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Corporations & securities brief ~ Republicans scrutinize Lenovo's purchase of IBM PC unit

[JURIST] In Wednesday's corporations and securities law news, the agreement by Lenovo [corporate website], China's largest computer supplier, to takeover [Lenovo press release] IBM's [corporate website] PC division for $1.75 billion is in jeopardy of falling apart as congressional Republicans warned that the sale could threaten US security interests. Three Republican committee chairmen led by Duncan Hunter [official website], chairman of the House Armed Services committee [official website], have already called for a full security review of the sale fearing sensitive military-related technology would be transferred to China. The chairmen are asking for a full 45-day review by the administration's Committee on Foreign Investment in the US (CFIUS) [official website], an inter-agency group that assesses the security and economic risks of takeovers of US companies by foreign groups. The Financial Times has more.

In other news...

  • The government's fraud case against former WorldCom Inc. Chief Bernard Ebbers received a boost today as a Merrill Lynch [official website] analyst testified that Ebbers addressed the company's financial problems "in a reasonable amount of detail." Read the Ebbers indictment [PDF]. AP has more.

  • As previously reported on JURIST's Paper Chase, The US Court of Appeals for the Second Circuit [official website] has reinstated part of an obesity lawsuit against McDonald's [corporate website], ruling that two New York children should be allowed to pursue their deceptive advertising claims. Read the Second Circuit's decision [PDF]. AFP has more.

  • The IRS has sent GlaxoSmithKline PLC a notice saying that the company owes $1.9 billion in back taxes for the years 1997 to 2000. Glaxo, who will contest the ruling, said it could owe as much as another $700 million in interest if the IRS is successful in its claim. CBSMarketWatch has more.

  • The trial of Emilio Botin, chairman of Santander Central Hispano [corporate website in Spanish], Spain's most powerful bank, has started in Madrid. Botin is accused of misusing bank funds after he approved bonus and pension payouts to two former executives for 160 million euros ($208 million). BBC has more.
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About Paper Chase

Paper Chase is JURIST's real-time legal news service, powered by a team of 30 law student reporters and editors led by law professor Bernard Hibbitts at the University of Pittsburgh School of Law. As an educational service, Paper Chase is dedicated to presenting important legal news and materials rapidly, objectively and intelligibly in an accessible format.

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