Vitamin Pills: A False Hope?

February 17, 2009
Vitamin Pills: A False Hope?
By TARA PARKER-POPE

Ever since the Nobel Prize-winning biochemist Linus Pauling first promoted “megadoses” of essential nutrients 40 years ago, Americans have been devoted to their vitamins. Today about half of all adults use some form of dietary supplement, at a cost of $23 billion a year.

But are vitamins worth it? In the past few years, several high-quality studies have failed to show that extra vitamins, at least in pill form, help prevent chronic disease or prolong life.

The latest news came last week after researchers in the Women’s Health Initiative study tracked eight years of multivitamin use among more than 161,000 older women. Despite earlier findings suggesting that multivitamins might lower the risk for heart disease and certain cancers, the study, published in The Archives of Internal Medicine, found no such benefit.

Last year, a study that tracked almost 15,000 male physicians for a decade reported no differences in cancer or heart disease rates among those using vitamins E and C compared with those taking a placebo. And in October, a study of 35,000 men dashed hopes that high doses of vitamin E and selenium could lower the risk of prostate cancer.

Of course, consumers are regularly subjected to conflicting reports and claims about the benefits of vitamins, and they seem undeterred by the news — to the dismay of some experts.

“I’m puzzled why the public in general ignores the results of well-done trials,” said Dr. Eric Klein, national study coordinator for the prostate cancer trial and chairman of the Cleveland Clinic’s Glickman Urological and Kidney Institute. “The public’s belief in the benefits of vitamins and nutrients is not supported by the available scientific data.”

Everyone needs vitamins, which are essential nutrients that the body can’t produce on its own. Inadequate vitamin C leads to scurvy, for instance, and a lack of vitamin D can cause rickets.

But a balanced diet typically provides an adequate level of these nutrients, and today many popular foods are fortified with extra vitamins and minerals. As a result, diseases caused by nutrient deficiency are rare in the United States.

In any event, most major vitamin studies in recent years have focused not on deficiencies but on whether high doses of vitamins can prevent or treat a host of chronic illnesses. While people who eat lots of nutrient-rich fruits and vegetables have long been known to have lower rates of heart disease and cancer, it hasn’t been clear whether ingesting high doses of those same nutrients in pill form results in a similar benefit.

In January, an editorial in The Journal of the National Cancer Institute noted that most trials had shown no cancer benefits from vitamins — with a few exceptions, like a finding that calcium appeared to lower the recurrence of precancerous colon polyps by 15 percent.

But some vitamin studies have also shown unexpected harm, like higher lung cancer rates in two studies of beta carotene use. Another study suggested a higher risk of precancerous polyps among users of folic acid compared with those in a placebo group.

In 2007, The Journal of the American Medical Association reviewed mortality rates in randomized trials of antioxidant supplements. In 47 trials of 181,000 participants, the rate was 5 percent higher among the antioxidant users. The main culprits were vitamin A, beta carotene and vitamin E; vitamin C and selenium seemed to have no meaningful effect.

“We call them essential nutrients because they are,” said Marian L. Neuhouser, an associate member in cancer prevention at the Fred Hutchinson Cancer Research Center in Seattle. “But there has been a leap into thinking that vitamins and minerals can prevent anything from fatigue to cancer to Alzheimer’s. That’s where the science didn’t pan out.”

Everyone is struggling to make sense of the conflicting data, said Andrew Shao, vice president for scientific and regulatory affairs at the Council for Responsible Nutrition, a vitamin industry trade group. Consumers and researchers need to “redefine our expectations for these nutrients,” he said. “They aren’t magic bullets.”

Part of the problem, he said, may stem from an inherent flaw in the way vitamins are studied. With drugs, the gold standard for research is a randomized clinical trial in which some patients take a drug and others a placebo. But vitamins are essential nutrients that people ingest in their daily diets; there is no way to withhold them altogether from research subjects.

Vitamins given in high doses may also have effects that science is only beginning to understand. In a test tube, cancer cells gobble up vitamin C, and studies have shown far higher levels of vitamin C in tumor cells than are found in normal tissue.

The selling point of antioxidant vitamins is that they mop up free radicals, the damaging molecular fragments linked to aging and disease. But some free radicals are essential to proper immune function, and wiping them out may inadvertently cause harm.

In a study at the University of North Carolina, mice with brain cancer were given both normal and vitamin-depleted diets. The ones who were deprived of antioxidants had smaller tumors, and 20 percent of the tumor cells were undergoing a type of cell death called apoptosis, which is fueled by free radicals. In the fully nourished mice, only 3 percent of tumor cells were dying.

“Most antioxidants are also pro-oxidants,” said Dr. Peter H. Gann, professor and director of research in the department of pathology at the University of Illinois at Chicago. “In the right context and the right dose, they may be able to cause problems rather than prevent them.”

Scientists suspect that the benefits of a healthful diet come from eating the whole fruit or vegetable, not just the individual vitamins found in it. “There may not be a single component of broccoli or green leafy vegetables that is responsible for the health benefits,” Dr. Gann said. “Why are we taking a reductionist approach and plucking out one or two chemicals given in isolation?”

Even so, some individual vitamin research is continuing. Scientists are beginning to study whether high doses of whole-food extracts can replicate the benefits of a vegetable-rich diet. And Harvard researchers are planning to study whether higher doses of vitamin D in 20,000 men and women can lower risk for cancer and other chronic diseases.

“Vitamin D looks really promising,” said Dr. JoAnn E. Manson, the chief of preventive medicine at Brigham and Women’s Hospital and an investigator on several Harvard vitamin studies. “But we need to learn the lessons from the past. We should wait for large-scale clinical trials before jumping on the vitamin bandwagon and taking high doses.”

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China Urges U.S., Europe to Protect Value of Debt in Reserves
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By Belinda Cao

Feb. 18 (Bloomberg) -- China, whose $1.95 trillion in currency reserves are the world’s largest, called on the U.S. and Europe to protect the value of its overseas investments and said it plans to spend more foreign exchange on imports and acquisitions.

