Chiquita Colombia Deaths Lawsuits Thrown Out

A US court has thrown out claims that US fruit giant Chiquita was liable for thousands of deaths during Colombia's civil war.

The firm was accused of supporting terrorists because it secretly paid $1.7m (£1m) to a right-wing paramilitary group that carried out the killings.

The Cincinnati, Ohio-based firm admitted similar criminal charges in 2007 brought by the Justice Department, and paid a $25m fine.

Portraits of people who disappeared during the armed conflict in Colombia

The company has always maintained it had to pay the paramilitary groups or else its workers would have been attacked.

On Thursday, Miami's 11th US Circuit Court of Appeals ruled 2-1 that federal courts had no jurisdiction in the lawsuits. 

"Noble goals cannot expand the jurisdiction of the court granted by statute," wrote Judge David Sentelle.

"Banana bloc" fighters of the Colombian United Self-Defence Forces

They cited a 2013 US Supreme Court ruling that limited attempts by foreigners to seek damages for overseas human rights abuses in US courts.

Chiquita Brands International welcomed the ruling, which could spare it billions of dollars in payouts.

But lawyers for the estimated 4,000 Colombian plaintiffs still have the option of pursuing the case elsewhere.

A Chuiqita fruit picker in Panama

Internal company documents, revealed by a Justice Department investigation, show Chiquita was aware of the payments' risks.

"Need to keep this very confidential," wrote one company executive in 1997 in a handwritten note, "people can get killed."

It made the payments from 1997 until 2004 to the United Self-Defence Forces of Colombia paramilitary group.

Chiquita sprang from the United Fruit Company, whose heavy-handed dealings in Latin America inspired the term "banana republic".

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The Week's Big Business Stories

Balfour And Carillion In £3bn Merger Talks

Updated: 6:20pm UK, Thursday 24 July 2014

By Mark Kleinman, City Editor

Two of Britain's biggest construction firms are in merger talks to create a £3bn powerhouse whose flagship projects would include London's Olympics Aquatics Centre and the redevelopment of Liverpool's Anfield home.

Sky News can exclusively reveal that Balfour Beatty, which is struggling after sacking its chief executive more than two months ago, is in detailed discussions with Carillion about a combination of the two companies.

If successfully completed, a deal would put the merged group on course for entry into the FTSE-100 index.

Balfour, which has a market capitalisation of £1.6bn, has seen its shares perform poorly, while shares in Carillion, which is valued at £1.45bn, have risen by more than 13% during the last 12 months.

"This would create a national leader and a world-class support services company," said one person familiar with the talks.

The two groups are likely to come under pressure from the Takeover Panel, the City's mergers watchdog, to confirm their discussions as soon as Friday, although a deal is far from certain to be finalised and could take until September to be formally announced.

Analysts said a tie-up would create scope for millions of pounds in cost savings at a broader-based infrastructure services group, with Carillion traditionally strong in the services area and Balfour Beatty having a successful track record in construction.

It is unclear how advanced the plans are although Richard Howson, the highly-regarded chief executive of Carillion, is likely to run the merged entity if they come to fruition.

Both Balfour and Carillion count the UK Government among their biggest customers, having profited from the explosion in the volume of private finance initiative projects in recent years.

Balfour won a £160m contract last month to construct a new maintenance facility at the Sellafield nuclear power plant, while earlier this week it was awarded a deal by the Highways Agency to upgrade a 13-mile stretch of the M3 to become a "smart motorway".

Andrew McNaughton, Balfour's chief executive, was ousted in May after little more than a year at the helm.

In its most recent profit warning, announced earlier this month, Balfour blamed a deterioration in the performance of its UK construction business, but insisted that its balance sheet remained in good shape.

Balfour is likely to continue to pursue a sale of Parsons Brinckerhoff, its US-based consulting and engineering group, regardless of the outcome of discussions with Carillion. Balfour said it would explore a sale of the business, which it bought for $600m (£354m) in 2009, earlier this year.

"As anticipated at the time of the acquisition (in 2009), there has been growth in the market towards design and build and Public Private Partnership contracts," it said in May.

"However, having professional services and construction capabilities combined within one organisation has not delivered material competitive advantage for the Group."

