Panasonic may sell Sanyo digital camera business: source

TOKYO (Reuters) – Panasonic Corp may sell its Sanyo digital camera business to Japanese private equity fund Advantage Partners by the end of March, a source familiar with the plan said.

A final decision on the sale will be made by the end of the year, the source said on condition he was not identified.

Advantage Partners will pay several hundreds of millions of yen for the business, which makes digital cameras for other companies, including Olympus Corp, the Nikkei business daily reported earlier.

Panasonic declined to comment saying it had not announced the plan.

The Japanese company aims to sell 110 billion yen ($ 1.34 billion) of assets, including buildings and land by the end of March to boost free cashflow to 200 billion yen for the business year. The company expects an annual net loss of close to $ 10 billion as it writes off billions in deferred tax assets and goodwill.

Panasonic acquired rival Sanyo, a leading maker of lithium ion batteries and solar panels, in 2010. Sales of compact digital cameras are under pressure from increasingly powerful smartphones.

Panasonic’s shares gained as much as 4 percent in early trading in Tokyo, compared with a 0.5 percent rise in the benchmark Nikkei 225 index. ($ 1 = 82.3900 Japanese yen)

(Reporting by Reiji Murai; Writing by Tim Kelly; Editing by Jeremy Laurence)

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Indian sitar virtuoso Ravi Shankar dies at 92

NEW DELHI (AP) — Ravi Shankar, the sitar virtuoso who became a hippie musical icon of the 1960s after hobnobbing with the Beatles and who introduced traditional Indian ragas to Western audiences over a 10-decade career, died Tuesday. He was 92.

A statement on the musician’s website said he died in San Diego, near his Southern California home. The musician’s foundation issued a statement saying that he had suffered upper respiratory and heart problems and had undergone heart-valve replacement surgery last week.

Indian Prime Minister Manmohan Singh also confirmed his death and called Shankar a “national treasure.”

Labeled “the godfather of world music” by George Harrison, Shankar helped millions of classical, jazz and rock lovers discover the centuries-old traditions of Indian music.

He also pioneered the concept of the rock benefit with the 1971 Concert For Bangladesh. To later generations, he was known as the estranged father of popular American singer Norah Jones.

His last musical performance was with his other daughter, sitarist Anoushka Shankar Wright, on Nov. 4 in Long Beach, California; his foundation said it was to celebrate his 10th decade of creating music. The multiple Grammy winner learned that he had again been nominated for the award the night before his surgery.

As early as the 1950s, Shankar began collaborating with and teaching some of the greats of Western music, including violinist Yehudi Menuhin and jazz saxophonist John Coltrane. He played well-received shows in concert halls in Europe and the United States, but faced a constant struggle to bridge the musical gap between the West and the East.

Describing an early Shankar tour in 1957, Time magazine said. “U.S. audiences were receptive but occasionally puzzled.”

His close relationship with Harrison, the Beatles lead guitarist, shot Shankar to global stardom in the 1960s.

Harrison had grown fascinated with the sitar, a long necked, string instrument that uses a bulbous gourd for its resonating chamber and resembles a giant lute. He played the instrument, with a Western tuning, on the song “Norwegian Wood,” but soon sought out Shankar, already a musical icon in India, to teach him to play it properly.

The pair spent weeks together, starting the lessons at Harrison‘s house in England and then moving to a houseboat in Kashmir and later to California.

Gaining confidence with the complex instrument, Harrison recorded the Indian-inspired song “Within You Without You” on the Beatles’ “Sgt. Pepper’s Lonely Hearts Club Band,” helping spark the raga-rock phase of 60s music and drawing increasing attention to Shankar and his work.

Shankar’s popularity exploded, and he soon found himself playing on bills with some of the top rock musicians of the era. He played a four-hour set at the Monterey Pop Festival and the opening day of Woodstock.

Though the audience for his music had hugely expanded, Shankar, a serious, disciplined traditionalist who had played Carnegie Hall, chafed against the drug use and rebelliousness of the hippie culture.

