All My Net Biz

The Financial Services Authority (FSA) is investigating Torex Retail for market abuse after both the software companys chairman and chief executive stepped aside from the day-to-day running of the business yesterday.

It is understood that the City watchdog is examining share dealings by some of the directors at Torex Retail over the past three months.

The FSAs inquiry is the third launched since last week, when Torex suspended its shares and issued a shock profits warning, just eight days after giving an upbeat statement to the market.

The Serious Fraud Office raided three homes earlier this week in relation to an investigation into Torex, while the London Stock Exchange is examining whether the AIM-listed company has breached disclosure rules.

Torex said yesterday that Christopher Moore, chairman at Torex Retail, who also used to be chief executive, has agreed to step aside, but will still carry out some duties and remain on the board.

Neil Mitchell, who replaced Mr Moore as chief executive in September, has been asked to step down from executive duties. He will also remain on the board.

Deloitte, which was brought in by management to review its financial position, has now parachuted in Iain Lynam, a restructuring expert, to lead the day-to-day running of the business.

Mr Lynam is also part of a new committee that will run Torex, and includes finance director Marcus Leek, who joined the companys board at the same time as Mr Mitchell. Geoffrey Forster, a senior non-executive director, will now chair the company in place of Mr Moore. David Hallett, a non-executive director, is also part of the new committee.

The FSA and Torex declined to comment.

HONG KONG (XFN-ASIA) - Hong Kong’s Financial Secretary Henry Tang announced several tax relief measures and concessions in his budget speech today amid a huge surplus in government finances and weeks ahead of the territory’s leadership election.

Analysts said the “people’s budget” will help the administration win the support of the general public, but noted that it failed to address some of the business community’s concerns such as a reduction in profits tax and broadening Hong Kong’s tax base via adoption of a goods services tax.

In his budget speech, Tang said that while the government remains wary of volatility in the global financial markets, the government is in a fairly comfortable position to give away an array of tax benefits to different segments of society.

“As the government’s financial position has improved following the strong recovery of our economy, I will propose a series of tax relief measures to share the fruits of economic prosperity with the community,” he said.

He said the government expects to generate a budget surplus of 55.1 bln hkd in the year to March 2007 as the economy expanded 6.8 pct in calendar 2006. Economic growth in the fourth quarter of last year was at a higher-than-expected 7.0 pct.

The projected budget surplus vastly exceeded the government’s original estimate, which was for a surplus of just 5.6 bln hkd.

The government forecast economic growth of 4.5-5.5 pct for 2007.

Tang asserted that the government’s ability to ease the public’s tax burden was tempered by a recognition to “avoid narrowing our tax base further and adhere to the principle of affordability.”

Chief Executive Donald Tsang, who is widely expected to secure a fresh term of office in the March 25 elections, has described as proactive and pragmatic the budget’s initiatives to improve employment, the economy and people’s livelihood.

“It (budget) fulfils the government’s pledge to place wealth in the hands of the people,” Tsang said.

Among the prominent measures outlined in the budget is a proposal to widen personal income tax bands to the 2002-2003 levels.

Under this scheme, the lower end of the taxable salaries band width will be increased to 35,000 hkd from 30,000 hkd, which would involve imposing the first 2 pct tax on the first 35,000 hkd of an employee’s annual salary.

Under the same proposal, the two highest marginal tax rates will be reduced to 12 pct and 17 pct from 13 pct and 19 pct , respectively.

Tang also said a one-time tax relief will be offered to taxpayers, including a waiver of 50 pct of salaries tax assessed for the year to March 2007, subject to a ceiling of 15,000 hkd.

The amount waived will be deducted from the taxpayer’s final tax payable for the year to March 2007.

Other tax relief measures include an increase in child allowance to 50,000 hkd from 40,000 for each child and an additional one-time child allowance of 50,000 hkd for each child in the year of birth.

To encourage the development of a knowledge-based economy, the government proposed an increase in the maximum amount of deduction for self-education expenses to 60,000 hkd from 40,000.

