Business Desk

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

The New York Sun

INTERNATIONAL


CHINA UNVEILS RULES ON FOREIGN INVESTMENT IN BROADCAST VENTURES


China said it will allow foreign investors to take minority stakes in television and production companies for the first time, widening access for Viacom, Walt Disney, and other broadcasting companies in the world’s biggest TV market by viewers.


The new policy, to take effect November 28, will allow foreigners to take stakes of as much as 49% in entertainment-programming ventures, the State Administration of Radio, Film, and Television said in a statement on its Web site. The ventures are required to have a minimum paid-up capital of $2 million and to use Chinese themes in two-thirds of programs, the statement said.


China has 1 billion potential viewers.


Viacom, America’s third-largest broadcasting, entertainment, and advertising company, has announced plans for two production ventures, including one with Shanghai Media Group to make children’s TV programs.


Disney, the second-largest American broadcasting and entertainment company, is in talks with Southern Media Corporation to make TV programs in the southern province of Guangdong next to Hong Kong, Southern Media said on October 15.


– Bloomberg News


LEGISLATIVE


HOUSE, SENATE LEADERS AGREE TO EXTEND INTERNET ACCESS TAX BAN


American lawmakers agreed on a plan to ban taxes until 2007 on Internet access provided by companies such as Microsoft Corporations’ MSN and Time Warner’s America Online, according to two senators involved in talks with leaders in the House of Representatives.


As part of a compromise to gain approval in the House, the Senate today unanimously approved revisions of a bill it passed in April to extend the ban, said Senator George Allen, a chief sponsor of the moratorium. Iowa Senator Grassley, the Republican chairman of the Finance Committee, said lawmakers felt pressure from businesses to resolve the matter.


“I do think that the House is going to pass it this week,” Mr. Allen, a Republican from Virginia, told reporters at the Capitol.


Federal law has blocked state and local taxes on Internet connections provided by services such as AOL and EarthLink Inc. since 1998 with a series of temporary measures that lapsed in November. State and local governments have stood pat since, hesitant to impose new levies on Internet services until Congress broke its deadlock and made a decision. President Bush favors a permanent ban on taxes for Internet access. The previous moratorium expired in November 2003.


– Bloomberg News


IN THE COURTS


CIGARETTE MAKERS ASK COURT TO BLOCK $280 BILLION CLAIM


American cigarette makers asked a federal appeals court to block the Justice Department from using an organized crime statute to get $280 billion from the industry in a civil court lawsuit now on trial in Washington.


The government, which filed the suit in 1999, claims that the money stems from a five-decade conspiracy by Altria Group’s Philip Morris USA unit, Reynolds American Inc.’s R.J. Reynolds Tobacco, and other cigarette makers to mislead the public about the dangers of smoking.


“If the government wants to put money into the Treasury, they’ve got to jump through the hoops of proving their case beyond a reasonable doubt,” a lawyer for the companies, Michael Carvin, told a panel of three judges of the U.S. Circuit Court of Appeals for the District of Columbia in Washington. “Forfeiture of illegal proceeds to the government is strictly limited to the criminal context.”


Cigarette makers argued that a $280 billion judgment, which would be the biggest in history, would bankrupt them. A ruling for the industry, which could be appealed to the entire federal appeals court or the U.S. Supreme Court, would prevent America from claiming the money at trial, which began September 21.


– Bloomberg News


NATIONAL


AMERICAN TO SAVE $300,000 BY PULLING PILLOWS FROM MD-80 PLANES


American Airlines, the world’s largest carrier, has pulled pillows from about half its fleet to save about $300,000 a year.


Eliminating pillows from American’s 334 MD-80 planes will allow American workers to clean the planes faster between flights, reducing the time aircraft sit at airport gates and increasing productivity, said Tim Wagner, an American spokesman. American removed the pillows Monday after workers suggested the change during a meeting on cost-saving ideas.


American and most other U.S. airlines are slashing expenses to stem losses and compete with profitable low-cost carriers. American, based in Fort Worth, Texas, has cut $4 billion a year in expenses since the end of 2002.