“We hope countries whose currencies are the main holdings in our international reserves will take effective measures to cope with the financial crisis,” Fang Shangpu, deputy director at the State Administration for Foreign Exchange, told a press conference in Beijing today. “They should work to maintain economic and financial stability, and protect the interests and confidence of investors.”

China increased its purchases of U.S. Treasuries last year by 46 percent to $696.2 billion, data released by the U.S. Treasury Department yesterday showed. Premier Wen Jiabao said on Feb. 2 his government’s Treasury strategy would be aimed at maintaining the “value” of its foreign reserves.

Benchmark 10-year Treasury yields climbed 44 basis points, or 0.44 percentage point, to 2.65 percent so far this year on speculation the government will step up borrowing to finance President Barack Obama’s $787 billion stimulus package.

U.S. government bonds returned 14 percent last year including price gains and reinvested interest, the most since rallying 18.5 percent in 1995, according to indexes compiled by Merrill Lynch & Co. Concern that the flood of bonds would overwhelm demand caused Treasuries to lose 3.1 percent in January, the steepest monthly drop in almost five years.

The nation’s decision of “whether to buy and how much to buy” of U.S. Treasuries will depend on “China’s own needs and follow the principle of value preservation and safety,” Fang said.

SAFE will also facilitate foreign-exchange purchases for companies seeking expansion overseas and use more reserves for imports, it said today.

The nation may set up an oil fund using part of the reserves to help companies buy fields abroad, according to a statement this week by the China National Petroleum Corp., the country’s biggest oil producer.

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Steinbrueck Says Euro States May Bail Out Members (Update2)
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By Rainer Buergin and Holger Elfes

Feb. 17 (Bloomberg) -- German Finance Minister Peer Steinbrueck said euro-region countries may be forced to bail out cash-strapped members of the 16-nation bloc, going further than his counterparts in saying euro states can’t be allowed to fail.

“Some countries are slowly getting into difficulties with their payments,” Steinbrueck said late yesterday in a speech in Dusseldorf. “The euro-region treaties don’t foresee any help for insolvent countries, but in reality the other states would have to rescue those running into difficulty.”

Steinbrueck’s comments underscore mounting investor concerns as European nations pile on debt to bail out banks and counter the deepest recession since World War II. The EU governing treaty says member states aren’t liable for other members’ obligations.

While declining to identify countries facing problems, the German finance chief said Ireland, which has a widening budget deficit, is in a “very difficult situation.” The comment came in response to a question from the audience. Ireland’s debt- rating outlook was cut by Moody’s Investors Service Jan. 30.

The European Commission predicts budget shortfalls this year of 11 percent of gross domestic product in Ireland, 3.7 percent in Greece, 6.2 percent in Spain and 3.8 percent in Italy, compared with 2.9 percent in Germany. The EU ceiling is 3 percent.

Euro Weakens

The euro fell below $1.26 for the first time since early December. The difference in yield, or spread, between 10-year Irish and German bonds widened nine basis points to 257 basis points today. It widened by almost six times since the middle of last year as investors demanded higher premiums to hold Irish debt.

The Irish government is committed to restoring sustainability to public finances by 2013, the Dublin-based finance ministry said today in an e-mailed statement. At 41 percent of gross domestic product, the country’s debt is below the EU average of 60 percent, it said.

EU rules don’t “really constrain the ability of euro area countries to support one another during a period of exceptional stress,” David Mackie, chief European economist at JPMorgan Chase & Co. in London, said in a research note. “It’s hard to imagine that the region as a whole wouldn’t come up with a package of measures to support the individual economy.”

Governments including Germany’s may call in help from international organizations first before committing funds and pushing their own budgets deeper into the red to help others.

‘Very Unlikely’

The German government, presiding over Europe’s biggest economy, is “very unlikely” to provide help to troubled euro- region members by selling bonds jointly, Juergen Michels, an economist at Citigroup Inc. in London, said in an interview, adding that it would be a “very expensive solution.”

“The most likely option is that the European Investment Bank or some other multinational organization will start supporting these countries by buying government bonds or by providing direct support,” Michels said. “That would help narrow spreads and reduce refinancing costs.”

Investors should keep buying bonds of European governments that have “more flexibility in funding requirements in the short term,” Barclays Plc analysts said today.

It’s better to be “adding positions here rather than in the periphery, where any renewed funding concerns may weigh more heavily,” Huw Worthington, a fixed-income strategist at Barclays Capital in London, wrote in a research note.

Default ‘Remote’

The chance of Ireland defaulting on its debts is “remote,” Moody’s Investors Service analyst Dietmar Hornung said today in a telephone interview. “Our rating and outlook on Ireland remain appropriate” and “Ireland remains a creditworthy issuer.”

Widening yield spreads are “worrying developments,” Luxembourg Finance Minister Jean-Claude Juncker, who represents the countries sharing the euro at international meetings, said at a Group of Seven gathering in Rome on Feb. 14, according to an unpublished prepared “speaking note.”

Michels said the EU can help governments that are finding it hard to sell their bonds without violating the bloc’s “no bail-out” clause. Any insolvency of a euro region country would be “fraught with significant costs” for the EU as a whole.

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Korea Banks’ Foreign Debt Burden Has Fallen, Ahn Says (Update3)
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By Kim Kyoungwha and Bomi Lim

Feb. 18 (Bloomberg) -- South Korean banks’ demand for dollars is decreasing as foreign-currency debt maturing every month this year is at least 50 percent lower than in the fourth quarter, a central bank official said.

Monthly foreign debt payments due have dropped to about $4 billion, from between $8 billion and $9 billion in the final three months of 2008, Ahn Byung Chan, director general of the Bank of Korea’s international bureau, said in an interview from Seoul yesterday. Concerns that Korean banks are facing a shortage of funds deepened after Woori Bank’s failure to meet an early repayment of 2014 debt roiled investors.

“Our banks are not having trouble getting foreign funding now,” Ahn said. “They are facing less need for foreign borrowing compared with the final quarter of last year.”

South Korea’s won has slumped 34 percent against the dollar in the past year, the worst-performing of the world’s 16 most- active currencies, on concern banks will run short of the greenback as exports slump and global funds dump emerging-market assets. South Korea has as much as $160 billion of external debt maturing over the next two years, compared with foreign-exchange reserves that shrank 23 percent in the past year to $200 billion, according to UBS AG, the world’s second-largest currency trader.

