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  <title>Shanghai Daily: Lawsuits and scandals</title> 
  <link>
  	http://www.shanghaidaily.com/article/list.asp?id=123
  </link> 
  <description>Shanghai Daily Lawsuits and scandals</description> 
  <language>en</language> 


<item>
	<title>Huang 'sorry for the pain'</title> 
	<link>
	
	http://www.shanghaidaily.com/article/?id=448523
	</link>
	<pubDate>7 Sep 2010 0:00:00 +0800</pubDate> 
	<category>Lawsuits and scandals</category> 
	<author>Zhang Fengming</author>
	<description><![CDATA[
	GOME Electrical Appliances founder Huang Guangyu said he respected a court ruling that upheld his 14-year prison sentence and felt sorry for Gome's shareholders but his battle with the retailer's board continues.
...]]></description>
	<content:encoded><![CDATA[GOME Electrical Appliances founder Huang Guangyu said he respected a court ruling that upheld his 14-year prison sentence and felt sorry for Gome's shareholders but his battle with the retailer's board continues.
 
Huang, the former boss of the home appliance conglomerate, last week lost his appeal against the sentence and an 800 million yuan (US$118 million) fine for bribery and insider trading.
 
"I am grateful for the support given by consumers, shareholders from home and abroad, suppliers, banks and other friends," Huang said in his letter yesterday. "I feel extremely sorry for the pain I've brought."
 
But Huang will proceed with his battle with its board of directors.
 
A special shareholders meeting is slated to be held on September 28 to discuss whether to unseat current Gome Chairman Chen Xiao and for the board's plan to issue 20 percent more shares.
 
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	<title>HP ousts CEO in scandal over falsifying expenses</title> 
	<link>
	
	http://www.shanghaidaily.com/article/?id=445708
	</link>
	<pubDate>8 Aug 2010 0:28:17 +0800</pubDate> 
	<category>Lawsuits and scandals</category> 
	<author></author>
	<description><![CDATA[
	HEWLETT-PACKARD Co has ousted its CEO for allegedly falsifying documents to conceal a relationship with a former contractor and help her get paid for work she didn't do.
 
News of Mark Hurd's abrupt departure on...]]></description>
	<content:encoded><![CDATA[Hewlett-Packard Co has ousted its CEO for allegedly falsifying documents to conceal a relationship with a former contractor and help her get paid for work she didn't do.
 
News of Mark Hurd's abrupt departure on Friday sent HP's stock tumbling. Shares of the world's biggest maker of personal computers and printers have doubled in value during his five-year stewardship, and HP became the world's No. 1 technology company by revenue in that time.
 
The company said it learned about the relationship several weeks ago, when the woman, who did marketing work for HP, sent a letter accusing Hurd, 53, and the company of sexual harassment. An investigation found that Hurd falsified expense reports and other financial documents to conceal the relationship. The company said it found that its sexual harassment policy wasn't violated but that its standards of business conduct were.
 
Hurd's "systematic pattern" of submitting falsified financial reports to hide the relationship convinced the board that "it would be impossible for him to be an effective leader moving forward and that he had to step down," HP General Counsel Michael Holston said on a conference call on Friday with analysts.
 
"The facts that drove the decision for the company had to with integrity, had to do with credibility, had to do with honesty," Holston said, declining to elaborate.
 
Holston said the inaccurate financial reports related only to Hurd's personal expenses.
 
Hurd acknowledged there were "instances in which I did not live up to the standards and principles of trust, respect and integrity that I have espoused at HP."
 
Hurd, who is married with two children, will get a US$12.2 million severance payment and nearly 350,000 shares of HP stock worth about US$16 million at Friday's closing price. The company also extended the deadline for options to buy up to 775,000 HP shares.
 
Los Angeles attorney Gloria Allred said she is representing the woman and "there was no affair and no intimate sexual relationship" between her client and Hurd. 
 
A person with knowledge of the case told the AP that the woman worked as a host for more than a dozen events for CEOs that Hurd attended between 2007 and 2009. The person said the disputed expenses range from US$1,000 to US$20,000 each for travel, lodging and meals.
 
