The Irish Independent reports that solicitor Michael Lynn was stopped by immigration officers in the United States at the weekend -- but they did not have the power to arrest him.
And he cannot be arrested outside Ireland -- despite a court order, the Irish Independent has learned.
The officers were acting on a worldwide alert issued by the gardai after Lynn disappeared here last month.
Border immigration control officers spotted Lynn at Newark Airport in New Jersey on Friday last as he stepped off a flight from Lisbon.
His description had been circulated by the gardai through Interpol to all police forces and other security agencies.
Officers interviewed Lynn, who told them he was on a three-day visit to the US and intended to return to Lisbon on Sunday.
However, the officers had no power to detain the solicitor as an order issued by a High Court judge here was not enforceable outside this jurisdiction.
Yesterday High Court president Mr Justice Richard Johnson queried what steps had been taken by gardai to find Lynn.
He said it had been several weeks since he had issued the order for his arrest and the gardai should be in a position to let him know the up- to-date position of their inquiries.
It is expected the judge will be given a detailed breakdown of garda activities this morning.
As the order issued by Mr Justice Johnson was from a civil court, it could not be enforced outside the State and other police forces did not have the legal power to hold Lynn.
As a result, gardai issued an appeal through Interpol to other agencies, asking them to help track down Lynn's whereabouts, and if he was spotted, to establish his recent movements.
Last night gardai were in contact with police and other agencies in Lisbon and Newark to determine if he had returned to Portugal on Sunday night.
Lynn can be arrested in another jurisdiction in connection with an alleged criminal offence here only if a substantial body of evidence has been built up against him.
At the moment there are no complaints from the banks that he has committed a crime.
Even if a complaint has been made, his extradition cannot be sought unless he is to be charged with a specific crime.
He cannot be extradited solely to face questioning about an alleged offence.
Yesterday Mr Justice Johnson challenged the Law Society and gardai on their efforts to locate the missing solicitor.
Judge Johnson said that as it had been a number of weeks since he issued a bench warrant for Lynn's arrest, the gardai should be in a position to let him know what the situation was and international police should be drafted in to locate Lynn, who is missing with mortgage debts of over €80m.
"If it means getting the international police involved, then so be it," said the judge, after the Mayo-born lawyer failed to turn up yet again for questioning by the Law Society.
Lynn, who had previously been last seen in public on December 10, 2007 at the London Offices of Merriman White -- which employed convicted fraudster Elio Malocco as its practice manager -- has also been referred by the Law Society to the Solicitor's Disciplinary Tribunal.
The referral of Lynn's alleged misconduct to the SDT is the first in a series of steps to have the aspiring property developer, who is facing arrest on foot of a court order, struck off the solicitors' roll.
Banks pursuing the solicitor fear he may have laundered and liquidated assets in foreign countries and misappropriated the proceeds of loans they issued to Lynn in good faith.
It is feared that Lynn, who left Ireland as part of a "well -planned exit" according to the Dublin Sheriff's office, may have sold property at knockdown prices in Portugal and Bulgaria and emptied bank accounts in Luxembourg, Portugal and Bulgaria in recent months.
Lynn's Irish bank accounts are frozen, but his international finances are beyond the reach of the Irish courts.
Yesterday, yet another bank secured a €11m court order against Lynn, whose solicitor's practising certificate has now been suspended after AIG, the insurance company, withdrew insurance cover for Lynn's practice just before Christmas.
The Irish Independent also reports that worries about job losses and the economy slowdown have sent consumer confidence crashing to one of its lowest levels in the past decade.
Four out of five consumers now believe that job losses will rise this year.
Consumers are so worried about the future that the Consumer Sentiment Index for December fell to 62.7 -- way below the long-term average of 99.2.
People have started to tighten their belts, with most expecting to pay more for oil and food, while the interest rate outlook remains uncertain.
The IIB/ESRI index is now at the third weakest point in the 12 years since it has been compiled, according to IIB Homeloans economist Austin Hughes.