“They are left with no choice but to maintain a strong front,” said Nizam Idris, a currency strategist with UBS in Singapore. “The relative shortage of dollar liquidity domestically has remained strong, although not yet as bad as it was in November.”

Won Decline

The won weakened 0.5 percent to 1,462.60 per dollar as of 11:31 a.m. in Seoul, extending this year’s loss to 14 percent. The one-year cross-currency swap rate, a gauge of availability of dollars, slid to a record minus 1.7 percent yesterday, indicating Korean banks need to pay extra interest on top of floating rates to borrow dollars. It was at minus 1.6 percent today. In such swaps, two parties agree to exchange payments in one currency for payments in another.

“The shortage of dollars has become more acute in South Korea as evident in the cost for banks to swap won for dollars,” Marc Chandler, global head of currency strategy at Brown Brothers in New York, wrote in a note today. “The dollar has near term scope towards 1,500.”

The slump in the Korean won was compounded by concerns that a prolonged global recession may “hurt the export-driven Korean economy,” starving banks of foreign exchange, Ahn said. He forecast the nation will post a trade surplus of as much as $2 billion this month after a shortfall of $3.3 billion in January.

March Crisis?

Speculation the country is headed for a “March crisis” when Japanese financial institutions close their books is groundless, Ahn said. Banks in Korea, including local branches of foreign financial institutions, have about $6 billion of yen debt due to be paid by March, he said. Their total yen denominated debt stands at $25 billion.

Nomura Holdings Inc. cut its forecast for South Korea’s gross domestic product for the second time in a month, predicting the economy will shrink 6 percent in 2009, a deeper contraction than the 2 percent decline forecast in January.

The government is close to setting limits for how much individual banks can draw from a 20 trillion won ($14 billion) state-backed recapitalization fund, Shin Dong Kyu, chairman of the Korea Federation of Banks, said in an interview yesterday.

Getting money from the fund may help Korean banks avoid skipping options to redeem their subordinated debt, Shin said. A decision by Woori Bank, the nation’s second-biggest lender, not to redeem $400 million of callable debt drove up the cost for Korean lenders to borrow dollars in the swap market.

The Bank of Korea will provide 10 trillion won for the recapitalization fund and state-owned Korea Development Bank will put in 2 trillion won. The remainder will come from private investors. The fund will be used for buying banks’ preferred shares and subordinated debt.

Shin, 57, dismissed concerns that Korean banks may struggle to repay overseas debt, saying foreign-exchange reserves will allow the country to help them meet obligations if necessary.

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Citi Cost-Cutters Skip Offices, Staff for Ex-CEOs Prince, Reed
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By Bradley Keoun

Feb. 17 (Bloomberg) -- Looking for Charles O. “Chuck” Prince, ousted 15 months ago as Citigroup Inc.’s chief executive officer? Just call his extension at the bank, which still pays for his office and secretary in Midtown Manhattan.

Former Citigroup investment-banking head Michael Klein also has a free office and secretary after receiving a $34.3 million exit package when he quit in July 2008. John Reed, 70, who hasn’t worked at the bank since he resigned as co-CEO in 2000 with a $5 million parting bonus, is entitled to an office and secretary for as long as he wants.

Sanford I. “Sandy” Weill, who retired as chairman in 2006, is ending a 10-year consulting contract with the bank in April after just three years. The agreement gave him millions of dollars in perks, including an office, car and driver and use of company aircraft, which he gave up in February.

Banks that took government rescue funds have been criticized by President Barack Obama, Congress and the public for lavish spending on pay and perks for top executives. Lenders continue to dole out benefits, including the longstanding practice of free offices and secretarial help, to former chiefs. Some of the recipients are blamed for abetting the financial crisis.

“The board should go to the executives and say, ‘OK, we are in a serious cost-cutting mood, and you don’t really need this office and secretary,’” said Paul Hodgson, who analyzes such perks as a senior research associate at the Corporate Library in Portland, Maine. “Or the executives themselves should pony up and say this is an expense that is unnecessary.”

Revamping Citigroup

Citigroup posted a record $18.7 billion loss last year, forcing the bank to seek a $52 billion bailout to stave off a crisis of confidence among depositors. CEO Vikram Pandit, 52, who took over from Prince in December 2007, has eliminated almost 39,000 jobs under a plan to slash costs. Last month, he canceled delivery of a corporate jet, and he told lawmakers Feb. 11 that he would cut his salary to $1 a year until his bank returns to profitability.

“I get the new reality and I will make sure Citi gets it as well,” Pandit said at the hearing before the U.S. House Financial Services Committee.

A Citigroup spokesman, Michael Hanretta, declined to comment.

It’s impossible to determine the cost of the free offices, said Alexander Cwirko-Godycki, research manager at pay consultant Equilar Inc. in Redwood Shores, California. Companies must list perks awarded to former executives when they depart, without estimating the value. Then the benefits don’t appear in annual proxy filings that detail current executives’ pay and benefits.

Merrill’s Former CEOs

“They’re completely under the radar,” Cwirko-Godycki said.

Citigroup isn’t alone in giving former executives office space, secretaries and other perks.

Merrill Lynch & Co., which had to sell itself last year to Bank of America Corp., provides an office and assistant to former CEO Stan O’Neal for the three years from his October 2007 resignation, according to a Securities and Exchange Commission filing. Merrill still maintains offices for ex-CEOs David Komansky, Daniel Tully and William Schreyer, two people familiar with the matter said.

Those costs are absorbed by Bank of America, which took $45 billion of rescue funds and $118 billion of asset guarantees.

Kennedy Thompson, ousted last year as Wachovia Corp.’s CEO, gets an office and assistant for three years, according to an SEC filing. San Francisco-based Wells Fargo & Co., which received $25 billion in bailout funds, is providing the office since buying Wachovia on Dec. 31, spokeswoman Mary Eshet said.

$267,000 a Year

“That’s a contractual item that continues after the acquisition,” Eshet said.

