Business & Finance
Wal-Mart Stores announced it will venture into the challenging Japanese market, taking eventual control of the deeply indebted Seiyu retail chain. Its stake will begin at 6.1 percent and increase in two stages to 66.7 percent by late 2007. Reports said the investment would cost Wal-Mart $2.02 billion. Seiyu operates more than 200 supermarkets and department stores, but as recently as last August it owed creditors $5.9 billion. Two years ago, Wal-Mart explored a merger with another Japanese retail chain, Daiei Inc., but those talks eventually collapsed.
Prospects dimmed for a merger to rescue Arthur Andersen LLP after word that two main prospects had broken off talks with the embattled auditor. Big Five accounting firms Deloitte Touche Tohmatsu and Ernst & Young both cited concerns over Andersen's potentially huge liabilities in the Enron debacle as their reasons for withdrawing. Reports said a third firm, Netherlands-based KPMG, was interested only in acquiring Andersen's overseas operations.
Four senior managers and two other executives were fired at the Maryland subsidiary of Allied Irish Banks (AIB) in the wake of $691 million in foreign currency losses, one of history's largest trading scandals. But it appeared that Susan Keating, chief executive of Allfirst Financial Inc. in Baltimore, would survive the purge. Allfirst's chairman also was unaffected; he is scheduled to retire June 1. An internal AIB report said the losses "raised questions of accountability ... at the highest levels," but the parent company's own two top executives were to keep their jobs as well. The massive loss, blamed on a rogue trader at Allfirst, was first reported Feb. 5.
Christie's and Sotheby's both faced millions of dollars in additional damages for a price-fixing scheme. The world's leading auction houses, based in London and New York, respectively, agreed 18 months ago to a $537 million settlement for customers at US auctions after being found guilty of colluding on commissions and other charges. A New York appeals court ruled Wednesday that foreign auction customers also may seek damages, in a decision that extends the reach of US antitrust law.