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Monday, June 26, 2017

In Pakistan, clean fuel firm struggles despite energy shortages

Reuters | Edition: United States TOP NEWS BUSINESS MARKETS WORLD POLITICS TECHNOLOGY COMMENTARY BREAKINGVIEWS MONEY LIFE PICTURES VIDEO X LIVE UPDATES: Northern Irish Democratic Unionist Party reaches agreement with UK Conservatives to form governmentVIEW MORE ENVIRONMENT Thu Mar 30, 2017 | 7:07 PM EDT In Pakistan, clean fuel firm struggles despite energy shortages ‹ A worker monitors linen being processed at the Kohinoor textile plant in Rawalpindi, Pakistan March 14, 2017. REUTERS/Caren Firouz 9/9 A worker monitors linen being processed at the Kohinoor textile plant in Rawalpindi, Pakistan March 14, 2017. REUTERS/CAREN FIROUZ A worker drains water from a gas filter at the Egas processing plant in Gujar Khan, Pakistan March 10, 2017. REUTERS/Caren Firouz 1/ A worker drains water from a gas filter at the Egas processing plant in Gujar Khan, Pakistan March 10, 2017. REUTERS/CAREN FIROUZ A worker pushes old shoes into the kiln of a brick factory in Islamabad, Pakistan March 9, 2017. REUTERS/Caren Firouz 2/9 A worker pushes old shoes into the kiln of a brick factory in Islamabad, Pakistan March 9, 2017. REUTERS/CAREN FIROUZ A worker carries shoes to be burned in the kiln of a brick factory in Islamabad, Pakistan March 9, 2017. REUTERS/Caren Firouz 3/9 A worker carries shoes to be burned in the kiln of a brick factory in Islamabad, Pakistan March 9, 2017. REUTERS/CAREN FIROUZ Workers lay a pipe to carry waste gas from an oil well to the Egas processing plant in Gujar Khan, Pakistan March 10, 2017. REUTERS/Caren Firouz 4/9 Workers lay a pipe to carry waste gas from an oil well to the Egas processing plant in Gujar Khan, Pakistan March 10, 2017. REUTERS/CAREN FIROUZ A worker checks the tank levels at the Murree brewery in Rawalpindi, Pakistan March 13, 2017. REUTERS/Caren Firouz 5/9 A worker checks the tank levels at the Murree brewery in Rawalpindi, Pakistan March 13, 2017. REUTERS/CAREN FIROUZ A worker monitors linen being processed at the Kohinoor textile plant in Rawalpindi, Pakistan March 14, 2017. REUTERS/Caren Firouz 6/9 A worker monitors linen being processed at the Kohinoor textile plant in Rawalpindi, Pakistan March 14, 2017. REUTERS/CAREN FIROUZ A worker monitors empty bottles on the bottling line at the Murree brewery in Rawalpindi, Pakistan March 13, 2017. REUTERS/Caren Firouz 7/9 A worker monitors empty bottles on the bottling line at the Murree brewery in Rawalpindi, Pakistan March 13, 2017. REUTERS/CAREN FIROUZ Bottles are filled with a lemon malt soft drink on the bottling line at the Murree brewery in Rawalpindi, Pakistan March 13, 2017. REUTERS/Caren Firouz 8/9 Bottles are filled with a lemon malt soft drink on the bottling line at the Murree brewery in Rawalpindi, Pakistan March 13, 2017. REUTERS/CAREN FIROUZ A worker monitors linen being processed at the Kohinoor textile plant in Rawalpindi, Pakistan March 14, 2017. REUTERS/Caren Firouz 9/9 A worker monitors linen being processed at the Kohinoor textile plant in Rawalpindi, Pakistan March 14, 2017. REUTERS/CAREN FIROUZ A worker drains water from a gas filter at the Egas processing plant in Gujar Khan, Pakistan March 10, 2017. REUTERS/Caren Firouz 1/9 A worker drains water from a gas filter at the Egas processing plant in Gujar Khan, Pakistan March 10, 2017. REUTERS/CAREN FIROUZ › X By Mehreen Zahra-Malik | CHAKWAL, PAKISTAN Hassan Raza says his clean fuel company, which captures natural gas "flared" at Pakistan's oil fields and sells it to industrial customers, is struggling to expand despite energy shortages and concerns over the country's poor pollution record. EGas Pvt. Ltd. has a number of high-profile clients, some of whom turned to the small firm during the worst shortages in 2010 and 2011, but Raza says the government should be doing more to encourage environmentally friendly technology. "A high cost penalty on emitted carbon is the only way this type of business can grow; otherwise what incentive would companies have to stop flaring?" Raza told Reuters at the EGas compression plant in Pakistan's central Chakwal district. "You penalize them and they will be forced to clean up their