(Reuters) - Security services provider ADT Corp said it may have to contribute to a tax bill faced by former parent Tyco International Ltd if the total amount assessed by the IRS exceeds $1.85 billion.
Tyco said on Monday it received a notice from the U.S. Internal Revenue Service stating that several of the company's former units, including ADT, owed taxes of $883.3 million and penalties of $154.0 million for tax years from 1997 to 2000. (http://r.reuters.com/nyr39t)
Tyco also said the IRS had disallowed interest and related deductions recognized on the U.S. income tax returns totaling about $2.86 billion related to intercompany debt transactions.
The company said four former subsidiaries would share the liabilities under tax-sharing agreements. The companies are Covidien Plc , TE Connectivity Ltd , ADT and Pentair Ltd . (http://link.reuters.com/saw39t)
Shares of ADT, which was spun off from Tyco in September, were little changed at $40.46 in morning trading on the New York Stock Exchange.
(Reporting by Mridhula Raghavan in Bangalore; Editing by Saumyadeb Chakrabarty)
By Matt Scuffham and Steve Slater
LONDON (Reuters) - Britain's financial regulator warned the Co-operative Bank two years ago that it needed to raise capital and was not in a position to buy hundreds of branches from Lloyds Banking Group.
Andrew Bailey, the Bank of England's deputy governor for financial stability, told lawmakers the regulator had major reservations about Co-op's ability to acquire 632 branches put up for sale by Lloyds as a condition of its 2008 state bailout.
Bailey said he had raised five issues of concern with the Co-op: capital, liquidity, risk management, integration, governance and management.
"It was a pretty full-set, roughly everything," he said.
The Lloyds deal, codenamed Verde, collapsed in April after Co-op was found to have a capital shortfall, which the regulator has since identified to be 1.5 billion pounds ($2.3 billion).
Co-op is forcing bondholders to help plug that shortfall, using a 'bail-in' rescue model which will see them swap their debt for new bonds and equity in the bank, losing 500 million pounds in the process.
"We never approved the Co-op bid for the Verde branches. Going back to the outset of the process, about two years ago when it was first an idea, I said to the board of the Co-op Bank that they needed to raise capital," Bailey told parliament's Treasury Select Committee on Tuesday.
The decision by Lloyds to sell the branches to Co-op prompted allegations that politicians - keen to back customer-owned financial services businesses, such as Co-op, as an alternative to mainstream banks - had encouraged the choice.
However, Lloyds executives told the committee last month that they had not been subject to political pressure and made the decision to back Co-op's bid for commercial reasons.
Bailey said Lloyds had been skeptical about a rival bid for the Verde branches from new banking venture NBNK and had agreed to work on a listing were the Co-op deal to fall through.
($1 = 0.6568 British pounds)
(Editing by Louise Ireland)
WASHINGTON (Reuters) - The Federal Reserve on Tuesday is set to vote on whether to adopt the international Basel III capital rules and will also consider a series of other reforms that go beyond that international agreement.
Daniel Tarullo, in charge of financial supervision at the Fed, said the Fed was working on four new rules for the country's biggest banks in the coming months, some of which he had alluded to in an earlier speech.
The Fed said it would adopt a leverage ratio, which measures equity as a percentage of assets without looking at risk weightings, beyond the 3 percent required by Basel.
The U.S. central bank was also working on a new rule to address risks in short-term wholesale funding and a rule on combined equity and long-term debt, as well as a capital surcharge for banks that pose a potential threat to the entire system.
The Fed had also adapted the risk weightings for residential mortgages and some other assets for smaller banks to address concerns that the regulation was too burdensome.
(Reporting by Douwe Miedema; Editing by Chizu Nomiyama)