Freeport downgraded as analysts question shift into energy, stock slips

(Reuters) – Shares of Freeport-McMoRan Copper & Gold Inc fell further on Thursday, a day after it said it had struck deals to expand into energy by acquiring Plains Exploration & Production Co and McMoRan Exploration Co for $ 9 billion, and at least four analysts downgraded the miner’s stock.

The transactions, valued at $ 19.6 billion including debt, were lambasted by investors and analysts alike as being unnecessary and a distraction from Freeport‘s copper business.

Freeport shares fell 5 percent to a 15-month low of $ 30.58 in morning trade before recovering slightly. The stock fell 15 percent on Wednesday after the announcement of the deals.

The investor backlash was exacerbated by the disclosure after the announcement that shareholders won’t be allowed to vote on the deal, meaning the only way they have to express their dissatisfaction is to dump the stock.

“We believe that Freeport stock will remain in the penalty box for the foreseeable future and multiples will remain depressed on the back of these acquisition announcements, given investor uncertainty on the strategic merit,” analysts at Goldman Sachs wrote in a research note.

The move into oil and gas means the company will lose its status as a pure-play copper and gold miner, analysts said.

“Freeport’s diversification into oil and gas arguably removes a key investment draw of the company in its copper exposure,” BMO Capital Markets analysts wrote.

Evy Hambro, a managing director at BlackRock, one of Freeport’s top-five shareholders, condemned the deal on Wednesday, saying there was no reason why the three companies should be put together.

Plains shares, which rose 23.4 percent on Wednesday, were down 2.2 percent at $ 43.48 while McMoRan Exploration‘s shares, which had risen 87 percent, were down 3.4 percent at $ 15.27.

The deal’s high debt component was also viewed as negative.

Standard & Poor’s cut its rating outlook on Freeport to negative from stable, including the company’s BBB corporate credit rating. “The negative outlook on Freeport reflects the leveraged nature of the proposed acquisitions, as well as risks associated with integrating the targeted companies,” S&P said.

The cost of protecting debt issued by Freeport against potential default fell slightly after rising sharply on Wednesday immediately after the deal announcement.

Five-year credit default swaps were 1.5 basis points tighter at 153 basis points. That means it costs $ 153,000 a year to protect $ 10 million of debt for five years. The CDS widened about 12 percent on Wednesday.

Yield spreads on the company’s 3.55 percent bonds due March, 2022 widened another 4 basis points to 206 basis points over 10-year Treasuries.

INVESTOR CONCERNS

Freeport said on Wednesday that the rationale for entering into the deal was to use low-cost financing available to the company to make attractive investments.

But analysts including Citigroup’s Brian Yu said there was no or little strategic fit or rationale for the deal.

Yu said he expected the deal to dilute Freeport’s 2013 earnings per share by 3.2 percent.

The Goldman Sachs analysts said Freeport would have to address investor concerns about the valuations of the deal, considering cross-ownership and management links among the three companies.

Both Freeport-McMoRan Copper & Gold and the company now known as McMoRan Exploration Co were spun off in the 1980s and 1990s from the former Freeport-McMoRan Inc.

Jim Bob Moffett is chairman of Freeport-McMoRan and co-chairman and chief executive of McMoRan Exploration. In addition, Plains owns nearly one-third of McMoRan Exploration’s shares after a 2010 asset sale.

Some analysts said the $ 6.9 billion deal for Plains undervalued the company, while $ 2.1 billion for McMoRan was on the high end.

“If the high risk ultra-deep drilling does not work, Freeport greatly overpaid for McMoRan in our view,” analysts at RBC Capital Markets said.

McMoRan has struggled with delays at its Davy Jones deep gas prospect off Louisiana.

Analysts at Nomura said the high debt load made a special dividend less likely and eroded any takeover premium in Freeport’s stock.

Nomura cut its price target on Freeport’s stock to $ 36 from $ 40, while UBS decreased its target $ 40 from $ 47.

Freeport shares were down 3.9 percent at $ 30.91 in early afternoon trading on the New York Stock Exchange.

(Reporting by Swetha Gopinath in Bangalore; Editing by Ted Kerr)

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Death toll from Philippine typhoon nears 300

NEW BATAAN, Philippines (AP) — Stunned parents searching for missing children examined a row of mud-stained bodies covered with banana leaves while survivors dried their soaked belongings on roadsides Wednesday, a day after a powerful typhoon killed nearly 300 people in the southern Philippines.

Officials fear more bodies may be found as rescuers reach hard-hit areas that were isolated by landslides, floods and downed communications.

At least 151 people died in the worst-hit province of Compostela Valley when Typhoon Bopha lashed the region Tuesday, including 78 villagers and soldiers who perished in a flash flood that swamped two emergency shelters and a military camp, provincial spokeswoman Fe Maestre said.

Disaster-response agencies reported 284 dead in the region and 14 fatalities elsewhere from the typhoon, one of the strongest to hit the country this year.

