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FRANKFURT - The biggest German bank, Deutsche Bank, has been implicated in a US tax evasion investigation, a press report alleged.

Deutsche Bank is suspected by US justice officials of having arranged transactions for lawyer John B. Ohle III, who was accused of allowing clients to avoid paying about 103 million dollars (81.5 million euros) in taxes, the Handelsblatt newspaper alleged in a report.

Its article was based on information published in the New York Times, and said the alleged tax evasion had taken place through speculative funds.

Deutsche Bank declined to comment on Wednesday when contacted by AFP.

In its third-quarter report however, the bank mentioned a criminal investigation into fiscal transactions made between 1997 and 2001 that was being carried out by federal US justice authorities.

The report said that “Deutsche Bank provided similar financial products and services in certain tax-oriented transactions that are the same or similar to the tax-oriented transactions” in question, and added that the “criminal investigation is ongoing.”

Shares in the biggest German bank fell by almost 5.0 percent in morning trading on the Frankfurt stock exchange, while the DAX index of leading shares had given up 1.35 percent overall.

AFP

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LONDON - Bank of England policymakers voted 9-0 to slash British interest rates by a third to 3.00 percent earlier this month, minutes of their meeting revealed.

The BoE had on November 6 slashed its key lending rate from 4.5 percent to the lowest level in more than half a century, a sign according to economists of a deep recession ahead for Britain.

The central bank's huge rate cut had taken markets totally by surprise and left borrowing costs at their lowest level since 1955.

The size of the reduction - 1.5 percentage points - was the biggest since March 1981 when rates were slashed by two percent under a different regulatory framework.

The BoE's central task is to keep inflation at the British government's set target of 2.0 percent.

In its minutes published on Wednesday, the bank said that its nine policymakers “judged that an immediate reduction in Bank Rate of 1.5 percentage points to three percent was necessary to meet the two-percent target for inflation in the medium term.”

British inflation came off a 16-year high to 4.5 percent in October as the cost of oil fell sharply, official data had showed on Tuesday.

With inflation set to tumble even further in coming months, analysts said Britain risked deflation, or a protracted general fall in prices, as well as historically-low interest rates in 2009.

The Consumer Price Index (CPI) annual inflation rate - the government's target measure - dropped from a 16-year high of 5.2 percent in September, the Office for National Statistics had said.

The BoE had last week said the British economy was probably already in recession and faced a risk of deflation as the global financial crisis takes its toll.

The economy is on the verge of a recession after contracting for the first time since 1992 in the three months to September by 0.5 percent.

A subsequent and widely expected further contraction in the fourth quarter will put the economy technically into recession.

AFP

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Mini unveiled an all-electric car for lease on a limited basis on the eve of the Los Angeles Auto Show, as the small-car company tests the waters in the electric vehicle market.

The BMW Group unit will begin accepting lease applications this week for 450 of its Mini E electric cars from customers in California, New York and New Jersey for $850 a month, and expects to have customers lined up by March.

Jim McDowell, head of Mini’s US operations, said that the company has already received more than 10,000 inquiries for the car on its website.

“What we’re doing right now is really just trying to get some experience with it,” he said. “What it means is the BMW Group is anticipating the needs of our world, as opposed to responding.”

The two-seater Mini E runs on a lithium-ion battery, the same that will help power General Motors Corp’s much-touted Chevrolet Volt. The battery gets about 240km per charge, the company said, and on a 240-volt outlet takes about four and a half hours to charge.

Like other electric cars, the charge time rules out the Mini E as a road-trip vehicle and limits it to shorter commutes. But McDowell said the car’s target is eco-conscious big-city dwellers.

“There are these very important world metropolises, where congestion is so extreme that driving to work takes on an entirely different dimension than it does in the rest of the world and the rest of the United States,” McDowell said.

McDowell said Mini will produce 500 of the cars, 450 of which will go to its one-year US lease programme, which opens to online applicants on Friday. He declined to reveal the company’s plans for the remaining 50.

