U.S. grand jury indicts four Audi managers in VW emissions probe

WASHINGTON (Reuters) – A federal grand jury in Detroit on Thursday indicted four managers at Volkswagen AG’s (VOWG_p.DE) luxury Audi unit as part of the U.S. government’s investigation into the German automaker’s diesel emissions cheating scandal, according to court documents.

VW admitted in September 2015 to secretly installing software in nearly 500,000 U.S. vehicles to cheat government exhaust emissions tests and pleaded guilty in 2017 to felony charges. In total, 13 people have been charged in the United States, including the four Audi managers.

Managers Richard Bauder, Axel Eiser, Stefan Knirsch and Carsten Nagel all worked in Audi’s engine development division in Germany. Bauder was head of Audi’s Diesel Engine Development department. A Justice Department spokesman said none are in custody. All are believed to be in Germany.

Lawyers for the four could not immediately be identified.

The government previously indicted one former Audi manager in July 2017, Giovanni Pamio. The new indictment is a significant expansion of the government’s criminal probe.

The four managers are charged in a 12-count indictment with conspiring to evade U.S. emissions standards in diesel vehicles sold in the United States with 3.0-liter engines. The vehicles include the 2009-2015 Audi Q7 vehicles as well as other Q5, A6, A7 and A8 diesel models and VW Touareg vehicles. They are accused of wire fraud, violating the Clean Air Act and conspiracy.

Volkswagen spokesman Pietro Zollino said the company continues “to cooperate with investigations by the Department of Justice into the conduct of individuals. It would not be appropriate to comment on individual cases.”

The indictment said the Audi managers realized they could not meet U.S. pollution standards given design constraints by Audi “including the need for a large trunk and high-end sound system.”

Audi engineers told Bauder in 2008 that unless the tank was larger “Audi had to cheat to pass U.S. emissions tests” and ensure that drivers could go 10,000 miles between dealer service visits, the indictment said.

In total, Volkswagen has agreed to pay more than $25 billion in the United States for claims from owners, environmental regulators, states and dealers, and has offered to buy back about 500,000 polluting U.S. vehicles. The buybacks will continue through 2019.

In 2017, VW also pleaded guilty to fraud, obstruction of justice and falsifying statements in a U.S. court. Under the plea deal, the automaker agreed to sweeping reforms, new audits and oversight by an independent monitor for three years.

U.S. prosecutors previously charged former VW Chief Executive Officer Martin Winterkorn, who remains in Germany. Two other former VW executives have pleaded guilty in the investigation and are in prison. Germany does not typically extradite its citizens for prosecution in U.S. courts.

Former Audi Chief Executive Rupert Stadler was not among those indicted. He is being investigated in Germany for his alleged role.

VW in October terminated Stadler’s contract against the backdrop of a criminal investigation into whether he was involved in emissions cheating.

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Emergency shelter for Montreal homeless opens at former Royal Victoria Hospital

The former site of the Royal Victoria Hospital in downtown Montreal is welcoming the city’s homeless into its new emergency shelter.

The third floor of the Ross Pavilion will accommodate up to 80 men and women. It will also provide a space for their pets, according to Quebec’s regional health authority.


Old Royal Victoria Hospital converted to emergency homeless shelter

Emergency shelter to open at old Royal Victoria Hospital for winter months

New emergency homeless shelter to help with winter overcrowding

“We’ve been able to move forward quickly on creating this emergency unit for homeless people,” said Montreal Mayor Valérie Plante Thursday.

“Of course, this is for this winter, but what is a positive sign is knowing that our administration, we want to find a solution on the long-term.”

“No one should be outside right now. Everyone deserves a roof.”

The move comes after Montreal’s homeless shelters — including the Old Brewery Mission, the Welcome Hall Mission, Maison du Père and Accueil Bonneau — voiced concerns about overcrowding in their facilities during in the winter.

“We would put down mattresses on the floor of the cafeteria and we would have about 80 people lined up throughout the night,” said Old Mission Brewery president and CEO Matthew Pearce.

