The trial of four Rio Tinto executives, including Australian citizen Stern Hu, will begin today in China with all four accused of receiving bribes in order to steal company secrets.
The Australian Government has been denied access to the trial, even after it applied to have a representative attend. Currently the hearings are behind closed doors.
Hu and his colleagues have waited almost nine months for a trial, with today the beginning of a three-day process.
The beginning of the trial comes as Rio Tinto chief executive Tom Albanese is in Beijing to speak at an economic forum. Analysts are currently waiting to see how the trial will impact iron ore business.
Sales of new vehicles fall
Meanwhile, sales of new motor vehicles fell by a seasonally adjusted 1.9% during February to 85,035, according to the latest results from the Australian Bureau of Statistics, but that figure remains 17.1% higher than the same period last year.
The biggest decrease was in the Northern Territory, where sales fell by 12.5%. Sales dropped in the Australian Capital Territory by 0.5%, in Tasmania by 5.8%, in Western Australia by 1.2%, in South Australia by 8.1% and Queensland by 3.4%.
Victorian car sales fell by 1.8%, while New South Wales was the only state to record a rise of 0.9%.
Arrow Energy has accepted an updated takeover offer reportedly worth as much $3.4 billion, from Royal Dutch Shell and PetroChina The offer is higher than the $4.45 per share offer announced on March 8, with shareholders set to gain from the new Dart Energy Limited entity.
“The cash component alone represents a 35% premium to both the last closing price and one month volume weighted average price prior to March 8,” Arrow said in a statement. The Dart Energy entity will cover the group’s Asian assets, along with some Australian assets as well.
Shares lower after weak Wall Street returns
The Australian sharemarket has opened lower today, following weak leads from Wall Street and the commodities markets over the weekend.
The benchmark S&P/ASX200 index was down 33 points or 0.69% to 4838.7 at 12.00 AEST, while the Australian dollar also fell slightly to US91c.
Commonwealth Bank shares lost 0.6% to $55.90, while ANZ lost 0.3% to $25.04. Westpac fell 0.3% to $27.36 as AMP lost 0.2% to $6.30.
New appointments
There have been a number of new appointments this morning, with Macquarie adding Michael Hawker as an independent non-executive director. Hawker currently serves as a director of insurance group Aviva Plc.
Chairman David Clarke said the board would benefit from Hawker’s experience in the financial industry, after spending 11 years with Citibank. “Michael’s appointment will represent an important addition to the skill base of our board,” Clarke said.
Meanwhile, General Motors has appointed Mike Devereux as chairman and managing director of Holden. Devereux, who previously served as head of GM’s Middle East operations, is expected to begin in his new post immediately in Melbourne.
Solomon Lew’s Premier Investments has recorded a first half net profit of $42.44 million for the first half of the year, representing a decrease of 13.7%, but the company says it is cautiously optimistic about the performance of the Just Group.
The company, which owns the Just Jeans, Jay Jays, Dotti, Smiggle and Peter Alexander brands, said the retail environment remains difficult with further interest rate rises expected.
“However, Premier is cautiously optimistic in relation to the relative performance of Just Group given its range of brands, their broad demographic coverage, the proven strength of its core and growth brands and a strong focus on retail fundamentals to achieve acceptable margin growth,” the group said in a statement. Total revenue was up by 6.3% to $483.99 million.
Austar to resist any deal with Foxtel
Mark Fries, head of Austar United Communications’ majority owner Libery Globa, has said the company intends to remain an Austar shareholder and that Foxtel’s complicated ownership structure makes any possible deal between the two companies very difficult.
He told ABC TV’s Inside Business that Liberty had exited some Asian markets; no such plans are marked for Australia.
“We did exit Japan last month and sold our minority interest there to a mobile operator for $4 billion so we’ve got plenty of cash, we are not sitting in a position where we need capital or need a return to our shareholders,” he said, also addressing Foxtel and the lack of any deal between the two pay-TV operators.
“They have a relatively convoluted ownership structure with lots of various interests and I can’t predict for you when those interest groups decide to do something,” he said. “You’ve got some very strong owners, strong willed owners who are getting something from this relationship, I do believe it will be difficult to break that up so it probably would fall on deaf ears.”
Overseas, state-owned conglomerate Dubai World is now expected to propose a $US26 billion debt restructuring plan to its creditors. The group, one of the three holding companies of the Dubai government, invested heavily in real estate before the bust in 2008.
Late last year investors scattered after the company said it would seek a delay on repaying $US26 billion in debt.
In New York, investors await the outcome of a Congressional vote on health care reform. President Barack Obama has placed the vote as his top priority, with the Democratic leadership confident of a win after months of debate.
Neil Catania, broker at MND Partners, told Reuters that the “market doesn’t like indecision. Whichever way it goes, there will be a decision and then people can move on”.
“If the bill passes, you’ll have a majority of people putting some money to work. It’s a mixed bag, though, because what’s good on one side is going to hurt another side. But more important than anything is the decision.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