The programme is designed to test the car’s performance in the real world, and the criteria for a lease will be strict, McDowell said. For example, along with limiting leaseholders geographically, it will also require them to have lockable garages with the wiring needed to install the car’s charging equipment.

“It has a tremendous electric draw when it charges,” McDowell said. Based on average electric rates in the areas the company is targeting, charging the car will cost roughly half as much as filling a tank at recent gasoline prices, he said.

Mini said it wants leaseholders who are “pioneering” in spirit, he said. They are expected to report to Mini on a regular basis on the car’s performance. The company wants to know the little things — how are consumers adapting to driving an electric car? Are they remembering to keep it charged? A half-hour test drive revealed just how stark the differences between the Mini E and a gas-powered car are. The pure-electric powertrain is bracingly silent, save for a soft whirring sound while the car accelerates.

The interior is retro and minimalist. A giant, glowing speedometer rests on the dashboard above the gear shift, while a slightly smaller gauge above the steering wheel indicates the remaining charge on a 0 to 100% scale. Instead of rear seats is a compartment that houses the car’s large battery.

McDowell dismissed concerns that the rapidly falling price of gasoline might dampen the car’s appeal. Consumers have already been spooked by this summer’s surge in fuel prices, he said, and Mini customers are fuel-conscious types anyway.

“I can guarantee you that existing Mini customers will be the first 100 that submit their applications,” he said.

Sapa-AP

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SINGAPORE - World oil prices held steady on Wednesday at their lowest levels in about 22 months but analysts said they will drop even lower because of worries over falling energy demand.

In late afternoon trade New York's main oil futures contract, light sweet crude for December delivery, was eight cents higher at 54.47 dollars a barrel after closing Tuesday in New York down 56 cents at 54.39 dollars, its lowest since January 2007.

Brent North Sea crude for delivery in January was 14 cents lower at 51.70 dollars after settling down 47 cents at 51.84 on Wednesday in London.

Concern for slowing global economic growth and its impact on energy demand has led oil prices to plummet from record peaks above 147 dollars in July.

prices should drop further to 43 or 44 dollars a barrel before rebounding along with the global economy next year, CFC Seymour securities in Hong Kong said in a report.

“We believe prices will be in decline until evidence emerges that the US is on track to end its recession,” CFC Seymour said.

Phil Flynn, of Alaron Trading, said oil “is being overwhelmed with the weight of the global economy“.

A Tuesday forecast by the Centre for Global Energy Studies (CGES) that world oil demand would likely contract this year for the first time in 25 years weighed on market sentiment.

The London-based energy market think-tank said prices have continued to fall despite the OPEC cartel's agreement last month to cut production by 1.5 million barrels per day. The price slide will continue “until real output cuts have been implemented,” CGES said.

The Organisation of the Petroleum Exporting Countries (OPEC), which produces about 40 percent of the world's oil, has so far failed to fully implement the output reduction that was to have begun on November 1, according to analysts.

“Oil demand forecasts continue to be revised downwards and a year-on-year contraction in global oil demand in 2008 and 2009 is now a very real possibility for the first time for 25 years,” CGES said.

“The path of oil prices will depend on how, and how quickly, OPEC cuts production in response to the falling demand for its oil,” it added.

OPEC is to meet on November 29 in Egypt, and some members are calling for the cartel to further cut production in the face of plunging prices.

Somali pirates were reportedly demanding ransom Wednesday for a Saudi Arabian tanker loaded with two million barrels of oil and seized at the weekend hundreds of miles (kilometres) off the coast of Kenya.

But Jason Feer, of energy market analysts Argus Media in Singapore, said the amount of oil involved was not in itself large enough to affect the crude market, although piracy was having other consequences.

“What seems to be happening is that piracy incidents around Somalia have gotten so bad that companies are avoiding using that route,” Feer said.

They now prefer a longer, more costly route, which could be potentially disruptive to Asian crude deliveries, he said.

AFP