When JPMorgan Chase & Co. Chairman William Harrison retired in December 2006, the New York-based bank agreed to give him office space and administrative support until he turns 70 in 2013, according to a filing. The cost was estimated at $267,000 a year. That’s more than five times the U.S. Census Bureau’s estimate of the nationwide median household income in 2007. JPMorgan spokesman Tom Kelly declined to comment.

“I don’t know why these guys are not capable of paying their own freight when they leave with millions and millions of dollars,” said Graef Crystal, a former compensation consultant and author of “The Crystal Report on Executive Compensation.” “You want an office? Get one yourself.”

Prince’s Perks

Companies often say they provide offices and secretaries to outgoing executives under consulting contracts or provisions that bar them from raiding employees, said Mark Poerio, co-chair of the executive compensation practice at law firm Paul, Hastings, Janofsky & Walker LLP.

Prince, 59, retired in November 2007, as the bank’s subprime losses approached a record $9.83 billion in the fourth quarter of that year. After paying him a total of $66.8 million in the three previous years, Citigroup gave Prince a $10.4 million bonus for his last 10 months in the job, according to a filing.

He also got perks worth about $1.5 million a year, including an office, assistant, car and driver and any resulting income taxes, according to the filing. Those benefits last for five years or until he gets another full-time job, according to the filing.

Weill, 75, built Citigroup through acquisitions over 17 years, including the 1998 merger of his Travelers Group Inc. with Reed’s Citicorp. Weill and Reed shared chief executive duties for two years until Weill won a boardroom showdown in February 2000.

Retirement Planning

Reed received a $5 million parting bonus that year and a $2 million annual “retirement benefit,” according to a filing.

He also received financial-planning services for up to five years, a car and driver, an office and secretarial support “for as long as you deem useful,” according to the company. A message left at Reed’s Citigroup office was returned by an assistant, who said Reed wasn’t giving interviews.

Prince, Klein and Weill didn’t respond to messages left at their Citigroup offices.

Weill got an office and secretary under the consulting contract awarded when he retired as chairman in 2006, according to a Citigroup filing. He also received a $1 million-a-year retirement pension, consulting fees of $3,846 a day for up to 45 days a year, a car and driver, private security, financial- planning fees and medical and dental coverage.

Weill Ends Contract

The bank agreed to reimburse him for income taxes owed on the perks. He received $69 million in salary, bonus and other pay during his last three working years, according to the filing.

In August 2008, Weill told Citigroup he wanted to end the contract, less than three years into it. The benefits stop in April.

On Feb. 1, the New York Post reported Weill used a Citigroup jet in December to take a family vacation to Mexico. Later that day, Weill’s Citigroup assistant, Michael Conway, sent reporters an e-mail saying Weill decided to give up personal use of company aircraft “in light of the unprecedented circumstances that Citi finds itself in.”

Costs associated with an office “probably pale in comparison with the costs of a lot of other things you can envision,” said Stuart Alperin, a partner at Skadden, Arps, Slate, Meagher & Flom LLP, which has Citigroup as a client. Even so, “you’ll probably see a decrease in this going forward, because directors and especially compensation-committee members are likely to be sensitive to anything that looks like you’re going against the current.”

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Kyrgyzstan says US base closure final

BISHKEK, Feb 6 - Kyrgyzstan said on Friday its decision to shut a US air base was final, dealing a blow to Washington’s efforts to retain what has been a major staging post for US forces fighting in Afghanistan.

The United States said it was still in talks with Kyrgyzstan about keeping the Manas base in the impoverished former Soviet republic and traditional Russian ally. ”The decision has been made,” said Kyrgyz government spokesman Aibek Sultangaziyev. ”The US embassy and the (Kyrgyz) Foreign Ministry are exchanging opinions on this, but there are no discussions on keeping the base.”

Kyrgyzstan’s stance has set a tough challenge for new US President Barack Obama, who plans to send additional troops to Afghanistan to try and boost NATO efforts to defeat Taliban and al Qaeda insurgents.

Kyrgyz President Kurmanbek Bakiyev announced the closure of the base this week after securing more than $2 billion in financial aid and credit from Russia at talks in Moscow.

The announcement left the United States scrambling to find alternative supply routes through other parts of Central Asia for shipments bound for landlocked Afghanistan.

Speaking in Tajikistan, another ex-Soviet republic in Central Asia, the US envoy to Dushanbe said Tajikistan had agreed to offer its airspace for transport of non-military NATO supplies to Afghanistan.

A Western diplomatic source told Reuters separately on Thursday the United States was close to a deal with Uzbekistan that would also allow Washington to open a new railway supply route for its troops in Afghanistan.

The United States, also seeking to reinforce supply routes to Afghanistan that bypass Pakistan where convoys face security risks, says it is still hopeful the base can be retained. ”We’re still very much engaged,” said Pentagon spokesman Bryan Whitman.

Russia, irked by the US military presence in Kyrgyzstan which it regards as part of its strategic sphere of interest, has long exerted pressure on the small, landlocked and mountainous Central Asian country to evict the US forces. NATO says it is concerned about Russia’s possible involvement in the Kyrgyz decision.

Moscow, which operates its own military base in Kyrgyzstan, has strongly denied any link between its aid package and the move to shut Manas. Asked if Washington had made any additional offers over the base, Kyrgyz Prime Minister Igor Chudinov said: ”We have not received any proposals.”

He says Kyrgyzstan wants to shut the base because it disagrees with US methods in Afghanistan. The Kyrgyz government needs parliamentary approval to proceed with the closure, but this is seen as a formality as the chamber is controlled by a pro-presidential party. A simple majority of votes is needed.

Officials have said parliament will vote next week. The Russian aid package, due to be approved by parliament on Friday, includes a $1.7 billion discounted loan to help Kyrgyzstan build a hydroelectric power plant. Russia, while blowing cold on the US military presence in Central Asia, has politically backed the NATO effort in Afghanistan. Moscow says it will be flexible to US requests for supplies to be allowed to cross its territory.