“It was inhumane and unhygienic.”

The shelters have been consistently over capacity since the cold snap this past November.

“Together we will provide a safe and dignified place for people who are homeless,” said Welcome Hall Mission president Sam Watts in a statement.

In Montreal, Watts estimates there are more than 3,000 people without a fixed address; many spending cold nights on the streets when shelters run out of beds.

Watts says the old Royal Vic is a temporary solution to help them sleep in a warm, dry and protected place.

“The solution to homelessness to really not to add emergency beds,” he said.

“The solution to the problem is to find ways of getting people quickly into apartments.”

The four organizing shelters will delegate tasks between themselves to operate the emergency shelter.

The temporary shelter cost about $200,000 to build; the Quebec government provided $150,000 and the City of Montreal added $50,000.

The temporary shelter is expected to stay open until April 15, wherein government officials and the shelters will reassess.

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Mexico’s most-wanted: A guide to the drug cartels

More than 200,000 people have been killed or have disappeared since Mexico’s government declared war on organised crime in December 2006.

The military offensive has led to the destruction of some drug gangs, splits within others and the emergence of new groups.

With widespread corruption and impunity exacerbating Mexico’s problems, there is no end in sight to the violence.

Which are the most powerful cartels today? And who is behind them?

The Sinaloa cartel

Founded in the late 1980s, the Sinaloa cartel headed by Joaquín “El Chapo” Guzmán has long been considered Mexico’s most powerful criminal organisation.

Having outfought several rival groups, the Sinaloa cartel dominates much of north-west Mexico and makes billions of dollars from trafficking illicit narcotics to the United States, Europe and Asia.

However, the cartel’s future is uncertain after Guzmán was recaptured in 2016 following two daring prison breaks. He was extradited to the US in January 2017 and now awaits trial in New York.

The Jalisco New Generation

Sinaloa’s strongest competitor is its former armed wing, the Jalisco New Generation cartel. Formed around 2010, the Jalisco cartel has expanded rapidly and aggressively across Mexico and is now challenging Sinaloa for control of strategic areas, including Tijuana and the port of Manzanillo.

The Jalisco cartel is blamed for a series of attacks on security forces and public officials, including downing an army helicopter with a rocket-propelled grenade in 2015. Mexico’s Attorney General Raul Cervantes declared it the nation’s largest criminal organisation in 2017.

What happened after El Chapo’s arrest?

Guzmán’s latest arrest created a split within the Sinaloa cartel, fuelling rising violence in the region.

On one side were Guzmán’s sons, Iván Archivaldo and Jesús Alfredo. On the other side, his former associate Dámaso López Núñez, alias “El Licenciado”, and his son Dámaso López Serrano.

Guzmán’s sons were kidnapped at a restaurant in Puerto Vallarta in 2016 but released days later. López Nuñez was among the suspected culprits. Guzmán’s sons also accused him of leading them into a near-fatal ambush in February 2017.

López Nuñez was arrested in Mexico City in May 2016 and López Serrano – who used to brag about his lavish lifestyle on Instagram – turned himself in at the US border in July 2017.

Guzmán’s sons are believed to have assumed control of the cartel. His older brother Aureliano is another influential figure vying for control, while Fausto Isidro Meza Flores, alias “Chapo Isidro”, has emerged as one of the cartel’s powerful local adversaries.

Who are Mexico’s most wanted?

Ismael “El Mayo” Zambada, an elusive veteran who ran the Sinaloa cartel alongside Guzmán, is one of the Mexican government’s primary objectives.

Aged 69, Zambada is nearing retirement but is said to retain strong influence behind the scenes. Mexico offers a 30m peso (£1.2m) reward for information leading to his capture.

Ruben Oseguera, alias “El Mencho”, the head of the Jalisco New Generation cartel, is another of Mexico’s most wanted kingpins. A former police officer and avocado vendor, he is the subject of a 2m peso (£82,000) state bounty.

Rafael Caro Quintero, the founder of the now-defunct Guadalajara cartel, is the US Drug Enforcement Administration’s most wanted fugitive.