“I was shocked to see people dressing so flamboyantly. They were all stoned. To me, it was a new world,” Shankar told Rolling Stone of the Monterey festival.

While he enjoyed Otis Redding and the Mamas and the Papas at the festival, he was horrified when Jimi Hendrix lit his guitar on fire.

“That was too much for me. In our culture, we have such respect for musical instruments, they are like part of God,” he said.

In 1971, moved by the plight of millions of refugees fleeing into India to escape the war in Bangladesh, Shankar reached out to Harrison to see what they could do to help.

In what Shankar later described as “one of the most moving and intense musical experiences of the century,” the pair organized two benefit concerts at Madison Square Garden that included Eric Clapton, Bob Dylan and Ringo Starr.

The concert, which spawned an album and a film, raised millions of dollars for UNICEF and inspired other rock benefits, including the 1985 Live Aid concert to raise funds for famine relief in Ethiopia and the 2010 Hope For Haiti Now telethon.

Ravindra Shankar Chowdhury was born April 7, 1920, in the Indian city of Varanasi.

At the age of 10, he moved to Paris to join the world famous dance troupe of his brother Uday. Over the next eight years, Shankar traveled with the troupe across Europe, America and Asia, and later credited his early immersion in foreign cultures with making him such an effective ambassador for Indian music.

During one tour, renowned musician Baba Allaudin Khan joined the troupe, took Shankar under his wing and eventually became his teacher through 7 1/2 years of isolated, rigorous study of the sitar.

“Khan told me you have to leave everything else and do one thing properly,” Shankar told The Associated Press.

In the 1950s, Shankar began gaining fame throughout India. He held the influential position of music director for All India Radio in New Delhi and wrote the scores for several popular films. He began writing compositions for orchestras, blending clarinets and other foreign instruments into traditional Indian music.

And he became a de facto tutor for Westerners fascinated by India’s musical traditions.

He gave lessons to Coltrane, who named his son Ravi in Shankar’s honor, and became close friends with Menuhin, recording the acclaimed “West Meets East” album with him. He also collaborated with flutist Jean Pierre Rampal, composer Philip Glass and conductors Andre Previn and Zubin Mehta.

“Any player on any instrument with any ears would be deeply moved by Ravi Shankar. If you love music, it would be impossible not to be,” singer David Crosby, whose band The Byrds was inspired by Shankar’s music, said in the book “The Dawn of Indian Music in the West: Bhairavi.”

Shankar’s personal life, however, was more complex.

His 1941 marriage to Baba Allaudin Khan‘s daughter, Annapurna Devi, ended in divorce. Though he had a decades-long relationship with dancer Kamala Shastri that ended in 1981, he had relationships with several other women in the 1970s.

In 1979, he fathered Norah Jones with New York concert promoter Sue Jones, and in 1981, Sukanya Rajan, who played the tanpura at his concerts, gave birth to his daughter Anoushka.

He grew estranged from Sue Jones in the 80s and didn’t see Norah for a decade, though they later re-established contact.

He married Rajan in 1989 and trained young Anoushka as his heir on the sitar. In recent years, father and daughter toured the world together.

When Jones shot to stardom and won five Grammy awards in 2003, Anoushka Shankar was nominated for a Grammy of her own.

Shankar, himself, has won three Grammy awards and was nominated for an Oscar for his musical score for the movie “Gandhi.” His album “The Living Room Sessions, Part 1″ earned him his latest Grammy nomination, for best world music album.

Despite his fame, numerous albums and decades of world tours, Shankar’s music remained a riddle to many Western ears.

Shankar was amused after he and colleague Ustad Ali Akbar Khan were greeted with admiring applause when they opened the Concert for Bangladesh by twanging their sitar and sarod for a minute and a half.

“If you like our tuning so much, I hope you will enjoy the playing more,” he told the confused crowd, and then launched into his set.

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Ravi Nessman reported from Bangkok.

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Idaho chooses state-based insurance exchange under “Obamacare”

SALMON, Idaho (Reuters) – Idaho Governor Butch Otter reluctantly opted on Tuesday for a state-based health insurance exchange under terms of President Barack Obama‘s healthcare overhaul, complaining it would do little to cut costs while inflating government.

