Citibank Korea probed
South Korea's financial watchdog said yesterday it has been investigating Citibank Korea Inc over derivatives trading losses worth more than 10 billion won (US$10.2 million). "After our regular inspection in October revealed derivatives-related losses that looked necessary for further investigation, we launched an extraordinary probe early December to find the cause of the losses and whether the trading activities were properly managed,'' said a Financial Supervisory Service official, who asked not to be named because of the sensitivity of the matter. Citibank Korea declined to comment, saying it is checking the matter. Last year, the regulator's investigation also found that the South Korean unit of Citibank had reaped gains by charging a higher fixed interest rate on mortgage products with a floating rate.
Budget terminal finished
Asia's first terminal customized for low-cost carriers (LCCs) was completed at Singapore's Changi Airport yesterday and is capable of handling 2.7 million passengers annually when flights start in March. The 25,000m2 facility, constructed at a cost of S$45 million (US$27 million), has a departure and arrival hall linked by a covered walkway. Space has been set aside for food and beverage outlets as well as free Internet terminals. Commercial operations start on March 26. "LCCs today account for approximately 10 percent of Changi Airport's total passenger flights, and will be a high-growth segment of the civil aviation sector in the Asia-Pacific region in the coming years," Minister of Transport Yeo Cheow Tong said.
HK plans tax break
Hong Kong expects to approve a legislation exempting offshore funds from paying profit tax by March in a move aimed at luring foreign investors to set up operations in the Chinese territory, a top Hong Kong government official said yesterday. Frederick Ma, secretary for financial services and the treasury, said plans to abolish the 17.5 percent profit tax on offshore funds trading in Hong Kong securities would be a "big attraction" for foreign investors and help deepen liquidity in the stock market. "We are hoping this legislation will be passed in the first quarter of this year," he told reporters on the sidelines of an investors conference here. "This will put us at par, if not more favorable, with some financial centers like the UK and the US."
■ Medical devices
Boston Scientific makes bid
Boston Scientific confirmed Sunday as "definitive" its offer to take over medical device producer Guidant valuing the company at US$25 billion, or US$72 a share. Massachusetts-based Boston Scientific, also a medical device producer, insisted its offer valued Guidant at more than US$3 billion above a rival offer by Johnson and Johnson, which Guidant shareholders are to vote on at the end of this month. If its bid of US$36 in cash and US$36 in Boston Scientific shares for each Guidant share is accepted, the takeover would create a US$10 billion company, Boston Scientific said. The company also said that it had in hand an agreement to sell Guidant's vascular intervention and endovascular businesses to medical giant Abbott, a move needed to secure antitrust approval for the acquisition.