Saturday, October 4, 2003

Business digest

From wire reports

Ex-NYSE chair Grasso accused of strong-arm

NEW YORK - Ousted New York Stock Exchange Chairman Dick Grasso pressured a floor-trading firm to buy more shares in American International Group Inc. after the insurer's chairman complained to him, according to a newspaper report.

Grasso had received written complaints from AIG Chairman Maurice Greenberg, a previous NYSE director, the Wall Street Journal reported Friday, citing unnamed sources.

Greenberg was a member of the NYSE's compensation committee that determined Grasso's $187.5 million pay package. Outrage over the size of the compensation led to Grasso's resignation two weeks ago.

Greenberg complained in an Oct. 23, 2002, letter to Grasso about Goldman Sachs Group Inc.'s Spear, Leeds & Kellogg unit, the "specialist" assigned to facilitate trading in AIG, the Journal said.

On multiple occasions following Greenberg's complaints, Grasso went to the trading floor and suggested that Spear increase its buying of AIG shares, the Journal said.

The Journal said buying the additional shares resulted in roughly $14 million in trading losses for Spear in the past few years.

Witness: Banker was warned about probe

NEW YORK - A disgraced star banker was warned that a criminal probe of his firm might involve him just before he advised fellow employees to clean out their files, a government witness testified Friday.

Former Credit Suisse First Boston lawyer David Brodsky said he told Frank Quattrone on Dec. 5, 2000, that it would be wise to get his own lawyer.

That same day, Quattrone sent an e-mail urging workers to follow a company policy that required the periodic destruction of certain files. Those workers did not know about the criminal probe.

Quattrone was indicted on obstruction and witness tampering charges for allegedly interfering with the probe.

Bankrupt Pillowtex assets sold at auction

CHARLOTTE, N.C. - The assets of bankrupt textile manufacturer Pillowtex Corp. went for $128 million at auction to a consortium of four companies, more than doubling the group's original offer in July.

The bid by GGST LLC, a joint venture that specializes in liquidation, will be considered by a Delaware bankruptcy court Tuesday.

The sheet and towel maker went was once the nation's third-largest producer of home textiles.

Most of the bids were exclusively for the brand names, which include Cannon and Royal Velvet.

Merger creates large Russian oil producer

MOSCOW - Russian oil giant Yukos has completed its merger with smaller rival Sibneft, creating the world's fourth-largest company in terms of oil production.

The new company will be named YukosSibneft and will generate $15 billion in annual revenues and have an estimated market value of about $35 billion.

But the celebration of the deal, completed ahead of schedule in less than six months, was tempered by the continuing criminal probe of Yukos, which already was Russia's largest oil producer.

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