Wednesday newspaper round-up: Rio Tinto/BHP, Kazakhmys, Currencies...

6th Oct 2010 06:36

Rio Tinto's $116bn iron ore venture with BHP Billiton is close to collapsing after regulators objected to the deal, the Times writes.Rio was forced to issue a statement last night saying that no formal decision had been made on the future of the project. Nevertheless, both companies are understood to believe that European regulators' disapproval makes it unlikely that the deal can succeed in its present form. The proposed joint venture would have seen Rio and BHP integrate their vast iron ore operations in the Pilbara region of Western Australia, the Times adds.Warren Buffett, the billionaire investor, has hit out at pay practices on Wall Street, attacking the lack of reform despite two years passing since the financial crisis struck. "People have a propensity to gamble, and it gets made easier and easier for them," Mr Buffett told a conference in Washington DC yesterday. "One of the problems we still have is we have unbalanced incentives for managers of huge financial institutions." In future, chief executives of banks who need government assistance should "go broke", said Mr Buffett. Their wives "should go broke, too", he added, the Telegraph reports.Kazakhmys stoked controversy over its links to the dictatorial Kazakh government yesterday when the company's chairman and biggest shareholder Vladimir Kim sold an 11% stake in the miner to the Astana administration. The move could lead to the Kazakh government becoming the largest single shareholder in the London-listed miner within a year. In a statement the copper giant said that the agreement "enables Mr Kim to diversify his investment portfolio whilst retaining a significant long-term shareholding in Kazakhmys", the Independent reports.The Bank of Japan's surprise move to reinstate zero interest rates has led to a warning of the danger of a currency war from the head of the International Monetary Fund. Dominique Strauss-Kahn warned that moves by central banks across the world to cut interest rates and carry out billions of pounds worth of quantitative easing could upset the global economy recovery as currencies chased each other ever lower, the Telegraph reports.Sir Terry Leahy used his last results presentation in charge of Tesco to deepen its commitment to the troubled American venture he spearheaded. The Fresh & Easy chain opened at the height of the sub-prime crisis on the West Coast of the United States, amid criticism that it had misjudged the American consumer. Sir Terry, due to hand over to Philip Clarke next year, said yesterday that Tesco would accelerate its store openings in the US next year, despite mothballing 13 shops in areas so badly affected by the housing crisis that they do not have enough residents to sustain a grocery store, the Times reports.David Cameron has hinted he may extend tax breaks to better-off married couples to help compensate them for the loss of child benefit payments, a move that has sparked a firestorm of protest from the media and mothers. In trying to douse the row over child benefit, the prime minister has muddied the message from the Conservative conference that the coalition's "tough but fair" cuts included harsh measures for high earners, the FT reports.Wall Street's sentiment towards Goldman Sachs and Morgan Stanley has turned sharply bearish over the past month with analysts' estimates for the banks' third-quarter earnings plunging amid a slump in trading activities. The poor performance of the trading operations - a key driver of the two banks' recovery after the financial crisis - will intensify questions over their business models and deepen fears of job cuts across the financial industry, the FT reports.Clifford Chance could be set to shatter one of the City's longest-standing barriers by becoming the first "magic circle" law firm to appoint a woman as its senior partner. Among three senior figures who are seeking to replace him is Daniela Weber-Rey, a partner in the Frankfurt practice. Ms Weber-Rey, 52, joined Clifford Chance in 1984 and specialises in German corporate law. She also sits on the board of BNP Paribas, the French bank, the Times reports.Millhouse, Roman Abramovich's asset management company, has lashed out at the Irish government and given warning of "huge reputation loss" and possible legal action if it continues to push it to foot part of the bill to bail out Irish Nationwide Building Society, the Telegraph reports.Nicola Horlick, one of the most prominent women in the City, is to set up a company that develops film scripts, with the help of a few of her Hollywood connections. The launch of Derby Street Films will be announced today by Bramdean Asset Management, the investment vehicle run by Ms Horlick. It plans to raise £2m from investors to develop books and ideas into film scripts, the Independent reports.