Business & Finance
Beleaguered Fannie Mae's board of directors was meeting in special session as the Monitor went to press, amid reports that the jobs of its chief executive and chief financial officer were on the line. A spokesman for the congressionally chartered mortgage lender declined to comment, but The Washington Post reported Saturday that if Fannie Mae's directors did not reach a decision on the future of the two men, the Office of Federal Housing Enterprise Oversight could do so. Franklin Raines, the CEO, and Timothy Howard, the finance chief, had defended Fannie Mae's accounting practices, which were rejected last week by the Securities and Exchange Commission. Those practices will result in a net loss for the period 2001 to the middle of this fiscal year that could reach $9 billion, reports say.
Amid international chaos, an auction of Yukos's assets was to be held as the Monitor went to press, despite the court order obtained in the US by the huge Russian oil company late last week when it filed for bankruptcy. Russian authorities insisted the injunction was not legally binding in Moscow. Gazprom, the state-owned natural gas company, was expected to be declared the winner of the auction. But Gazprom was depending on a $13.3 billion loan pledged by a consortium of six banks - among them JPMorgan Chase of New York and four of Europe's largest - each of which told the Financial Times that it had yet to sign the necessary documents guaranteeing the money and that it would obey the injunction rather than put its license to do business in the US at risk. The Russian authorities are demanding $27.5 billion in back taxes and penalties from Yukos.
Siemens AG, the engineering giant, was rebuffed in efforts to buy VA Technologie AG, a smaller rival in Linz, Austria. The latter's board said it couldn't recommend Siemens' $1.12 billion offer to shareholders because it was "inadequate." Siemens declined to say whether it will raise the offer.
American Express announced it will cut up to 2,000 jobs as part of a restructuring plan aimed at saving $75 million a year. Some of the affected employees could be offered posts in South Asia, however, as a result of the sale and transfer of the company's private banking operations in Luxembourg.
Telstra Corp., the largest provider of phone service in Australia, vigorously denied published reports that it intends to lay off up to 4,300 more employees because of dwindling profit margins. The company already has cut its work force by more than half over the past decade.