Diamond Foods Inc. is replacing its CEO and chief financial officer after an internal investigation found that the company improperly accounted for payments to walnut growers and it needs to restate two years of financial results.
The news, announced late Wednesday, sent shares of the San Francisco-based company plummeting more than 43 percent in after-hours trading.
Diamond Foods, which makes Emerald Nuts and Pop Secret popcorn, has been embroiled in a dispute over the payments for several months. The company said that its audit committee found that the payments were booked in the wrong period.
The payments _ an estimated $20 million in 2010 and $60 million in 2011 _ skewed the company’s financial results.
Diamond Foods placed its CEO Michael Mendes and Chief Financial Officer Steven Neil on administrative leave. The company is looking for permanent replacements. In the meantime, it appointed Rick Wolford, a Diamond Foods director and former CEO of Del Monte Foods, as its acting CEO. Michael Murphy, of Alix Parners, will serve as acting chief financial officer.
The deal could put Diamond Foods’ plans to acquire the Pringles brand from Procter & Gamble Co. in jeopardy. The deal, worth $1.5 billion when it was announced in April, would be the biggest acquisition ever for Diamond Foods and make it the second-largest snack maker in the nation behind PepsiCo Inc.
The collapse of Diamond Foods’ shares also hurts its ability to finance the deal.
Cincinnati-based P&G called the news from Diamond Foods “very disappointing.” It said in a statement that it is evaluating its next steps and keeping all its options open.
“Pringles remains a valuable asset and it has attracted considerable interest from other outside parties,” P&G said.
Shares of Diamond Foods were halted in trading earlier in the day but fell $15.88 to $20.78 in after-hours trading. Its shares have been on a downward slide since hitting $96.13 in late September.
Diamond Foods said it takes the integrity of its financial statements seriously and is working to complete the restatements as soon as possible.
One of Switzerland’s top priorities this year is to restore confidence in the country’s financial industry following a series of setbacks that included the resignation of its central bank chief, the Swiss leader said Thursday.
President Eveline Widmer-Schlumpf said the Cabinet was examining ways of tightening loopholes in its oversight of both the central bank and its directors’ personal business transactions.
Swiss National Bank chairman Philipp Hildebrand stepped down Monday amid a public furor over his family’s private currency deals, which he maintained were legal under the bank’s internal rules against insider trading. Hildebrand was considered a key actor in Switzerland’s efforts to resist being sucked into the European debt crisis.
Widmer-Schlumpf told reporters in Geneva that the government would await a report on personal deals conducted by the remaining five members of the central bank’s enlarged governing board before deciding who should replace Hildebrand. She declined to say whether external candidates would be considered.
The Swiss government also intends to pursue deals with other countries aimed at resolving long-standing disputes over tax evasion, said Widmer-Schlumpf, who is also the country’s finance minister instant credit report.
Switzerland has been gradually softening its banking secrecy rules in recent years amid pressure from cash-strapped governments angry that their taxpayers are hiding money in Swiss banks.
Negotiations with the United States were particularly difficult, she said. “They are not easy partners, we know that, but still they are constructive.
“I hope that we can resolve this issue in a way that respects the Swiss legal situation,” said Widmer-Schlumpf.
Swiss media have reported that U.S. authorities are demanding the names of all Swiss bankers who had contact with American clients in recent years, with a deadline set for Jan. 23. Such a move could greatly increase the pressure on Swiss banks to reach a settlement with U.S. authorities.
Widmer-Schlumpf said the government is also examining the possibility of a tax deal with Italy that could mirror accords already reached with Britain and Germany. The European Union has opposed such bilateral agreements and demanded a universal agreement for all its members.
Chinese Premier Wen Jiabao said business conditions may be
A man from St. Louis County is the second person to seek damages from Schnucks after falling ill during an E. coli outbreak linked to lettuce sold at local stores, according to a lawsuit filed Thursday in circuit court.
In mid-October, Charles Meyer, 61, ate romaine lettuce and other salad bar items several times from the Schnucks in Cool Valley. Meyer later developed an E. coli bacterial infection and was treated at Mercy Hospital in Creve Coeur, where he stayed in the cardiac unit for several days.
Meyer has not regained his previous health and strength since the illness, according to the lawsuit.