Meanwhile, in a tax concession to property owners, the government proposed to waive taxes on apartments for the first two quarters of the next fiscal year which begins in April. The waiver will be subject to a ceiling of 5,000 hkd per quarter for each apartment.

Tang said he expects that 99 pct of domestic properties and 86 pct of non-domestic properties to be spared from such taxes during the period.

Agnes Chan, partner at accountancy firm Ernst and Young, said the government was more generous this time compared to the previous years in handing out an array of tax relief measures to different sectors, including the middle class.

“The accountancy profession was pleasantly surprised that Tang was more generous this time than in previous years in offering tax concessions and relief while exercising caution that the recurring impact of the relief measures on the budget is confined only to some 5.5 bln hkd,” she said.

“If the recurring tax measures amounting to 5.5 bln hkd is related to the government’s estimated surplus of 55 bln hkd, that’s only 10 pct which is modest,” she said.

“Unlike in the past when disgruntled segments spoke out for being left out of tax concessions, I believe this year’s budget will win wide support in the community because there’s something for nearly everyone, except the business community,” she said.

She noted that Tang’s failure to address the long-term structural problem of the need to broaden Hong Kong’s tax base through the introduction of a goods services tax (GST) is bound to disappoint the business community, including overseas institutions like the International Monetary Fund.

“I believe officials deliberately set this aside because of the elections this year and because of the widespread opposition to this tax measure,” she said.

Paul Chow, tax partner at Grant Thornton Hong Kong, said Tang’s failure to address the proposed GST is a big letdown to the business community.

“I’m sure overseas business institutions, including the IMF, will be upset and disappointed that the government has not done anything to advance its long-term objective of broadening Hong Kong’s tax base,” he said.

“Developed countries did not have huge problems introducing some form of a goods services tax and they now have the benefit of having a stable revenue source. In this regard, the (Hong Kong) government doesn’t have ample political will,” he said.

Chow added that the local business community is disappointed that the government did not see fit to reduce profits tax even by 50 basis points. Corporate profit taxes currently stand at 17.5 pct.

“There will be noises over this issue, but I don’t expect strong protests either,” he said.

He also noted that while Tang spoke of accelerating implementation of various infrastructure projects, his speech was devoid of fresh and bold initiatives on the economic front.

“I believe he was constrained from getting too ambitious in this year’s budget so as to leave ample room for the next government to undertake bolder initiatives, such as a reduction in both salaries and profits taxes,” said Chow.

He said that Tang’s budget this year is more populist than anything else because most of the tax measures that he proposed to implement were largely aimed at meeting the general public’s clamour for some form of “wealth sharing” in a bumper year when the surplus far exceeded the original estimate.

(1 usd = 7.8 hkd)

jun.concepcion@xfn.com

jc/rc

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for an archive of Cramer’s “Mad Money” recaps.

People can look at the volatility in the stock market and tear their hair out, or they can learn how to profit on days like today, Jim Cramer told viewers of his “Mad Money” TV show Thursday.

It’s a two-step program, Cramer said. The first step consists of learning how not to lose money. The second step is discovering how to make money off the panic.

As market-players see stocks go down, they begin to believe people are selling because something must be wrong. But that is not true, Cramer clarified. Stocks this morning were on sale and selling at a discount not because they were necessarily bad but because people panicked and thought it was time to sell, he said.

Instead of joining the panic, take advantage of the now-cheaper stocks, Cramer advised. When Heinz (HNZ) was down 71 cents this morning, people thought maybe there was something wrong with the ketchup, he said. But investors were just “scared and wanted to unload anything.”

Many people believe that any stock going down deserves to, but that is not true, Cramer explained. He has made the mistake of panicking in the past and wants viewers to learn from that. “I never made a dime by panicking,” Cramer said.

“Panic loses people fortunes,” he said. “There is always a better time to sell than that panic moment.”

