Top 10 business stories in 2010

IN 2010, the Jamaican dollar appreciated for the first time in 18 years and interest rates fell to the lowest in 25 years following the US$1.3 billion agreement between Government and the International Monetary Fund (IMF) — arguably the biggest news story last year.

The IMF deal is among a list of top stories that made 2010 another eventful year in local business. Sunday Finance lists our picks of the year’s most significant happenings in commerce.

IMF deal signed

Jamaica and the IMF signed a US$1.3-billion Standby Agreement in February 2010 after a series of back and forth negotiations between the two parties. The Jamaica Debt Exchange (JDX) — a voluntary programme under which holders of Government bonds accepted lower interest rates and longer maturities — was critical to the IMF signing the deal and is expected to save the administration $40 billion in interest expenditure on domestic debt over the current financial year. Increased market confidence arising from the IMF support resulted in an appreciation of the Jamaican dollar, which ended the year trading at just under J$86 to US$1.

Air Jamaica sold to Caribbean Airlines

Government in April concluded negotiations with Trinidad-based Caribbean Airlines Limited for the acquisition of the fleet and routes of Air Jamaica, which was a financial burden on the country. Under the agreement, the government of Trinidad and Tobago was slated to contribute working capital while the Jamaican Government assumed the debt and covered the winding-up costs.

At the time of its sale, Air Jamaica had an accumulated debt of some US$1 billion ($89.5 billion) but the deal still sparked anger among some Jamaicans who viewed the move as a ‘sell-out’ of a cherished national asset.

David Smith convicted

David Smith, the Jamaican foreign exchange trader whose private investment club Olint collapsed in 2008, was in September sentenced to 6 1/2 years in prison after he pleaded guilty to two counts of conspiracy to money laundering and two counts of conspiracy to defraud in the Turks and Caicos Islands (TCI). Smith, whose assets were frozen in the TCI, is facing several multimillion dollar lawsuits in Jamaica and the TCI from disgruntled persons who were attracted to Olint's promise of 10 per cent interest per month on their investments.

Dudus unrest hits businesses

Businesses are still counting the cost of civil unrest which was sparked when gunmen loyal to Christopher 'Dudus' Coke, the alleged crime lord wanted by the United States to face gun-and drugtrafficking charges, engaged agents of the State for three days in May in West Kingston. Seventy-three lives were lost, many businesses looted and Jamaica’s image damaged during the fighting.

Junior Market listings galore

Last year saw the highest amount of listings on the Jamaica Stock Exchange (JSE) in 25 years with seven new listings on the JSE Junior Market. The listings boosted the profile of the secondary market and JSE general manager Marlene Street Forrest last week said that a further 10 more companies — including manufacturing, entertainment, shipping, tourism and retail companies — are expected to list in 2011. A listing on the Junior Market provides small and medium-sized enterprises (SMEs) a 10-year tax incentive, in addition to the equity financing to fund expansion and growth. During the first five years of the listing the companies pay zero corporate tax, while half of the current rate is charged for the last five years.

It’s Proven

Proven Investments Limited (PIL), a partnership of Jamaican investment bankers, made big moves in 2011 and silently emerged as a powerful force in the local financial sector. Its private placement of 200 million shares, which opened on January 27, was quickly snapped up by 150 private and institutional investors and netted US$20 million. The firm in August completed the purchase of Guardian Asset Management Jamaica Limited (GAM) and posted a net profit of US$5.55 million for the seven months ended September 30, 2010.

Paymaster loses copyright case

The Supreme Court in May threw out a copyright infringement/breach of contract claim brought by Paymaster Jamaica against GraceKennedy and software developer Paul Lowe, a landmark ruling which brought to a close a chapter in the decade-old legal tussle. Paymaster was ordered to pay damages to Lowe for an injunction

obtained in 2000, blocking his marketing of the bill payment software at the heart of the dispute. Paymaster was also ordered to pay damages to GraceKennedy Remittance as a result of the injunction, barring its continued use of the multiple bill-payment software, which was licensed to it by Lowe.