A number of private equity firms and trade buyers are understood to remain interested in buying the US business.

Carillion has enjoyed a more productive period, winning the Anfield redevelopment project earlier this month and boasting a total order book of £18.5bn, according to its most recent update to the City.

Shares in Balfour closed down 1.1% on Thursday at 232.1p, while shares in Carillion ended 0.65% higher at 338.5p.

Spokesmen for Balfour Beatty, which is being advised by Goldman Sachs, and Carillion, which is using Lazard, declined to comment.

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BSkyB Unveils Plan For European Pay-TV Giant

The owner of Sky News has announced an ambitious plan to create a European pay-television giant that will more than treble the company's potential customer base.

Announcing its full-year results on Friday, BSkyB confirmed that it had reached a deal with 21st Century Fox (21CF) to acquire its 100% interest in Sky Italia and 57.4% stake in Sky Deutschland in deals worth a combined £5.3bn.

The transactions will propel BSkyB into market-leading positions in five countries, including three of the four largest pay-TV markets in Europe, and provide a platform to sell a diverse range of entertainment products in some of the Continent's wealthiest economies.

They will also give the company access to markets in Germany and Italy where seven out of ten homes have yet to sign up to pay-TV services.

In total, BSkyB's potential customer base will increase from 30 million households to more than 97 million.

BSkyB sees an opportunity to grow customer numbers

Jeremy Darroch, BSkyB's chief executive, said: "This transaction will create a world-class, multinational pay-TV business with enhanced headroom for growth and immediate benefits of scale.

"The three Sky businesses are leaders in their home markets and will be even stronger together. By creating the new Sky, we will be able to use our collective strengths and expertise to serve customers better, grow faster and enhance returns."

Completion of the takeover in Germany may involve buying out minority shareholders in Sky Deutschland, who are being offered the same price for their shares as that accepted by 21CF.

The German stake is costing BSkyB £2.9bn, while the Italian takeover comprises £2.1bn in cash as well as BSkyB's shareholding in the National Geographic channel worth about £380m, which 21CF is acquiring.

BSkyB is funding the takeovers through a combination of debt and asset sales, as well as raising 9.9% of its share capital through a placing.

Under the terms of the fundraising, 21CF, which is chaired by Rupert Murdoch, will retain its stake of just under 40% in BSkyB by subscribing for its pro rata position, worth approximately £500m.

BSkyB said the deals would generate annual cost synergies of about £200m.

Friday's announcement underlines the quickening pace of media consolidation on both sides of the Atlantic.

Last week, BSkyB received nearly £500m from the sale of its remaining shareholding in ITV to Liberty Global, the owner of Virgin Media.

21CF, meanwhile, is expected to channel the proceeds from its European disposals into a war chest aimed at sealing a takeover of Time Warner, owner of the Warner Brothers film studio and the CNN news network.

The City's reaction to the terms of BSkyB's acquisitions in Germany and Italy is likely to be mixed, with some analysts sceptical about the prospects of penetrating those markets as effectively as the company has done in the UK.

BSkyB's results for the 2013-14 financial year were stronger than consensus forecasts, with adjusted revenue up 6.5% to £7.6bn.

BSkyB's customers take almost 35 million products

Operating profit slipped by just 5% to £1.26bn despite heavy investment in product development and distribution, and the higher cost of Premier League rights.

Negotiations over the next three-year contract to broadcast live top-flight English football are expected to get underway early next year.

Analysts say the threat of another significant hike in the cost of the rights, or of being outbid altogether, may act as a drag on BSkyB's share price until the outcome of the auction is clear.

However, Mr Darroch pointed to the strongest growth the company had seen for three years, with nearly 35 million products now taken by customers across pay-TV, broadband, telephony, on-demand and mobile services.

BSkyB has also sought to reduce its reliance on the Premier League to attract customers, signing major rights renewal deals with other sports and investing heavily in drama and entertainment content.

Its share price - up 10% over the past 12 months - fell back by 3% in early trading on the FTSE 100 on Friday as investors digested news of the acquisitions and equity-raising.