act. And that's where we come in." A spokesman at the Pakistan Environmental Protection Agency said flaring occurred, but that measures were being taken to control it. "We are in touch with all stakeholders and are seeking their compliance as per international standards," he said. Chronic power shortages severely dented Pakistan's economy earlier in the decade, and industry turned to burning wood, rubber, and even used shoes to keep its furnaces, boilers and generators running. ADVERTISEMENT Those pressures have eased considerably, with rising volumes of imported liquefied natural gas (LNG) and heavy investment in pipelines and port terminals. There are plans to have five LNG terminals operational by the start of 2019. Compared to state-led investment in LNG, Raza operates at the margins, but sees potential for growth in a country that generates only two-thirds of its energy needs. Despite being around for seven years, and employing about 100 people, EGas only captures 3 million cubic feet per day (MMcfd) of the estimated 150 MMcfd of gas that Pakistan flares, or burns, daily. "I'm only utilizing a tiny portion of the gas that is being wasted around the country," Raza said. Expansion is not cheap. EGas started out with one truck in 2010 and now has 25, each fitted with a network of cylinders inside to store and transport highly pressurized gas. The largest of the trucks costs $1 million apiece. The company has also had to lay down an expensive network of pipelines that take the captured gas from the oil wells to the company's hydration and compression plants. While Raza wants more support from Pakistan, some of his clients turned to the company because of concern about pressure from foreign regulators and businesses. ALSO IN ENVIRONMENT Firefighters battle flames near Spanish lynx wildlife reserve Ten percent of fish caught in oceans get dumped: study Kohinoor Textile Mills, one of Pakistan's largest exporters which sells bed linen to major foreign brands, chose EGas in 2011 partly because of its green credentials. To keep its plants running during the height of energy shortages, it was burning huge piles of wood and coal each day. "Foreign regulators and clients come and if you are burning away rubber and diesel and wood, it doesn't look good to them," said Usman Zafar, Kohinoor's general manager for processing. "Harming the environment is almost as big a no-no now as child labor. So we had to find new ways to keep running." Another major client is Murree Brewery that started sourcing gas from EGas in 2015. "We wanted to find something better than furnace oil, or burning wood, something that caused less pollution," said Mohammad Javaid, the brewery's general manager. (Writing by Mehreen Zahra-Malik) Our standards: The Thomson Reuters Trust Principles. X NEXT IN ENVIRONMENT Photo Firefighters battle flames near Spanish lynx wildlife reserve TRENDING STORIES 1 Exclusive: U.S. warship stayed on deadly collision course despite warning - container ship captain 2 Asylum seekers in Canada who fled Trump now trapped in legal limbo 3 Clogged oil arteries slow U.S. shale rush to record output 4 Trump, Modi seek rapport despite friction on trade, immigration 5 UK PM May strikes $1.3 billion deal to get Northern Irish DUP support for her government SPONSORED STORIES Born before 1972? New Life Insurance Information Born before 1972? New Life Insurance Information LIFE INSURANCE COMPARISON | COMPARE LIFE INSURANCE How can I get involved in the virtual power plant in Adelaide? How can I get involved in the virtual power plant in Adelaide? AGL 7 disruptive technologies to watch out for in 2017 7 disruptive technologies to watch out for in 2017 TELSTRA IN:SIGHT 6 Ways Australians Could Save On Health Insurance 6 Ways Australians Could Save On Health Insurance ISELECT Recommended by SPONSORED CONTENT Follow Reuters: Follow Us On Twitter Follow Us On Facebook Follow Us On LinkedIn Follow Us Via RSS Subscribe: Newsletters | Apps Reuters is the news and media division of Thomson Reuters. Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. *All quotes delayed a minimum of 15 minutes. See here for a complete list of exchanges and delays. 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Friday, June 23, 2017