“We expect we will see some concern from our customers,” Mr. Wagner said. “The fact is, it will save us some money.”


Company spokeswoman Jacquie Young estimated the annual savings at $300,000.


American, a unit of AMR Corporation, chose to remove pillows from the MD-80s because they have adjustable seat headrests that can be used in place of pillows, Mr. Wagner said. The planes will continue to carry blankets.


Passengers should benefit because workers will be able to focus on cleaning the plane instead of collecting pillows, he said. Pillows from the MD-80s will be used on other American aircraft.


The Fort-Worth Star Telegram reported the story yesterday.


– Bloomberg News


CALPERS FUND VALUE REACHES $177.7 BILLION, HIGHEST EVER


The value of California Public Employees’ Retirement System investments reached $177.7 billion, a record for the largest U.S. pension fund because of gains in the stock market.


The pension fund grew from $167.9 billion as of Sept. 30, a 5.8% increase, Chief Investment Officer Mark Anson said at the Calpers headquarters in Sacramento. The previous record was $176 billion in March 2000.


Calpers earned 16.7% on investments in the year ended June 30, the biggest return since a 20% gain in 1998.The gains may ease pressure on municipalities that have increased employer contributions over the past three years. Calpers oversees benefits for more than 1.4 million state and local government employees, from police to tax clerks.


“We’ve seen a very strong stock market since the election,” Mr. Anson said. “Now that the election is over, any uncertainty that was in the market is gone and I think we will end up having a strong year.”


The Dow Jones Industrial Average has gained 5.2% since President Bush was re-elected to a second term on November 2. So far this month, Calpers has gained 5.5%, Anson said. For the year ended September 30, the fund grew by 13.8%.


– Bloomberg News


PILGRIM, BAXTER TO EACH PAY $80 MILLION IN SETTLEMENT


Gary Pilgrim and Harold Baxter, co-founders of the money management firm Pilgrim Baxter & Associates, agreed to pay record fines of $80 million each to settle regulators’ complaints that they allowed and profited from abusive fund trading.


Mr. Pilgrim, 64, and Mr. Baxter, 58, also were barred from the money management industry for life, the Securities and Exchange Commission said in a statement. The financial penalties are the largest imposed on individuals in the 17-month investigation of trading practices in the $7.6 trillion mutual fund industry.


“The amounts being paid in this settlement are virtually unprecedented in civil cases,” the director of the SEC’s enforcement division, Stephen Cutler, said in the statement. The penalties “reflect the severity of the misconduct and the fundamental breach of duty at issue in this case.”


Pilgrim Baxter & Associates agreed in June to $100 million in penalties and reduced fund fees to settle regulators’ claims. Gary Pilgrim, who was president and chief investment officer, and Mr. Baxter, the company’s chief executive, were ousted in November 2003.The Wayne, Pa.-based firm, renamed Liberty Ridge Capital on October 1, is a unit of Old Mutual Plc.


– Bloomberg News


PHARMECEUTICALS


BRISTOL-MYERS EXPECTS TO FILE NEW DRUG APPLICATIONS BY YEAR’S END


Bristol-Myers Squibb Company reiterated yesterday it was on track to file two new drug applications by the end of the year- one for its diabetes treatment Muraglitazar and the other for rheumatoid arthritis medicine abatacept.


The company added that Entecavir, an investigational hepatitis B treatment it filed two months ago with the Food and Drug Administration, has been granted priority review by the agency. That means the FDA will make a decision on Entecavir’s application within six months instead of the typical 10 months.


Bristol-Myers also released data showing that muraglitazar reduced triglyceride levels 26% to 29% and increased HDL cholesterol or good cholesterol 14% to 16%.Triglycerides are a type of fat.


Muraglitazar is one of a new class of drugs called dual PPAR agonists. Similar experimental drugs been linked to an increased risk of cancer. Bristol-Myers is codeveloping Muraglitazar with Merck & Co, which halted development of its own PPAR last year.


– Associated Press


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