"The drop in consumer sentiment in December resulted from increased worries about the job market and a deterioration in the buying climate.
"As such, it hints that Irish consumers may be tightening their belts in response to rising fears of unemployment," Mr Hughes said.
When the survey was compiled in December, there were huge job losses, including 500 redundancies at Abbott Ireland in Galway, 150 jobs in drinks group C&C and 50 jobs at the Denny meat plant in Tralee.
The gloomy outlook for consumers comes after the Live Register climbed by 5,000 in November, the biggest increase in six years. And concerns about construction job losses are increasing with a further unemployment rise in December.
Economist David Duffy of the ESRI (Economic and Social Research Institute) said: "The index remains close to the all-time low point of 60.9 reached in July 2003 and is well below the 89.8 recorded in December 2006. Consumers continue to express concerns about the housing market, rising interest rates and job losses."
The only positives in the survey results was the slight improvement in the personal finances of most households from tax changes in the Budget.
But overall, consumers remain downbeat about job losses and are likely to lower their spending, the survey indicates.
Meanwhile, an economic forecast from accountancy group PricewaterhouseCoopers yesterday predicted that economic growth in Ireland would be more modest this year.
This was because of the slowing housing market contributing to a contraction in investment and easing consumer spending growth. Growth of 3.5pc is forecast for 2008, PwC said.
The Irish Times reports that Iona Technologies is to close its office in Beijing, China, as part of its cost-cutting drive announced last week.
Iona had carried out research and development in China as well as sales and other supporting functions. The office is mostly staffed by Chinese nationals. It is not expected the company will cut significant numbers of staff at its Irish or US offices.
A spokeswoman for the company would not confirm the closure and said Iona would provide further details of its cost-cutting proposals when it announces fourth-quarter results later this month.
Last week Iona was forced to issue a detailed trading statement which showed revenues for the quarter were likely to be $18 million rather than in the range of $20-22 million which it had previously guided.
Chief executive Peter Zotto said the Nasdaq-quoted software maker would take "meaningful cost reduction actions" to cut operating expenses by 10 per cent.
Iona employs about 45 people in the Asia Pacific region, the bulk of whom are employed in Beijing and at a Japanese sales office.
Iona has successfully built links with the highest levels of Chinese government and its offices have been visited by the former state premier Zhu Rongji and the current premier Wen Jiabao.
Although he no longer has an executive role in the company, the decision to close the China office is likely to be embarrassing for Dr Chris Horn, the company's co-founder and vice-chairman of the board.
Dr Horn was one of the co-founders of the Ireland-China Association in 2000. He is also chairman of Slí Siar, a consultancy he founded with US citizen Nicole Bernard in 2005, which provides business services to firms entering the Chinese market. Although Iona has disappointed the markets in three out of the last four quarters, it is still generating cash and expects to close the fourth quarter with a cash balance of $56 million.
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The Irish Times also reports that Aer Lingus has begun its Belfast International to Heathrow service claiming strong passenger numbers and sounding positive about the future for its €150 million hub - the first outside the Republic.
The first departure took off at 7:40am yesterday carrying the first of 700 Aer Lingus passengers booked on Heathrow services, chief executive Dermot Mannion said.
He forecast that the highest profile of the nine new routes out of the airport would be successful and would undercut the opposition.
Accompanied by John Doran, the airport's chief executive, Mr Mannion suggested Aer Lingus would expand its services further, but would not say to where. His remarks led Mr Doran to claim that passenger totals would pass the six million mark next year - up by more than 750,000 on current levels.
Aer Lingus was now the fourth largest carrier serving Heathrow, Mr Mannion claimed, coming in behind British Airways, Lufthansa and British Midland. He denied that current fares to Heathrow were lead-in prices which would eventually rise to competitors' levels.