Telecoms sector continues to attract huge investments

Local telecommunications providers continued to invest top dollars in the competitive industry. Digicel in August became part of a select few firms globally to launch fourth generation (4G) technology for wireless Internet, while LIME in December rolled out its Mobile TV, which offers a range of options for viewing on a mobile phone. Claro, owned by the World’s richest man Carlos Slim, pumped millions of dollars in marketing and continued to gnaw at shares in the mobile phone market. Additionally, Flow continued to introduce new broadbrand products and services, including an offering of up to 100 megabits per second (Mbs) to residential customers.

Sugar assets sold to Chinese

Government in July sealed the divestment of the final three sugar estates held by the Sugar Corporation of Jamaica (SCJ) — Monymusk, Bernard Lodge and Frome — to Chinese company Complant. In a deal worth more than US$10 million, Complant purchased the three remaining sugar estates and leased approximately 30,000 hectares of sugar lands to increase the production of cane islandwide.

Alcohol tax drama

Goverment quietly announced in November that alcoholic beverages would be taxed $960 per litre of pure alcohol — the SCT increase implemented effective December 1, 2010 with a view to raising an additional $772 million for fiscal year 2010/11. What ensued was a brouhaha that pitted two of the country's largest alcohol beverage companies — Red Stripe and Wray & Nephew — against each other, with Red Stripe intimating that it may even pull its export business as a result of the tax measures.

Source: JA.Observer


Pepsi pumps 12 million into Rebel Salute

There is a special buzz surrounding the next staging of Rebel Salute set for January 15, 2011 at Port Kaiser in St Elizabeth. As usual, there will be a galaxy of musical stars on show including Romain Virgo, Toots and the Maytals, Tarrus Riley, Queen Ifrica, Tony Rebel, Tanya Stephens, I-Octane and Khago.

There will also be an emerging talent on stage too. His good fortune came courtesy of Pepsi's $12-million sponsorship of the long-running reggae festival.

A refreshing new act, Noah was selected from among hundreds of contenders during a series of road shows that were held in Montego Bay on November 13; Negril on December 4; and in Junction on December 18.

This is all a part of the sponsorship geared towards the perpetuation of quality music in Jamaica and its importance to Jamaicans. "Music is important to our consumers," said Carlo Redwood, head of marketing for Pepsi here in Jamaica. "And Rebel Salute has always been a high-quality event with high-quality performances."

That was among the main reasons why Pepsi decided to partner with Jamaican music icon Tony Rebel. That, and the fact that the entertainer has always been about creating positive music, Redwood said.

A portion of the sponsorship money went into staging the Rebel Salute road shows that also served to build momentum for Rebel Salute, Redwood explained.

The remainder, he said, will go directly towards promotions, production costs and paying the entertainers, who also include Fantan Mojah, Chuck Fenda, Stevie Face, Nadine Sutherland, Spanner Banner, and AJ Brown among others.

In the lead-up to the show, Pepsi will also be running promotions in St Elizabeth, Clarendon and Mandeville. Redwood explains that wherever Pepsi product is being sold at wholesale stores and supermarkets at these locations, consumers will get the opportunity to win prizes, including tickets to Rebel Salute.

Of course, on the night of the show there will be a special VIP booth set up where specially invited guests and some patrons will be able to enjoy free drinks and engage in special activities during the show.

These special activities will involve local music, Redwood says.

Tony RebeL, who will be celebrating his birthday as the 18th staging of Pepsi Rebel Salute takes place, is asking fans to be present at the show as his present.


After a Bad Choice for 1st Release, Keyshia Cole Back on Track

Keyshia Cole is starting to experience the repercussions of her defiant choice to release her Nicki Minaj collaboration, “I Aint’ Thru,” as the first single for her latest album. She said she should have followed her label’s advice.

“The label didn’t really want to drop the record because they knew … that people wanted a more intense, soulful record from me about love and I really should have followed (their) direction,” Keisha told Associated Press.

Nevertheless, she insisted she doesn’t regret it, saying:

“I wanted that to be a statement record. It’s like saying, ‘I’m doing me, you know. I don’t have no regrets for nothing that I’m doing.” Chairman of Geffen Records Ron Fair also backs her up, “There’s no way to predict how people will respond to things. It’s something that Keyshia really wanted to say.”

But in a quick response, she and her people released another song, “Long Way Down” to recover from the lack of response. And so far, things are looking better.