Mary Kozlowski filed suit earlier this month against Schnucks after she suffered permanent kidney damage from an E. coli infection after eating salads from the Des Peres Schnucks.
Federal health officials tagged romaine lettuce as the likely culprit of the E on line pay day loans. coli outbreak that sickened 60 people across 10 states this fall. Investigators determined that romaine lettuce from salad bars at nine Schnucks locations was the most common denominator in the illnesses.
The contamination probably occurred at a farm before the lettuce reached the stores, according to a report from the federal Centers for Disease Control and Prevention.
Both lawsuits also name Vaughan Foods of Oklahoma, which supplies romaine lettuce to Schnucks. The plaintiffs are represented by the law firms Aleshire Robb in Springfield, Mo., and Marler Clark in Seattle.
A key central bank survey showed Thursday that confidence at major Japanese manufacturers fell over the last quarter, as the export-reliant country battled a strong yen and an increasingly precarious global economy.
In the Bank of Japan’s “tankan” survey of business sentiment, the main index for big manufacturers fell to minus 4, in the first deterioration in two quarters. Three months ago, it stood at 2.
The figure represents the percentage of companies saying business conditions are good minus those saying conditions are unfavorable, with 100 representing the best mood and minus 100 the worst.
The result is in line with Kyodo News agency’s average market forecast.
Japan has been battling a strong yen, which has hit multiple historic highs this year against the dollar. Amid economic uncertainty in Europe and the U.S., global investors have looked to the Japanese currency as a relatively safe haven.
But Japan relies on exports to drive growth, and the yen’s appreciation has hit companies such as Toyota Motor Corp. and Sony Corp. hard. When the yen climbs, it reduces the value of exporters’ overseas profits when repatriated to Japan payday advance.
That has forced companies to shift more production overseas, prompting worries about a hollowing out of Japanese industry.
Big non-manufacturers were feeling slightly more optimistic. Their confidence index rose to 4 from 1 three months earlier.
Medium-sized manufacturers’ reading was flat, at minus 3, while the small manufacturers’ index improved to minus 8, up from minus 11.
The tankan, which helps guide monetary policy, showed that large companies overall plan to boost capital spending by 1.4 percent this fiscal year through March 2012. The figure is down from 3 percent in the September survey.
Large manufacturing companies assume an average exchange rate of 79.02 yen per dollar for this fiscal year, compared with 81.15 yen three months ago.
The Bank of Japan surveyed 10,846 companies nationwide. About 99 percent responded.
The bank’s next policy board meeting is scheduled for Tuesday and Wednesday.
Mining company Anglo American has gained a controlling interest in diamond miner De Beers, paying $5.1 billion for the 40 percent of De Beers shares held by the Oppenheimer family.
The deal potentially raises Anglo American’s stake to 85 percent. The government of Botswana, however, has pre-emption rights to buy one-fourth of the Oppenheimer shares at the time the transaction closes, potentially increasing its stake to up to 25 percent.
“This has been a momentous and difficult decision as my family has been in the diamond industry for more than 100 years and part of De Beers for over 80 years,” said Nicky Oppenheimer, representing the Oppenheimer family interests which are held by CHL Group.
Anglo American shares were up 3.4 percent in midmorning trading in London.
Asian stock markets fell Tuesday as new concerns emerged about the viability of a much-heralded plan to contain Europe’s debt crisis.
Benchmark oil fell to near $92 a barrel. The dollar rose slightly against the yen, a day after jumping about 5 percent following Japan’s move to buy dollars and sell the strong yen to protect its exporters.
Japan’s Nikkei 225 index dropped 1.4 percent to 8,859.21. Hong Kong’s Hang Seng lost 1.4 percent to 19,584.69, and Australia’s S&P/ASX 200 shed 1.5 percent to 4,232.90. Benchmarks in Singapore, India and Indonesia were also down.
South Korea’s Kospi gained 0.1 percent to 1,911.39. Key indexes in Taiwan, Malaysia and Thailand also rose.
Wall Street tumbled Monday, with confidence shaken by the collapse of the brokerage house MF Global. The securities firm filed for bankruptcy protection after it was downgraded by ratings agencies for holding too much European debt.