This person, who requested anonymity because this person wasn't authorized to speak publicly about the case, said many of the expenses were for meals after the events and that Hurd insists they were legitimate business expenses.
 
The company's chief financial officer, Cathie Lesjak, 51, was named interim CEO. She has been with the company 24 years but does not want to fill the position permanently. 
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<item>
	<title>GOME to take legal action over its founder</title> 
	<link>
	
	http://www.shanghaidaily.com/article/?id=445536
	</link>
	<pubDate>6 Aug 2010 0:08:31 +0800</pubDate> 
	<category>Lawsuits and scandals</category> 
	<author>Pan Xiaoyi</author>
	<description><![CDATA[
	GOME Electrical Appliances Holding is to take legal proceedings against Huang Guangyu, founder and former chairman of the company, seeking compensation in connection with his breach of fiduciary duties.
 
The company...]]></description>
	<content:encoded><![CDATA[GOME Electrical Appliances Holding is to take legal proceedings against Huang Guangyu, founder and former chairman of the company, seeking compensation in connection with his breach of fiduciary duties.
 
The company filed a writ of summons against Huang in the Hong Kong High Court yesterday to claim for damages suffered by the company for his breaches relating to the repurchases of the company's shares in early 2008, the company said in a statement to Hong Kong Stock Exchange. 
 
Meanwhile, GOME received letters from Shining Crown Holdings, Huang's wholly owned company, proposing a number of changes in the management team including depriving Chen Xiao of his duties as executive director and board chairman as well as cancellation of the company's general mandate passed earlier, the company said.
 
Insider trading
 
The moves reflect deepening disagreement between the current management team and the former chairman, who is not willing to give up his control over the company despite being jailed for 14 years this year for bribery and insider trading. 
 
Huang remains the single biggest shareholder with 34 percent of GOME's shares and he has appealed his sentence. 
 
The conflict first emerged in May when Huang vetoed five decisions discussed at a board meeting including assigning three personnel from Bain Capital, also a major shareholder, as non-executive directors. 
 
However, the board of directors unanimously approved the assignment regardless of Huang's opposition. 
 
There are also media reports that Huang demanded GOME take action to share responsibility in the accusation against him to alleviate his own punishment after he was detained in late 2008, a demand which was rejected by the company.
 
Adverse effect
 
"The arrest and later conviction of Huang for various economic crimes caused a great deal of uncertainty for the company, and inevitably continued to have a significant adverse effect to some extent, especially on its ability to access capital," the company said.
 
The board is unanimous in its belief that the proposals put forward by Shining Crown are unwarranted and driven by the interests of just one shareholder, the company said. 
 
And it is strongly opposed to the proposals from Shining Crown, which it considers to be "completely unmerited, significantly restrict management's flexibility to access capital and put the company at a distinct disadvantage in a highly competitive market environment."
 
Shares were suspended from trading yesterday and will resume trading today, the company said. 
 
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<item>
	<title>Officers to apologize to reporter given warrant</title> 
	<link>
	
	http://www.shanghaidaily.com/sp/article/2010/201007/20100731/article_444941.htm
	</link>
	<pubDate>31 Jul 2010 1:20:02 +0800</pubDate> 
	<category>Lawsuits and scandals</category> 
	<author>Wang Xiang</author>
	<description><![CDATA[
	OFFICERS in east China's Zhejiang Province will offer a face-to-face apology to a reporter whom they wrongly listed as a wanted suspect for his reporting on a local company's alleged insider trading. 
 
However,...]]></description>
	<content:encoded><![CDATA[OFFICERS in east China's Zhejiang Province will offer a face-to-face apology to a reporter whom they wrongly listed as a wanted suspect for his reporting on a local company's alleged insider trading. 
 
However, police said earlier yesterday that the investigation into allegations of defamation against Shanghai-based journalist Qiu Ziming and his newspaper, the weekly Economic Observer, would continue, according to Xinhua news agency. 
 
"The Lishui City police will continue to investigate the case and responsibility will be clarified after further investigation," said Chen Zhong, director of Lishui Public Security Bureau, as quoted by Xinhua. 
 