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IMF Upgrade For UK As Russian Growth Shrinks

The International Monetary Fund (IMF) has revised upwards, for a fourth consecutive time, its forecast for UK economic growth while sharply lowering expectations for the US and sanctions-hit Russia.

In its latest World Economic Outlook (WEO), the IMF upgraded its estimate for UK growth by 0.4% to 3.2% this year.

It represented the biggest upwards revision among major economies and confirmed its earlier projection that the UK would grow this year by more than any other advanced economy.

The IMF's expectations for 2015 also rose - with GDP growth of 2.7% now forecast.

The Chancellor George Osborne, who was accused by the IMF 15 months ago of "playing with fire" over his austerity programme, responded: "Today the IMF has upgraded their 2014 forecast for the UK by more than any other major economy.

"The Government's long term economic plan is working but the job is not yet done and so we will go on making the assessment of what needs to be done to secure a brighter economic future".

The update was released just a day before official figures are due to give the first estimate of second quarter GDP growth - expected by economists to remain in line with that measured in the previous quarter, of 0.8%.

The UK's economic recovery has been helped by wider employment compared to previous recoveries, the housing market recovery, improved manufacturing output but also particularly strong consumer spending despite weak wage growth.

The IMF charted the effects of a harsh winter on the recovery in the US, citing first quarter weakness across the Atlantic as a component behind its decision to downgrade its global growth projection by 0.3% to 3.4%.

It said the move also reflected slowing growth in many emerging markets and softer domestic demand in China.

But it was its latest forecast for the effects of the crisis over Ukraine on Russia that caught the eye.

Its expectations for Russian GDP growth in 2014 were slashed by 1.1% to a paltry 0.2%, with the effects of western sanctions biting into activity.

The IMF said downside risks to global growth included the possibility of higher oil prices arising from global conflicts - with Russia a major supplier of gas and oil to mainland Europe.

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Balfour And Carillion In £3bn Merger Talks

By Mark Kleinman, City Editor

Two of Britain's biggest construction firms are in merger talks to create a £3bn powerhouse whose flagship projects would include London's Olympics Aquatics Centre and the redevelopment of Liverpool's Anfield home.

Sky News can exclusively reveal that Balfour Beatty, which is struggling after sacking its chief executive more than two months ago, is in detailed discussions with Carillion about a combination of the two companies.

If successfully completed, a deal would put the merged group on course for entry into the FTSE-100 index.

Balfour, which has a market capitalisation of £1.6bn, has seen its shares perform poorly, while shares in Carillion, which is valued at £1.45bn, have risen by more than 13% during the last 12 months.

"This would create a national leader and a world-class support services company," said one person familiar with the talks.

The two groups are likely to come under pressure from the Takeover Panel, the City's mergers watchdog, to confirm their discussions as soon as Friday, although a deal is far from certain to be finalised and could take until September to be formally announced.

Analysts said a tie-up would create scope for millions of pounds in cost savings at a broader-based infrastructure services group, with Carillion traditionally strong in the services area and Balfour Beatty having a successful track record in construction.

It is unclear how advanced the plans are although Richard Howson, the highly-regarded chief executive of Carillion, is likely to run the merged entity if they come to fruition.

Both Balfour and Carillion count the UK Government among their biggest customers, having profited from the explosion in the volume of private finance initiative projects in recent years.

Balfour won a £160m contract last month to construct a new maintenance facility at the Sellafield nuclear power plant, while earlier this week it was awarded a deal by the Highways Agency to upgrade a 13-mile stretch of the M3 to become a "smart motorway".

Andrew McNaughton, Balfour's chief executive, was ousted in May after little more than a year at the helm.

In its most recent profit warning, announced earlier this month, Balfour blamed a deterioration in the performance of its UK construction business, but insisted that its balance sheet remained in good shape.

Balfour is likely to continue to pursue a sale of Parsons Brinckerhoff, its US-based consulting and engineering group, regardless of the outcome of discussions with Carillion. Balfour said it would explore a sale of the business, which it bought for $600m (£354m) in 2009, earlier this year.

"As anticipated at the time of the acquisition (in 2009), there has been growth in the market towards design and build and Public Private Partnership contracts," it said in May.