So if you’re terrified, take a break, said Cramer — otherwise, you’ll be selling at the wrong time. Stocks don’t always go down because they deserve to, so don’t panic-sell, he said.

Now that people know how to protect themselves from panicking, it’s time to learn how to play the panic and profit, Cramer told viewers. Frenzied Foolproof

Some institutions that buy stocks have lists of what they want to buy, and they don’t pay attention to the trading floor panic, he said. Similarly, Cramer believes everyone should have a list of stocks he wants to buy, and prices he wants to pay, all compiled from continuous homework.

“Take advantage of the frenzied fools,” Cramer said. Plan things in advance, do your homework, make a list, and be ready to buy stocks when they are selling at a discount, he recommended.

Cramer said this method is rational. On the other hand, he believes “the worst time to make a decision is at the end of a rough trading day when your gut is telling you the sky is falling.”

When investors make lists, they can make their decisions rationally “without the heat of the moment.” So when a day like today rolls around, they can buy stocks at a discount, Cramer said. A Spot of T Cramer said he wants people to buy AT&T (T) . “Put it on your list and buy it on a day like today,” he said. “Play the scared, volatile market” and buy it on the cheap.

“Don’t be the prey; be the predator,” Cramer said. “Don’t be scared; be prepared.” Some People Want to Make Friends…

In his “Sell Block” segment, Cramer explained just how dangerous making friends can be in this game.

When Howard Schultz, the founder and chairman of Starbucks (SBUX) , visited Cramer’s show in February, Cramer said he respected Schultz and his organization so much that he wanted to become friends with him.

However, he stuck to his guns and resisted the urge to do so, because in the end he cares more about his viewers than making friends. At the end of the segment with Schultz, Cramer advised his listeners against pulling the trigger short term on the worldwide coffee company. And now Starbucks is down 10% since Schultz was on the show.

The growth rate is decelerating, and the stock simply isn’t worth buying, Cramer said. Although it looks like a good long-term story, right now it’s too expensive, he said.

Making friends with Schultz could have cost people money, and Cramer said he knows that. Therefore, his priority is not to make friends, but to do what’s best for his viewers, he said.

Until Starbucks shares go down to $27, it’s not coming out of the sell block, Cramer said. Maybe that will be time to buy it, but not now. Starbucks closed today at $30.39, down 52 cents. Radioactive Play Cramer welcomed American Ecology (ECOL) CEO Stephen Romano to the show.

“Business is going really well,” Romano responded. “Our new contract in Pennsylvania is a cleanup of radioactive materials from processing uranium and thorium. This is what we excel at.” It’s high-volume material that the company moves by rail to Idaho to the desert, where it’s disposed of, he said.

Romano, in response to Cramer’s question, said American Ecology is a company that benefits from increased regulation. “Arguably, the nuclear industry is the most heavily regulated industry in the U.S. It is good for our business.”

Romano said the company provides an attractive dividend to shareholders and is looking to grow.

Cramer said he supports people buying the stock. Lightning Round

Cramer was bullish on Nymex (NMX) , Analog Devices (ADI) , Devon Energy (DVN) , Hain Celestial (HAIN) , BorgWarner (BWA) , Johnson Controls (JCI) , Agilent Technologies (A) , Sears Holdings (SHLD) , Qwest Communications (Q) , Level 3 Communications (LVLT) , Allied World Assurance (AWH) and American International Group (AIG) .

Cramer was bearish on RF Micro Devices (RFMD) , Kodiak Oil & Gas (KOG) , SunOpta (STKL) , Verigy (VRGY) , Lowe’s (LOW) and Home Depot (HD) .

For more of Cramer’s insights during the Lightning Round, click here.

Want more Cramer? Check out Jim’s rules and commandments for investing from his popular book by http://www.thestreet.com/tsc/cramerbook.

THREE people have been arrested in connection with a flood of fake 20 banknotes which have been used to con shopkeepers throughout the Lothians.

Detectives investigating the recent string of fraud cases have recovered more than 70 of the fake notes as they hunt for the forgers who are producing them.