The police department in Suichang County in Zhejiang announced on Tuesday that they started a nationwide manhunt for the reporter for ruining the reputation of Zhejiang Kan Specialty Material Co Ltd. 
 
The detention warrant for Qiu was scrapped on Thursday. 
 
The 28-year-old Qiu told Xinhua that he had not slept for days because of the threat. 
 
He said his series of negative reports on Zhejiang Kan since May were all based on solid evidence. 
 
In Qiu's stories, he accused the company of using its local political connections to buy state property worth 600 million yuan (US$88.5 million) with only 890,000 yuan. 
 
Zhejiang Kan suspended public trading on June 7 after Qiu's stories were published. The company reported to police, accusing Qiu of defaming it with fabricated reports. 
 
Suichang police issued the detention warrant citing Qiu's articles. 
 
The case aroused a nationwide uproar calling for the protection of investigative reporters in China. 
 
The General Administration of Press and Publication said yesterday they had stepped in to investigate the case. 
 
The GAPP and the Chinese Association of Journalists said they will definitely support Qiu and his newspaper if his reports were not problematic. The GAPP said media supervision of listed companies must be protected and encouraged. 
 
Qiu has garnered vast support from the Internet. A survey conducted by sina.com.cn showed that 89 percent of all 116,541 voters regard the arrest warrant against Qiu as illegal.
 
"Qiu's case would be milestone in the protection of Chinese journalists' rights," said Wang Shengzhong, deputy chief editor of the newspaper.
 
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<item>
	<title>Lehman cases</title> 
	<link>
	
	http://www.shanghaidaily.com/sp/article/2010/201007/20100724/article_444138.htm
	</link>
	<pubDate>24 Jul 2010 0:31:56 +0800</pubDate> 
	<category>Lawsuits and scandals</category> 
	<author></author>
	<description><![CDATA[
	THE Hong Kong Monetary Authority said yesterday that investigation of more than 99 percent of 21,674 Lehman Brothers-related complaint cases has been completed. Another 169 cases remain under investigation.
 
According...]]></description>
	<content:encoded><![CDATA[The Hong Kong Monetary Authority said yesterday that investigation of more than 99 percent of 21,674 Lehman Brothers-related complaint cases has been completed. Another 169 cases remain under investigation.
 
According to the HK Monetary Authority, of the completed cases, 13,078 were resolved by a settlement agreement, 2,492 cases by enhanced complaint handling procedures, 2,561 cases were closed because of insufficient prima facie evidence of misconduct and 2,818 cases are under disciplinary consideration.
 
Around 43,700 Hong Kong people invested nearly HK$15.7 billion (US$2.02 billions) in products issued or guaranteed by Lehman Brothers.]]></content:encoded>
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<item>
	<title>NDRC to slap fines on price manipulation</title> 
	<link>
	
	http://www.shanghaidaily.com/sp/article/2010/201007/20100714/article_442998.htm
	</link>
	<pubDate>14 Jul 2010 0:00:00 +0800</pubDate> 
	<category>Lawsuits and scandals</category> 
	<author></author>
	<description><![CDATA[
	CHINA will fine individuals and companies up to 2 million yuan (US$295,000) for circulating misleading or false information about price hikes, the country's top economic planner said yesterday.
 
The announcement...]]></description>
	<content:encoded><![CDATA[CHINA will fine individuals and companies up to 2 million yuan (US$295,000) for circulating misleading or false information about price hikes, the country's top economic planner said yesterday.
 
The announcement by the National Development and Reform Commission was part of efforts by the agency to curb price manipulation and profiteering in the country.
 
The suggested punishment measures to combat commodity hoarding and forcing up prices are now open to public debate until August 13, after which it will be submitted to China's top legislature for a legislative reading, the NDRC said in a statement on its website.
 
In case of serious offences, those who break the price regulations will lose their business licenses and be subject to confiscation of their illegal gains and receive fines up to five times their illegal gains, the NDRC said.
 
The NDRC also said it believed the price regulations would be helpful to handle the inflationary expectation and stabilize price levels.
 