Idaho was one of several Republican-led states that delayed compliance with the Affordable Care Act until after the November 6 presidential election in hopes a victory by Republican candidate Mitt Romney would bring a repeal of the law.

Under the law also known as “Obamacare,” states had the choice of running their own state-based exchanges, allowing the federal government to administer the program, or form a state-federal partnership to oversee the exchange.

States had faced a November 14 deadline to declare their plans but that was pushed back to December 14 by Health and Human Services Secretary Kathleen Sebelius.

Exchanges are to provide a marketplace for Americans to gain health insurance coverage at government-subsidized rates beginning in 2014.

Idaho was one of six undecided states along with Utah, Indiana, Pennsylvania, Virginia and Florida, according to the Kaiser Family Foundation‘s website. (Kaiser Family Foundation map: http://r.reuters.com/wac64t)

Idaho and 18 other states – many of which are controlled by Democrats – have told the administration that they intend to set up their own exchanges, according to the foundation.

Twenty-one states – including many Republican-led states that opposed Obamacare before the election – have said they will allow the federal government to administer the program.

The rest have said they will form a state-federal partnership, according to the foundation.

Otter said he opted for a state-based exchange but did not believe the healthcare law would succeed in its goal of reducing costs.

Otter, an outspoken opponent of Obamacare, said he has chafed under the prospect of its “mandates and overreaching federal authority.”

“Our options have come down to this: Do nothing and be at the federal government’s mercy in how that exchange is designed and run, or take a seat at the table and play the cards we’ve been dealt,” Otter said.

The health insurance exchange in Idaho, still subject to approval by the Republican-controlled legislature, must be open for enrollment by October 1, 2013.

(Editing by Daniel Trotta and Lisa Shumaker)

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Oil price rises on Fed stimulus hopes

BANGKOK (AP) — The price of oil rose Wednesday as investors anticipated that new measures to perk up the U.S. economy will be announced at the end of the Federal Reserve‘s policy meeting.

Benchmark crude for January delivery was up 8 cents to $ 85.87 per barrel at midday Bangkok time on the New York Mercantile Exchange. The contract rose 23 cents to finish at $ 85.79 per barrel in New York on Tuesday. It was the first time crude closed higher after falling for five straight sessions.

There’s a widespread expectation that the Fed will Wednesday announce more bond-buying. The Fed has been selling $ 45 billion a month in short-term Treasurys and using the proceeds to buy an equal amount of longer-term securities. The intent is to lower long-term borrowing rates and encourage spending.

“If that happens, that will mean the U.S. dollar will get weaker and that generally supports the buying of oil futures,” said Victor Shum, an energy analyst at consultancy Purvin & Gertz in Singapore. That’s because a weaker dollar makes commodities like oil less expensive for investors holding other currencies.

Oil also got a boost from a survey that indicated German investors believe Europe’s largest economy may avoid slipping into recession, although growth is expected to remain tepid.

Brent crude, used to price international varieties of oil, was unchanged at $ 108.01 per barrel in London.

In other energy futures trading on Nymex:

— Heating oil rose 0.4 cent to $ 2.931 per gallon.

— Wholesale gasoline rose 1.3 cents to $ 2.623 per gallon.

— Natural gas rose 0.4 cent to $ 3.408 per 1,000 cubic feet.

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Corruption probe shrouds Quebec in new darkness

MONTREAL (Reuters) – Half a century ago, a new crop of Quebec leaders sparked the so-called Quiet Revolution to eradicate the “Great Darkness” – decades of corruption that kept Canada‘s French-speaking province under the dominance of one party and the Catholic church.

The revolution’s reforms, including cleaning up the way lawmakers were elected and secularizing the education system, seemed to work, paving the way for decades of growth, progress and prominence as Canada emerged as a model of democracy.

Fifty years later, a public inquiry into corruption and government bid-rigging suggests the province’s politics are not as clean as Quebecers had hoped or believed.

