Business Watch

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This article was published 21/12/2010 (5424 days ago), so information in it may no longer be current.

Wholesalers shine

MANITOBA wholesalers outshone most of their provincial counterparts in October, ringing up the country’s second biggest monthly sales gain and their fifth consecutive month of rising sales.

Statistics Canada said Monday that Manitoba’s wholesale trade sector posted $1.19 billion worth of sales for the month — a gain of 1.1 per cent from September’s $1.18 billion.

Only Ontario did better, with a 1.5-per-cent gain, while Canada’s sales were essentially unchanged at $44.9 billion.

Despite the strong showing in recent months, Manitoba’s sales were still running 2.1 per cent behind last year’s pace after the first 10 months of the year.

Wholesale sales can be an indicator of anticipated trends in consumer spending because retailers tend to order more product from wholesalers if they expect strong spending by consumers, and cut back if they think spending is weakening.

CRTC fines Bell $1.3M

OTTAWA — The CRTC sent a blunt Do-Not-Mess-With-Us message Monday about the Do Not Call List, hitting Bell Canada with a $1.3-million penalty for violating telemarketing rules.

The telecommunications regulator found that independent telemarketers hired by Bell in Canada and overseas made unsolicited calls to Canadians to sell TV, telephone and Internet services.

They called consumers who had signed up for the national Do Not Call List, or had asked Bell Canada to be put on the company’s internal, no-calls list.

It is by far the biggest penalty the CRTC has ever slapped on a company for breaking the Unsolicited Telecommunications Rules under the Telecom Act. Prior to last March, it had only imposed $73,000 in penalties after hearing 300,000 complaints.

But the commission suddenly upped the ante this month, the two-year anniversary of the Do Not Call List.

May face fraud charges

NEW YORK — Accounting firm Ernst & Young LLC may face civil fraud charges in New York for its alleged role in the demise of Lehman Brothers, according to a report.

The Wall Street Journal, citing anonymous sources, said in a Monday article that State Attorney General and New York governor-elect Andrew Cuomo may file the lawsuit this week, with the state possibly seeking fines and other penalties.

The case alleges that Ernst & Young did not act in the appropriate manner while Lehman misled investors about its financial condition.

Lehman was one of Ernst & Young’s biggest clients before the investment bank’s collapse in 2008 when the financial crisis intensified. The report says Ernst & Young made about $100 million in fees from 2001 through 2008 for its auditing work.

An Ernst & Young spokesman declined to comment on the report.

The potential lawsuit focuses on Lehman transactions that include repurchase agreements and its alleged attempts to have investors falsely believe it was more financially stable than it really was. The report says Ernst & Young approved of the transactions and gave the company a complete audit opinion from 2001 through 2007.

While charges may be looming, Ernst & Young may try to settle before any lawsuit is filed, the report added.

Strong demand for Boeing

SEATTLE — Boeing said Monday it’s again increasing the production rate for its 777 aircraft due to strong customer demand.

The Chicago company will boost output to 8.3 of the 777 planes a month in the first quarter of 2013.

In March it announced plans to increase production to seven airplanes per month from five starting in the middle of next year.

United Airlines first placed the 777 into service in 1995. There have been 907 deliveries of the aircraft, which comes in several different versions including a long-range freighter.

Boeing said it has a backlog of more than 250 777s and that suppliers are prepared for its production increases. Boeing’s Winnipeg plant products parts for the 777, among other aircraft.

Maple Leaf revamps board

TORONTO — Maple Leaf Foods Inc. has begun a process to revamp its board of directors as the restructuring meat processor faces calls for reforms following the departure of a former major investor.

The Toronto-based meat and bakery company (TSX:MFI) said Monday a committee of its board is soliciting shareholder input as it searches for new director candidates.

“We are looking forward to engaging with our shareholders, and making changes that further strengthen our ability to provide oversight to ensure this company maximizes sustainable return to shareholder,” committee chairman James Hankinson said in a statement.

At least one shareholder — activist hedge fund West Face Capital Inc. — has complained that the Maple Leaf board is too big and alleges some of the directors are too closely involved on a personal level with the McCain family, which has control through special voting rights.

West Face acquired a 10 per cent stake from the Ontario Teachers’ Pension Plan Board in August.

— Staff / The news services