Earlier this month, the NDRC set up two offices to control monopolistic behavior and curb market manipulation.
 
 
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<item>
	<title>US judge allows class action against Apple</title> 
	<link>
	
	http://www.shanghaidaily.com/sp/article/2010/201007/20100713/article_442837.htm
	</link>
	<pubDate>13 Jul 2010 0:00:00 +0800</pubDate> 
	<category>Lawsuits and scandals</category> 
	<author></author>
	<description><![CDATA[
	A JUDGE in San Jose, Californian, says a monopoly abuse lawsuit against Apple Inc and AT&amp;T Inc's mobile phone unit can move forward as a class action.
 
The lawsuit consolidates several filed by iPhone buyers starting...]]></description>
	<content:encoded><![CDATA[A JUDGE in San Jose, Californian, says a monopoly abuse lawsuit against Apple Inc and AT&T Inc's mobile phone unit can move forward as a class action.
 
The lawsuit consolidates several filed by iPhone buyers starting in late 2007, a few months after the first generation of Apple's smartphone went on sale.
 
An amended complaint filed in June 2008 takes issue with Apple's practice of "locking" iPhones so they can only be used on AT&T's network, and its absolute control over what applications iPhone owners can and cannot install on the gadgets.
 
The lawsuit also says Apple secretly made AT&T its exclusive iPhone partner in the United States for five years. Consumers agreed to two-year contracts with the Dallas-based wireless carrier when they purchased their phones, but were in effect locked into a five-year relationship with AT&T, the lawsuit argues.
 
The actions hurt competition and drove up prices for consumers, the lawsuit claims.
 
Apple and AT&T have not commented on the terms of their deal. In its response to the complaint, Cupertino, California-based Apple said it did not hurt competition.
 
In court documents filed on July 8, Judge James Ware said parts of the lawsuit that deal with violations to antitrust law can continue as a class action.
 
Ware dismissed other claims, among them allegations that Apple broke the law when a software update caused some phones to stop working and deleted programs users had purchased.
 
The lawsuit seeks to stop Apple from selling locked phones in the US and from determining what programs can be installed. 
 
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<item>
	<title>Steel mill cartel fined</title> 
	<link>
	
	http://www.shanghaidaily.com/sp/article/2010/201007/20100701/article_441611.htm
	</link>
	<pubDate>1 Jul 2010 0:00:00 +0800</pubDate> 
	<category>Lawsuits and scandals</category> 
	<author>Aoife White</author>
	<description><![CDATA[
	EUROPEAN Union regulators yesterday fined steel producer ArcelorMittal 276 million euros (US$337 million) for secret deals to fix steel prices for nearly two decades with 16 other steel makers.
 
The European Commission...]]></description>
	<content:encoded><![CDATA[EUROPEAN Union regulators yesterday fined steel producer ArcelorMittal 276 million euros (US$337 million) for secret deals to fix steel prices for nearly two decades with 16 other steel makers.
 
The European Commission says it fined all of the companies a total of 518 million euros, bringing to 1.49 billion euros the amount of fines it has levied this year on businesses who formed cartels.
 
It accuses the steel producers of holding more than 550 meetings from 1984 to 2002 to fix prices across Europe and allocate customers for prestressing steel, long curled steel wires used by builders to make foundations, balconies or bridges.
 
ArcelorMittal, the world's largest steel maker, received the largest fine based on the size of its operations and revenues - but also won a reduction for cooperating with investigators. 
 
Austria's Voestalpine said it would appeal its 22 million-euro fine, saying it "has made it abundantly plain to the EU commission that the company has never been involved in the prestressing steel cartel."
 
Spain-based Global Steel Wire's unit Tycsa was fined 54 million euros while Emesa, Galycas and ArcelorMittal's Spanish unit were jointly fined 40.8 million euros.
 