Since May, when the inquiry opened in Montreal, Canadians have been getting daily doses of revelations of fraud through live broadcasts on French-language television stations. Corruption involving the Mafia, construction bosses and politicians, the inquiry has shown, drove up the average building cost of municipal contracts by more than 30 percent in Montreal, Canada’s second-largest city.

Last month, Montreal Mayor Gerald Tremblay resigned as did the mayor of nearby Laval, Gilles Vaillancourt. Both denied doing anything wrong, but said they could not govern amid the accusations of corruption involving rigging of municipal contracts, kickbacks from the contracts and illegal financing of elections.

Tremblay has not been charged by police. Vaillancourt’s homes and offices have been raided several times by Quebec’s anti-corruption squad, which operates independently of the inquiry, but no charges have been filed against him either. Police said the raids were part of an investigation but they would not release further details.

“Quebecers lived for several years under the impression that they had found the right formula, that their parties were clean,” said Pierre Martin, political science professor at the University of Montreal. Now, he said, “people at all levels are fed up.”

The inquiry must submit its final report to the Quebec government by next October. It has exposed practices worthy of a Hollywood noir thriller – a mob boss stuffing his socks with money, rigged construction contracts, call girls offered as gifts, and a party fundraiser with so much cash he could not close the door of his safe.

“Even though we are in the early days, what is emerging is a pretty troubling portrait of the way public contracts were awarded,” said Antonia Maioni, director of the McGill Institute for the Study of Canada in Montreal.

Quebec’s Liberals, the force behind the Quiet Revolution, launched the inquiry as rumors of corruption swirled. The government then called an election for September, a year ahead of schedule, in what was seen as an attempt to stop damaging testimony hurting its popularity.

The tactic did not help. Jean Charest’s Liberals lost to the Parti Quebecois, whose ultimate aim is to take the French-speaking province, the size of Western Europe, out of Canada.

‘IT WASN’T COMPLICATED’

According to allegations at the inquiry, the corruption helped three main entities: the construction bosses who colluded to bid on contracts, the Montreal Mafia dons who swooped in for their share, and the municipal politicians who received kickbacks to finance campaigns.

In Quebec, the Mafia has been dominated by the Rizzuto family, with tentacles to the rest of Canada and crime families in New York and abroad. But recently the syndicate has been facing challenges from other crime groups in Montreal, according to the Toronto-based Mafia analyst and author Antonio Nicaso.

The reputed godfather of the syndicate, Vito Rizzuto, has been subpoenaed to appear before the commission, but the date for his testimony has not been set.

The hearings have zeroed in on four construction bosses and how their companies worked with the Mafia, bribed municipal engineers and provided funds for mayoralty campaigns in Montreal, the business capital for Quebec’s 8 million people.

“It’s not good for the economy,” said Martin. “It’s not good for any kind of legitimate business that tries to enter into any kind of long-term relationship with the public sector.”

Quebec’s anti-corruption squad has arrested 35 people so far this year, staging well-publicized raids on mayoral offices and on construction and engineering companies. The squad has arrested civil servants and owners of construction companies, among others.

“I now must suffer an unbearable injustice,” Tremblay said in a somber resignation speech earlier this month after a decade as mayor of Montreal, saying he could not continue in office because the allegations of corruption were causing a paralysis at City Hall.

Some of the most explosive allegations at the inquiry, headed by Quebec Superior Court Justice France Charbonneau, came from Lino Zambito, owner of a now bankrupt construction company, and from a top worker for Tremblay’s political party, Union Montreal.

Zambito, who is seen as one of the smaller players and who also faces fraud charges, described a system of collusion between organized crime, business cartels and corrupt civil servants, with payments made according to a predetermined formula.

“The entrepreneurs made money, and there was an amount that was due to the Mafia,” Zambito told the inquiry. “It wasn’t complicated.”

Zambito said the Mafia got 2.5 percent of the value of a contract, 3 percent went to Union Montreal and 1 percent to the engineer tasked with inflating contract prices.

Tremblay did not respond to emails requesting comment on the allegations of corruption at city hall.