In what was a relatively low-key launch of services to Heathrow, Mr Mannion admitted the switch of slots from Shannon to Belfast "had caused some difficulties", but he pointed to what he called the "continuing, very substantial base at Shannon" with transatlantic and European ser-vices. "We are committed to Shannon in the long-term," he insisted.
He declined to comment on the decision by property developer Liam Carroll to increase his stake in the company, saying only that he hoped to provide a return on all investments made in Aer Lingus.
Mr Doran contrasted the current position of Belfast International and the breadth of services offered to that which existed five years ago. "The number of services was quite small, basically just one international service. Today we have 50 services of which 36 are international."
The Irish Examiner reports that growth in the economy will slide from 4.9% in 2007 to 3.5% this year according to the latest economic review.
Lower housing output and falling consumer spending will see the slowdown in economic growth that emerged in the last quarter of 2007 continue throughout this year, said PricewaterhouseCoopers in its latest economic review.
It estimates growth of 4.9% was achieved in 2007, significantly above the average rate of growth in the eurozone economies of 2.6% for the same period. Projected growth of 3.5% compares with 2.1% for this area.
Yael Selfin, head of macro consulting at PWC said “the economic slowdown in 2007 is likely to continue in 2008, as further house price falls, lower employment gains, tighter credit conditions and easing export demand undermine the pace of growth”.
Despite all of the downside “Ireland should still remain one of the Euroland’s fastest-growing countries in 2008”, he said.
Its growth forecast compares favourably with other projections, some of which are close to 2% for the current year.
The Central Bank and the Government forecast an economic growth rate of 3% this year.
Apart from the loss of consumer confidence and the house-building crisis, PWC warned inflation could also pose a serious threat in 2008.
“The recent surge in the rate of inflation poses another challenge for Ireland in the year ahead.
Although inflation is expected to moderate slightly in 2008, further commodity price increases present a significant upside risk to this outlook.” Inflation hit 5% in November and compares with 3.1% for Europe where inflation is at a six-year high.
Recent indicators suggest consumer spending eased over the final quarter of 2007, with retail sales growth and consumer confidence trending downwards.
“Slowing consumer spending growth is likely to continue in 2008, as falling house prices and a less vibrant labour market constrain consumers’ ability and willingness to spend. The recent turmoil in global capital markets is also likely to lead to tighter lending conditions and make access to credit more difficult, which should further limit spending growth,” said the report.
The Financial Times reports that Britain will next week be told by Brussels to increase its use of renewable energy at least six-fold by 2020 to meet the controversial climate change targets agreed by Tony Blair in the dying days of his premiership.
Mr Blair defied business leaders and ministerial colleagues last March when he backed a plan to put Europe in the lead in fighting climate change. Only next week will individual European Union member states find out what it means for them.
But officials in Brussels and Whitehall have told the Financial Times that Britain will have to increase its use of renewables as a share of all energy use from about 2 per cent to 13-14 per cent by the end of the next decade.
The country-by-country breakdown of the EU’s green energy plan is proving highly controversial before it is even published – Nicolas Sarkozy, French president, has warned he could oppose his country’s target. The fear is Europe could force itself into heavy investment in new energy technology which could prove expensive and force up fuel bills.
John Hutton, the Blairite business secretary, expects the targets to be “very ambitious”, but wants Britain “to contribute our fair share”.
The renewables push is part of the political legacy of Mr Blair and Jacques Chirac, the former French president who overcame domestic resistance to endorse a low-carbon plan. That included a binding commitment to make renewables account for 20 per cent of all energy use by 2020 with the precise allocations to be announced this month. Member states must still approve this.
Mr Blair was warned by the former Department of Trade and Industry that the scheme was unachievable and costly, but he overruled ministers. The European Commission will next week set out the “burden sharing” arrangements between the EU’s 27 member states on how to raise the EU’s average renewables use from 8.5 per cent to 20 per cent.
Britain has the lowest renewables share of any major EU country: only Malta and Luxembourg have less.