About 80 people survived the deluge in New Bataan with injuries, and Interior Secretary Mar Roxas, who visited the town, said 319 others remained missing.

“These were whole families among the registered missing,” Roxas told the ABS-CBN TV network. “Entire families may have been washed away.”

The farming town of 45,000 people was a muddy wasteland of collapsed houses and coconut and banana trees felled by Bopha’s ferocious winds.

Bodies of victims were laid on the ground for viewing by people searching for missing relatives. Some were badly mangled after being dragged by raging flood waters over rocks and other debris. A man sprayed insecticide on the remains to keep away swarms of flies.

A father wept when he found the body of his child after lifting a plastic cover. A mother, meanwhile, went away in tears, unable to find her missing children. “I have three children,” she said repeatedly, flashing three fingers before a TV cameraman.

Two men carried the mud-caked body of an unidentified girl that was covered with coconut leaves on a makeshift stretcher made from a blanket and wooden poles.

Dionisia Requinto, 43, felt lucky to have survived with her husband and their eight children after swirling flood waters surrounded their home. She said they escaped and made their way up a hill to safety, bracing themselves against boulders and fallen trees as they climbed.

“The water rose so fast,” she told AP. “It was horrible. I thought it was going to be our end.”

In nearby Davao Oriental, the coastal province first struck by the typhoon as it blew from the Pacific Ocean, at least 115 people perished, mostly in three towns that were so battered that it was hard to find any buildings with roofs remaining, provincial officer Freddie Bendulo and other officials said.

“We had a problem where to take the evacuees. All the evacuation centers have lost their roofs,” Davao Oriental Gov. Corazon Malanyaon said.

The International Federation of Red Cross and Red Crescent Societies issued an urgent appeal for $ 4.8 million to help people directly affected by the typhoon.

The sun was shining brightly for most of the day Wednesday, prompting residents to lay their soaked clothes, books and other belongings out on roadsides to dry and revealing the extent of the damage to farmland. Thousands of banana trees in one Compostela Valley plantation were toppled by the wind, the young bananas still wrapped in blue plastic covers.

But as night fell, however, rain started pouring again over New Bataan, triggering panic among some residents who feared a repeat of the previous day’s flash floods. Some carried whatever belongings they could as they hurried to nearby towns or higher ground.

After slamming into Davao Oriental and Compostela Valley, Bopha roared quickly across the southern Mindanao and central regions, knocking out power in two entire provinces, triggering landslides and leaving houses and plantations damaged. More than 170,000 fled to evacuation centers.

As of Wednesday evening, the typhoon was over the South China Sea west of Palawan province. It was blowing northwestward and could be headed to Vietnam or southern China, according to government forecasters.

The deaths came despite efforts by President Benigno Aquino III’s government to force residents out of high-risk communities as the typhoon approached.

Some 20 typhoons and storms lash the northern and central Philippines each year, but they rarely hit the vast southern Mindanao region where sprawling export banana plantations have been planted over the decades because it seldom experiences strong winds that could blow down the trees.

A rare storm in the south last December killed more than 1,200 people and left many more homeless.

The United States extended its condolences and offered to help its Asian ally deal with the typhoon’s devastation. It praised government efforts to minimize the deaths and damage.

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Associated Press writers Jim Gomez, Teresa Cerojano and Oliver Teves in Manila contributed to this report.

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Jazz pianist Dave Brubeck dead at 91

NEW YORK (Reuters) – Jazz pianist Dave Brubeck, whose choice of novel rhythms, classical structures and brilliant sidemen made him a towering figure in modern jazz, has died at the age of 91, his longtime manager and producer Russell Gloyd said on Wednesday.

Brubeck died of heart failure on Wednesday morning after he fell ill on his way to a regular medical exam at Norwalk Hospital, in Norwalk, Conn., a day short of his 92nd birthday, Gloyd said.

His Dave Brubeck Quartet put out one of the best selling jazz songs of all time: “Take Five,” composed by alto saxophonist Paul Desmond. Like many of the group’s works, it had an unusual beat — 5/4 time as opposed to the usual 4/4.

“We play it differently every time we play it,” Brubeck told The Philadelphia Inquirer in 2005. “So I never get tired of playing it. That’s the beauty of jazz.”

“Take Five” was the first million-selling jazz single.

Dressed in a suit and horn-rimmed glasses and living a clean-cut lifestyle in the 1950s, Brubeck did not fit the stereotype of a hipster jazzman and his music was not nearly as brooding as that coming from East Coast be-bop players.

Despite his innovative approach, some critics interpreted Brubeck’s popularity as a sign of un-coolness, but his fans were undeterred.

Brubeck was born in Concord, California, on December 6, 1920. His father was a rancher and as a teenager Brubeck was a skilled cowboy. But his mother, a music teacher who had five pianos in the house, saw that he took up piano at age 5.