"However, having professional services and construction capabilities combined within one organisation has not delivered material competitive advantage for the Group."

A number of private equity firms and trade buyers are understood to remain interested in buying the US business.

Carillion has enjoyed a more productive period, winning the Anfield redevelopment project earlier this month and boasting a total order book of £18.5bn, according to its most recent update to the City.

Shares in Balfour closed down 1.1% on Thursday at 232.1p, while shares in Carillion ended 0.65% higher at 338.5p.

Spokesmen for Balfour Beatty, which is being advised by Goldman Sachs, and Carillion, which is using Lazard, declined to comment.

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Amazon Bleeds Value After Posting $126m Loss

Amazon's strategy of putting investment ahead of profits prompted a further share sell-off in after-hours trading last night, when it emerged losses deteriorated in its last quarter.

The internet retailer's costly shift towards digital content and consumer electronics businesses was a key factor behind its net loss of $126m (£74.1m) - double what analysts had been expecting.

The figure compared to a loss of $7m in the same period a year earlier.

Total operating expenses rose 24% to $19.36bn on revenues of $19.34bn - which themselves represented an increase of 23%.

Shareholders - who have long been frustrated by Amazon's focus on growth over profit - registered their protest through a 10% fall in its share price.

The Fire smartphone goes on sale today in the US

It meant that Amazon's value had plunged 20% during 2014 to date at a time when many world indices are at record highs and there was no sign that the company - the largest online retailer in the US - would change tack soon under the leadership of its chief executive Jeff Bezos.

Amazon forecast an operating loss of between $810m and $410m for the third quarter ending in September, a sharp increase from a loss of $25m a year earlier.

Amazon is investing heavily in new businesses and hardware products, as it prepares to take on major tech rivals such as Apple, Google and Netflix.

Chief financial officer Tom Szkutak said Amazon had a "tremendous amount of opportunities" and its investments were "certainly impacting short-term results".

He disclosed that the firm was spending more than $100m on original video content in the third quarter alone.

He continued: "We're going to continue to invest on behalf of customers with the understanding that long-term has to come".

New products and businesses unveiled this year include a subscription book service, new digital content for its Prime online video service, a TV streaming-box and the upcoming Fire smartphone, which makes its US debut on Friday.

Amazon also continues to spend billions of dollars expanding its fulfilment centres, or warehouses, across the world.

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RBS Confirms 92% Profits Boost A Week Early

Shares surged in Royal Bank of Scotland (RBS) on Friday after it confirmed a 92% rise in half-year pre-tax profits to £2.7bn, despite further writedowns for past mistakes.

The bank, which remains 81%-owned by the taxpayer following its bailout during the financial crisis, brought forward its results by a week saying they were "significantly stronger" than the market had been expecting.

The RBS share price rose 14% in early trading - adding £3bn to its value - when the FTSE 100 opened for business on news of the profit performance.

The bank said the better results came as economic improvements in the UK and Ireland fed through to its bottom line while it was also running down bad assets more quickly.

On a separate operating profit basis, a rise of 267% was recorded compared to the same period last year.

However, it made an additional provision of £150m for the costs associated with the mis-selling of payment protection insurance (PPI), taking the total to date to £3.25bn.

RBS also set aside £100m more for the mis-selling of interest rate swaps - taking the total to £1.3bn.

Its chief executive, Ross McEwan, has previously warned that the bank may face additional charges in future arising from regulatory investigations into activities including foreign exchange rigging.

This follows fines for previous mistakes such as the manipulation of the Libor inter-bank lending rate and money laundering.

Mr McEwan said: "The results we are posting today show the steady progress we are making as we take the steps to be a much simpler, smaller and fairer bank.

"These results show that underneath all the noise and huge restructuring of recent years, RBS is a fundamentally stronger bank that can deliver good results for customers and shareholders.

"There is progress on all of our key priorities - capital is stronger, costs are lower and customer activity is gradually improving - although we have only just started with our programme to make it easier for customers to do more business with us.

"But let me sound a note of caution. We are actively managing down a slate of significant legacy issues.

"This includes significant conduct and litigation issues that will hit our profits in the months and years to come.

"I'm pleased we've had two good quarters, but no one should get ahead of themselves here - there are bumps in the road ahead of us.