According to a Financial Times analysis using the Commission model, Sweden would end up with more than 50 per cent of its energy coming from renewables, while Germany could have about 18 per cent and France more than 20 per cent.
Britain’s efforts will focus on renewable electricity generation, including wind and the possible construction of a tidal barrage across the Severn estuary, capable of generating 5 per cent of UK energy. An energy bill offers new incentives for green power.
Greenpeace says even the UK target of generating 15 per cent of electricity from renewables in 2015 would still fall far short of the target, because electricity only accounts for a minor part of the UK’s total energy use. Heating – heavily dependent on gas – and transport fuel, where there are fewer alternatives, account for the bulk of UK energy use.
The FT also reports that efforts to boost farm production in Europe have failed in spite of record market prices and a move by Brussels to let farmers use more of their land to grow crops.
The European Union last year scrapped a long-standing rule requiring farmers to set aside 10 per cent of their land in an attempt to increase output and cool prices. But data released on Monday showed that French and Germans farmers sowed less than 2 per cent more winter crops in spite of the measures.
The weak response makes it likely that prices for wheat, barley, rapeseed and other crops will remain high.
The French agriculture statistics office reported a “modest” rise of 1.2 per cent in winter crop sowing, although it warned farmers could still increase their spring crops. France is the largest agriculture producer in Europe. Germany reported a mere 1.9 per cent rise in sowing.
The figures show that German and French farmers, instead of taking advantage of the set-aside rule suspension and expanding their arable land, have switched between crops. An increase in wheat sowing was offset by declines in rapeseed.
Gary Sharkey, chairman of the wheat committee in the National Association of British and Irish Millers, said: “We have never been so dependent on good weather and good growing conditions for the next crop.”
No official data are yet available for other countries, but analysts said it was likely to reflect the French and German trends.
Sorin Vaslobal, a broker at Plantureux, the Paris-based agriculture commodities house, said the decision last autumn to scrap the set-aside rule came too late for some farmers. Analysts said that set-aside land was often the poorest in quality and record high prices for fertilisers discouraged farmers to cultivate it.
The European failure follows a similar pattern in the US, where farmers barely increased their wheat sowing of winter crops in spite of surging prices and the lowest wheat inventories since 1947.
In Chicago, agriculture commodities on Monday hit fresh records on concerns that production will not increase enough to refill global inventories while robust demand from emerging countries and the biofuel industry continues unabated.
The European Commission said preliminary indications showed an increase in wheat production at the expense of other crops, but there were large variations between member states.
The New York Times reports that the price of copper has tripled in five years. Zinc has doubled. Wheat and soybeans rose 70 percent in 2007. Futures prices of crude oil, gold, silver, lead, uranium, cattle, cocoa and corn are all at or near records.
A global boom in the cost of commodities, the staple ingredients of a modern economy, is entering its sixth year with no end in sight. Commodities have always been subject to boom-and-bust cycles, but many economists see a fundamental shift driving the markets these days.
As development rolls across once-destitute countries at a breakneck pace, lifting billions out of poverty, demand for food, metals and fuel is red-hot, and suppliers are struggling to meet it. Prices are spiraling, and Americans find themselves in what amounts to a bidding war with overseas buyers for products as diverse as milk and gasoline.
“It is absolutely a fundamental change in the global economic structure,” said Bart Melek, global commodities strategist for BMO Capital Markets, an investment firm based in Toronto. “Global commodities ranging from oil to base metals to grains are moving higher as billions of people in China and around the world get wealthier and are consuming more as they produce products for us, and increasingly for themselves.”
Now, with the United States economy slowing, the question is what happens next. One possibility is that a recession in this country, should it occur, would suppress demand enough that commodity prices would fall substantially for the first time in several years. But many economists argue that demand overseas would keep prices high even with a recession in the United States. That would compound the economic pain for Americans, forcing them to continue paying a premium at the meat counter and the gas pump even as their paychecks suffered.