At the College of the Pacific in Stockton, California, he planned to be a veterinarian, but within a year he was majoring in music and playing jazz in nightclubs.

“After my first year in veterinary pre-med I switched to the music department … and that was at the advice of my zoology teacher,” Brubeck said in a Reuters interview. “He said ‘Brubeck, your mind is not here, with these frogs and formaldehyde. Your mind is across the lawn at the conservatory. Will you please go over there.’”

Brubeck later met the co-director of a weekly campus radio show, Iola Marie Whitlock, and they eventually married.

After graduation, Brubeck studied under French composer Darius Milhaud and played in a U.S. Army jazz band during World War Two.

In the late 1940s, he moved to the San Francisco Bay area, where he headed an experimental jazz octet. He formed a trio in 1950 and the following year expanded to a quartet with Desmond, who he had known since the war.

Brubeck injected classical counterpoint, atonal harmonies and modern dissonance into his music, hinting at composers such as Debussy, Bartok, Stravinsky and Bach.

The group built an enduring fan base by taking its subdued bluesy brand of classically influenced jazz to colleges.

As a leading figure in the West Coast jazz scene, which also included Gerry Mulligan and Chet Baker, Brubeck was featured in a Time magazine cover story in 1954. Some critics and black musicians, who felt jazz was a central part of black culture, resented the story about the prominence of a white artist.

In the article Brubeck said Milhaud had told him “if I didn’t stick to jazz, I’d be working out of my own field and not taking advantage of my American heritage.”

Brubeck disbanded the quartet in 1967 after nearly 17 years to concentrate on composing. He wrote several choral works, all religiously influenced.

He later began performing jazz regularly again and appeared with his sons, Darius, a composer and pianist; Chris, who played electric bass and trombone; and drummer Danny. They were billed as Two Generations of Brubeck.

In February 1989 Brubeck, who had a history of heart problems, underwent triple-bypass surgery but kept playing. Well into his 80s, he still put on some 80 shows a year. He had a pacemaker implanted in October 2010.

Actor-director Clint Eastwood, a jazz fan, announced plans to make a documentary on Brubeck in 2007. Eastwood also was named chairman of the Brubeck Institute at the University of the Pacific, designated as the home of his papers, private recordings and other memorabilia.

Brubeck and his wife, who also was his agent and lyricist, had two other sons, Matthew, a cellist, and Michael, and a daughter, Catherine. The couple lived in Wilton, Connecticut.

(Reporting by Christine Kearney; Editing by Leslie Gevirtz)

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With Teva at crossroads, new CEO set to unveil vision

NEW YORK/TEL AVIV (Reuters) – Teva Pharmaceutical Industries‘ new Chief Executive Jeremy Levin has promised investors it will be a very different company going forward. Next week he has to prove it.

Levin’s ability to paint a bright future for the world’s biggest maker of generic drugs at a meeting with investors and analysts on December 11 in New York became a bit more difficult last week, when Teva issued a 2013 earnings forecast that fell short of Wall Street estimates.

Levin, a big pharma veteran, is expected to shift Teva’s focus to branded drugs even as its most important such product, top-selling multiple sclerosis treatment Copaxone, faces new competition and a 2015 patent expiration. Investors are also hoping for a meaningful boost to the annual dividend while new management works to jumpstart a stagnant share performance.

“I’ve made a lot of money in Teva and I’ve seen this company wither in front of my eyes,” said Dan Hunt, a co-portfolio manager for RCM Capital Management’s Wellness Fund. Hunt’s fund no longer includes Teva shares, but RCM has small Teva holdings.

“The most important signal (shareholders) need to hear on the record from Levin is ‘whatever it takes I will protect you’,” Hunt said, adding that Teva has not delivered for its shareholders in years.

Teva’s U.S. shares are up about 2 percent in 2012 after falling 22.6 percent in 2011. They are off 35 percent from a 2010 peak at about $ 64. Shareholders of smaller Teva rivals Watson Pharmaceuticals Inc and Mylan Inc have fared far better with Watson up about 45 percent this year and Mylan shares up about 27 percent over the same period.

Levin has taken some preemptive steps to placate investors ahead of the meeting by announcing that the company plans to cut $ 1.5 billion to $ 2 billion in costs over the next five years, streamline operations and discontinue some research programs.

Morgan Stanley estimated that Copaxone sales account for 58 percent of Teva’s projected 2013 earnings. Levin will have to reveal how he plans to make up for the anticipated decline in Copaxone revenue beyond cost-cutting efforts.

Generic drugs accounted for 56 percent of Teva’s revenue last year, but the company faces obstacles to generic growth in the United States, the world’s largest market.

Following a wave of major patent expirations, the number of multibillion-dollar drugs going generic will diminish after the next couple of years. And new generic drugs are facing competition sooner along with faster price declines. Generic drugs are also facing considerable price pressure in Europe.