A former party organizer, Martin Dumont, alleged the mayor was aware of double bookkeeping used to hide illegal funding during a 2004 election.

Dumont said the mayor walked out of the room during a meeting that explained the double bookkeeping system, saying he did not want to know anything about it.

Dumont also described how he was called into the office of a fundraiser for Union Montreal to help close the door of a safe because it was too full of money.

“I think it was the largest amount I’d ever seen in my life,” Dumont said at the inquiry.

GOLF, HOCKEY, ESCORTS

The inquiry also saw videos linking construction company players with Mafia bosses. In one police surveillance video, a Mafia boss was seen stuffing cash into his socks.

A retired city of Montreal engineer, Gilles Surprenant, described how he first accepted a bribe in the late 1980s after being “intimidated” by a construction company owner. Over the years he said he accepted over $ 700,000 from the owners in return for inflating the price of the contracts.

Another retired engineer, Luc Leclerc, admitted to bagging half a million dollars for the same service. He said the system was well-known to many at city hall and simply part of the “business culture” in Montreal. He also got gifts and paid golf trips to the Caribbean with other businessmen and Mafia bosses.

Gilles Vezina, who is currently suspended from his job as a city engineer, concurred.

“It was part of our business relationships to get advantages like golf, hockey, Christmas gifts” from construction bosses, he told the inquiry in mid-November.

The gifts didn’t stop there. Vezina said he was twice offered the services of prostitutes from different construction bosses in the 1980s or early 1990s, which he said he refused.

The accusations are jarring for a country that prides itself on being one of the least corrupt places in the world, according to corruption watchdog Transparency International. But experts say corruption in Montreal was something of an open secret.

“The alarm signals have been going off here for 20 years and no one has done anything,” said Andre Cedilot, a former journalist who co-wrote a book on the Canadian Mafia.

Quebec’s new government has introduced legislation tasking the province’s securities regulator with vetting businesses vying for public contracts and allowing it to block companies that do not measure up.

Anti-corruption activist Jonathan Brun was not optimistic.

“You’ve got to use modern technology,” said Brun, a co-founder of Quebec Ouvert, a group that wants to make all information about contracts freely available rather than asking regulators to oversee individual companies. “You’ve got to change the entire system if you really want to fight corruption.”

(Writing by Russ Blinch; Editing by Janet Guttsman, Mary Milliken and Prudence Crowther)

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Google’s Gmail service suffers disruption

SAN FRANCISCO (Reuters) – Several Google Inc Web products, including the popular Gmail service, appeared to go dark for users on several continents on Monday.

Google confirmed that “service disruptions” had affected Gmail and Google Drive, its online storage service. The two products are part of Google’s Apps suite, a Microsoft Office rival that caters to both consumers and businesses.

By 10:10 a.m. Pacific Time (1.10 p.m. EST), Google’s Apps Dashboard monitoring service reported that Gmail and Drive service had resumed. The company did not specify how many users were affected, or where, but the outage prompted widespread complaints on social media on both coasts in the U.S. and other major markets, from the United Kingdom to Brazil.

Some users additionally reported that the outage had affected Google Docs, the company’s word-processing and spreadsheet programs, while Chrome, Google’s Internet browser, also crashed unexpectedly.

“We are currently experiencing an issue with some Google services,” Google spokeswoman Andrea Freund said in a statement. “For everyone who is affected, we apologize for any inconvenience you may be experiencing.”

Firmly entrenched in the consumer market, Gmail is one of Google’s most popular and important product offerings. The search giant, which has been pushing a corporate version of the email service and its Apps suite to businesses to compete with Microsoft, said this month that the package will no longer be free to business customers.

(Reporting By Gerry Shih; Editing by Andrew Hay and Nick Zieminski)

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Jenni Rivera’s family hopes Mexican-American singer still alive

LOS ANGELES (Reuters) – The family of Mexican-American singer Jenni Rivera said on Monday they are holding onto hope that she may still be alive, although U.S. officials said earlier that she died on Sunday in a plane crash in Mexico.