These economists say it will be hard to stop the ascent in commodity prices because it is connected more than at any other time in recent years to events beyond the United States, particularly the industrialization of China, and to a lesser extent of India, and in booming oil economies like Saudi Arabia and Russia.
“The world is coming alive and the lights are coming on across Asia,” said James Glassman, a senior economist at JPMorgan Chase. “What we are dealing with is a tremendous demand for resources.”
Meeting that demand is becoming more difficult. Oil is no longer easy to find, and the cost of producing it is escalating. Droughts and in places excessive rain have produced sporadic grain shortages; some scientists link such extremes in weather to global warming and the rising use of fossil fuel.
The biggest single factor increasing commodity prices is China’s rush to construct factories, other buildings and roads to satisfy a growing, increasingly middle-class urban population with a taste for cars and other consumer goods.
China today has 7,000 steel factories, double the number in 2002. Every new factory needs electricity, which means that power plants must be built. More diesel-powered trains are required to get the coal to the power plants, and more trucks and expanded ports are needed to move the steel to market.
China’s industrial revolution caused an increase in crude oil consumption to 7.5 million barrels a day last year from 5.5 million barrels in 2003, according to the International Energy Agency, representing 31 percent of the total rise in global demand. Over the same period, China was responsible for 64 percent of the increased global demand for copper, 70 percent of that for aluminum and 82 percent for zinc.
The Chinese economy grew well over 10 percent last year, compared with an American growth rate of perhaps 2.5 percent. China has grown briskly since 1982, when Communist leaders began to revamp the economy. India’s economy is growing almost as fast, in large part from a surge in domestic consumption.
The International Energy Agency projects that China and India combined may increase their oil consumption to 23.1 million barrels in 2030 from 9.3 million a day in 2005. The demand for oil is also growing in big developing countries like Russia and Mexico, where car ownership is rapidly rising.
That global demand lifts both metals and food prices. Vast construction projects to dig up oil sands in Canada and drill for conventional oil across the Middle East and Africa are under way, driving up the price of steel.
As fuel costs go up, countries like the United States and Brazil look for alternatives like biofuels. The ethanol boom in the Midwest has driven up the price of corn. Since corn is a vital feed product for animals, the prices of meat and milk have followed. The prices of other grains are going up as their acreage is supplanted by corn.
“You are trying to feed people, cattle and cars, so you have this global fight between food and energy,” said Michael Lewis, global head of commodities research at Deutsche Bank. He noted that the United States was responsible for 60 percent of the increase in the global demand for corn last year, which he said resulted primarily from the rapid expansion of ethanol production.
The rise in commodity prices is accompanying a broadening of the middle class in many countries, but recent protests in Mexico after a steep climb in tortilla prices showed that not everyone stands to gain. The world’s poor spend a large percentage of their income on food, so higher grain prices tend to hit them hard.
Consumers in the United States have less to spend at the mall when they pay $3 a gallon for gasoline. The national average for a gallon of unleaded gasoline has climbed to $3.07 from $2.24 a year ago, according to AAA, the automobile club, while a gallon of diesel fuel has climbed to $3.43 a gallon from $2.61.
Price shock has also accompanied trips to the supermarket. According to preliminary estimates by the Department of Agriculture for 2007, beef and veal prices rose 4.5 percent, poultry 5.2 percent, dairy products 7.4 percent and eggs 28 percent. The department is projecting increases for many food items this year, although it says that they may ease for those that rose the most in 2007. Experts, though, say that similar sustained food inflation has not been seen in the United States since 1990.
Economists and some others say the continuing boom in commodities prices may slow this year, if for no other reason than the 2007 pace for many crucial commodities — up 57 percent for crude oil and more than 70 percent for wheat and soybeans — was so stunning. Since the 2001 recession, the Commodity Research Bureau’s broad price index has risen by 100 percent.