Police chiefs believe a criminal gang from outside the region is printing the notes, which are described as “very good quality”.

They are extremely difficult to tell from genuine currency, although when compared directly the fakes are slightly lighter. Many of the fakes appear to be Bank of Scotland notes with the serial number DK312544.

More than a dozen shopkeepers have been conned by criminals passing more than 1400 of the fake notes at fast-food restaurants, bakeries and other shops.

CID detectives swooped on an address in Broxburn, West Lothian, last week and arrested a 27-year-old man. He was allegedly in possession of 17 of the fake 20 notes.

And two women, aged 28 and 35, were arrested this week after allegedly passing four 20 counterfeit notes in Livingston’s Almondvale Centre. They were caught in possession of 11 of the forgeries after buying food at a Greggs Express bakery.

Two batches of notes are believed to be in circulation, one set copying 20 notes from the Royal Bank of Scotland and the other mimicking the Bank of Scotland’s currency.

The seized notes are being sent to experts at the Bank of England in a bid to determine how they are manufactured.

Detective Constable David Crookston, of West Lothian CID, led the inquiry which saw the arrest of the 27-year-old suspect.

He said: “We’re not sure how these notes are being printed but it would appear to be quite hi-tech. They are very good quality. The notes seem to be coming into West Lothian from outside the force area, but where from is a mystery at the moment. “We’re working with detectives from Midlothian and East Lothian, where notes with the same serial numbers are also appearing.”

Last month staff at the Almondvale Shopping Centre sparked a police warning after reporting a number of forged notes being handed over in its stores.

The centre has reported a further wave of dodgy currency turning up this month, while a Livingston petrol station has also been targeted.

Sergeant Chris Hume, the officer in charge of policing the centre, said up to four notes a day were being passed to its shops.

He said: “We’ve had in excess of 30 counterfeit notes in the last few weeks. The Greggs Express has been hit twice, along with WH Smith, Stationery Box and others. They’re hitting a number of different stores, buying small items to get the genuine change.

“Often they are being noticed when the staff cash up at the end of the day. We’ve had a few calls when staff have noticed them as the suspects are being served.”

Fake cash has also turned up across Midlothian in recent weeks, with eight fake Bank of Scotland 20 notes being recovered from shops.

One of the notes was handed over at the McDonalds restaurant in Straiton Park on January 9 by a man in his 20s who used it to pay for a meal.

However, a police spokeswoman said officers in Edinburgh had not noticed an increase in fake notes being passed in city shops.

A spokesman for the Royal Bank of Scotland added that its staff had not received reports of an influx of counterfeit notes bearing the bank’s insignia.

Related topic

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http://business.scotsman.com/topics.cfm?tid=946

Iran’s beleaguered president, Mahmoud Ahmadinejad, is facing a powerful challenge from his fiercest political rival for control of the country’s nuclear and economic policies.

Hashemi Rafsanjani, a pragmatic conservative who was defeated by Mr Ahmadinejad in the 2005 presidential election, believes Iran may have to yield to western demands to suspend uranium enrichment in order to save the country’s Islamic system from collapse.

He is trying to persuade the country’s supreme leader, Ayatollah Ali Khamenei - who has the final say in all state matters - that further negotiations are essential to avoid a potentially disastrous conflict with the US or Israel.

Mr Rafsanjani demonstrated his growing influence over the nuclear issue in a meeting today with Britain’s ambassador to Tehran, Geoffrey Adams. He told Mr Adams that Iran was willing to submit to “any verifying measures by the responsible authorities” to prove the peaceful nature of its nuclear programme, which many in the west suspect is aimed at developing an atomic bomb.

Diplomatic sources said Mr Rafsanjani appeared to be offering full verification only as part of a negotiated future deal, rather than immediate access. Iran this week announced that it had denied access to 38 inspectors from the International Atomic Energy Agency, the UN’s nuclear watchdog.

