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Friday, September 27, 2013
Messi appears in court over tax evasion allegations - FT.com
Messi appears in court over tax evasion allegations - FT.com:
September 27, 2013 4:42 pm
Messi appears in court over tax evasion allegations
Lionel Messi, the Barcelona and Argentina footballer, appeared in a Spanish court on Friday to defend himself against allegations of evading €4.2m of taxes related to the four-time world player of the year’s image rights and sponsorships.
The 26-year old forward, whose prolific scoring for Barcelona has won him recognition as one of the best footballers of his generation, has been accused by prosecutors alongside his father, Jorge, of using a complex network of shell companies in Belize and Uruguay to avoid paying Spanish taxes on the earnings.
ON THIS STORY
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- Messi under investigation for tax fraud
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- A guide to tax inversions
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IN EUROPE
On Friday the player arrived at a closed court session in the Catalan city of GavĆ to be greeted by cheering supporters, as well as the odd cry of “thief” from the crowd before entering the courthouse to testify.
Mr Messi, often celebrated as a hero in his adopted Catalonia, has denied the alleged offences alongside his father, which are said to have taken place between 2007 and 2009.
The player and his father earlier this year paid back €5m to the Spanish state as a “corrective payment” after being accused of filing false tax returns, but denied having committed any wrongdoing, linking the establishment of the network of offshore companies to a former agent.
The pair had said in a previous statement when the allegations emerged: “We have always fulfilled our tax obligations following the advice of our tax consultants who will take care of clarifying this situation.”
Messi, who is ranked the 10th highest earning athlete in the world by Forbes magazine, had earned the bulk of the money from sponsors Adidas and Pepsi, alongside other companies.
The emergence of the Messi tax case is a rare instance of a player with a reputation for being softly spoken and private attracting attention off the playing field.
The Barcelona forward was plucked by the Catalan club’s scouting network from Argentina at the age of 11 in return for it paying for the young player’s treatment for a growth hormone deficiency, later making his debut for the first team at 17 years old.
He went on to become the leading star in a Barcelona side that won three Champion’s League trophies, and the team’s all-time leading scorer in official competitions and sixth highest in the history of the Spanish league.
The emergence of Messi at Barcelona coincided with the arrival of the Portuguese player Cristiano Ronaldo at arch rivals Real Madrid, with the pair boosting the international audiences of the Spanish league as they have vied to outscore each other.
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Tuesday, September 24, 2013
Sunday, September 22, 2013
Friday, September 20, 2013
Asian Groups Dominate Brasil Oil Auction
September 20, 2013 1:37 am
Asian groups dominate Brazil oil auction
The auction for one of Brazil’s biggest oil discoveries attracted little interest from western companies, with the list of bidders led instead by Chinese companies and other Asian state-owned oil groups.
Many investor-owned companies such as Exxon, BG Group, BP and Chevron did not register to bid for Libra, considered the crown jewel of Brazil’s deepwater oilfieldswith forecast production of up to 1m barrels of oil equivalent a day. That is equivalent to about half of Brazil’s present production.
ON THIS STORY
- Brazil says Libra oilfield is ‘huge opportunity’ for oil groups
- Oil M&A markets look east
- Petrobras faces test to tap pre-salt oil
- Brazil’s Petrobras steps up data security
- Chevron to settle $17.5bn Brazilian oil spill suits
ON THIS TOPIC
- Brazil grants corruption conviction appeals
- Global Insight Rousseff dashes Obama hope of stronger ties
- Brazil corruption case faces legal test
- Rousseff to decide if US visit will go ahead
IN OIL & GAS
The auction drew only a quarter of bidders expected by the government, as concerns rise over onerous state controls in the industry.
The list was led by Asian groups such as Malaysia’s Petroliam Nasional, Petronas and India’s ONGC.
In total, 11 companies paid the R$2.05m registration fee before Wednesday’s deadline to bid for rights to explore Libra, according to a statement on Thursday by ANP, Brazil’s oil and gas regulator.
Magda Chambriard, head of ANP, said she had expected more than 40 companies to bid during the auction, which is scheduled for October 21.
France’s Total and Anglo-Dutch oil group Royal Dutch Shell were among the few non-state companies to register their interest in Libra’s pre-salt reserves, so-called because they are buried under a thick layer of salt beneath the seabed.
Next month’s auction will be the first under the country’s 2010 production-sharing agreement through which the government has sought to increase its control over the country’s newly discovered reserves.
Under the model, the government will award rights to explore and produce oil at Libra to whichever company or group that promises to give the largest share of its output from the field to the Brazilian government.
Brazil’s state-owned oil company Petrobras will also automatically take a minimum stake of 30 per cent in the winning consortium and become the operator of the field, controlling exploration and production.
The list of bidders released by ANP was also notable for its lack of US companies, especially as tensions rise between the two countries.
Reports this month that the US has been spying on all areas of Brazilian politics and business, including Petrobras, have led to calls for the government to postpone the Libra auction.
