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World Business Quick Take

■ BANKING

Morgan Stanley buys stake

US banking giant Morgan Stanley has completed a deal to buy a 19.9 percent stake in a medium-sized Chinese trust bank based in Hangzhou, the two companies said yesterday. The purchase of Hangzhou Industrial and Commercial Trust (杭州工商信託投資) company is part of Morgan Stanley’s efforts to tap into China’s growing financial market, a joint statement said. “The investment further demonstrates Morgan Stanley’s willingness and determination to expand its business in the China market,” Sun Wei, chief executive of Morgan Stanley China, was quoted as saying in the statement. The official Shanghai Securities News reported the purchase cost at about 200 million yuan (US$29.3 million), citing senior company officials.



■ SOUTH KOREA

Pyramid scheme busted

Police said yesterday they had busted South Korea’s biggest-ever “pyramid” financial scam involving nearly US$2.6 billion collected from tens of thousands of investors. They said they were hunting 14 swindlers, including Cho Hee-pal, who is accused of raising about 3.9 trillion won (US$2.6 billion) from more than 30,000 investors. Cho, 51, established a company called BMC in 2004 to lease medical devices to hospitals, bathhouses and beauty salons and recruited investors the way multi-level merchandising firms do. Police said Cho’s company lured investors, mostly middle-aged or elderly women with scant financial knowledge, with the promise of high returns. Many reinvested their dividends in the company.



■ BANKING

Norinchukin to raise capital

Norinchukin Bank, the de facto central bank for Japan’s farm and fishery cooperatives, plans a huge US$10.5 billion capital hike to shore up its finances, a report said yesterday. The bank is expected to boost its capital base by more than ¥1 trillion (US$10.5 billion) by March, the Nikkei Shimbun reported, citing unnamed sources. It would be the biggest capital hike yet by a Japanese bank during the current financial crisis. Norinchukin said this month it had booked a loss of about ¥100 billion in the first half of this fiscal year on its securities holdings due to recent market turmoil.



■ AUSTRALIA

Rudd warns of deficit

The Australian government is prepared to see a huge budget surplus run into deficit as it fights the fall-out from the global financial crisis, Prime Minister Kevin Rudd said yesterday. The surplus of A$21.7 billion (US$14 billion) forecast in May’s budget was slashed earlier this month by three-quarters to A$5.4 billion as the government warned the crisis would cut tax receipts, growth and jobs. But Rudd’s comments marked the first time he had acknowledged that the government was prepared to run the budget into deficit.



■ COMPUTERS

IBM denies layoff report

International Business Machines Corp (IBM), the world’s largest provider of computer services, denied reports it would cut 1,000 jobs at its Japan unit by the end of the year to offset declining sales. “There is no truth to the reports; we don’t have a specific target for job cuts,” Kazuhiko Suyama, a spokesman at IBM Japan Ltd, said by telephone yesterday. “Rather than reducing the number of unskilled employees, we have a plan to upgrade their skills.” IBM’s Japan unit plans to cut 1,000 jobs, or 6 percent of its workforce, the Nikkei English News reported yesterday, without saying where it obtained the information.


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