"Today's results are pleasing but no one at this bank is complacent about the challenges ahead."

In an interview with Sky News, Mr McEwan said its profit growth was attributable to both the economic recovery and the lender's efforts to turn around its fortunes.

"The economy has been improving. It's moved through from being a consumer-led recovery now into small and medium-sized businesses.

"Our growth in that market, of new business, is up 31% this half over the last."

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Lloyds To Claw Back Pay As Libor Fine Looms

By Mark Kleinman, City Editor

Lloyds Banking Group is to examine whether it can claw back millions of pounds paid to former executives who will next week be implicated in the global Libor rate-rigging scandal.

Sky News understands that the taxpayer-backed lender's board will discuss the scope for bonus clawbacks shortly after it announces settlements with regulators in the UK and US, which could take place as soon as Monday.

Insiders said that up to 15 Lloyds employees would face investigations as part of disciplinary proceedings to be launched by the bank once the fines, which could be as high as £300m, are confirmed.

Several managers who were involved in Lloyds' Libor rate submissions have already been suspended.

The clawback move by Lloyds, which is 25% owned by the taxpayer, is expected to be welcomed by George Osborne, the Chancellor.

Royal Bank of Scotland, which was fined £390m manipulating benchmark rates in February last year, deducted £300m from that year's bonus pool to cover part of the cost of the penalties. Additional sums have been docked in subsequent years.

Lloyds was the first of the major banks to cancel outstanding bonus awards to top executives, announcing in 2012 that it would reduce the bonus of former chief executive Eric Daniels after the scale of its payment protection insurance mis-selling became clear.

However, the bank may face a tough challenge to reclaim or cancel bonuses because of the length of time that has passed

Lord Blackwell, Lloyds' new chairman, is expected to examine the issue during forthcoming discussions with board members.

Barclays was the first bank to settle with regulators for manipulating Libor submissions, paying £290m in June 2012.

Bob Diamond, the bank's former chief executive, and Marcus Agius, its chairman, both left their jobs over the scandal.

Since then, though, some banks, including RBS and UBS, have paid substantially higher penalties, and others, such as Deutsche Bank, could also

Lloyds said on Friday that it "notes the recent media coverage regarding potential settlements with a number of government agencies and their investigations into submissions, communications and procedures around the setting of Interbank Offered Rates and other benchmarks.

"LBG confirms that it is in late-stage settlement discussions with a number of agencies. The settlements remain to be agreed and LBG expects they will include the payment of penalties. 

"LBG will update the market on these issues as appropriate."

The bank declined to comment on potential bonus clawbacks or on disciplinary action against employees.

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UK Economy Emerges From Six-Year Downturn

Official figures show the UK economy has emerged from six years of lost growth to return to its pre-crisis peak.

The Office for National Statistics (ONS) said Britain's economy was now bigger than it was before the financial crisis as gross domestic product (GDP) expanded by 0.8% in the second quarter of the year.

The performance matched that of the previous quarter, although today's figure is only a first estimate and subject to revision.

It meant that on an annual basis, growth was 3.1% higher than was measured in the same period last year, leaving total output 0.2% higher than in the first quarter of 2008 - its previous peak.

Consumer spending is still driving growth

The measure of GDP per head - taking account of a growing population and weaker productivity - remains below the peak.

In its April to June calculations, the ONS charted 1% quarter-on-quarter growth in the service sector - which accounts for 75% of total UK GDP - while industrial production rose 0.4%.

However both construction and agriculture made negative contributions of 0.5% and 0.2% respectively. Both were hit by the effects of a very wet winter and spring.

The construction sector was damaged by a weak May

The ONS said only the service industry was now bigger than it was before the crisis, with industrial output and construction still 10% smaller.

Chancellor George Osborne said: "Thanks to the hard work of the British people, today we reach a major milestone in our long-term economic plan."

He tweeted: "We owe it to hardworking taxpayers not to repeat the mistakes of the past.

"Economy bigger than previous peak in 2008 but long way to go - the Great Recession was one of deepest of any major economy & cost UK 6 years."