Mr Rafsanjani’s conciliatory stance contrasts starkly with Mr Ahmadinejad’s defiant opposition to the suspension of uranium enrichment. The president’s rhetoric has been blamed in many circles for a recent UN security resolution imposing sanctions on Iran for its nuclear activities, which many in the west suspect is aimed at developing the atomic bomb.

Mr Ahmadinejad faced down his critics this week by vowing to continue his policies and declaring that 10 more UN resolutions would not deny Iran its nuclear rights. He also told state television that “wise voices” in the US would prevent the Bush administration from launching a military strike against Iran.

Mr Rafsanjani - a former president and pillar of Iran’s political establishment - disagrees, and is understood to have formed a committee overseeing the nuclear negotiations. The committee will assess whether the country’s international standing has been damaged by Mr Ahmadinejad’s radical statements.

“Before the sanctions, Rafsanjani hoped Iran could obtain its enrichment objectives through mutual understanding with the west. But now he thinks we have reached a dangerous point and that a step should be taken backwards in the hope that two forward can be taken later.” said Mohammad Atrianfar, a respected political commentator and associate of Mr Rafsanjani.

“He doesn’t see negotiation as a sign of weakness. He wants to limit the impact of the sanctions and get Mr Khamenei and the government to accept that if Iran faces mounting sanctions or a military attack or any crisis which damages the economic life of the people, then there is a possibility of the whole system collapsing,” he said.

“Things have changed since the early days of the Islamic revolution, when people would sacrifice their lives. Now they will only defend the system if it provides them a safe life.”

Disclosure of Mr Rafsanjani’s move to re-establish himself comes after the Guardian last week reported that Mr Ahmadinejad’s authority was under pressure from critical MPs and an increasingly concerned Mr Khamenei. His re-emergence contradicts widely-held assumptions that his influence had diminished following his presidential defeat. His increasing prominence follows last month’s electoral triumph in topping the poll in elections to the experts’ assembly, an important clerical body.

Mr Rafsanjani also criticised Mr Ahmadinejad’s government this week for failing to privatise state enterprises, a policy agreed under Iran’s constitution and supported by Mr Khamenei. He said Iran’s economy would be overtaken by poorer neighbouring countries if prized national assets remained under state control. Mr Ahmadinejad - who has vowed to spread wealth more evenly and alleviate poverty - favours a bigger government role in the economy.

Mr Rafsanjani’s comments added to a chorus of anger over Mr Ahmadinejad’s economic policies, which have been widely denounced for stoking inflation and failing to cure unemployment. Dismay over rising prices has driven supposedly like-minded MPs in the fundamentalist-dominated parliament to launch a petition summoning the president to answer questions. It has so far gathered 63 signatures and needs only a further nine to be effective. Meanwhile, proceedings are underway to impeach four of his ministers accused of incompetence.

“Even though the majority of MPs are fundamentalists like Ahamdinejad, the level of dissatisfaction is much higher than previous governments faced from parliament,” Akbar A’alami, a reformist MP told the Guardian. “The criticisms go beyond political groupings. I think it has reached a critical level.”

Presenting next year’s budget, an unrepentant Mr Ahmadinejad told MPs on Sunday that he had controlled inflation and said it was running at 12%. Independent estimates put it at 30%. Critics say rising food and housing costs are hurting the poor, whom Mr Ahmadinejad had pledged to help.

Insiders say anger towards the president is sufficient for a majority of MPs to want to impeach him and remove him from office. However, Mr Khamenei is reluctant to sanction such a step, out of concern for the trauma it could inflict on the system rather than personal loyalty to the president.

Yet if the economy continues to deteriorate, Mr Ahmadinejad’s position could become vulnerable, some analysts think. “The supreme leader is absolutely sensitive to the rate of inflation,” said Saeed Leylaz, an economic analyst. “He has issued one public criticism, three months ago when inflation was lower than it is now. If it is even higher three months from now, then surely Mr Khamenei will not remain silent.”