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Victims emerge at Safra Group

By Jonathan Wheatley in São Paulo

Published: February 18 2009 02:00 | Last updated: February 18 2009 02:00

Customers of the Safra Group, which include one of Brazil's biggest banks and which has substantial private banking operations in the US and Europe, have emerged as victims of the Bernard Madoff scandal.

The Financial Times believes that Banco Safra of São Paulo for several years marketed a fund called Zeus Partners Limited, one of many "feeder" funds that channelled money to Bernard Madoff Securities, Mr Madoff's New York brokerage firm, from investors around the world.

More than two dozen feeder funds held over $20bn with Mr Madoff, tarnishing the reputation of some of the biggest private banks and hedge fund specialists, as well as Santander, the Spanish bank.

Operators of the feeder funds included some big names in fund management, including Union Bancaire Privée, the Swiss private bank, Tremont, owned by Oppenheimer Funds, the US asset manager, and Pioneer Alternative Investments, which is part of Italian bank UniCredit.

Safra Group denies any involvement with Bernard Madoff Securities.

A Safra spokesperson in New York said Banco Safra in Brazil had no involvement with Mr Madoff's funds and that none of the Safra banks promoted any of the Madoff funds, although some Safra-family banks outside Brazil invested in Madoff funds if customers requested them to do so.

He added: "The Zeus fund is not a Safra fund."

But documents obtained by the FT from investors in Brazil include a single-sheet description of the fund headed "Safra Group" and "Zeus Partners Limited" and bearing the Safra Group logo.

The FT has also obtained an "executive summary" of the fund which lists Banque Jacob Safra (Gibraltar) Limited, part of the Safra Group, as the fund's custodian.

Banco Safra in Brazil did not respond to requests for comment on the Zeus fund and its involvement with Mr Madoff.

The CVM, Brazil's securities commission, is investigating whether institutions in Brazil sold Madoff feeder funds to investors, and whether they were authorised to do so.

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China threat to Indian IT

By James Fontanella-Khan and David Pilling in Mumbai, and Kathrin Hille in Beijing

Published: February 18 2009 00:41 | Last updated: February 18 2009 00:41

China poses the biggest challenge to India’s IT outsourcing industry, which is expected to grow by an average 15 per cent over the next two years, according to the chief executive of India’s biggest business processing outsourcer.

“China is a huge threat [to Indian IT groups]. Long-term that is the only real threat we [Indians] have,” Pramod Bhasin, chief executive of Genpact, told the Financial Times.

Mr Bhasin admitted that it was “pretty rough out there” for Indian outsourcing companies, but said some would pick up business from clients needing to cut costs and preserve cash. He said the Indian outsourcing sector, which commands about 51 per cent of global share, would slow from recent growth rates of 30 per cent a year, but would continue to expand.

On China, he said: “There are no big players at the moment, but their government is investing in the sector, [and] pushing out English education much earlier.”

In January, Beijing started offering incentives, including tax breaks and subsidies, to the outsourcing industry, in an effort to help it grab more market share.

Egidio Zarrella, KPMG partner and IT adviser, said China was likely to become a global leader in IT outsourcing, serving domestic businesses and swathes of the Asia-Pacific region.

“China is on the ascendancy,” said Mr Zarrella. “Not only are they learning English, but they are also training in Japanese, which is a very profitable market where the Indians have been struggling.”

However, a recent McKinsey report said China’s IT sector was too fragmented and that domestic companies were not as accustomed as other countries to outsourcing non-core activities. It also said China lacked graduates with sufficient professional management skills.

“China is doing very well compared with itself historically, but compared with the global industry, it is not growing fast enough to catch up,” said Alex Peng, a partner at McKinsey. China’s top 5 outsourcing companies have been growing at about 20 per cent annually, slower than their Indian peers.

Mr Bhasin agreed that China was not an imminent threat, but said Beijing’s incentive package was a clear sign that it was aiming to encroach on India’s $60bn IT services market. Including the Philippines and Malaysia, the global outsourcing industry will be worth about $150bn by 2012, according to McKinsey.

“When the Chinese set their mind on something they do it – and they tend to execute things a hell of a lot better than the Indian government does,” said Mr Bhasin.

The Indian government had never supported the IT industry properly, Mr Bhasin said, for example failing to provide basic infrastructure: “We supply our own power, our own security, our own training and transportation ... If India doesn’t do reform properly there is a possibility that its market share will drop.”

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12:29 GMT, Wednesday, 18 February 2009
EU court attacks GM crop secrecy
Anti-GM protest in Luxembourg, 20 Oct 08

Europe's top court has ruled that EU governments have no right to conceal the location of field trials of genetically modified (GM) crops.

The European Court of Justice was responding to a case brought by Pierre Azelvandre in Alsace, eastern France.

He wanted to know where GM field trials had taken place in his local area.

The only EU-approved GM crop is a strain of corn developed by the US firm Monsanto. But GM trials for research are legal, under strict controls.

The court in Luxembourg ruled on Tuesday that "information relating to the location of the release can in no case be kept confidential".

It said "considerations relating to the protection of public order and other secrets protected by law... cannot constitute reasons capable of restricting access to the information listed by the [EU] directive, including in particular those relating to the location of release".

On Monday, the European Commission failed in a bid to force the governments of France and Greece to allow Monsanto's GM corn to be grown in their countries.

Opponents of GM crops say more scientific data is needed, arguing that their long-term genetic impact on humans and wildlife could be harmful.

The biotech industry says the crops are as safe as traditional varieties, and that they would provide plentiful, cheaper food.

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03:35 GMT, Wednesday, 18 February 2009
Aids is China's deadliest disease
By Jill McGivering
BBC News

Neon-lit barbarshop offering sexual services, Beijing, China, July 2008

Chinese officials have said that HIV/Aids was the leading cause of death last year, compared with other infectious diseases.

It is thought to be the first time this has happened.

A report by the country's state media said HIV/Aids had led to the deaths of almost 7,000 people in the first nine months of 2008.

The number of deaths caused by tuberculosis and rabies fell back into second and third place.

The numbers are increasing dramatically - China's Ministry of Health say that until three years ago, fewer than 8,000 people altogether had died from HIV/Aids.

By last year, the total had risen to five times that many.