New app: Uber, but for an Uber CEO

Wed Jun 21, 2017 | 4:28 PM EDT Travis Kalanick, co-founder and CEO of Uber Technologies Inc. speaks at the Wall Street Journal Digital Live ( WSJDLive ) conference at the Montage hotel in Laguna Beach, California October 20, 2015. Reuters/Mike Blake New app: Uber, but for an Uber CEO By Richard Beales | NEW YORK (Reuters Breakingviews) - Uber co-founder Travis Kalanick has quit as chief executive under a cloud of business and cultural troubles, including harassment allegations. These threaten the ride-hailing service's eye-popping, and currently unwarranted, valuation of $68 billion. In addition to the shortage of senior managers after departures in recent months, he leaves a void right at the top. Using the company's own how-to guide as a template, Breakingviews imagines an Uber-like app that helps fill it.  How to request a CEO: 1. Enter your requirements in the "Who on Earth?" box. Alternatively, if a strong record on scaling startups, taking firms public, tackling cultural and diversity problems and turning money-losing businesses around seems too much to ask of one person, simply tap a shortcut icon at the bottom of your screen, which will connect with your executive search firm. 2. Your default starting point is set to "Desperate." If you are hoping for a different perception, your board and remaining managers will need to work hard to implement recent recommendations on changing the boys'-club culture – even while your request is still pending. 3. Use the slider at the bottom of your screen to toggle between available CEO options. For example: UberXX would limit the search to women, perhaps including ex-Yahoo boss Marissa Mayer, Uber board member Arianna Huffington, Hewlett Packard Enterprise CEO Meg Whitman or even Facebook operating chief Sheryl Sandberg; and UberCAR would seek automotive specialists like former Ford Motor bosses Alan Mulally and Mark Fields, leaders who could push forward the autonomous-driving part of your business. UberPOOL, meanwhile, would alert other Uber board members who already have day jobs, unemployed tech executives such as Nikesh Arora, formerly of Google and SoftBank, or people like Jack Dorsey, who is already running Twitter and Square but may have further capacity. 4. Tap "Request." You may be asked to confirm (a) that you're serious about changing the corporate culture and (b) that your investors have accepted that your current valuation is far lower than assumed in the past. 5. Wait for a CEO candidate to accept your request, if any are brave enough to take the role with Kalanick, who sits on the board and controls the company, riding shotgun. 6. When your request has been accepted you'll see your CEO's résumé and estimated time of arrival. Given the circumstances, that this may come with surge pricing. 7. Your app will notify you when your CEO is close to accepting the job. Failure to confirm the request quickly could result in a damaging delay. 8. Keep in mind this app can be used to replace board members, as well Also In Breakingviews Brexit one year on: an alternative history Viewsroom: Helping Uber hail a new CEO

Friday, June 16, 2017

disclosure shows $594m income in 2016-17

afr NEWS Donald Trump's 98 page financial disclosure shows $594m income in 2016-17 facebook email twitter June 17 2017 - 12:19PM President Donald Trump had personal liabilities of at least $US315.6 million ($415.5 million) to German, US and other lenders as of mid-2017, according to a federal financial disclosure form released late on Friday by the US Office of Government Ethics. He had roughly $US20 million in income from his new marquee Washington hotel, which opened just down the street from the White House last September. Revenues also increased at Mar-a-Lago, the Florida resort known as the "Winter White House." Donald Trump has released his financial disclosure statement which shows personal liabilities of at least $US315.6 million. Donald Trump has released his financial disclosure statement which shows personal liabilities of at least $US315.6 million. Photo: AP Trump reported income of at least $US594 million for 2016 and early 2017 and assets worth at least $US1.4 billion. The 98-page disclosure document posted on the ethics office's website showed liabilities for Trump of at least $US130 million to Deutsche Bank Trust Company Americas, a unit of German-based Deutsche Bank. Donald Trump earned roughly $US20 million in income from his new marquee Washington hotel which opened during the ... Donald Trump earned roughly $US20 million in income from his new marquee Washington hotel which opened during the election campaign in September 2016. Photo: Beth J. Harpaz For example, Trump disclosed a liability to Deutsche exceeding $US50 million for the Old Post Office, a historic Washington property where he has opened a hotel. Trump reported liabilities of at least $US110 million to Ladder Capital, a commercial real estate lender with offices in New York, Los Angeles and Boca Raton, Florida. The largest component of Trump's income was $US115.9 million listed as golf-resort related revenues from Trump National Doral in Miami, down from $US132 million he reported a year ago. Income from many of his other hotels and resorts largely held steady. Revenue from Trump Corporation, his real-estate management company, nearly tripled, to $US18 million, and revenue from Mar-a-Lago grew by 25 per cent, to $US37.25 million. The private club doubled its initiation fee to US$200,000 after Trump's election. Revenue from Mar-a-Lago grew by 25 per cent, to $US37.25 million. The private club doubled its initiation fee to ... Revenue from Mar-a-Lago grew by 25 per cent, to $US37.25 million. The private club doubled its initiation fee to US$200,000 after Trump's election. Photo: Alex Brandon He earned $US11 million from the Miss Universe pageant, after selling the beauty contest back in 2015. Revenue from television shows like "The Apprentice" fell to $US1.1 million, down from $US6 million a year earlier. His assets probably exceeded $US1.4 billion because the disclosure form provided ranges of values. The document showed Trump held officer positions in 565 corporations or other entities before becoming US president. His tenure in most of those posts ended on January 19, the day before his inauguration, and in others in 2015 and 2016. Most of the entities involved were based in the United States, with a handful in Scotland, Ireland, Canada, Brazil, Bermuda and elsewhere. Trump has refused to release his tax returns, which would give a much clearer indication of his wealth and business interests. But he has submitted federal forms disclosing his and his family's income, assets and liabilities. "President Trump welcomed the opportunity to voluntarily file his personal financial disclosure form," the White House said in a statement, adding that the form was "certified by the Office of Government Ethics pursuant to its normal procedures." An Office of Government Ethics spokesman declined to comment on the contents of the report, other than to say it was certified by the office, which is an ethics watchdog for federal government employees. Trump released a disclosure form in May 2016 that his campaign at the time said showed his net worth was $US10 billion. Some critics disputed that figure as overblown.