SMALL ACQUISITIONS

South African-born Levin, a former senior vice president for strategy at Bristol-Myers Squibb Co, took over as CEO of Israel’s biggest company in May, replacing Shlomo Yanai.

In five years at the helm, Yanai engineered a number of large acquisitions, including last year’s $ 6.5 billion purchase of U.S. drugmaker Cephalon, which has been viewed by some analysts as a disappointment. The company last month took a $ 481 million impairment charge related to the Cephalon deal.

Levin last week signaled a desire for more targeted acquisitions focused on Teva’s core areas of expertise, such as central nervous system disorders and respiratory diseases.

He has begun to whittle away at non-core businesses, selling Teva’s U.S. animal health unit to Bayer for up to $ 145 million. Investors said Teva needs to improve production efficiency and downsize or close some of its plants.

Levin, who implemented at Bristol-Myers a series of deals and alliances with small and large companies, has been credited with helping to guide Bristol through its enormous patent cliff as the blood clot preventer Plavix, which had been the world’s second biggest selling prescription medicine, lost exclusivity.

“The key is smart deals and getting an estimate of what a reasonable growth rate is going forward,” said Robert Caravella, equity research analyst for Victory Capital Management, which holds about $ 9 million in Teva convertible bonds.

“The biggest issue is there’s not an understanding of where revenue and earnings are going to go and how we’re going to get to that point,” he said.

BIGGER DIVIDEND?

Shareholders would also like to see Teva raise its dividend, which provides only a 2.5 percent return on the stock, below the industry average of about 4 percent. Alternatively, the company may decide to increase shareholder returns by boosting its $ 3 billion share buyback.

Steven Tepper, an analyst at brokerage Harel Finance, said Levin must demonstrate how Teva can again become a growth company or that it will be a value investment going forward through a significant dividend increase. “This plan will have to convince investors it’s making that move,” Tepper said.

RCM Capital’s Hunt said Levin must present “a strong, formed, clear strategic vision” of where the company is headed.

The question is whether it will be enough to convince disenchanted investors such as Stewart Capital, which has more than $ 1 billion in assets under management but sold its Teva holdings shortly after Levin took over.

Matthew DiFilippo, chief portfolio strategist for Stewart, was skeptical that one individual could effect the change necessary to transform Teva back into an industry darling. “So while we recognized his talents, we also recognized the challenges they face and we sold,” he said.

A lot of money remains on the sidelines waiting for what Levin has to say, said Ori Hershkovitz, managing partner at Israel-based pharmaceutical hedge fund Sphera. Levin needs to say he is committed to replenishing Teva’s branded pipeline and will do whatever it takes to replace those lost sales by 2016, Hershkovitz said, and he must “make the market believe it”.

(Additional reporting by Steven Scheer in Jerusalem; Editing by Leslie Gevirtz)

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Citigroup in 11,000 staff cull

5 December 2012 Last updated at 14:17 ET

Citigroup says it is cutting 11,000 jobs worldwide in an efficiency drive, with most of the jobs being lost in its consumer banking division.

The bank said the move, which will see its headcount shrink by 4%, would cost it about $ 1bn (£621m) in pre-tax charges.

Shares in the bank rose 7% following the announcement.

The move comes two months after the bank’s former chief executive, Vikram Pandit, suddenly resigned.

Michael Corbat took over from Mr Pandit as chief executive.

The bank said the $ 1bn charge would be recorded in its fourth-quarter figures for this year.

It said it would also add another $ 100m in charges to the first half profits for 2013.

Citigroup said the changes would leave it $ 900m better off in 2013 and a further $ 1.1bn the following year.

The company said that about 25% of the charges for the fourth quarter related to its securities and banking division, with another 10% in transaction services.

Another third would come from reductions in its global consumer banking division, where 6,200 positions would be cut.

Moving out

The banking group said it would be selling or scaling back consumer operations in Pakistan, Paraguay, Romania, Turkey and Uruguay.

Other countries affected by the changes would be Brazil, Hong Kong, Hungary, South Korea and the US.

It is also closing branches in Greece and Spain, countries hard-hit by the eurozone crisis.

It intends to focus on the 150 cities that have the highest growth potential in consumer banking.

After the changes, Citi said it would have more than 4,000 retail branches around the world.

At the time of Mr Pandit’s sudden departure, the bank’s chairman, Michael O’Neill, said the departure was not due to any “strategic, regulatory or operating issue”.

Mr Pandit left the bank with a settlement of more than $ 15m.

He resigned a day after Citi reported an 88% drop in quarterly profits to $ 468m.

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WestJet embraces tech to woo business travelers

TORONTO (Reuters) – WestJet Airlines Ltd will use technological innovation, including a new Internet ticket booking system, to help it transform from a no-frills carrier to a lower-cost full-service airline courting lucrative corporate travelers, its chief executive said on Monday.

Canada’s second-biggest airline plans to launch a series of technology systems, most notably the new online booking engine, which will sell three tiers of tickets, in the next two months.