The company’s collapse startled investors already nervous that the United States _ with an economy growing at the slowest pace since the end of the Great Recession _ is in danger of falling back into recession.
The Dow Jones industrial average spiraled down 2.3 percent to close at 11,955.01. The S&P 500 fell 2.5 percent to 1,253.30, and the Nasdaq composite fell 1.9 percent to 2,684.41.
European leaders reached an agreement Thursday aimed at shoring up the region’s banks and preventing a severe debt crunch in Greece from bringing down Europe’s financial system.
But the European debt crisis is still far from fixed. One troubling sign is that borrowing costs for Italy and Spain have increased, a signal that traders remain worried about those countries’ ability to pay their debts.
Complicating the picture further was the announcement by Greek Prime Minister George Papandreou on Monday that his debt-strapped country will hold a referendum on whether to accept the European debt deal faxless cash advances.
“That puts everything in question. No longer do you have Greece backing it,” said Andrew Sullivan, principal sales trader at Piper Jaffray in Hong Kong. “It is putting another level of uncertainty into it, and the markets don’t like uncertainty.”
Meanwhile, surveys showing China’s manufacturing remained sluggish in October also weighed on investor sentiment. Hong Kong-listed GOME Electrical Appliance Holdings, China’s largest appliances retailer, fell 5.8 percent. Anhui Conch Cement Co. fell 3.6 percent. China’s biggest steel company, Baoshan Iron & Steel Ltd., lost 0.4 percent.
But Qantas Airways rose 1.6 percent as the world’s 10-largest airline took to the skies again after a debilitating series of strikes and subsequent staff lockout were halted by an Australian court.
Negative earnings also weighed on shares.
Japanese consumer electronics giant Panasonic Corp. tumbled 4.5 percent, a day after reporting a quarterly loss and projecting a huge annual loss due to slumping TV sales and a strong yen.
Australian retailer Harvey Norman fell 3.7 percent after the company reported a drop of almost 20 percent in pre-tax earnings in the three months to September.
In energy trading, benchmark crude for December delivery was down 82 cents at $92.37 a barrel in electronic trading on the New York Mercantile Exchange. The contract slipped 13 cents to settle at $93.19 in New York on Monday.
The euro fell to $1.3804 from $1.3924 late Monday in New York. The dollar rose slightly to 78.07 yen from 78.05 yen.
CARDS WIN = BETTER ECONOMY: Alan Skrainka of Cornerstone Wealth Management - a former chief market strategist for Edward Jones - has some economic nuggets to offer regarding the Cardinals and the World Series.
According to Skrainka, research shows when the Cards win the series, the stock market rises an average of 13 percent in the following year, more than any other team that has won at least 4 times.
Skrainka’s theory is that the joy and exuberance experienced by the vast Cardinal Nation after a win gives an immediate boost to consumer and investor confidence — thereby lifting the stock market and the gross domestic product (GDP) instant payday loan.
This all adds up to Skrainka’s early decision to escalate his estimates for the stock market and GDP next year, since 12 of the past 14 teams have that have won the World Series won the first game.
Sounds a little like the idea that lipstick purchases are an economic indicator so I say, let’s go with it.
Greece will have to take fresh austerity measures, the debt-ridden country’s finance minister said Wednesday, a day after Athens moved a step closer to getting the vital bailout funds it needs to avoid a disastrous default next month.
The prospect of more tax increases and spending cuts are likely to be met with mounting concern in a country mired in a deep recession and the number of unemployed rising to around one in seven.
“Do we have to take additional measures? Yes we have to take supplementary measures … because of the recession, because of the difficult task, and the weakness of the central administration have not produced the required results,” Evangelos Venizelos said in Parliament ahead of a Cabinet meeting.
He did not specify what the measures might be.
Greece has been under pressure from its international lenders to meet fiscal targets and slash the size of its bloated public sector, which has more than 750,000 staff in the country of 11 million people.
It has already pledged to suspend up to 20,000 civil servants on reduced pay as part of a plan to shed 150,000 public jobs through 2015. It also recently announced a new property tax, to be paid through electricity bills to make it easier and faster for the state to collect.
State electricity company unionists have threatened not to collect the tax and not to cut off the electricity supply to those who refuse to pay.
