Business & Finance
Refco Inc. is cooperating with authorities, a spokesman said. But he wouldn't comment further on the fast- growing troubles engulfing the nation's largest independent futures broker. Refco's share price has plunged more than 60 percent since Monday, when the company suspended chief executive Phillip Bennett and announced that he'd hidden $430 million in unpaid debts dating to 1998 - making its earnings appear greater than they actually were. The news reportedly has triggered an exodus of customers to rival brokers, and Standard & Poor's and Moody's Investors Service both have lowered their ratings of Refco's debt. Moreover, the Forbes.com reporting service said Thursday that banking giants Goldman Sachs, Credit Suisse First Boston, and Bank of America each may be liable for $200 million since they were the lead underwriters for Refco's Aug. 11 initial public offering if - as seems probable - investors demand their money back. The investors also could bring a class-action suit against Refco, analysts said. Bennett has repaid the money with interest after taking out a loan for which he pledged much of his personal property as collateral. But he was arrested on fraud charges Tuesday, although freed after posting a $50 million bond and agreeing to wear an electronic monitoring device. His attorney accused prosecutors of "jumping the gun" and said Bennett "received no personal profits from this." Refco is based in New York.
In a deal valued at $1.1 billion in stock, KDDI Corp. will buy the telecommunications division of Tokyo Electric Power Co., the companies announced Thursday. KDDI is Japan's second-largest phone company, and analysts said the acquisition is aimed at helping it compete with Nippon Telegraph & Telephone Corp., a former government monopoly. Tokyo Electric has the infrastructure that will allow KDDI to offer customers high-speed Internet access.
Unilever PLC, the food and personal-care products giant, dismissed a published report that it will transfer 2,500 jobs to low-wage India and countries in Eastern Europe. But a spokesman conceded that the company is considering options for outsourcing the work of its technical support, human resources, and financial units and said "it would be unusual if we did not start to implement any decisions by 2006." Unilever, a British-Dutch company, markets such brands as Hellmann's mayonnaise, Knorr soups, Birds Eye frozen vegetables, Breyers ice cream, Lipton tea, Dove and Lux soap, and Ponds skin cream.