“Companies evolve or they die,” Chief Executive Gregg Saretsky told Reuters in a phone interview from the company’s Calgary head office.

“We’re 16 and going on 17 years old and we can’t stay just as we were 17 years ago. The world has changed. And we are changing to be more relevant for a broader segment of guests.”

The new Internet booking system, which WestJet hopes to launch in late January, will sell economy, mid-tier and premium tickets. That is a major shift from its current system, which sells only the lowest-priced ticket available.

Economy tickets under the new system will continue to sell the lowest available fare, but the cancellation fee for them will jump to C$ 75 ($ 75.48) from C$ 50. Mid-tier tickets will have a C$ 50 cancellation fee.

Premium tickets, unavailable until late March when WestJet finishes reconfiguring its 100 Boeing 737 planes to allow more leg room, will include priority screening and boarding, free cancellations and flexibility on ticket changes.

Pricing for those tickets, which may include free meals and drinks and an extra baggage allowance, has not yet been determined. Fares will be well below half the price for business class at WestJet’s bigger competitor, Air Canada, Saretsky said.

“It’s time for us to be more serious with respect to going after business travelers because frankly, they’re the ones who are booking last-minute and are happy to pay for the conveniences,” Saretsky said.

WestJet will launch its premium economy service with 24 seats per plane, but will consider expansion if it proves “wildly successful,” he added.

POISED FOR CHANGE

WestJet, which has spent about C$ 40 million over the past two years on technology projects, is poised for major changes in 2013 as it readies to launch a new regional airline, Encore.

Saretsky hopes that WestJet’s switch in coming weeks to a new Internet phone system will allow ticket reservation agents to work from home and help make room for Encore staff.

Some 750 reservation agents work at WestJet’s Calgary offices, which house about 2,400 staff. Space will be needed for Encore employees over the next 18 months while their office, hangars and maintenance stores are constructed at the WestJet campus.

Encore will be launch in the second half of 2013, “probably closer to July than December,” Saretsky said, with seven Bombardier Q400 planes.

While WestJet won’t announce Encore’s schedule until Jan 21, the carrier will initially serve only “a handful” of new cities, with ticket prices up to 50 percent below Air Canada’s, he added.

Over the next two months, WestJet will also roll out a guest notification system that alerts travelers via email about their flights, allowing them to check in remotely.

Such self-service technology will be critical as WestJet faces increasing labor costs, Saretsky said.

Wage and benefit costs, which represent about a third of operating costs, have climbed 50 percent since WestJet was founded in 1996.

“You can see that creates a little bit of drag on earnings,” Saretsky said. “We’ve got to find ways of reducing our component costs.”

If WestJet can increase self service options for travelers, that could limit the need for new employees, Saretsky said. Management also wants to improve attendance management, so that fewer employees book off sick around long weekends, and more quickly clean and process planes between flights, he said.

(Reporting By Susan Taylor; Editing by Peter Galloway)

(This story was corrected to show that WestJet is replacing its Internet booking engine, not entire reservation system, in the first and second paragraphs)

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Longtime editor at DC’s Vertigo imprint leaving

PHILADELPHIA (AP) — DC Entertainment says its executive editor and senior vice president of Vertigo — a groundbreaking imprint whose titles have included “Hellblazer,” ”DMZ” and “Sandman” — is leaving early next year.

Karen Berger will step down in March after nearly 20 years at the helm, saying in a statement released by DC late Monday that she is ready for a professional change.

During her tenure at Vertigo, the imprint saw a wide range of writers and artists — Neil Gaiman, Jill Thompson, Becky Cloonan and Brian Wood, among them — who produced titles beyond the traditional superhero and villain archetype.

Gerard Way of My Chemical Romance and writer of “The Umbrella Academy” tweeted that Berger gave “us weird kids in high school a Sub Pop Records for comics.”

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Online:

http://www.vertigocomics.com

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After parent’s cancer death, one in five kids self-injure

NEW YORK (Reuters Health) – One in five teens who lost one of their parents to cancer cut or burn themselves, compared to one in ten teens with two living parents, according to a new Swedish study.

“We were very surprised to find that so many did it,” said lead researcher Tove Grenklo, a behavioral scientist at the Karolinska Institutet in Stockholm.

Cutting and burning is thought to be how some troubled teens express their emotions, according to the American Academy of Child and Adolescent Psychiatry. Those teens may hurt themselves if they can’t talk about their feelings, are upset or have low self esteem.

Earlier this year, a study found that children start harming themselves as early as third grade. (see Reuters Health article of June 11, 2012. http://reut.rs/Kveo8v)

The study’s researchers write in the Archives of Pediatrics and Adolescent Medicine that past research showed children with one dead parent are already more likely to have – among other things – psychiatric problems, depression, drug and alcohol abuse and anxiety.

Grenklo and her colleagues wanted to see if they were also more likely to hurt themselves.