“In our eyes, we still have faith that our sister will be OK,” Rivera’s brother Juan told reporters outside the family house near Long Beach, California.

“We thank God for the life that he has given … my sister,” said Juan Rivera, also a singer. “For all the triumphs and successes she has had, and we expect that there will be more in the future.”

Rivera, 43, died after the small jet she was traveling in crashed in northern Mexico on Sunday, U.S. officials said. Rivera’s father, Pedro, told Telemundo television on Sunday that everyone on the plane had died. So far, authorities have not announced the recovery of any bodies.

The U.S. National Transportation Safety Board said it was helping Mexican authorities with the investigation of the crash of the private Learjet LJ25.

The plane crashed at about 3:30 a.m. local time (4.30 a.m. EST) in the municipality of Iturbide some 70 miles south of Monterrey, from which the singer and six others were en route to Mexico City.

Rivera was to perform in the city of Toluca, 40 miles southwest of Mexico city, in central Mexico after a concert in Monterrey on Saturday night.

It is not clear what caused the crash, and the Mexican transportation ministry said the wreckage was strewn so far about that it was difficult to recognize the crash site.

Rivera was born in Long Beach to Mexican immigrants and lived in suburban Los Angeles. She was a giant figure in the Mexican folk nortena and banda genres.

She had sold 15 million albums in her 17-year career and garnered a slew of Latin Grammy nominations.

“The entire Universal Music Group family is deeply saddened by the sudden loss of our dear friend Jenni Rivera,” the singer’s record label said in a statement.

“From her incredibly versatile talent to the way she embraced her fans around the world, Jenni was simply incomparable,” Universal added in the statement. “Her talent will be missed; but her gift of music will be with us always.”

In recent years Rivera had branched out into television with a reality television show and as a judge on the Mexican version of the singing competition “The Voice.”

(Reporting by Eric Kelsey; Editing by Jill Serjeant and Lisa Shumaker)

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FDA OKs J&J prostate cancer drug for pre-chemo use

(Reuters) – U.S. health regulators on Monday expanded the approval of Johnson & Johnson‘s drug Zytiga for advanced prostate cancer to allow its use prior to treatment with chemotherapy.

The widely-expected, expanded Food and Drug Administration approval, which came after the company demonstrated that Zytiga could extend survival if used prior to chemotherapy, is likely to significantly boost sales of the new medicine.

Wells Fargo Securities analyst Larry Biegelsen, in a research note earlier this year, forecast peak Zytiga sales of $ 2.3 billion in 2016, with about 70 percent coming from pre-chemo use.

Zytiga was originally approved in April 2011 for use in combination with the steroid prednisone to treat men whose prostate cancer had progressed following treatment with the chemotherapy drug docetaxel.

The pill, which works by decreasing production of the hormone testosterone that fuels cancer growth, had sales of about $ 800 million in its first year of availability, capturing some 60 percent of the post-chemotherapy market.

That market share is likely to shrink due to new competition in the post-chemotherapy setting from Xtandi, which is sold by Medivation Inc and Astellas Pharma Inc, analysts said. Xtandi is still undergoing late stage trials in patients who have not yet received chemotherapy treatment and the drug could be a year or two away from a similar expanded approval.

However, Sanford Bernstein analyst Geoffrey Porges said Xtandi was likely to gain some “off label” use in pre-chemo patients. The term refers to doctors prescribing drugs for none-approved uses.

“Ultimately we are convinced that Xtandi will get a comparable or better label expansion by mid 2014,” he said.

Meanwhile, Zytiga patients starts will get “an immediate boost,” Porges added.

In late stage clinical trials of more than 1,000 patients with advanced prostate cancer who had not been treated with chemotherapy, those who received Zytiga on average lived more than five months longer than those who received a placebo.

“Today’s approval demonstrates the benefit of further evaluating a drug in an earlier disease setting and provides patients and health care providers the option of using Zytiga earlier in the course of treatment,” Richard Pazdur, director of the Office of Oncology Drug Products in the FDA’s Center for Drug Evaluation and Research, said in a statement.

