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

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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