Thursday, June 15, 2017

Rape Victim Sues Uber, Says Execs Portrayed Her as a Liar

NEWS JUN 15 2017, 6:53 PM ET Rape Victim Sues Uber, Says Execs Portrayed Her as a Liar BY ASSOCIATED PRESS advertisement DETROIT — A woman who was raped by an Uber driver in India is suing the company for a second time, alleging that Uber executives got her private medical records and made false statements claiming she fabricated the attack. The lawsuit filed Thursday in a California federal court seeks unspecified damages on behalf of the woman, who is identified only as Jane Doe. Related: Uber Board Member Who Made Sexist Comment During All-Hands Meeting Resigns The allegations compound a long string of image problems for the ride-hailing company, whose CEO took a leave of absence earlier this week after an investigation found a dysfunctional culture that allowed sexual harassment. Twenty employees have been fired, and this week a board member was forced to step down after making a sexist remark at an employee meeting. Uber's Scandal-Plagued 2017, Explained The new lawsuit says Uber executives falsely portrayed the woman as a liar who made up the 2014 rape in collusion with a competing service seeking to undermine Uber's business. But the driver was convicted of rape and sentenced to life in prison. The first lawsuit was settled in 2015, before the allegations regarding the woman's medical records surfaced last week. San Francisco-based Uber issued a statement Thursday that didn't deny the allegations. "No one should have to go through a horrific experience like this, and we're truly sorry that she's had to relive it over the last few weeks," the company said. Related: Uber’s Embattled CEO Travis Kalanick Is Taking Indeterminate Leave The new lawsuit alleges that shortly after the rape, Eric Alexander, then Uber's vice president for business in Asia, got the woman's medical records after a meeting with police in New Delhi. Alexander showed them to Emil Michael, then vice president of business, and CEO Travis Kalanick "so that he (Alexander) could attempt to defame and undermine her very serious allegations of sexual assault and rape," the lawsuit says. Alexander was dismissed from Uber this month after media reports about the medical records, the lawsuit said. Michael left Uber on Monday. Kalanick, who has said he must grow up and needs management help, has taken an indefinite leave. His mother was killed and father was hurt in a May boating accident. advertisement Related: Uber’s Board Accepts Holder Recommendations, Discusses CEO’s Future The lawsuit alleges that Kalanick stated publicly after the rape that Uber would support the woman and her family, then put out false conspiracy theories about the woman. "Rape denial is just another form of the toxic gender discrimination that is endemic at Uber and ingrained in its culture," said Douglas Wigdor, a New York attorney who represents the woman. At the time of the rape, the woman lived in New Delhi, but now she lives in Texas, according to the lawsuit. View Full Experience