For the study, they used Sweden’s national death databases to find and survey teens who lost one of their parents to cancer between 2000 and 2003, when they were between 13 and 16.

They then found teens who still had two living parents for a comparison group.

Of the 851 teens who lost a parent, 622 returned their survey, as did 330 of the 451 teens in the comparison group.

Overall, about 20 percent of the teens with only one surviving parent said they hurt themselves, compared to about 10 percent of teens with both parents living.

‘WE SHOULD TALK WITH EACH OTHER’

“This study is one of the first to establish that (losing a parent to cancer) might be a unique risk factor for this behavior,” said Stephen Lewis, who was not involved with the new study but has studied self-injury at the University of Guelph in Ontario, Canada.

Lewis added that the study’s findings seem to be in line with other estimates of how many teens injure themselves.

The researchers say teens may be driven to self-injure after their parents’ deaths by an increased sense of emotional distress and numbness.

Another possible explanation for the increase is that the teens lost a caretaker who would notice their emotional suffering and prevent self-injury, they add.

As for prevention, both Grenklo and Lewis emphasized communication.

“I’m a strong believer that we should talk with each other,” said Grenklo. “Children need to know the facts of what happened and why. And that it’s OK to be sad and talk about the diseased parent.”

“We know one of the reasons people self injure is that they use injuring as a way to release their emotions,” said Lewis, who added that it’s important for parents, family members and teachers to know how to talk about self-injury and how to prevent it.

Lewis said information on preventing and handling self injury can be found at SIOutreach.org – a Web site where he is co-director.

SOURCE: http://bit.ly/TLILN8 Archives of Pediatrics and Adolescent Medicine, online December 3, 2012.

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Insight: UK court reveals fear and mistrust at TNK-BP

LONDON (Reuters) – A former TNK-BP employee may have confessed to fraud out of fear during a meeting in the office of German Khan, the head of the oil company and one of Russia’s most prominent businessmen, according to a British High Court judge.

In the first judicial account of encounters earlier this year between Khan and his former subordinate Igor Lazurenko, testimonies from the two men paint a picture of fear and mistrust at TNK-BP, one of the country’s largest private companies which is half-owned by Britain’s BP.

The actions and methods of Khan and other oligarchs who grew rich from the privatizations of the 1990s are a sensitive issue in Russia, where President Vladimir Putin is trying to increase state control and crack down on profiteering without scaring off investment. The case opens a window on a world where courts, police and imprisonment are seen by many Russians as tools of the wealthy.

Khan, BP and TNK-BP’s other shareholders are trying to fold their business into state oil company Rosneft. Closing the deal, one of the biggest energy takeovers in history, would net them billions of dollars in cash and could make them shareholders in the state company.

BP has secured government approval to acquire Rosneft shares from the state and expects to complete its part of the sale by mid-2013, but Khan’s side of the deal is only partly formed and has no approvals yet. The whole deal is worth $ 55 billion.

“Whilst it is clearly not possible at this stage to make any definitive findings… Mr. Khan’s own evidence provides some support for Mr. Lazurenko‘s evidence that he was coerced into making this confession,” said Andrew Sutcliffe QC, sitting as judge of London’s High Court, in a November 20 decision.

This week, TNK-BP decided not to appeal the judgment, and on Tuesday, Lazurenko’s lawyers were seeking a total of 1.6 million pounds ($ 2.6 million) in costs from the company.

In his 88-page ruling, Sutcliffe dismissed TNK-BP’s attempts to bring fraud charges against Lazurenko, a one-time Russian army officer who was in charge of organizing oil transport contracts. Sutcliffe called TNK-BP’s potential for a case “very weak”, described some claims as “false and misleading” and was critical about its lack of evidence against Lazurenko.

TNK-BP has also abandoned its attempts to stop Lazurenko from publishing certain documents in his possession. Lazurenko has said they provide evidence of high-level corporate and government corruption and implicate high ranking Russian officials. He has not published them.

The claimant in the November 20 ruling is OJSC TNK-BP Holding, the main holding company of TNK-BP. The defendants are Lazurenko, three other individuals, and a number of companies with which he is connected.

TNK-BP alleged that Lazurenko, who worked for the company from 2003 until he quit this year, took bribes and laundered the money through businesses operating in Montenegro. In August, TNK-BP obtained a UK court order that froze 39 million euros ($ 51 million) worth of the defendants’ assets.

The judge’s account in the November 20 ruling reveals a detailed picture of the encounters in Khan’s office.

In one of them, Lazurenko’s testimony says, Khan told him he stood accused of accepting $ 8 million in bribes for oil transport contracts and threatened “strong action” against him and his family if he did not admit to doing so. Lazurenko denied the allegations on that occasion.

As he arrived for a later meeting, Lazurenko says he saw a man sitting outside “who looked to me like he was from the Moscow police or Ministry of Internal Affairs. I find it hard to explain in the English court how and why I formed this impression,” he said, “but I think it would be very obvious to a Russian judge. It relates to the way this individual looked and was dressed.”