Data on HIV in China are still unreliable. Official reporting of cases does seem to have improved.

The central authorities seem more willing to recognise HIV as a public health crisis and address it with education campaigns.

But there are still concerns that officials at local and provincial level are under-reporting, either by mistake or because they think it's not in their interest to show rises.

This latest news comes as the spread of HIV in China has entered a dangerous new phase.

Initially it was concentrated in high-risk populations, injecting drug users in particular.

Infection from contaminated blood transfusions was also common.

More sex

But now the main cause of transmission is thought to be unsafe sex.

China is still a deeply conservative society - but it is also going through a period of rapid social change.

Greater freedom of movement means millions of migrant workers have left small communities to enjoy the anonymity of cities.

Male workers, away from their families, have more sexual opportunity.

Prostitution has increased. Premarital sex is also becoming more acceptable.

On Tuesday, the World Health Organisation warned of a steep rise in HIV amongst Asian men who have sex with men, unless prevention programmes targeting them were greatly improved.

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植草被告、高裁は敗訴…サンデー毎日「セクハラ癖」報道巡り

　電車内で痴漢行為をしたとして東京都迷惑防止条例違反罪に問われ、１、２審で懲役４月の実刑判決を受けた元大学教授・植草一秀被告（４８）（上告中）が、週刊誌のサンデー毎日に「セクハラ癖は業界で有名」などと報じられ、名誉を傷つけられたとして、発行元の毎日新聞社に損害賠償を求めた訴訟の控訴審判決が１８日、東京高裁であった。

　山本博裁判長は「被告の性的な面のモラルが低いことは真実」と述べ、名誉棄損を認めて３３万円の賠償を命じた１審・東京地裁判決を取り消し、植草被告の請求を棄却した。

　対象となったのは、２００４年５月２日号の記事。植草被告が０４年４月に女子高生のスカート内を手鏡でのぞこうとしたとして同条例違反で逮捕された事件（罰金刑確定）について、知人の話などを掲載した。

　植草被告は「極めて不当な判決で、到底納得できない。上告を検討中」などとするコメントを出した。

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公立病院の不良債務処理「特例債」総額５７２億円発行へ

　総務省は１８日、医師不足などで生じた公立病院の不良債務を処理するため、地方債の特例として創設した「公立病院特例債」に関する、５２団体の発行予定額を発表した。

　総額は約５７２億５０００万円。償還期間は７年以内で、地方自治体にとっては短期の借金を長期に振り替え、計画的に返済することが可能になる。

　５２団体の内訳は、都道府県は沖縄県だけで、２９億８０００万円となっている。政令市では名古屋市が３３億７０００万円、神戸市が１７億４７００万円。その他は、大阪府泉佐野市が２４億９４００万円、長崎県大村市が１４億２７００万円などとなっている。

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三井住友銀、三菱商事系の投資会社に20％出資

　三菱商事は18日、未公開株投資の分野で三井住友銀行と提携すると発表した。三菱商傘下の投資会社「エー・アイ・キャピタル」（東京・千代田）に三井住友銀が出資し、未公開株ファンドを対象とする資産運用業務で連携する。三井住友銀の出資比率は20％と三菱商（51％）、大同生命保険（25％）に次ぐ。非常勤取締役1人も派遣し、持ち分法適用のグループ会社とする。(20:01)

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アラビア石油、北海の油田権益取得を発表

　ＡＯＣホールディングス傘下のアラビア石油は18日、ノルウェー領北海のイメ油田の権益10％を取得すると正式発表した。ノルウェー政府の承認を得た後、70％の権益を持つカナダの石油開発会社タリスマン・エナジーから取得する。2009年10―12月に生産を開始し、まず日量4万バレルを出荷する計画。(13:01)

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「認定こども園」増設、11年度メド2000カ所以上　内閣府素案

　内閣府の「認定こども園制度の在り方に関する検討会」（座長、山懸文治大阪市立大教授）がまとめる、認定こども園普及促進策の素案が17日、明らかになった。こども園を2011年度までに2000カ所以上に増やす目標を掲げるとともに、施設の認定基準の見直しを含めた二重行政の解消や、財政支援の充実を盛り込んだ。18日の会合に提示し、3月中に最終案をとりまとめる。

　素案はほかに、(1)教育と保育の総合的な提供の推進(2)家庭や地域の子育て支援機能の強化(3)質の向上――を打ち出した。既存の保育所や幼稚園のこども園への移行を促すため、両施設で異なる職員配置や調理室、屋外遊戯場などの認定基準の見直しを提言した。(07:01)

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国内のＨＩＶ感染・発症、08年は過去最多に　厚労省まとめ

　国内で2008年に新たに報告されたエイズウイルス（ＨＩＶ）の感染者数は1113人、エイズを発症した人は432人でともに過去最高だったことが18日、厚生労働省エイズ動向委員会のまとめで分かった。感染者は6年連続、発症者は3年連続の増加となった。

　新規の感染者、患者数の合計は1545人。性交渉による感染が1329人で、大多数を占めた。男女別では男性が1442人、女性が103人だった。年齢別にみると、30代が559人で最多。20代が377人、50代が283人と続いた。

　感染者や患者数が伸び続ける一方、保健所などで検査を受ける人も増加している。08年に抗体検査を受けた人は17万7156人で、前年より約2万 3000人多かった。エイズ動向委員会は「早期治療、感染拡大防止のため、保健所などの検査や相談の機会を積極的に利用してほしい」とコメントした。 (20:34)

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滞納家賃：未明督促に賠償命令　「ゼロゼロ」保証会社に

　家賃保証会社社員に滞納家賃を厳しく取り立てられたとして、福岡市の３０代の男性会社員が、東京の保証会社と社員３人に計約１００万円の損害賠償を求めた訴訟の判決が１７日、福岡簡裁であった。野瀬真司裁判官は「未明までの支払い交渉は男性に精神的苦痛を与えた」として同社に５万円の支払いを命じた。