Wednesday, June 14, 2017

Trump under investigation for possible obstruction of justice: Washington Post

Wed Jun 14, 2017 | 7:25 PM EDT FILE PHOTO: U.S. President Donald Trump arrives at Newark International airport in Newark, NJ U.S., to spend a weekend at Trump National Golf Club in Bedminister, New Jersey, June 9, 2017. Reuters/Yuri Gripas Trump under investigation for possible obstruction... X U.S. President Donald Trump is being investigated by special counsel Robert Mueller for possible obstruction of justice, the Washington Post reported on Wednesday, citing unidentified officials. Mueller is investigating alleged Russian interference in the 2016 U.S. presidential election and possible collusion with the Trump campaign. Former FBI Director James Comey told Congress last week he believes he was fired by Trump to undermine the agency's Russia probe. The Washington Post, citing five people briefed on the requests who spoke on condition of anonymity, said Dan Coats, the director of national intelligence, Mike Rogers, the head of the National Security Agency, and Richard Ledgett, the former deputy director at the NSA, had agreed to be interviewed by Mueller's investigators as early as this week. The obstruction of justice investigation into Trump began days after Comey was fired on May 9, according to people familiar with the matter, the Washington Post said. ADVERTISEMENT Advertisement Scroll to continue with content Trump's legal team quickly denounced the report on Wednesday. "The FBI leak of information regarding the President is outrageous, inexcusable and illegal," a spokesman for Trump’s legal team, Mark Corallo, said. A spokesman for Mueller's team declined to comment. Several legal experts told Reuters that Comey's testimony last week that Trump expected loyalty and told Comey he hoped he could drop an investigation of a former top aide could bolster obstruction of justice allegations against Trump. Also In Big Story 12 Fed raises rates, unveils balance sheet cuts in sign of confidence Global stocks pressured by report on Trump probe, Fed hike, soft U.S. data Comey would not say in his testimony last week whether he thought the president sought to obstruct justice, but added it would be up to special counsel Mueller "to sort that out." After Comey's testimony, Trump said he had been vindicated because his former FBI director confirmed telling Trump on three occasions that he was not under investigation. While a sitting president is unlikely to face criminal prosecution, obstruction of justice could form the basis for impeachment. Any such step would face a steep hurdle as it would require approval by the U.S. House of Representatives, which is controlled by Trump's fellow Republicans. (Additional reporting by Steve Holland Nathan Layne; Reporting by Eric Beech; Editing by Howard Goller)

Breaking News:Travis Air Force Base in California under lockdown orders, people told to 'shelter in place' and standby