Inside, “Khan told me he had someone outside his office who would arrest me unless I admitted that I had received this money and agreed to repay it”.

He said Khan also told him to remember the fate of Viktor Paliy, a business associate of AAR, through which Khan holds his stake in TNK-BP, who ended up in prison.

“I was scared and knew that I could not continue to deny his allegations if I wanted to get out of his office and leave the building. Therefore I admitted the allegation, even though I knew it to be untrue,” the court document cited Lazurenko saying.

Khan, in his testimony, acknowledged that he referred to the implications for Lazurenko’s family, and that he mentioned the fate of Paliy. He said his intention was to persuade Lazurenko to admit to his crimes.

BETTER TO CONFESS

“I may well have said that if he did not make an admission it would cause serious problems for him. I did not say that he had to confess if he wanted to get out of my office freely and leave the building,” said Khan in his testimony.

Khan denied there had been a policeman outside the office, but said “there may have been someone from internal security service, many of whom are former law enforcement officers.”

He went on to say Lazurenko had “a reputation as a very cold, detached individual”, and that any suggestion he was frightened was “wholly ridiculous.”

However, Sutcliffe used more of Khan’s own testimony to back up his judicial view that Lazurenko might have been right to be scared.

“I told Mr. Lazurenko on at least one occasion that he should think about his family,” the judge quoted Khan as saying. “This was not a threat to harm either Mr. Lazurenko or any members of his family … It is a well-known fact that persons accused of economic crimes can spend years in prison even before being tried, and risk having their assets frozen by the state pending trial… I was offering Mr. Lazurenko a sensible alternative. Pay back the money he stole from TNK-BP and thus avoid the risk of prison.”

The judge also noted Khan’s response to Lazurenko’s description of him as “extremely ruthless”.

“As is well known,” Khan said, “Doing business in Russia is not for the faint hearted.”

Asked for a response to the judgment and the judge’s remarks, TNK-BP said in an emailed statement it was “confident in our position and will continue pursuing Mr. Lazurenko in all appropriate jurisdictions.”

It added: “Before fleeing Russia Mr. Lazurenko admitted his wrongdoing against the company… Mr. Lazurenko did not make any reports to the Russian or English police about any coercion.”

A spokesman for Lazurenko said: “The two damning judgments against TNK-BP… bring to an end a seven month campaign instigated by TNK-BP in an attempt to gag Mr Lazurenko and guarantee his silence.

“Despite its vast resources and lengthy investigations, TNK-BP has been unable to produce any evidence to support its allegations against Mr Lazurenko,” he said in an email.

BP and AAR, a consortium holding 50 percent of TNK-BP, both declined to comment on the contents of the court document.

GAGGING ORDER

The separate UK gagging order keeping Lazurenko’s documents secret was lifted on October 16. The judge who lifted it revealed that Transneft, the Russian pipelines monopoly, was named in the corruption allegations. Transneft has declined to comment on the subject. TNK-BP had plans to appeal against the lifting of the injunction, but has since dropped that action too.

The Khan-Lazurenko dispute dates back to March when Khan made Lazurenko the subject of an internal inquiry. In April, Lazurenko resigned and left Russia.

TNK-BP is a 50-50 venture between BP and AAR. AAR is a consortium owned by Khan and fellow tycoons Mikhail Fridman, Viktor Vekselberg and Len Blavatnik.

BP has been at odds with the AAR shareholders on and off for years. Problems came to a head in 2010 when BP wanted to do business with increasingly powerful Rosneft, and the tycoons resisted. The sale to Rosneft is set to bring the saga to an end.

BP last month won Russian government approval to acquire Rosneft shares from the state holding company Rosneftegaz, a step on the way to securing $ 12.3 billion of cash and an 18.5 percent stake in Rosneft that will raise its holding to 19.75 percent. AAR’s side of the deal is less complete, but Rosneft has said it hopes to agree it in December.

After the acquisition, Rosneft, headed by Putin ally Igor Sechin, will be pumping 4.6 million barrels of oil equivalent, more than U.S.-based Exxon Mobil.

Lazurenko was represented by solicitors Mischon de Reya and TNK-BP by Bryan Cave.

(additional reporting by Doug Busvine in Moscow and Dmitry Zhdannikov in London; editing by Janet McBride)

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Official: Syria moving chemical weapons components

WASHINGTON (AP) — U.S. and allied intelligence have detected Syrian movement of chemical weapons components in recent days, a senior U.S. defense official said Monday, as the Obama administration strongly warned the Assad regime against using them.

A senior defense official said intelligence officials have detected activity around more than one of Syria‘s chemical weapons sites in the last week. The defense official spoke on condition of anonymity because he was not authorized to speak publicly about intelligence matters.

Secretary of State Hillary Rodham Clinton, in Prague for meetings with Czech officials, reiterated President Barack Obama‘s declaration that Syrian action on chemical weapons was a “red line” for the United States that would prompt action.