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<item>
	<title>German court convicts ex-MAN exec</title> 
	<link>
	
	http://www.shanghaidaily.com/sp/article/2010/201006/20100629/article_441354.htm
	</link>
	<pubDate>29 Jun 2010 0:00:00 +0800</pubDate> 
	<category>Lawsuits and scandals</category> 
	<author></author>
	<description><![CDATA[
	A FORMER executive at German truck and machinery maker MAN SE was convicted of bribery yesterday for paying millions of euros to secure a contract in Kazakhstan.
 
Heinz Juergen Maus, the former head of the MAN Turbo...]]></description>
	<content:encoded><![CDATA[A FORMER executive at German truck and machinery maker MAN SE was convicted of bribery yesterday for paying millions of euros to secure a contract in Kazakhstan.
 
Heinz Juergen Maus, the former head of the MAN Turbo AG unit, was given a two-year suspended sentence and will have to pay a 100,000 euro fine.
 
Maus acknowledged during his trial at the Munich state court that he ordered the payment of 9 million euros (US$11.1 million) to secure a gas pipeline modernization contract in Kazakhstan in 2004.
 
He said he thought at the time that he was acting in the interests of his company - but "now I realize that it was wrong."
 
Maus told the court that the head of the Kazakh partner in the deal, MunayGaz, had made "blatantly and unmistakably clear" that it would have to pay a "market entry fee" to secure the deal, and had negotiated it down from an initial demand of 12 million euros.
 
Presiding Judge Joachim Eckert said the defendant "admitted without ifs and buts" to the accusations against him, the German news agency DAPD reported.
 
He added that Maus didn't try to pass off the blame on lower-ranking officials and didn't personally profit from the deal - but nevertheless committed a crime.
 
After consulting with prosecutors and the defense, Eckert already had hinted last week that Maus' confession would come with a mild sentence.
 
Maus retired in 2007. His firm has declined to comment on the charges as he is no longer an employee.
 
In a separate case, prosecutors last year launched an investigation of bribes allegedly paid to boost truck and bus sales at parent company MAN.
 
 
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<item>
	<title>US drops criminal probe against AIG</title> 
	<link>
	
	http://www.shanghaidaily.com/sp/article/2010/201005/20100524/article_437928.htm
	</link>
	<pubDate>24 May 2010 0:09:39 +0800</pubDate> 
	<category>Lawsuits and scandals</category> 
	<author></author>
	<description><![CDATA[
	THE US Justice Department has decided not to file criminal charges against the former head of a division at American International Group Inc whose dealings in mortgage-related securities nearly bankrupted the insurance...]]></description>
	<content:encoded><![CDATA[THE US Justice Department has decided not to file criminal charges against the former head of a division at American International Group Inc whose dealings in mortgage-related securities nearly bankrupted the insurance giant and led to a controversial government bailout, according to lawyers involved in the cases.
 
The decision appears to bring an end to the criminal probe of AIG, but a Securities and Exchange Commission probe into AIG and the dealings of its London-based Financial Products subsidiary is continuing and could lead to a civil securities fraud case.
 
Lawyers representing Joseph Cassano, who formerly ran AIG's Financial Products unit, and Andrew Forster, who worked for Cassano, said they were told by federal prosecutors late Friday that no criminal charges would be filed.
 
A person familiar with the government's criminal investigation of AIG confirmed that charges wouldn't be brought. 
 
The person was not authorized to speak publicly on the matter and spoke on condition of anonymity.
 
The Justice Department declined comment on Saturday.
 
SEC investigators have been involved in the case from the start, but it is unclear when a decision would be made on a civil fraud case.
 
Federal prosecutors were investigating AIG's Financial Products unit, which dealt in financial contracts called credit default swaps that helped sink AIG in September 2008, leading to a taxpayer-funded bailout. The credit default swaps AIG sold were insurance-like guarantees on mortgage securities that wound up forcing AIG to pay out billions of dollars after the housing market went bust.
 
Investigators were looking into whether Financial Products officials tried to deceive investors and AIG's auditors, PricewaterhouseCoopers, by misstating the accounting value of a credit default swap portfolio.
 
When AIG posted a loss for the fourth quarter of 2007, it pinned the blame on an US$11 billion writedown related to the credit default swaps held by its Financial Products group.
 
 
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