The American Cancer Society estimated that more than 28,000 U.S. men will die from prostate cancer in 2012, making it the second leading cause of cancer death behind lung cancer.

J&J shares closed up 15 cents at $ 70.60 on the New York Stock Exchange.

(Reporting by Bill Berkrot and Ransdell Pierson; Editing by Gerald E. McCormick, Nick Zieminski and Andrew Hay)

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HSBC ‘to pay $1.9bn’ in US deal

10 December 2012 Last updated at 19:30 ET

HSBC is to pay US authorities $ 1.9bn (£1.2bn) in a settlement over money-laundering, say reports, the largest ever in such a case.

The UK-based bank was alleged to have helped launder money belonging to drug cartels and states under US sanctions.

Earlier this year HSBC admitted having poor money laundering controls following a US Senate investigation.

Last month announced it had set aside $ 1.5bn to cover the costs of any settlement or fines.

The deal could be announced as early as Tuesday, the Wall Street Journal reports.

It follows the announcement of a similar but much smaller settlement with UK-based Standard Chartered bank, which will pay $ 300m in fines for violating US sanction rules.

The cases are seen as part of a crackdown on money laundering and sanctions violations being led by federal government agencies and New York state authorities.

The $ 1.9bn sum in the HSBC settlement is expected to include around $ 1.25bn forfeited by HSBC – the largest amount ever paid out in such a case – and a $ 650m civil fine.

The bank will also admit charges of violating bank secrecy laws and the Trading With the Enemy Act, reports suggest.

Senate criticism

The settlement had been widely expected following a report by the US Senate, published earlier this year, that was heavily critical of HSBC’s money laundering controls.

The report suggested HSBC accounts in Mexico and the US were being used by drug barons to launder money.

It cited examples including the transfer of $ 7bn between HSBC’s Mexican and US subsidiaries between 2007 and 2008, made despite Mexico’s reputation as a centre of drug smuggling.

It also said HSBC regularly circumvented restrictions on dealings with Iran, North Korea, and other states under US sanctions.

HSBC admitted its money laundering controls were not strong enough following the Senate report.

On Tuesday the London-based multinational announced it had appointed a former US official to work as its head of financial crime compliance – a new position.

Bob Werner was previously the head of the US Treasury’s Office of Foreign Assets Control (OFAC) – the agency responsible for enforcing the US sanctions on countries including Iran.

He will be responsible for beefing up HSBC’s anti money laundering and sanctions compliance systems.

It is unclear what impact the case will have on HSBC’s business. The bank is the biggest in Europe by market capitalisation, and made pre-tax profits of $ 12.7bn for the first six months of 2012.

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Egypt army given temporary power to arrest civilians

CAIRO (Reuters) – Egypt’s Islamist president has given the army temporary power to arrest civilians during a constitutional referendum he is determined to push through despite the risk of bloodshed between his supporters and opponents accusing him of a power grab.

Seven people were killed and hundreds wounded last week in clashes between the Islamist Muslim Brotherhood and their critics besieging Mohamed Mursi’s graffiti-daubed presidential palace. Both sides plan mass rallies on Tuesday.

The elite Republican Guard has yet to use force to keep protesters away from the palace, which it ringed with tanks, barbed wire and concrete barricades after last week’s violence.

Mursi, bruised by calls for his downfall, has rescinded a November 22 decree giving him wide powers but is going ahead with a referendum on Saturday on a constitution seen by his supporters as a triumph for democracy and by many liberals as a betrayal.

A decree issued by Mursi late on Sunday gives the armed forces the power to arrest civilians and refer them to prosecutors until the announcement of the results of the referendum, which the protesters want cancelled.

Despite its limited nature, the edict will revive memories of Hosni Mubarak’s emergency law, also introduced as a temporary expedient, under which military or state security courts tried thousands of political dissidents and Islamist militants.

But a military source stressed that the measure introduced by a civilian government would have a short shelf-life.

“The latest law giving the armed forces the right to arrest anyone involved in illegal actions such as burning buildings or damaging public sites is to ensure security during the referendum only,” the military source said.