On Tuesday President Dilma Rousseff announced she would postpone indefinitely herstate visit to Washington next month in response to the spying allegations.
This article has been amended since its original publication regarding the number of UK-based bidders
Thursday, September 19, 2013
Brasil's Petrobras To Invest Heavily In Data Security In Response To American Spying
September 18, 2013 6:37 pm
Brazil’s Petrobras to invest heavily in data security
Brazil’s state-owned oil company Petrobrassaid it was investing R$21bn in five years to improve data security amid allegations US spies are targeting the company.
The comments from Petrobras, which follow the postponement on Tuesday by PresidentDilma Rousseff of a state visit to Washingtonover the espionage controversy, come amid fears of increasing fallout for business from the row.
ON THIS TOPIC
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IN LATIN AMERICA & CARIBBEAN
“This is a policy that is so important it has been personally approved by the board of directors,” Maria das GraƧas Foster, Petrobras president, told a public forum in Rio de Janeiro of the investment in security. “The management of our goods, people, information and the wealth we create is of crucial importance.”
Brazilian politicians have been angered by informationleaked by former US National Security Agency contractor Edward Snowden alleging that Washington’s spying was aimed not only at terrorists but also at President Dilma Rousseff and state-owned oil company, Petrobras.
The fallout could have commercial consequences, with communications minister Paulo Bernardo saying Brazil could require telecommunications companies to use only locally made equipment, a move that would hit foreign suppliers and add to the costs of the industry.
The government is also pushing an internet bill through Congress that would seek to force companies such as Google and Facebook to keep data concerning Brazilians in servers sitting physically within the country.
Having the information physically located in Brazil would mean the companies would have to adhere to Brazilian privacy law regarding information affecting its citizens.
In her comments, Ms GraƧas Foster said Petrobras was investing R$3.9bn in security this year alone with 3000 employees engaged in the area.
Strict security procedures included requiring scientists and functionaries to avoid transferring the most critical data, such as seismic studies of the company’s oil reserves, through the internet.
The company’s data centre for storage of crucial information was also physically protected by a system of biometric checks, such as thumb readers.
Few business leaders had expected much in terms of concrete dealmaking from Ms Rousseff’s planned state visit to Washington next month.
But the visit was meant to have capped off a slow improvement in relations between the two hemispheric giants since Ms Rousseff took office in January 2011.
Boeing of the US is seen as one of the frontrunners for a planned Brazilian fighter jet contract and US oil majors are believed to be interested in the Latin American country’s proposed forthcoming auctions of fields in giant offshore oil discoveries.
Brazilian companies, meanwhile, hope to strengthen their foothold in the US, with local aircraft maker Embraer looking for defence contracts.
JoĆ£o Augusto de Castro Neves of Eurasia Group said there was little room for positive overtures between Brazil and the US.
But he said Brazil could little afford a trade war with the US as it battles with high inflation and other economic problems.
There is also rising concern in Brazil that it is being locked out of the world trade system with the US, Europe and other South American countries negotiating their own trade agreements.
Some of Brazil’s more extreme proposals, such as forcing the use of locally produced telecoms equipment or the local storage of data, would also be formidably difficult to implement.
“I don’t see Brazil following through on some of the threats, especially towards internet companies,” he said.
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Wednesday, September 18, 2013
Tuesday, September 17, 2013
Rousseff May Cancel US Trip
September 17, 2013 1:51 am
Rousseff to decide if US visit will go ahead
Dilma Rousseff is expected to announce on Tuesday whether she will go ahead with a state visit to Washington next month after anger in Brazil over US spying.
The Brazilian leader spoke with US President Barack Obama by phone on Monday evening about the visit amid speculation she may cancel or postpone the trip until next year to express her dissatisfaction with Washington.
ON THIS STORY
- US not out of the woods over Brazil spying claims
- Brazil outraged by claims of US spying
- Brazil faces a world of tough decisions
- CIA budget revealed in Snowden leak
- Court told Miranda files risk to security
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- Rousseff angry at new US spying report
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IN LATIN AMERICA & CARIBBEAN
“She told him she would have a position by tomorrow on the subject,” said a person familiar with the matter.
Revelations that the US National Security Agency monitored everything from Ms Rousseff’s personal communications with her staff to the affairs of state-owned oil company Petrobras have rocked Brazil.
Brazilian officials see the spying as an affront at a time when the two sides have been trying to raise the importance of the relationship. The state visit is to be the first by a Brazilian president in nearly two decades.
“People feel bad that the president is being spied on by a country that describes Brazil as a strategic partner,” said Paulo Sotero, director of the Brazil Institute at the Wilson Center.
The revelations were contained in stories released by Guardian journalist Glenn Greenwald and Fantastico, a programme on Brazil’s dominant television network Globo TV, using material from Edward Snowden, the fugitive former NSA contractor.
“The United States understands that recent disclosures in the press – some of which have distorted our activities and some of which raise legitimate questions for our friends and allies about how these capabilities are employed – have created tensions in the very strong bilateral relationship we have with Brazil,” the White House said last week.