“We have made our views very clear: This is a red line for the United States,” Clinton told reporters. “I’m not going to telegraph in any specifics what we would do in the event of credible evidence that the Assad regime has resorted to using chemical weapons against their own people. But suffice it to say, we are certainly planning to take action if that eventuality were to occur.”

Syria said Monday it would not use chemical weapons against its own people. The Ministry of Foreign Affairs said Syria “would not use chemical weapons — if there are any — against its own people under any circumstances.”

Syria has been careful never to confirm that it has any chemical weapons.

The use of chemical weapons would be a major escalation in Assad’s crackdown on his foes and would draw international condemnation. In addition to causing mass deaths and horrific injuries to survivors, the regime’s willingness to use them would alarm much of the region, particularly neighboring states, including Israel.

At the White House, press secretary Jay Carney said, “We are concerned that in an increasingly beleaguered regime, having found its escalation of violence through conventional means inadequate, might be considering the use of chemical weapons against the Syrian people. And as the president has said, any use or proliferation of chemical weapons by the Syrian regime would cross a red line for the United States. “

Administration officials would not detail what that response might be.

Although Syria is one of only seven nations that have not signed the Chemical Weapons Treaty, it is a party to the 1925 Geneva Protocol that bans the use of chemical weapons in war. That treaty was signed in the aftermath of World War I, when the effects of the use of mustard gas and other chemical agents outraged much of the world.

Clinton didn’t address the issue of the fresh activity at Syrian chemical weapons depots, but insisted that Washington would address any threat that arises.

An administration official said the trigger for U.S. action of some kind is the use of chemical weapons or movement with the intent to use or provide them to a terrorist group like Hezbollah. The U.S. is trying to determine whether the recent movement detected in Syria falls into any of those categories, the official said. The administration official was speaking on condition of anonymity this person was not authorized to speak publicly about the issue.

The senior defense official said the U.S. does not believe that any Syrian action beyond the movement of components is imminent.

An Israeli official said if there is real movement on chemical weapons, it would require a response. He didn’t say what that might be and spoke on condition of anonymity pending a formal government response to the reports of the latest activities.

Israeli officials have repeatedly expressed concerns that Syrian chemical weapons could slip into the hands of Hezbollah or other anti-Israel groups, or even be fired toward Israel in an act of desperation by Syria.

Syria is believed to have several hundred ballistic surface-to-surface missiles capable of carrying chemical warheads.

Its arsenal is a particular threat to the American allies, Turkey and Israel, and Obama singled out the threat posed by the unconventional weapons earlier this year as a potential cause for deeper U.S. involvement in Syria’s civil war. Up to now, the United States has opposed military intervention or providing arms support to Syria’s rebels for fear of further militarizing a conflict that activists say has killed more than 40,000 people since March 2011.

Clinton said that while the actions of President Bashar Assad‘s government have been deplorable, chemical weapons would bring them to a new level.

“We once again issue a very strong warning to the Assad regime that their behavior is reprehensible, their actions against their own people have been tragic,” she said. “But there is no doubt that there’s a line between even the horrors that they’ve already inflicted on the Syrian people and moving to what would be an internationally condemned step of utilizing their chemical weapons.”

Activity has been detected before at Syrian weapons sites, believed to number several dozen.

Defense Secretary Leon Panetta said in late September the intelligence suggested the Syrian government had moved some of its chemical weapons in order to protect them. He said the U.S. believed that the main sites remained secure.

Asked Monday if they were still considered secure, Pentagon press secretary George Little declined to comment about any intelligence related to the weapons.

Senior lawmakers were notified last week that U.S. intelligence agencies had detected activity related to Syria’s chemical and biological weapons, said a U.S. intelligence official, speaking on condition of anonymity to discuss the closed-door meetings. All congressional committees with an interest in Syria, from the intelligence to the armed services committees, are now being kept informed.

“I can’t comment on these reports but I have been very concerned for some time now about Syria’s stockpiles of chemical weapons and its stocks of advanced conventional weapons like shoulder-launched anti-aircraft missiles,” said House intelligence committee Chairman Mike Rogers, R-Mich. “We are not doing enough to prepare for the collapse of the Assad regime, and the dangerous vacuum it will create. Use of chemical weapons by the Assad regime would be an extremely serious escalation that would demand decisive action from the rest of the world,” he added.

Syria is believed to have one of the world’s largest chemical weapons programs, and the Assad regime has said it might use the weapons against external threats, though not against Syrians. The U.S. and Jordan share the same concern about Syria’s chemical and biological weapons — that they could fall into the wrong hands should the regime in Syria collapse and lose control of them.

___

Klapper reported from Prague. Associated Press writers Josef Federman in Jerusalem, Albert Aji in Damascus and Matthew Lee, Kimberly Dozier, and Julie Pace in Washington contributed to this report.

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