Convicted of the abduction, torture and murder of DEA agent Enrique Camarena in 1985, he served 28 years of a 40-year sentence in Mexico before being released after a court ruled he should have been tried in a state rather than a federal court.

The US state department offers rewards of up to $20m (£14m) for information on Caro Quintero, and up to $5m each for Zambada or Oseguera.

What happened to Mexico’s other major players?

In eastern Mexico, the Gulf cartel and their fearsome former allies Los Zetas have been weakened by killings and arrests of top leaders, leading to splits within both groups.

In western Michoacán state, the pseudo-religious Knights Templar and La Familia cartels have been largely vanquished by vigilante groups, although the region remains contested by their remnants and several newer gangs.

To the north, the once mighty Juárez, Tijuana and Beltrán-Leyva cartels have all been weakened by Sinaloa cartel offensives.

How has the criminal landscape changed?

Mexico’s criminal landscape has grown more fragmented since then-President Felipe Calderón sent the army to combat the cartels in December 2006.

The government succeeded in capturing or killing the leaders of the biggest cartels, but this led to many smaller and often more violent gangs springing up in their place.

Without the capacity for transnational drug trafficking, these gangs deal in kidnapping, extortion, human trafficking, illegal logging and mining, and stealing oil from government pipelines.

Are things better or worse than they were?

The level of violence dropped after the election of President Enrique Peña Nieto in 2012, but it has shot up dramatically in the last two years, with 2017 on course to be the worst year on record.

Activists and journalists are routinely murdered, while corruption and impunity remain rampant.

The legalisation of marijuana in parts of the US has driven Mexico’s cartels to push harder drugs like methamphetamine, heroin, and fentanyl, a powerful synthetic opioid.

This has fuelled an epidemic north of the border, with provisional figures from the US Centers for Disease Control and Prevention suggesting that more than 64,000 Americans died from drug overdoses in 2016, up 21% from the previous year.

How violent are the cartels?

Mexico’s cartels are notorious for their extreme violence. Beheadings and torture have become commonplace over the past decade.

Victims are sometimes hung from bridges or dissolved in barrels of acid. Some cartels post graphic execution videos on social media to intimidate their enemies.

How many people have died?

Mexico registered more than 200,000 murders from January 2007 to December 2016, according to government records. More than 30,000 people are classified as having disappeared in that same timeframe.

2017 was the most violent year in two decades, with more than 25,000 murders, official figures suggest.

The final figures for the year are expected to be published in July 2018.

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Newmont to become largest gold producer with $10 billion Goldcorp buy

(Reuters) – Newmont Mining Corp said on Monday it would buy smaller rival Goldcorp Inc in a deal worth $10 billion, creating the world’s biggest gold producer in the face of dwindling easy-to-find reserves of the precious metal.

The deal, the second high-profile merger in the mining industry since Barrick Gold Corp agreed to buy Randgold Resources Ltd in September last year, comes as the industry looks for ways to cut costs and increase scale.

The company, which will be called Newmont Goldcorp, is set to overtake current leader Barrick Gold’s annual production and will have mines in Americas, Australia and Ghana.

The Denver, Colorado-based company Newmont will also sell $1 billion to $1.5 billion worth of assets over the next two years as part of the deal, mirroring a similar move by Barrick when it announced the Rangold acquisition.

After the deal the new company expects to produce 6-7 million ounces of gold annually over the next ten years and beyond. Barrick has forecast 2018 total gold production in the range of 4.5 million to 5 million ounces.

The new company will be led by Newmont Chief Executive Officer Gary Goldberg. Goldberg will retire at the end of 2019 and Tom Palmer, Newmont’s chief operating officer, will then take over as the CEO.

Newmont will offer 0.3280 of its share and $0.02 for each Goldcorp share. Based on Newmont’s Friday close, that translates to $11.46 per share, a premium of about 18 percent to Goldcorp’s Friday close on the New York Stock Exchange.

The deal is scheduled to close in the second quarter and is expected to generate up to $100 million in savings, the company said.