　弁護士や司法書士らでつくる「全国追い出し屋対策会議」によると、「追い出し屋」などと呼ばれる家賃保証会社の取り立て行為に慰謝料が認められるのは、全国初という。

　判決によると、男性は同社を連帯保証人に０７年４月、敷金、礼金なしとうたう福岡市内のいわゆる「ゼロゼロ物件」のアパートを月額約５万円で借りた。男性が同年６～８月の家賃を滞納したところ、社員３人が８月末の午後９時ごろ男性方を訪れ、翌午前３時まで支払い交渉を続けたという。

　野瀬裁判官は「原告が賃料などの支払いを怠った事実があるにしても、午前０時を過ぎた後の支払い交渉は男性の生活の平穏を害し、精神的苦痛を与えたというべきだ」と被害を認めた。

　男性の代理人司法書士は「『追い出し屋』の被害が確認され始めたこの段階での判決は意義が大きく、被害予防につながることを願う」と話している。

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ロシア：サハリン２のＬＮＧ供給へ　日本に新たな調達先

　ロシア・サハリン沖の石油・天然ガス開発事業「サハリン２」の液化天然ガス（ＬＮＧ）製造工場が１８日稼働し、３月中に日本向けの輸出が始まる見通しになった。ＬＮＧの輸出はロシア初で、日本にとっては新たなエネルギー調達先としての期待が大きい。世界的にＬＮＧの需要が高まる中、最大の天然ガス埋蔵国であるロシアとの資源面での友好関係の構築がより重みを増している。【プリゴロドノエ大木俊治、平地修、森禎行】

　１８日は、サハリン州南部のプリゴロドノエのＬＮＧ工場で稼働式典があり、麻生太郎首相やロシアのメドベージェフ大統領が出席。麻生首相は「サハリンという日本の隣接地にエネルギー源を持つことは長年の夢だった」。メドベージェフ大統領も「世界的なエネルギー供給国としてロシアの立場を強化する」と、サハリン事業の意義を互いに強調した。

　サハリン２は、日本から三井物産と三菱商事が参加して、総額約２００億ドルをかけて開発が進められてきた。既に原油の生産が始まっており、今回のＬＮＧ工場稼働で事業の総仕上げとなる。ガスはサハリン北東沖で採掘され、パイプラインで約８００キロ南のプリゴロドノエに運搬、ＬＮＧに加工して海上輸送する。

　経済産業省によると、０８年の日本の天然ガス供給量は約６９００万トンで、ほとんどを輸入に頼っている。サハリン２からは最大で年６００万トン近い供給が見込まれ、国内のガス・電力会社９社が２０年程度の長期契約を結んでいる。

　日本は原油を含め中東依存度が高いエネルギー調達先の多様化を進めており、ロシアからの初のＬＮＧ輸入は大きな意味を持つ。また、日本と地理的に近いため２～３日で国内に輸送でき「輸送コストは中東より大幅に安く済む」（三井物産）メリットもある。

　天然ガスの供給先が欧州に偏っているロシアは今後、アジア・太平洋向けに極東地域での資源開発を進める方針。日本に対しては資金や技術面での協力を求めたい意向がある。日本にとっても、欧米や新興国でＬＮＧの需要が高まる中、安定した調達先の確保が重要な課題となっており、開発を積極的に支援する構えだ。

　ただ、サハリン２を巡ってロシア政府は、環境問題を理由に三井物産や三菱商事の事業主体への出資を半減させ、政府系のガスプロムが過半数を握った経緯があり「何をするか分からない国」（大手商社幹部）との懸念もある。両国間には領土問題などの難問も多いが、官民ともに友好関係を深めることが課題になりそうだ。

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日ロ首脳会談、「互恵」に新機軸　アフガン支援で連携

　【ユジノサハリンスク＝犬童文良】麻生太郎首相とロシアのメドべージェフ大統領との首脳会談は、従来のエネルギーなど経済分野の協力に加え、アフガニスタンの復興支援で連携するなど新機軸を打ち出すのが狙いだ。「互恵」をめざした日ロの協力関係はかつてないほどに厚みを増してきた。懸案の北方領土問題を最終的に解決する好機につなげられるかが焦点だ。

　首相は18日の首脳会談終了後、記者団に「アジア太平洋地域における戦略的関係をロシアと構築するうえで重要な一歩を踏み出した」と成果を強調した。日本の対ロ外交の悲願は領土問題を解決し平和条約を締結することだが、石油価格上昇により急速な経済成長を遂げたロシアは日本がどれだけ経済協力の秋波を送っても、締結交渉に乗るそぶりも見せなかった。(20:29)

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日露首脳会談：北方領土返還、首相が新手法に言及

　【ユジノサハリンスク大谷麻由美】麻生太郎首相は１８日午前、ロシア・サハリン州ユジノサハリンスクでメドベージェフ露大統領と会談した。会談後、麻生首相は記者団に、北方領土問題について「新たな、独創的で型にはまらないアプローチで、我々の世代で解決すべく、具体的な作業を加速しようということで一致した」と語った。四島返還について「４島の話は向こう（ロシア）が２、こっちが４ではまったく進展しない。日露間すべてに引っかかっている問題だ。政治が決断しなければいけない」とも述べた。また両首脳が、プーチン首相の５月の訪日でも合意したことを明らかにした。

　南部が戦前は日本領だったサハリンを日本の首相が訪問するのは戦後初めて。会談でメドベージェフ大統領は「両国の互恵的協力を拡大したい。日露間の政治対話が積極的に行われていることを心から歓迎する。金融サミット、イタリアサミットでも必ず個別会談を行うつもりだ」と発言。麻生首相は「ロシアはアジア太平洋地域の重要なパートナーだ。日露双方の関心事項の話を続けて行きたい」と述べた。

　両首脳の会談は昨年１１月、アジア太平洋経済協力会議（ＡＰＥＣ）出席に合わせてペルー・リマで行って以来２度目。会談後、両首脳はサハリン南部のプリゴロドノエに向かい、日本企業も参加する石油・天然ガス開発プロジェクト「サハリン２」液化天然ガス（ＬＮＧ）製造工場の稼働式典に参加する。