However many people reacted to the news with scepticism. Posts of Sky News' Facebook page suggested not everyone feels Britain is out of the economic doldrums.

Ed Balls accuses ministers of creating a cost of living crisis

:: Robert Futsal Brassett: "They may declare it. But it don't feel like it."

:: Dorothy Dougan "Just in time for the General Election how fortuitous. So do we all get pay rise now?"

:: Jax Bell - "So NOW can we all get a decent pay rise,MPs 11% everyone who is on benefits/pension 2.5% Working people in North East 1%. Worst Government Leaders in British History"

:: Josephine Hargreaves - "Really? Come out into the real world & talk to the ordinary people to see if its over!"

:: Kerry Livesey - "Good news but let's hope the low paid workers benefit"

The pace of the recovery will feed into expectations about the timing of an interest rate rise by the Bank of England though its governor Mark Carney recently suggested it would be tied to improved data on wage growth.

While employment has soared in recent months, salary growth has fallen to 0.3% year-on-year and continues to lag inflation - last measured at 1.9%.

The scenario that has left the Bank fearing the impact of any rate rise on consumers, whose spending remains the biggest driver of economic growth.

Labour's shadow chancellor, Ed Balls, said of the latest GDP figures: "At long last our economy is back to the size it was before the global banking crisis - three years after the US reached the same point.

"But with GDP per head not set to recover for three more years and most people still seeing their living standards squeezed, this is no time for complacent claims that the economy is fixed.

"Wages after inflation are down over £1,600 a year since 2010, housebuilding under this government is at its lowest level since the 1920s and business investment is lagging behind our competitors.

"Labour's economic plan will make Britain better off and fairer for the future."

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Housing Shortage Sees More Tenants Evicted

By Mark White, Home Affairs Correspondent

Increasing numbers of private tenants are being evicted or exploited by landlords cashing in on the increase in house prices and the shortage of rented accommodation, according to latest figures.

Citizens Advice (CAB) saw a 38% rise in the number of people turning to the charity for help with eviction notices served on them, despite being up to date with their rent.

CAB recorded 5,000 cases across the country in 2013/2014 where tenants complained about being forced from their homes, even though they were not in arrears. That figure is up from 3,750 the previous year.

Problems in London and the South East are particularly acute, the charity said, where many house prices are the highest in the country.

Private tenant Ryan Herran told Sky News he was being forced from his Muswell Hill home of five years, because he complained about damp and mould in the property and demanded his landlord fix the problem.

After months of wrangling with the owner, he was eventually served with a section 21 eviction order.

"I was actually in shock for a couple of days because I've always been a good tenant and always paid my rent and never engaged in anti-social behaviour," he said.

"I did ring up the property management company and they told me they don't have to give a reason under the section 21 eviction notice. They said they felt they were doing me a favour by at least giving me two months notice."

Mr Herran believes his eviction is motivated by spite and certainty on the part of the landlord that he would easily be able to find another tenant.

The number of tenants seeking help over eviction has nearly doubled

Roger Harding from the homelessness charity Shelter said: "Sadly landlords can evict for no reason, even if you've been keeping up with the rent. 

"We've found many worrying examples where landlords have evicted people simply because they don't want to have to deal with repair issues and that's something we want to see outlawed."

During January to March 2014 house prices rose by 18% in London and 10% in the South East, compared to the same period the previous year.

CAB's figures reveal those rises were mirrored by an increase in private tenants reporting they had been served with eviction notices, despite being up to date with their rent.

The charity said the number of tenants in London and the South East seeking help over eviction notices between January and March 2014 was 900, compared with 400 over the first quarter of the year before.

Landlord Richard Blanco rents out properties across six London boroughs and is also a member of National Landlords Association. He said private landlords are often unfairly maligned.

"There's a small minority of rogue landlords who might try and increase rents but really the most sensible business model for landlords is to maintain the property well and to have a good relationship with tenants and to try to ensure tenants stay as long as possible," he said.

Mr Blanco said, contrary to widespread belief, more than three quarters of private tenants have not faced an increase in rents over the past 12 months.

The Government is in the process of introducing new legislation which it hopes will strengthen the rights of private tenants and help protect them from exploitation, or unjustified eviction.

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