Japan, Canada investors to buy U.S. power plant for $2 billion: Nikkei

Monday, July 1st, 2013 | Finance News

TOKYO (Reuters) - A consortium including Mitsubishi Corp and Japanese and Canadian pension funds will buy a U.S. gas-fired power plant in Michigan this month for nearly 200 billion yen ($2.01 billion), the Nikkei business daily reported on Tuesday.

Mitsubishi, Japan's Pension Fund Association, Mizuho Bank , the Japan Bank for International Cooperation (JBIC), and Canadian pension fund Omers will acquire all shares in the parent firm of the 1.63-gigawatt power plant, the report said, without citing sources.

The current owners include a Swedish investment fund, said.

($1 = 99.7450 Japanese yen)

(Reporting by Osamu Tsukimori; Editing by Paul Tait)


Sprint Nextel must face NY suit over tax fraud: judge

Monday, July 1st, 2013 | Finance News

NEW YORK (Reuters) - Sprint Nextel Corp must face a lawsuit brought by New York state accusing the company of deliberately not collecting or paying millions of dollars of taxes for its cell phone service, a judge has ruled.

In a decision made public on Monday, New York Supreme Court Justice O. Peter Sherwood denied a motion by Sprint to dismiss the lawsuit.

Sherwood, however, dismissed a conspiracy claim against Sprint and ruled that certain claims applying to periods before March 31, 2008 are barred by a three-year statute of limitations.

A Sprint spokesperson did not immediately respond to a message seeking comment.

The lawsuit brought by New York Attorney General Eric Schneiderman was the first tax enforcement action filed under the state's False Claims Act.

Under the False Claims Act, whistleblowers may be eligible to receive up to 25 percent of any money recovered by the government as a result of information they have provided.

Based on whistleblower information, Schneiderman alleged in the lawsuit that Sprint failed to bill customers for more than $100 million in taxes for its wireless services over seven years.

He said Sprint's decision not to collect and pay taxes was part of a nationwide effort by the Overland Park, Kansas-based company to lure customers from rivals such as AT&T Inc and Verizon Wireless, and make its service $4.6 million less expensive per month.

The lawsuit seeks three times the amount of underpaid tax, plus penalties.

A spokesman for Schneiderman applauded the ruling in a statement, saying it "sends a message that tax dodgers will be exposed and prosecuted to the fullest extent of the law."

(Reporting by Andrew Longstreth and Karen Freifeld; Editing by Ryan Woo)


Asian stocks perkier, Nikkei extends gains

Monday, July 1st, 2013 | Finance News

By Ian Chua

SYDNEY (Reuters) - Asian stocks rose on Tuesday with Tokyo's Nikkei extending gains after encouraging manufacturing data in Europe and the United States helped cheer a market fretting about a slowing Chinese economy.

MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> rose 0.5 percent in early trade, reversing Monday's 0.3 percent fall. Australian shares <.axjo> climbed 1.8 percent, while South Korean stocks <.ks11> edged up 0.1 percent.</.ks11></.axjo></.miapj0000pus>

Japan's Nikkei <.n225> was up 0.9 percent at its highest since late May, adding to Monday's 1.3 percent gain.</.n225>

"We will likely continue to test strong levels," said Kenichi Hirano, operating officer at Tachibana Securities. "A weaker yen has become the normal condition, and stock prices are showing a tendency to gradually rise."

The lighter mood in Asian bourses followed a rise on Wall Street, which took heart after data showed U.S. manufacturing expanded last month, while construction spending neared a four-year high in May.

Also encouraging, factory activity in Europe showed signs of stabilization last month, and British manufacturing recorded its strongest growth in more than two years.

All these reports helped offset some disappointment over China, whose own survey on Monday showed a further slowdown in factory activity.

The reports also highlight an improving trend for the U.S. economy that could see the Federal Reserve keep to guidance that it could start dialing down stimulus later this year.

Analysts said that should keep the U.S. dollar on an upward trajectory over the medium- to longer- term.

"As the U.S. economy pulls ahead of Europe and Japan, and the Fed changes course, the dollar is at the start of a multi-year rally," said Kit Juckes, strategist at Societe Generale.

Juckes said the dollar index, which tracks the greenback's performance against a currency basket, can rise by 10-15 percent over the medium/longer term.

For now though, the dollar index was taking a bit of a breather having jumped 3.5 percent from June 19 to June 28 to reach a one-month peak. It was last down 0.1 percent at 82.996 <.dxy>, just off Friday's high of 83.344.</.dxy>

Against the yen, the dollar hovered near a one-month high of 99.87, while the euro edged up 0.1 percent to $1.3070.

The big mover was the Australian dollar, which bounced to $0.9240 from a 33-month trough of $0.9110 as investors trimmed bearish positions following a bruising 4.7 percent tumble in June.

The steep fall in the currency, which in itself is stimulatory for the economy, is a key reason many economists expect the Reserve Bank of Australia (RBA) will keep its cash rate steady at a record low 2.75 percent later on Tuesday.

Only 2 out of 23 economists polled by Reuters see the RBA lowering its cash rate to 2.5 percent and markets are giving a less than one-in-five chance of a rate cut. The outcome of the meeting is due at 0430 GMT.

In the commodities, copper slipped 0.5 percent to $6,943 per tonne while U.S. crude was steady at $97.95 a barrel.

Spot gold hovered at around $1,251 an ounce, continuing to consolidate after a horror quarter in which it slumped 23 percent, its worst performance in 45 years.

(Additional reporting by Dominic Lau and Lisa Twaronite; Editing by Eric Meijer)