X Edition: United States Suspect in baseball field shooting ranted against Trump on social media Politics | Wed Jun 14, 2017 | 7:02pm EDT Suspect in baseball field shooting ranted against Trump on social media left right 4/4 left right James Hodgkinson of Belleville, Illinois is seen in this undated photo posted on his social media account. Social Media via REUTERS 1/4 left right 2/4 left right 3/4 left right 4/4 left right 1/4 By Sue Britt | BELLEVILLE, Ill. The suspect who opened fire on Republican lawmakers as they played baseball on Wednesday raged against Republican U.S. President Donald Trump on social media and idolized Bernie Sanders, whom he saw as the only politician who understood the working class. Authorities identified the gunman as James Hodgkinson, a 66-year-old home inspector from the St. Louis suburb of Belleville, Illinois. He died from injuries sustained in a shoot-out with Capitol Hill police who were at the scene in Alexandria, Virginia, outside Washington. Hodgkinson is believed by investigators to have been a person "of strong views," a senior U.S. official said, without elaborating. The Belleville News-Democrat newspaper posted a photograph of Hodgkinson protesting outside a post office there in 2012, wearing sunglasses and a goatee and holding a homemade placard that read "TAX the Rich." Hodgkinson was a member of many anti-Republican groups on Facebook including "The Road to Hell Is Paved With Republicans," "Terminate The Republican Party," and "Donald Trump is not my President," his profile showed before it was taken down. Trump won the U.S. presidential election in November. Republicans also control both chambers of Congress. "Trump is a Traitor. Trump Has Destroyed Our Democracy. It's Time to Destroy Trump & Co." Hodgkinson wrote in a March 22 post. His profile picture was a U.S. flag with the slogan: "Democratic Socialism explained in 3 words: 'We the People.'" Hodgkinson went to Washington several weeks ago to protest against Trump's election, his brother told the New York Times. The former mayor of Alexandria, Bill Euille, said he talked with the suspect at the local YMCA most mornings for more than a month, and even tried to help find Hodgkinson a job after seeing he was living out of a gym bag, the Washington Post said. Stephen Brennwald, an Alexandria attorney, also saw Hodgkinson at the YMCA wearing long pants rather than gym attire, and said he often seemed to be staring into space. "It's just very freaky to think that this guy who was just sitting in there for weeks, not really doing anything, actually turned out to shoot at people," Brennwald told Reuters. 'DESPICABLE ACT' Hodgkinson's Facebook profile featured a cover photo of Sanders, a U.S. senator from Vermont who ran unsuccessfully to be the Democratic Party's presidential candidate last year. Sanders, an independent who ran as a progressive populist but was defeated by Hillary Clinton, said the suspect had "apparently volunteered" on his campaign. In a statement, Sanders condemned the shooting as a despicable act." One woman who asked not to be named told Reuters that Hodgkinson had contacted her via Facebook as part of a political discussion, but that he subsequently commented on her page that Clinton was a "liar" and a "baby killer." "I actually blocked him at one point," the woman said. A bartender at the Pork Barrel BBQ in Alexandria said Hodgkinson started coming in for beers about a month ago. "He was a regular-looking guy that kind of gave you a sense of the creeps, but you can't really put your finger on it," said Christina Shrimshaw, 27, who served him a handful of times but never remembered him discussing politics. "He would talk about very mundane things, like golf. He was big into watching the Golf Channel." Also In Politics No hint of new gun control push in U.S. Congress after shootings Trump being investigated for possible obstruction of justice: Washington Post A neighbor in Belleville, William Schaumleffel, recalled how in March he heard gunshots and saw Hodgkinson shooting with a long gun toward woods across a corn field from his yard. "I yelled at him: 'Hey, stop shooting over there. There are houses over there,'" Schaumleffel said. Hodgkinson did not stop, he added, so he filed a report with the sheriff's office. Hodgkinson's criminal history included a 2006 arrest on battery charges that were later dismissed, as well as multiple traffic violations, according to state records that identified him as a 5-foot, 6-inch (1.67-metre) man weighing 190 pounds (86 kg), with brown eyes. Most of the infractions were ultimately dropped. Hodgkinson had been licensed as a home inspector and real estate appraiser, but did not renew his home inspector license after it expired last year, state records showed. His license to appraise real estate expired in 1997. According to Facebook, Hodgkinson went to Belleville Township High School West and studied flight training at Southwestern Illinois College. Beginning in mid-2015, Hodgkinson began expressing support for Sanders' 2016 campaign, and federal records showed he donated $18 to the effort. "Bernie is the Only Candidate in Decades that Really Cares about the Working Class," Hodgkinson posted on June 13, 2016. The Belleville News-Democrat published letters he wrote the paper criticizing Republicans, tax policies and income inequality. One from August 2012 read: "I have never said 'life sucks,' only the policies of the Republicans." (Additional reporting by Colleen Jenkins, Diane Bartz, Dustin Volz, Letitia Stein, Gina Cherelus, Mark Hosenball, Chris Kenning, Ian Simpson, Angela Moon, Peter Szkeley and Grant Smith; Writing by Daniel Wallis; Editing by James Dalgleish and Peter Cooney) Our Standards: The Thomson Reuters Trust Principles Next In Politics Senate backs legislation to slap new sanctions on Russia WASHINGTON The U.S. Senate voted overwhelmingly on Wednesday for new sanctions punishing Russia for meddling in the 2016 U.S. election, and to force President Donald Trump to get Congress' approval before easing any existing sanctions. MORE FROM REUTERS   BRIEF-Lianluo Smart Ltd enters into a loan agreement with Digital Grid (Hong Kong) Technology Co Limited 'Nonsense': Powerful Republican denounces White House information shut-out 'Trial of a lifetime' plays out in tiny South Dakota town F-35 jets grounded at U.S. Air Force base in Arizona: officials U.S. Air Force suspends flying ops of Lockheed's F-35 at Luke Air Base Sponsored Content From Around the Web Promoted by Revcontent 50 Illegal Photos Smuggled out of North Korea Manplate Millions of People Are Cancelling Their Netflix Account Because of This One Site Daily Life 9 Ways To Lose Belly Fat When You're Crazy Busy TodaysDiets Angelina Jolie's Daughter Used To Be Adorable, But Today She Looks Insane Hyperactivz What Happens When You Do Planks Every Day? TodaysDiets Crazy Billionaire Reveals How You Can Make $4500/day Easily Starting Today Cash System Trending Stories 1 Fed raises rates, unveils balance sheet cuts in sign of confidence 2 Fire engulfs London tower block, at least 12 dead, dozens injured 3 U.S. lawmaker, others shot on baseball field by man angry with Trump 4 UPS shooting leaves four dead, including gunman, in San Francisco 5 Trump being investigated for possible obstruction of justice: Washington Post Pictures Fire engulfs London tower block Sponsored Topics Follow Reuters: Follow Us On Twitter Follow Us On Facebook Follow Us On RSS Follow Us On Instagram Follow Us On YouTube Follow Us On LinkedIn Subscribe: Feeds | Newsletters | Podcasts | Apps Reuters News Agency | Brand Attribution Guidelines | Careers Reuters is the news and media division of Thomson Reuters. Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Learn more about Thomson Reuters products: Eikon Information, analytics and exclusive news on financial markets - delivered in an intuitive desktop and mobile interface Elektron Everything you need to empower your workflow and enhance your enterprise data management World-Check Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks Westlaw Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology ONESOURCE The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs CHECKPOINT The industry leader for online information for tax, accounting and finance professionals All quotes delayed a minimum of 15 minutes. See here for a complete list of exchanges and delays. © 2017 Reuters. All Rights Reserved. Site Feedback Corrections Advertising Guidelines Cookies Terms of Use Privacy Policy