Ms Rousseff has reportedly come under pressure from within her centre-left Workers’ party to abandon the visit, with her mentor, former president Luiz InĆ”cio Lula da Silva, cited as being one of those in favour of cancelling.
However, cancellation would represent a setback for improving relations between the US and Brazil, which has been one of Ms Rousseff’s main foreign policy achievements.
She may opt to postpone the trip until about April to allow the scandal to die down and to reduce the risk of having the visit disrupted by further embarrassing revelations, people familiar with the matter said.
The scandal is also threatening commercial interests between the two countries.
US business is eyeing fighter jet contracts in Brazil as well as the auction next month of one of the most important offshore oilfields in the country’s giant “pre-salt” oil discoveries.
The spying revelations are likely to make it harder for US companies to secure those contracts.
“Even though the scandal will stoke nationalist sentiment and create incentives for BrasĆlia to impose some restrictions on American companies operating in sensitive sectors, the threat of outright retaliation against Brazilian companies in the US is likely to contain the risk of the scandal escalating into a trade war,” Eurasia Group said.
Monday, September 16, 2013
The Current Economic Woes Of Argentina
September 16, 2013 1:11 pm
Risk of default adds to woes for Argentina’s FernĆ”ndez
In the heart of downtown Buenos Aires, it is hard to walk more than 20 paces without being accosted by hawkers buying and selling dollars. Interested customers will be led into an inconspicuous office in a nearby building.
“They’re called ‘caves’, because they’re supposed to be secret. Of course everyone knows they’re there,” said a hawker who called himself RaĆŗl. “Illegal? Of course they are! But don’t worry, the police are paid off, nothing will happen to you.”
ON THIS TOPIC
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- IMF steps back from Argentine debt case
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IN GLOBAL ECONOMY
The thriving currency black market on postcard Florida Street in the commercial centre of Argentina’s capital is a result of strict foreign exchange controlsintroduced in 2011 to stem capital flight. In the “caves”, dollars can be sold for close to double the official rate of 5.7 pesos.
Argentina’s artificially overvalued currency is one of an array of economic problems facing Cristina FernĆ”ndez de Kirchner, president. Others include stubbornly high inflation, state subsidies that are sapping resources, and an abysmal business climate that has seen investment all but dry up.
“We have an economy that has become dysfunctional,” said Miguel Kiguel, an economist and former government official, who identifies the overvalued currency as one of the roots of the problem, undermining the economy’s competitiveness.
During Ms FernĆ”ndez’s second term as president, surpluses in the current and capital accounts have shrivelled into twin deficits. This is especially bad for a country that has outlaw status on the international capital markets and cannot seek financing abroad.
That problem will only deepen if Argentina slips into a technical default, which some observers believe is all but inevitable after a US appeals court last month ruled in favour of the holdouts demanding that Ms FernĆ”ndez’s government pay the $1.3bn it owes them in full, in the latest chapter in a long-running saga that began when Argentina defaulted on almost $100bn in debt in 2001.
The likelihood that Argentina will default for a second time in little more than a decade only increased when Ms FernƔndez subsequently proposed a new debt exchange, which congress will approve this week, since if the plans are implemented in full observers say they would put Argentina in contempt of court.
The government is doing its utmost to stave off the moment of reckoning, when the US Supreme Court issues a definitive ruling on the case – something it may not do until next year – but some question how much another default will really change what is already a bad situation.
“It will just be one more stripe on the tiger,” added Mr Kiguel, who observes that Argentina is already paying default-level interest rates on its debt.
Serious economic problems are among the main reasons why the ruling Peronist movement fared so poorly in primary elections last month, making it almost impossible for the president to secure the two-thirds majority she would need in midterm legislative elections on October 27 to amend the constitution and enable her to run for a third consecutive term in office in 2015 presidential elections.
With less than two years of Ms FernĆ”ndez’s presidency remaining, the battle for succession is well under way, sending local politics into flux.
Carlos Germano, a political analyst, said: “We are about to see a fierce dispute for the change of leadership of the Peronist party, as well as a realignment of forces in the opposition.
“The great unknown is how the president will react to all of this.”
Ms FernĆ”ndez is losing the support of the trade unions and low-wage workers – bedrocks of the Peronist movement. Some fear that her waning power could have grave repercussions.
“Why has Argentina had these macroeconomic problems for such a long time without a crisis? Because we have had a strong government,” according to Luis Secco, an economist. “When political power weakens and there are macroeconomic problems, the possibility of a crisis increases greatly,” he said, pointing to the premature collapse of the AlfonsĆn and de la RĆŗa governments in 1989 and 2001 respectively.
Sergio Berensztein, a pollster, said: “The president’s power has weakened extraordinarily, thanks to a series of terrible decisions. She has done everything wrong.”
He added that Ms FernĆ”ndez’s victory in 2011 presidential elections, with an unprecedented 54 per cent of the vote, led her to believe that she had carte blanche. “She went for everything, but she ended up with nothing.”
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Please don't cut articles from FT.com and redistribute by email or post to the web.
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