A public reeling from repeated rounds of spending cuts and tax hikes is showing waning patience with measures that appear not to have the necessary effect on the state budget. Many warn that with the country facing a fourth year of recession in 2012 and unemployment at more than 16 percent, yet more austerity could sink the economy.
Yannis Varoufakis, an economics professor at Athens University, said the government’s actions appear increasingly desperate and likened its strategy to “the last stages” of the Vietnam war.
“The more obvious it was that the war was lost, the more desperate the attempts of the United States army and air force to bomb Vietnamese villages in order to save them,” Varoufakis said.
Venizelos though is pressing ahead with the strategy and argues that Greece will emerge a stronger economy once it’s got a grip on its public finances and rebalanced the economy more towards the private sector.
He said that without the supervision of debt inspectors from the European Central Bank, the International Monetary Fund and the European Commission, collectively known as the troika, Greece would have “slipped off the fiscal track instant personal loans guaranteed.”
The troika has been pressing the Greek government hard to adhere to the reforms it agreed to in return for bailout money. In particular, the inspectors want it to move faster in reducing the size of the public sector.
Their quarterly reviews of the country’s progress is essential to the country’s international creditors releasing funds from a euro110 billion ($151 billion) bailout loan that has been keeping Greece afloat since last year.
Measures taken so far include pension and salary cuts in the public sector, and a series of tax hikes on everything from food and fuel to property and income.
The troika suspended its current review in early September amid talk of missed targets and delays, and Venizelos held two critical conference calls with them on Monday and Tuesday.
Brussels and Athens said progress had been made in the calls, and the troika heads are due back in the Greek capital next week _ a clear hint that the next batch of bailout cash amounting to euro8 billion ($11 billion) is likely to be released.
Venizelos conceded that it was a “humiliation” for Greece to ask for loans and to be under international supervision, but that the country had to if it was to avoid a more a calamitous outcome.
“If we did not have the supervision of the troika … we would have again unfortunately slipped off the fiscal track,” he said. “Just as the country derailed in an unprecedented away between 2004 and 2009. It’s not a question of intent. It’s a matter of mentality, lack of ability, management structure, methods, habits, and inertia.”
Greece has been struggling to persuade its creditors that it deserves to receive the next installment of its bailout. Without it, the country only has enough funds to see it through mid-October.
“The choices we are making are, unfortunately, absolutely necessary,” Venizelos insisted.
“When you are borrowing money, you are obliged to consider the opinion of the lender,” he said. “There is a negotiation. And of course the strong party is the one who pays out, not the one who receives. That is of great importance.”
____
Theodora Tongas in Athens contributed.
Asian stocks opened higher Friday after promising U.S. jobs data helped propel Wall Street up.
Japan’s benchmark Nikkei 225 stock average was narrowly up at 8,985.22 in early trading. Hong Kong’s Hang Seng index rose 1.3 percent to 19,854.14 and South Korea’s benchmark Kospi index was 0.9 percent higher at 1,833.44.
Australia’s S&P/ASX200 index gained 1.5 percent to 4,204, while benchmarks in New Zealand, the Philippines and mainland China also rose.
On Thursday, the Dow Jones industrial average shot 423 points higher following news that the U.S. job market had gotten a little better.
The Labor Department reported that the number of people applying for unemployment benefits fell below 400,000 last week for the first time in since April, a positive sign for the job market.
The brighter outlook was enough to catapult stocks. The Dow finished at 11,143.31, up 423.37 points, or about 4 percent. The S&P 500 finished up 4.6 percent and the Nasdaq composite index 4.7 percent.
World markets fluctuated wildly this week as signs the U.S. might be headed toward recession rattled investors already unnerved by Europe’s worsening debt crisis.
The leaders of Germany and France, the biggest economies of the nations that use the euro currency, announced they will meet Tuesday to discuss the financial crisis on the continent.
The stocks of French banks have been hammered because of concerns they will be hit with massive losses from European sovereign debt they hold. One European nation after another has struggled with debt, with Spain and Italy the latest.
France is trying to assure financial markets that it will not be downgraded from AAA. Standard & Poor’s rating agency stripped the United States of its top-flight AAA credit rating last Friday.
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