“People are gravitating more toward [the song],” she stated. “I just think that people expect me to be, you know, an artist that sings about just love. But I’m always growing as an artist and I have to feed my artistry.”


Oprah Winfrey launches OWN TV network

US talk-show host Oprah Winfrey has launched her own TV network, which will offer round-the-clock lifestyle programmes.

The channel is called OWN, or the Oprah Winfrey Network. It is a joint venture with the Discovery channels.

OWN's start date has been delayed twice and its cost has reportedly swollen to $189m (£121m).

Among the programmes scheduled is a reality show starring the Duchess of York, Sarah Ferguson.

Winfrey has built up a huge fan base during 25 years as the host of the syndicated Oprah Winfrey Show.

The programmes on the new station have a focus on empowerment, improvement, positivity aimed mainly at women, who are Ms Winfrey's core audience.

"I wanted to build a network which empowers you, the viewer, to turn your dreams into reality," Ms Winfrey said on a preview programme that launched the network on Saturday.

One of the programmes offered will be a reality show in which 10 finalists from thousands of applicants will compete for the chance to host their own TV show.

There will also be a programme called Why Not?, hosted by Canadian country singer Shania Twain.


Discovery cancels Michael Jackson autopsy TV show

The Discovery Channel television network has said it will not air a re-enactment of Michael Jackson's autopsy, amid concerns the programme was distasteful.

Executors for the late star's estate had requested the programme - entitled Michael Jackson's Autopsy: What Really Killed Michael Jackson - be cancelled.

John Branca and John McClain had said the show was "in shockingly bad taste".

Discovery said an forthcoming court hearing was also a factor.

"Given the commencement of legal proceedings beginning next week, and at the request of Michael Jackson's estate, the scheduled broadcast of the medical documentary related to Michael Jackson's official autopsy has been postponed indefinitely," Discovery Networks International said in a statement.

Mr Branca and Mr McClain said they were pleased with the network's decision.

In a letter previously sent to Discovery, the pair had accused the company of being motivated by "blind desire" to exploit the singer's death.

"Your decision to even schedule this programme is in shockingly bad taste and insensitive to Michael's family," the co-executors wrote.

Sequined glove

The programme was scheduled to be aired in Europe on 13 January.

An advertisement used to promote the show reportedly depicted a body covered by a sheet with one hand wearing the singer's trademark sequined glove visible.

A preliminary hearing is scheduled to begin on 4 January where it will be decided if there is sufficient evidence to try Jackson's physician, Dr Conrad Murray, on involuntary manslaughter charges.

Dr Murray has repeatedly denied causing Jackson's death.

The singer died suddenly in June of 2009 from a prescription drug overdose at age 50, weeks before beginning a set of concerts.


Chuck Berry taken ill during gig

Rock 'n' roll legend Chuck Berry cut short a concert in Chicago after collapsing on stage.

He slumped over his keyboard and did not move for a couple of minutes before being helped off stage, Chicago Sun-Times reporter Dave Hoekstra wrote.

Concertgoer Steve Handwerker told the Associated Press news agency that Berry fell face first onto his keyboard.

Berry, 84, later re-emerged but told fans he had no strength to continue performing, the Sun-Times reported.

With hits like Johnny B Goode and Roll Over Beethoven, the singer and guitarist is one of the pioneers of rock 'n' roll and influenced artists including The Beatles, The Rolling Stones and The Beach Boys.


Earthquake of 7.2 magnitude hits off Chile coast

 

A 7.2-magnitude earthquake has hit off the central coast of Chile, the US Geological Survey says.

The epicentre was 95km (60 miles) northwest of Temuco with a depth of 17km, the USGS said.

It added that there was no current widespread tsunami threat, although there are reports of people fleeing the area.

An 8.8-magnitude earthquake in the same area last February caused widespread destruction and left dozens dead.

There were no immediate reports of casualties or damage from the quake, which hit at 1720 (2020 GMT).

It was centred about 600 kilometres (370 miles) southwest of the capital, Santiago.


Russia grounds all Tu-154Bs after fatal fire

Russia's airlines must ground their Tu-154B planes, after a fire in Siberia which killed three people, the country's transport watchdog says.