Vancouver-based Goldcorp’s U.S.-listed shares were up about 13 percent before the bell on Monday. Newmont Mining’s shares were down 3 percent.

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ProSieben e-commerce arm buys control of Aroundhome

FRANKFURT (Reuters) – German media group ProSiebenSat.1 Media’s (PSMGn.DE) e-commerce arm NuCom is buying control of Aroundhome, an online broker for home services and products, in a deal valued at 140 million euros ($161 million).

The investment represents a bet on taking the lead in the German-speaking region to help people searching for a company to put a solar panel on their roof, install a new kitchen or fix their central heating.

“We see a huge market potential in Europe,” Aroundhome founder and CEO Robin Behlau said in an interview, adding home spending in Germany, Austria and Switzerland was worth more than 65 billion euros a year.

Aroundhome, previously called Kaeuferportal, says it has achieved average revenue growth of 35 percent a year since 2014. It has just rebranded and launched a promotional campaign that includes advertising on ProSieben’s stable of TV channels.

The deal will ensure NuCom, an investment vehicle set up by ProSieben to boost online growth as its core advertising-funded TV business struggles, has controlling stakes in all of its 10 properties.

Shares in ProSieben are trading near seven-year lows, putting pressure on CEO Max Conze, who has been in the job for six months. Conze in November cut ProSieben’s dividend payout ratio and lowered his revenue forecast.

As part of the deal, investor General Atlantic will swap its stake in Aroundhome for an increased holding in NuCom, which will rise to 28.4 percent from the 25.1 percent when it came in as a partner last February.

“Our medium-term goal is for Aroundhome to become the clear category champion,” NuCom Co-CEO Claas van Delden told Reuters.

He said the online market for such services was, in Germany, “effectively vacant,” but growing rapidly in countries like the United States, where the partners in the deal see ANGI Home Services as a model.

ANGI, owned by IAC/InterActiveCorp (IAC.O), is valued at six times revenues whereas Aroundhome is worth two times, said van Delden: “We see great potential to add value.”

For General Atlantic, the deal simplifies its relationship with NuCom while backing Aroundhome’s promotional drive, said Principal Christian Figge.

In the Aroundhome deal, NuCom will raise its voting stake to 94 percent from 42 percent. It will acquire 42 percent from General Atlantic via a share swap, and pay cash to buy a further 10 percent from Aroundhome’s founders.

CEO Behlau will retain a 6 percent stake and continue to run the company.

NuCom expects to achieve revenues of 1 billion euros this year and 2 billion by 2023. Van Delden said it targeted annual organic revenue growth of 10-15 percent, rising to 20 percent including acquisitions.

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How could a brand new plane crash?

Lion Air flight JT 610 has crashed into the sea, with nearly 190 people on board, shortly after taking off from the Indonesian capital, Jakarta.

A lot of attention has focused on the fact the plane, a Boeing 737 MAX 8, was brand new. This is the first major incident involving that kind of plane.

Details so far have been scant and the cause will not be confirmed until a full investigation has been carried out.

Plane crashes are often the result of a combination of factors – both technical and human – but could the fact that the plane was so new have played any part?

The Boeing 737 MAX 8 has only been in commercial use since 2017.

Budget carrier Lion Air said in July it was “very proud” to be the first in Indonesia to deploy the plane, and that it had ordered as many as 218 units.

The plane involved in Monday’s incident has only been in operation since 15 August.

It had logged only 800 hours of flight time, according to the head of the National Transportation Safety Commission, Soerjanto Tjahjano.

The pilot is reported to have radioed air traffic control in Jakarta asking for permission to turn back, shortly after taking off.

Now it has emerged that the plane had some technical problems on Sunday on its penultimate flight.

A technical log obtained by the BBC for that flight – from Denpasar airport in Bali to Jakarta – suggests that the airspeed reading on the captain’s instrument was unreliable, and the altitude readings differed on the captain’s and first officer’s instruments.

As a result of the problem, the captain handed over control of the plane to the first officer, the crew continued their flight and they landed safely at Jakarta.

