds’ share price – it was down 2% to 53p. But, if and when 62p is seen, expect to hear the government declare victory, and a profit, far too early.

Glasenberg and the black kettles

“I hope CEOs have learned their lesson. The big guys really screwed up.” So said Ivan Glasenberg, multibillionaire chief executive of Glencore, this week in a blast against the mining industry’s record in recent years of overbuilding and overinvesting.

He makes a fair point, of course, since there have been some spectacular writedowns in asset values at big miners. But is Glasenberg really the man to preach?

He has also been a director of Xstrata – where Glencore hopes soon to complete its takeover – since 2002. There have been no big writedowns (yet) at Xstrata but few would describe the company, circa 2006-08, as a model of level-headed financial sobriety in a room of excitable fools.

Xstrata aggressively pursued a takeover of platinum producer Lonmin, to the point of bagging 29% of the shares, in late 2008, long after the whistle had blown on the commodities price boom. A humiliating 2-for-1 rights issue followed (causing a little difficulty for Glencore itself in the midst of the credit crunch) to repair a balance sheet overburdened with debt.

OK, Glasenberg was only a non-executive director of Xstrata, but he was definitely a big guy: Glencore owned 35% of the shares and had two, and then three, boardroom seats.

And, as we’re on the subject of overoptimism, spare a thought for investors who invested in Glencore’s flotation in May 2011 at 530p a share. That price has never been seen since and the shares now stand at 377p, down a little yesterday as completion of the Glenstrata deal was delayed again (maybe the Chinese competition authorities noticed that part of Glasenberg’s speech about the importance of miners not building in order to keep the market “tight”).

Among London’s big five mining stocks, only ailing Anglo-American’s shares have done worse than Glencore’s since the latter’s IPO.

That wasn’t meant to be the script. Wasn’t being big in trading commodities, as opposed to merely digging the stuff out of the ground, meant to offer shareholders protection? All will be explained in inimitable style with Tuesday’s results, one assumes.

Blackout Britain?

It may be galling, but it’s probably time to get less exercised about Centrica’s booming profits and start to worry about something more important – like how will the UK keep the lights on.

There have now been two serious warnings in a fortnight. The first was from Alistair Buchanan, chief executive of regulator Ofgem, who said there was “horrendous serendipity” in a large chunk of the UK’s power generation (mainly coal) going offline just as global supplies of gas, the easiest power source to turn on in a hurry, could be squeezed.

Sam Laidlaw, Centrica’s chief executive, then said he wouldn’t be building more gas-fired plants until new market legislation is in place, which could take another two years. He told the FT he thinks there is a possibility of rolling blackouts by 2017-18 if there are nuclear or other outages.

Is Laidlaw trying to make himself even more unpopular by refusing to invest now? Not really. It is reasonable for Centrica to want to know how the government intends the market to work before it commits. That’s just how the privatised energy industry works these days, as the government knows. The rate for having gas-fired plants on stand-by, for example, is vital commercial information.

Buchanan and Laidlaw may not be disinterested parties in this debate, but warnings from high places about energy shortages in three and four years’ time should not be ignored. The questions for the department for energy are clear. Now that new nuclear is delayed until 2020 at the earliest, what is the contingency plan? Is there one?

From Bumi to bust despite Bakrie win

Shares in Bumi have fallen almost 20% in the six trading days since the board triumphed over Nat Rothschild (above) in the battle to control the boardroom. Bumi is an illiquid stock, of course, but the old theory was that victory for the board would be “good” for the share price in that divorce from the Indonesian Bakrie family would be more likely to happen. On this argument, a raging Rothschild at the helm would have created more uncertainty.

Corporate divorces, even ones planned months ago, don’t happen overnight. And a week of radio silence from Bumi is perhaps a welcome novelty by recent standards.

All the same, bruised investors in Bumi might welcome some reassurance soonish that all is well with the Bakrie unwind.

Xstrata-Glencore merger delayed

Category : World News

Xstrata and Glencore push back the date again for when they expect to complete their $31bn merger to March.

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Ivan Glasenberg’s neighbours rest uneasily with Glencore tax windfall

Category : Business

The village of Rüschlikon got £242m when Glencore floated – but many residents have reservations about the money’s origins

He’s so rich and pays so much tax that every one of his 3,600 neighbours in the picturesque village overlooking Lake Zurich got a 7% tax break, but not everyone in Rüschlikon likes Ivan Glasenberg.

The 55-year-old, who had been living quietly in the village for more than a decade, exploded into the public consciousness last year when his previously extremely secretive commodity trading company Glencore floated on the London Stock Exchange and turned Glasenberg into Switzerland’s sixth richest man overnight.

The float valued his stake in the company, which is worth four times as much as Marks & Spencer, at £5.7bn. Even with Switzerland’s famously low tax rates, Glasenberg, pictured above, paid 360m Swiss francs (£242m) in tax to Rüschlikon’s coffers because under Swiss law a large proportion of income taxes are paid to the local community rather than directly to the state.

As a result Rüschlikon, which was already known as the “richest village in Switzerland”, was left with so much spare cash that the village council proposed cutting its already low tax rate by a further 7%. The idea was overwhelmingly approved in a public vote, but some citizens argued against the windfall – suggesting it was tainted money – and are still concerned today.

The money which Rüschlikon is benefiting from comes via Glencore’s mining and trading operations in more than 40 countries around the world. “He [Glasenberg] covers a lot of territory and has access to a lot of heads of state,” said James Campbell, a former executive at mining multinational Anglo American who worked closely with Glasenberg on one of his first deals in the 1980s. “His modus operandi is active. Certainly you either like Ivan or you don’t. I’m not sure those who don’t like him can tell you why.”

Growing up, Glasenberg was a keen athlete, going on to become a champion race walker who would have competed in the 1984 Olympics if South Africa had not been banned from the competition during the apartheid period. Chris Rael, who trained with him in California in the 1980s and now works for the US athletics team, remembers Glasenberg as courteous, friendly and approachable. “He never talked about money or business, so I would never have suspected that was what he’d become.”While Glasenberg, who lives in a glass and steel chalet up a steep hill with views over the lake, is on first-name terms with presidents and prime ministers, few people in Rüschlikon had heard of him until his taxes reached the village coffers. The huge payment caused an immediate stir, with the mayor being advised to call the village’s bank to make sure it was prepared to receive such a large payment.

In Le Bistro cafe in the converted waiting room of Rüschlikon station, from where the village’s rich residents can be whisked to downtown Zurich in 15 minutes, none of the clientele whiling away the afternoon have met Glasenberg but all are happy to chat about his impact on the community.

“They are really happy with him paying a lot of taxes,” said waitress Sylvia Hauser. “But they don’t like his business, they don’t like what he is doing. It’s not very friendly and they do not agree with what he does, especially in

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EU backs Xstrata-Glencore merger

Category : World News

The European Commission gives its backing to commodities giant Glencore’s $31bn (£19.5bn) bid to take over mining firm Xstrata.

Link: EU backs Xstrata-Glencore merger

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No merger bonuses for Xstrata execs

Category : Business, Stocks

Shareholders in mining group Xstrata have blocked bonuses worth about $220 million promised to some of its top executives as an incentive to stay at the company after its takeover by commodities trader Glencore.

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