ENERGY

GAZPROM TO TAKE OVER PRIVATELY OWNED OIL COMPANY

MOSCOW – The state-controlled energy giant Gazprom agreed to purchase a majority stake in the privately owned oil company Sibneft for $13.01 billion yesterday, the largest corporate deal in the country’s history and one that will increase the state’s grip on Russia’s booming energy sector.

Gazprom, the former Soviet natural gas ministry, will acquire 72.66% of Sibneft shares. The sale will be almost completely financed with a loan of $12 billion from a consortium of Western banks. Sibneft is Russia’s fifth largest producer, pumping about 900,000 barrels of oil a day. The company emerged from the privatization of key and lucrative state assets after the collapse of the Soviet Union, a policy that was deeply unpopular here and is now being reversed by the administration of President Putin.

“The state is continuing its drive to control the oil sector and its strategic development,” a senior energy analyst at Nikoil Capital Market Research in Moscow, Caius Rapanu, said. Gazprom had earlier bought 3% of Sibneft through its banking arm, and because it will now own more than 75% of the company, Russian law allows it to exercise complete control over the company’s decisions.

– The Washington Post

FOOD

AMERICA TO BAN BELUGA CAVIAR

A ban on beluga caviar imports will be announced by America today, putting pressure on Britain and the rest of the European Union to follow suit.

Beluga caviar is considered the most delicious. It sells for more than $3,500 a pound in America. The beluga sturgeon, from which the prized roe comes, is the largest of the species, growing to up to 4,000 pounds and living up to 100 years if left undisturbed. The beluga is now the rarest of the species, all of which are in decline, according to a new report. The Convention on International Trade in Endangered Species, based in Geneva, says the Caspian population has dropped by half in the past five years and the Black Sea’s by a fifth.

The two main producers of beluga caviar are Kazakstan, where the fish is taken from the Ural River, its last natural spawning ground, and Iran, where the beluga is netted at sea.

– The Daily Telegraph

HEDGE FUNDS

SEC SUES FORMER FUND MANAGER

The Securities and Exchange Commission filed a lawsuit yesterday against a former New York hedge fund manager, claiming he misrepresented the fund’s value and allowed certain investors to make withdrawals to the detriment of others.

The lawsuit, filed in the Southern District of New York, alleges Joseph Daniel, the one-time managing general partner of the Critical Infrastructure Fund, improperly inflated the value of many of the fund’s private placement investments and failed to write down their value when those investments performed poorly.

“As a result, Daniel made misrepresentations to investors about the value of their investments in the fund and the fund’s performance, and allowed certain investors to redeem their shares at inflated values to the detriment of the remaining investors,” the lawsuit says. “These events caused significant losses for investors.”

A lawyer for Mr. Daniel declined to comment yesterday. The complaint alleges Mr. Daniel failed to properly record the value of the fund’s investments in certain private companies as those firms encountered financial difficulties as the securities markets declined in 2000 and 2001. As a result, the fund’s private investments were overvalued beginning in December 2000, according to the lawsuit.

Between December 2000 and January 2002, sixteen investors also were allowed to withdraw all of their equity from the fund, totaling more than $2 million, the complaint states.

– Dow Jones Newswires

PHARMACEUTICALS

PFIZER SUED OVER PROMOTION OF LIPITOR

Pfizer is the target of a purported class-action lawsuit alleging wrongful promotion of its blockbuster-drug Lipitor as a beneficial treatment for nearly everyone with high cholesterol, although no studies have shown it’s effective for women and the elderly without prior heart disease. The lawsuit was filed in the U.S. District Court in Boston by the law firm Hagens Berman Sobol Shapiro on behalf of several individuals, a consumer group and the Teamsters, according to a statement issued by the law firm yesterday.

The release came on the heels of an approval Tuesday by the Food and Drug Administration for the additional use of Lipitor to lower the chance of stroke in patients with Type 2 diabetes, or who are at risk for developing heart disease. The drug, which is the best-selling drug in the world with $10.86 billion in 2004 sales, first received FDA approval in November 1997. The complaint cited a study conducted by Ascot, a research organization, that women who took Lipitor developed 10% more heart attacks than the women who took a placebo.

– Dow Jones Newswires

IN BRIEF

Bear Stearns and other banks plan to tell the New York Federal Reserve it will take eight months to clear a backlog of unconfirmed trades in the $12.4 trillion credit derivatives market … Pfizer said 23-year board member Stanley Ikenberry was elected leader of the company’s 12 independent directors … General Motors averted a strike by reaching a three-year contract agreement with the Canadian Auto Workers union that will let the company cut more than 1,000 jobs … Delphi has asked General Motors for an aid package worth $6 billion to help avoid a bankruptcy filing … Fannie Mae said its mortgage investment portfolio shrank for a 10th consecutive month in August to the smallest in almost three years … American International Group CEO Martin Sullivan said insurers, battered by Hurricane Katrina’s devastation in the Gulf of Mexico last month, are raising commercial property rates around the world … European Union lawmakers boosted oversight of financial markets, passing tighter controls on company audits, and new capital requirements for banks and investment firms … Hennes & Mauritz, Europe’s largest clothing-store chain, said third-quarter earnings gained 36%, the most in more than two years … Vincor International, Canada’s biggest vintner, rejected an unsolicited $900 million buyout offer from larger rival Constellation Brands and said it would consider a higher bid.

– Bloomberg News and Dow Jones Newswires