At least 43 were injured when the plane, carrying 124 people, burst into flames before take-off from Surgut.

Russia's transport safety regulator said the ban would remain in place until the cause of the disaster had been established.

The "black box" voice and data recorders have been recovered.

The plane exploded in a fireball on Saturday.

The Tu-154B is one version of the Tu-154 dates from the Soviet era, and is used extensively on domestic air routes in Russia and the former Soviet Union.

There are 14 Tu-154Bs still in service in Russia, according to the RIA Novosti news agency.

The Kolavia plane was taxiing for a flight to Moscow, when a fire started in one of its engines, an emergency services spokesman said.

The fire then caused a powerful blast which destroyed the plane and caused flames across an area of 100 square metres, he said.

Most of the passengers were evacuated before the explosion.

"There was a thick, black smoke and people started to panic. They were literally stepping on each other's heads," said Sergei Grigoriyev, a singer with the band Na-Na who were on board.

"I saw my life flash before me," he said, according to Itar-Tass news agency.

Fellow band member Vladimir Politov said the group had escaped out an emergency exit over the wing and were all unharmed.

The Tu-154 entered service in the 1970s but a series of crashes triggered concerns over its safety record.

Russia's national carrier airline Aeroflot took all its remaining 23 Tu-154 aircraft out of service in January 2010.

Polish President Lech Kaczynski was killed last year when a Polish Airforce Tu-154 crashed in western Russia.


Queensland city flooding 'faster than expected'

Floodwaters in the Australian city of Rockhampton are rising faster than expected, Queensland authorities say.

The city has already been badly hit, with many people being forced to flee.

More than 20 towns have already been cut off or flooded across an area larger than France and Germany, with more than 200,000 people affected.

Earlier, a woman swept from the road in her car has become the first victim of the widespread flooding, and at least two others are reported missing.

While waters are receding in some areas, in Rockhampton - a city of 77,000 - they have yet to reach their peak.

Floodwaters are expected to reach nine metres (30 feet) on Monday and peak at 9.4 metres on Wednesday, threatening as many as 4,000 homes.

Rockhampton's airport, a major regional hub, was closed to commercial traffic due to flooded runways, while many main roads and railways into the town had been cut off, and power supplies were disrupted.

The city could be isolated for up to 10 days, reports say.

"These waters are exceptionally fast, they're not to be trifled with and they're not to be taken lightly," said Alistair Dawson, Queensland's assistant police commissioner.

Meanwhile, the weather bureau has warned Queensland residents of another severe storm, which is forecast to bring "damaging winds, very heavy rainfall, flash flooding and large hailstones".

One Rockhampton resident told the BBC there had been panic-buying in the city.

"Lots of people have been stocking up on fuel. I also heard about one woman who brought 20 loaves of bread from a supermarket," said the resident, Petros Khalesirad.

Rockhampton Mayor Brad Carter has said about 40% of the city could be affected, and warned the floods had swept snakes downstream.

"Snakes have been swimming at people's feet as they make their way through the waters," he said. "I know one guy who killed four snakes this morning, one of which was a Taipan - the more it bites, the more it injects venom that could easily kill."


Iran 'shoots down Western spy drones' in Gulf

Iran's Revolutionary Guards have shot down two "Western spy drones" in the Gulf, a senior Iranian commander has been quoted as saying.

"Many" other drones have been shot down over an unspecified period of time, the Fars news agency quoted him as saying.

The head of the Revolutionary Guards' air force wing, Amir Ali Hajizadeh, produced no evidence to support the report.

He said this was the first time news of the incidents had been reported.

The drones were mainly being used in Iraq and Afghanistan but "some violations against our soil" had also occurred, the commander said.

The Revolutionary Guards were set up following the Islamic revolution in 1979, and its commanders have frequently delivered warnings to Israel.

Last August Iran unveiled what it said was its first domestically built drone, the Karrar.

It said it had a range of 1,000km (620 miles) and could carry two 250-pound (115kg) bombs, or a precision bomb of 500 pounds.

There is no independent corroboration of the latest Iranian claims.

The Fifth Fleet of the US navy is based in Bahrain, on the other side of the Gulf from Iran, which has threatened to block shipping through the strategic Strait of Hormuz, if it is attacked.