Lion Air have not confirmed the report, but this may have been the unspecified “technical problem” that the company’s chief executive said the plane’s Denpasar to Jakarta flight had suffered from.

Edward Sirait said that this problem had been “resolved according to procedure”.

He added that Lion Air was currently operating 11 aircraft of the same model. He said there were no plans to ground the rest of the planes.

‘Snags’ sorted quickly

Aviation analyst Gerry Soejatman told the BBC that usually it is old aircraft that are at the highest risk of accidents but that there can also be problems with very new ones.

“If it’s very new there are sometimes snags that only reveal themselves after they are [used routinely],” he said. “These usually get sorted [within] the first three months.”

The plane would have hit the three-month mark in just a few weeks.

Another analyst, Jon Ostrower of aviation publication The Air Current, said there were “always new teething issues… that’s common, but a far cry from something that would threaten the safety of an aeroplane”.

He added that new planes generally “enjoy a maintenance holiday because everything is so new, not the reverse”.

Both analysts said it was too early to draw definitive conclusions about what had gone wrong with Flight JT 610.

“I don’t know what would make a plane this new crash,” Mr Ostrower told the BBC. “There are so many different factors that can contribute to an accident like this.”

Mr Soejatman said he believed it was “likely to be technical issues that caused it but it’s still very early days”.

“We can really [only determine the cause] when we get more information,” he said.

Indonesia’s poor aviation safety record, though, has other experts believing that factors such as human error or poor oversight are more likely to be behind Monday’s tragedy.

Boeing has said it is “deeply saddened” by the loss of the plane. It sent its sympathies to the victims’ families and said it would co-operate with the investigation.

According to Boeing, the 737 MAX series is the fastest-selling plane in its history, and has accumulated almost 4,700 orders.

The MAX 8 has been ordered by airlines including American Airlines, United Airlines, Norwegian and FlyDubai.

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'A total disgrace': Poppy wreaths thrown from war memorial

Officers on patrol through the town centre in the early hours of Saturday morning discovered 50 wreaths had been thrown around in Regent Street, where the Cenotaph War Memorial is.

Swindon South Police posted on Facebook: “This was a mindless act of vandalism and shows complete disregard for those servicemen and women that have given the ultimate sacrifice in service of this country.

“Enquiries are ongoing and we urge that anyone who was in the area at the time that has any information that could assist the police to contact 101 and ask to speak to SPC 4448 Scott-Barrett regarding CRN 54190003682.”

Police say it happened at 4.38am.

Chief Constable Kier Pritchard tweeted: “This is a total disgrace.

“I laid our @wiltshirepolice wreath at this Cenotaph on Sun 11th Nov 2018 alongside many war veterans to show respect to those who paid the ultimate sacrifice to provide the freedoms we enjoy today.

“Name those involved and help us identify them.”

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Israel UAV maker Aeronautics gets 850 million shekel buyout offer

JERUSALEM (Reuters) – Israeli unmanned aerial vehicle maker Aeronautics (ARCS.TA) said on Sunday it received an offer to be acquired by state-owned Rafael Advanced Defense Systems and businessman Avihai Stolero for 850 million shekels ($232 million).

Aeronautics, which has a market value of 507 million shekels, said the offer for all its shares would be done as a reverse merger executed through a company jointly owned by Rafael and Stolero.

Aeronautics would become private and its shares delisted from the Tel Aviv Stock Exchange.

Negotiations will take place until Feb. 15. In the meantime, Rafael will conduct its due diligence.

Last August, Aeronautics rejected a 430 million shekel acquisition from Rafael and Stolero.

Earlier this month, state-owned Israel Aerospace Industries [ISRAI.UL] said it was in early talks to invest in Aeronautics.

Aeronautics manufactures unmanned aerial vehicles for military surveillance and defense purposes, as well as for the commercial sector.

($1 = 3.6699 shekels)

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Can A Crop Crisis Be Averted In Zimbabwe?