Presidential spokesman Yasser Ali said the committee overseeing the vote had requested the army’s assistance.

“The armed forces will work within a legal framework to secure the referendum and will return (to barracks) as soon as the referendum is over,” Ali said.

Protests and violence have racked Egypt since Mursi decreed himself extraordinary powers he said were needed to speed up a troubled transition since Mubarak’s fall 22 months ago.

The Muslim Brotherhood has voiced anger at the Interior Ministry’s failure to prevent protesters setting fire to its headquarters in Cairo and 28 of its offices elsewhere.

Critics say the draft law puts Egypt in a religious straitjacket. Whatever the outcome of the referendum, the crisis has polarized the country and presages more instability at a time when Mursi is trying to steady a fragile economy.

On Monday, he suspended planned tax increases only hours after the measures had been formally decreed, casting doubts on the government’s ability to push through tough economic reforms that form part of a proposed $ 4.8 billion IMF loan agreement.

“VIOLENT CONFRONTATION”

Rejecting the referendum plan, opposition groups have called for mass protests on Tuesday, saying Mursi’s eagerness to push the constitution through could lead to “violent confrontation”.

Islamists have urged their followers to turn out “in millions” the same day in a show of support for the president and for a referendum they feel sure of winning with their loyal base and perhaps with the votes of Egyptians weary of turmoil.

The opposition National Salvation Front, led by liberals such as Mohamed ElBaradei and Amr Moussa, as well as leftist firebrand Hamdeen Sabahy, has yet to call directly for a boycott of the referendum or to urge their supporters to vote “no”.

Instead it is contesting the legitimacy of the vote and of the whole process by which the constitution was drafted in an Islamist-led assembly from which their representatives withdrew.

The opposition says the document fails to embrace the diversity of 83 million Egyptians, a tenth of whom are Christians, and invites Muslim clerics to influence lawmaking.

But debate over the details has largely given way to noisy street protests and megaphone politics, keeping Egypt off balance and ill-equipped to deal with a looming economic crisis.

“Inevitability of referendum deepens divisions,” was the headline in Al-Gomhuriya newspaper on Monday. Al Ahram daily wrote: “Political forces split over referendum and new decree.”

Mursi issued another decree on Saturday to supersede his November 22 measure putting his own decisions beyond legal challenge until a new constitution and parliament are in place.

While he gave up extra powers as a sop to his opponents, the decisions already taken under them, such as the dismissal of a prosecutor-general appointed by Mubarak, remain intact.

“UNWELCOME” CHOICE

Lamia Kamel, a spokeswoman for former Arab League chief Moussa, said the opposition factions were still discussing whether to boycott the referendum or call for a “no” vote.

“Both paths are unwelcome because they really don’t want the referendum at all,” she said, but predicted a clearer opposition line if the plebiscite went ahead as planned.

A spokeswoman for ElBaradei, former head of the U.N. nuclear watchdog, said: “We do not acknowledge the referendum. The aim is to change the decision and postpone it.”

Mahmoud Ghozlan, the Muslim Brotherhood’s spokesman, said the opposition could stage protests, but should keep the peace.

“They are free to boycott, participate or say no, they can do what they want. The important thing is that it remains in a peaceful context to preserve the country’s safety and security.”

The army stepped into the conflict on Saturday, telling all sides to resolve their disputes via dialogue and warning that it would not allow Egypt to enter a “dark tunnel”.

A military source said the declaration read on state media did not herald a move by the army to retake control of Egypt, which it relinquished in June after managing the transition from Mubarak’s 30 years of military-backed one-man rule.

The draft constitution sets up a national defense council, in which generals will form a majority, and gives civilians some scrutiny over the army – although not enough for critics.

In August Mursi stripped the generals of sweeping powers they had grabbed when he was elected two months earlier, but has since repeatedly paid tribute to the military in public.

So far the army and police have taken a relatively passive role in the protests roiling the most populous Arab nation.

(Additional reporting by Edmund Blair and Yasmine Saleh; editing by Philippa Fletcher)

World News Headlines – Yahoo! News

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