　北方四島の領土交渉でメドベージェフ大統領は昨年、麻生首相との初会談で「この問題の解決を次世代に委ねることは考えていない。首脳の善意と政治的意思があれば解決できる」と発言していた。　両首脳は両政府の懸案である「ビザなし交流」問題も協議。ビザなし交流は北方四島の元島民や人道支援目的などに限って身分証明書などで四島に渡航できる仕組みだが、ロシア政府は１月、国後島に渡航しようとした日本の支援団に「出入国カード」の記入・提出を要求。日本政府は「カード提出は北方四島をロシア領と認めることになる」と反発し、支援を中止している。

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ロシア、３島返還論と受け取る可能性も＝カギは平和条約の「うまみ」

　【ユジノサハリンスク１８日時事】ロシア・サハリンで１８日に行われた日ロ首脳会談後、麻生太郎首相は北方領土問題に関し「向こうが２島、こっちが４島では全く進展しない」と語ったが、ロシア側はこれを、首相自身が以前に示した４島の面積等分を基にした３島返還で政治決着を図るサインと受け取る可能性もある。ただ、ロシア側が関心を持つかは、北方領土問題を解決することで「利益が見込める」と考えるかどうかに懸かる。

　「双方に受け入れ可能な解決策が必要」とするロシア側からすれば、３島返還論は２島返還以上の妥協を拒む従来の立場からの後退を意味する。第二次大戦の結果として４島領有を正当化してきたこともあり、素直にはのめない案だ。麻生政権の今後の安定度にも不安が残る。

　他方、ロシアは中国との国境画定交渉で、アムール川などに浮かぶ３島の主権を、総面積でほぼ２等分して決着させた経緯がある。その意味では、北方４島の「折半」による問題解決は、国内的に受け入れる余地があるともいえる。

　ロシア側が前向きに検討するには、領土問題解決による平和条約締結に「うまみ」があると考えるかどうかだ。サハリンではこの日、両国企業が参加する石油・天然ガス開発事業「サハリン２」の液化天然ガス（ＬＮＧ）工場が稼働。生産ピーク時には年間９６０万トンの６割近くが日本向けとなり、エネルギー分野で日本が「上客」に浮上する。

　欧州向けを中心としてきたロシアの資源戦略は近年、天然ガスの供給停止問題で不安定さを露呈した。多角化を図るためアジア太平洋市場に目を向けるロシアにとって、日本とのエネルギー協力拡大はその突破口として重要。他の分野を含めた日本の高い技術力も魅力だ。

　ただロシアでは、北方領土問題が未解決のままでも経済関係拡大は可能との考えも依然根強い。政治決着を図るためにロシア指導部に対する日本側の強い「説得力」が求められる事実は変わらない。（了）

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韓国ガス公社、サハリン２から天然ガス調達

　【ソウル＝鈴木壮太郎】韓国知識経済省は18日、韓国ガス公社が4月からロシア・サハリン沖の資源開発事業「サハリン２」から液化天然ガス（ＬＮＧ）を購入すると発表した。年間150万トンで、契約期間は20年間。韓国はＬＮＧの調達ルートが中東・東南アジアに偏っているため、近距離にあるサハリンから購入してＬＮＧの安定確保と調達コストの削減につなげる。(20:13)

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日露首脳会談：ロシアは日本の譲歩が念頭に？

　【ユジノサハリンスク大木俊治】１８日行われた日露首脳会談で、ロシアのメドベージェフ大統領は北方領土問題について「新たな、独創的で型にはまらないアプローチ」を提案したとされるが、具体的な内容は明らかではない。ラブロフ外相は会談に先立つ１７日、インタファクス通信に「（領土問題で）標準的でない提案をしたこともないし提案することもない」と述べており、ロシア側の真意は不明だ。ただ、ロシアの専門家や政治家の間では「これまでロシアは柔軟性を示してきたが、日本が４島返還のかたくなな姿勢を崩していないことが交渉の前進を阻んでいる」との意見が強く、大統領の発言は暗に日本側に「独創的で型にはまらない」譲歩を迫ったとの見方もできる。

　日露専門家のコーシキン・戦略策定センター上級研究員は「メドベージェフ大統領は紳士的で外交的な表現を好む」と指摘し、今回の大統領発言に特別な意味を酌もうとする日本側の期待を戒める。ロシア側には、プーチン政権下で１９５６年の日ソ共同宣言の有効性を認め、事実上の「２島返還」にまで歩み寄ったのに対し、日本側は従来の「４島返還」の立場を崩さなかった、といういら立ちがあるためだ。

　これまでの領土交渉では、ロシア側から「共同開発」の形で問題解決を図る提案が出されたこともある。主権問題が障害となって進展することはなかったが、ロシアが今後の方向性としてこうした手法を念頭に置いている可能性もある。今回ロシアが麻生太郎首相をサハリンに招待した背景には、極東の経済開発で日露協力を進める思惑があったとみられ、領土問題の解決を経済協力の延長線上と考えていれば、こうした提案が再浮上しても不思議ではない。

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首相サハリン訪問、「ロシアの領土主権が保証された」露メディア
2009.2.18 19:33

　【モスクワ＝佐藤貴生】麻生太郎首相のサハリン訪問について、ロシアの有力紙コメルサントは１８日付で、イタル・タス通信のゴロブニン東京特派員の寄稿を掲載した。

　記事は「日本の首相がサハリンのロシアの領土主権を保証した」という見出しで、日本政府が帰属未確定としている南樺太を含むサハリンを、麻生首相が訪問することで「ロシアがサハリンに主権を有することをはっきりと、最終的に確認することになる」と、日本外務省当局者が語ったとしている。

　記事はサハリンをめぐる日露間の交渉の経緯を振り返った上で、２００１年、ユジノサハリンスクで日本の総領事館が活動を開始したことを踏まえ、「日本政府はサハリンも、その行政区内にある（北方領土を含む）クリル（千島列島）も、ロシアに帰属していることを言外に認めた」としている。

　また、出入国カードの提出をめぐり、今年１月に日本側の北方四島支援事業が中止された件については、ロシア外務省には日本側の要望を聞き入れる用意があるものの、ロシア側の移民や国境警備関連の部局がビザ（査証）なしでの国後島上陸に反対している可能性を示唆した。