Zimbabwe’s farmers are urging authorities to undertake cloud seeding to ease an early-season drought that’s hurting crops and destroying cattle pastures.

The four-week dry spell has caused some farmers to delay planting summer crops, which include the country’s staple corn, while those that sowed earlier have seen plants withering in the absence of rain. Zimbabwe has, for decades, seeded clouds with silver iodide, which can thicken them to encourage rain by cooling water droplets and making them heavier. However, the science is disputed by some meteorologists.

“We expected a drought, but didn’t think it would be this serious, this early,” said Wonder Chabikwa, the president of the Zimbabwe Commercial Farmers’ Union. While it’s too early to estimate the effects on harvests, the government should start cloud seeding to “save the situation”, he said.

Zimbabwe has endured intermittent food shortages since the government began an often-violent programme that seized most white-owned, large-scale farms from 2000. The situation has been exacerbated by periodic droughts. Today, the country is a net importer of crops such as soy, used as animal feed, and, often, corn.

Zimbabwe’s meteorological department expects “normal to below normal rainfall” between December and March, it said in an e-mailed response to questions. Traditionally, rain falls between late November and early April.

While parts of the country could expect heavy rain in January, it is mostly moving in from from the south, the department said. Zimbabwe relies mainly on the inter-tropical convergence zone weather phenomenon, which brings rain down from the equator.

While the start to the season has been poor, especially for crops such as corn and soy, farmers may be able to re-plant with short-season varieties and salvage harvests if rain arrives from the north, farmer groups said. They’ve advised their members to sell older livestock and concentrate on feeding young animals because of diminished grazing area.

“We used to plant in mid-November; nowadays we plant in mid-December because the rains come later,” said Shereni Shiri, a small-scale farmer in Zimbabwe’s northern Guruve district. “But planting in January? It’s foolish to think you’ll reap a good crop because by the time you come to harvest, the days will be shorter with less sun.”


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German utility EWE to offer minority stake next month: sources

FRANKFURT (Reuters) – German regional utility EWE [LANDWE.UL] will offer investors a minority stake next month, three people familiar with the matter said, in a deal that could value the whole group at up to 6.2 billion euros ($7.2 billion).

After advertising the offer of the 26 percent stake, probably in late February, prospective buyers would have four weeks to indicate their interest, one of the people said.

EWE, which also has a telecoms business, has said it wants to find a new strategic partner in 2019 to raise fresh funds for investments, including building glass-fiber networks with Deutsche Telekom (DTEGn.DE).

Potential buyers included a group made up of infrastructure investor Macquarie (MQG.AX) and German insurer Allianz (ALVG.DE), the people said, as well as Canadian pension fund OMERS, Australian infrastructure fund IFM and Dutch pension fund PGGM.

Chinese firms might also show interest, one of the sources said, adding that they might channel any investment through a Western infrastructure fund rather than directly taking part in the auction due to Germany’s opposition to Chinese suitors.

Germany tightened rules last year to fend off unwanted takeovers by Chinese investors in strategic assets.

EWE’s 26 percent stake would be worth about 1.5 billion to 1.6 billion euros, the sources said, a value that would likely make it one of the biggest German utility deals in 2019.

Due to the size of the stake and limited influence that comes with it, the most likely bidders will be pension and infrastructure funds, which target low but stable returns.

“IRR (internal rate of return) expectations of some bidders are below 7 percent”, one of the sources said.

“EWE has a stable and defensive model,” another source said, adding any investor would need to be comfortable with EWE’s regional ownership and its long-term decision-making process.

Most of unlisted EWE, which has annual sales of 8.25 billion euros and an operating margin of 6.1 percent, is owned by cities and municipalities in northwest Germany. Peer EnBW (EBKG.DE) has a 6 percent, which it will relinquish as part of the 26 percent stake sale.

A spokesman for EWE said the sale has been agreed by the firm’s management, supervisory board and municipal owners. The transaction adviser was Citibank Group (C.N), he said.

Allianz, OMERS and PGGM declined to comment. IFM and Macquarie were not immediately available for comment.

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