“I would temper wild-eyed bulls who think China can grow at 10 percent plus without a strong United States,” said Adam Robinson, an energy analyst at Lehman Brothers. He said that China, which was an importer of steel and aluminum as recently as 2002, is now an important exporter of both to the United States and Europe and that some of the new steel factories could fail if there was a global recession.
Nevertheless, Mr. Robinson said commodities prices would probably remain steady in 2008 and possibly slide in 2009. The prices of many, if not most, major commodities — including nickel, copper, sugar, silver, cocoa and coffee — have continued their climb so far this year.
“Demand will be very difficult to slow down unless you take a very bearish view on the long-term global economy,” Mr. Robinson added.
The NYT also reports that Citigroup is expected to announce a series of drastic steps on Tuesday, including the elimination at least 4,000 additional jobs, a steep cut in its stock dividend and another big investment by foreign investors, in a bid to bolster its finances in the face of deepening losses.
Beginning what is expected to be a grim week for financial company earnings, Citigroup is likely to announce a write-down of $18 billion to $20 billion, the biggest yet by a major bank or Wall Street firm, said a person briefed on the situation. Such a big loss, the result of soured mortgage-related investments, could wipe out the bank’s profit for all of 2007 and plunge it into the red.
As part of a plan to shore up Citigroup, the chief executive, Vikram S. Pandit, is expected to announce the start of a new round of job cuts that many analysts say will accelerate in the coming months. The first reductions, of about 4,000 workers, will come on top of 17,000 job cuts announced last spring.
Citigroup is also expected to turn to wealthy foreign governments again and announce the sale of a $12.5 billion stake to the Kuwait Investment Authority and several others, including Prince Walid bin Talal of Saudi Arabia, people briefed on the situation said. In November, the company sold a $7.5 billion stake to a Middle Eastern fund, the Abu Dhabi Investment Authority.
The latest moves highlight the extent to which Citigroup’s capital position has weakened and raise questions about the company’s diversified business model.
“The board has been behind the ball, no doubt about it,” said Meredith A. Whitney, a banking analyst at CIBC World Markets, who has called on Citigroup to cut its dividend. “This is a company with serious capital shortfalls. The balance sheet should be the first thing that should be looked at for a bank, not the last.”
Shares of Citigroup have dropped more than 47 percent over the last year. They fell 50 cents on Monday to $29.06
Many investors have expected Citigroup to cut its dividend but the company’s board has resisted that step. Eliminating the dividend completely would save Citigroup about $10 billion a year.
The details about additional layoffs, meanwhile, are uncertain. Mr. Pandit has been working on what he called an “objective, dispassionate review” that might lead to a reorganization or other adjustments.
For Citigroup, things may yet get worse. The company announced in December that it would bring tens of billions of dollars worth of securities held by structured investment vehicles onto its balance sheet. And as rising unemployment adds to the gloomy talk about a recession, Citigroup may face more losses on home equity loans, credit card debt and personal loans.
Such a possibility makes raising new capital vital. Prince Walid, who helped rescue Citigroup in the early 1990s, and Capital Research and Management, a money management firm that is the bank’s biggest shareholder, are being offered the chance to invest to avoid having their current stakes diluted, but it is unclear whether they will choose to do so.
In addition to Kuwait, the Government of Singapore Investment Company is also involved. A planned multibillion-dollar investment by China Development Bank fell through recently because of resistance from the Chinese government, according to a person briefed on the plan.
Officials representing the China Development Bank and China’s Finance Ministry separately denied any knowledge of a proposed investment in Citigroup.
While Chinese investors have bought big stakes in Wall Street firms like Bear Stearns, the scuttled deal with Citigroup suggests there may be limits on how much the Chinese government is willing to invest in Western banking.
Some analysts said Mr. Pandit might have to raise more capital after the latest infusion. “Citigroup needs $20 to $30 billion” over the next year, said Christopher Whalen, the managing partner of Institutional Risk Analytics.