SMSFs and Alternative Investment Strategies

> Cleardocs SMSFs and Alternative Investment Strategies This discussion was published on 5 December 2016 and prepared to reflect the position as at the date of publication. REDEEM 20% OFF YOUR FIRST SMSF SMSFs and related party borrowings: ATO releases a revised guidance note and determination on non-arm's length arrangements On 28 September 2016, the ATO released a Practical Compliance Guideline PCG 2016/5 and a Taxation Determination TD 2016/16, in relation to limited recourse borrowing arrangements and 'arm's length terms'. The ATO has revised its previous position and clarified the circumstances, and the extent to which, a SMSF may be exposed to non-arm's length income tax assessments when they enter into these borrowing arrangements. The ATO's revised approach represents a more balanced approach regarding these issues. Stephanie McLennan, Maddocks Lawyers What is the ATO's revised position? The relevant ATO publications The release of the Practical Compliance Guideline (PCG 2016/5) and the Taxation Determination (TD 2016/16) have altered the way the ATO will treat limited recourse borrowing arrangements (LRBAs) with related party lenders, for the purposes of determining exposure to the non-arm's length income (NALI) provisions in section 295-550 of ITAA 1997 (Act). Division 295—Taxation of superannuation entities When will the ATO treat dealings as being on arm's length terms? The ATO will only treat dealings as being on arm's length terms if the arrangements reflect what might be expected to have occurred if the parties to the scheme had been dealing with each other at arm's length. For example: PCG 2016/5 still contains safe-harbour terms for related party loans which, if reflected in the relevant transaction documents, will ensure the NALI provisions do not apply; and the parties must otherwise determine what terms would have been offered to the SMSF trustee by an unrelated third party lender. So apart from the safe-harbour provisions, how will the ATO assess whether the arrangement is on arm's length terms? When assessing whether an arrangement is on arm's length terms, the ATO will assess whether the SMSF has derived more ordinary and statutory income under the scheme then it might have been expected to derive if the parties had been dealing with each other at arm's length in relation to the scheme. In order to determine what the parties might have been expected to derive had the parties been dealing with each other at arm's length (hypothetical situation), one must identify: the steps of the relevant scheme; the parties to the scheme; the amount of ordinary or statutory income that the SMSF might have been expected to derive if the same parties to the scheme had been dealing with each other on an arm's length basis; and the terms of the borrowing arrangement under the hypothetical arrangement, such as: the interest rate; whether the interest rate is fixed or variable; the term of the loan; and the loan to market value ratio. Once the hypothetical situation has been determined, it is necessary to consider whether the SMSF would have or could have entered in to the hypothetical borrowing arrangement. This is a very important assessment and bears out the key difference from the ATO's previous position (as explained further below): If the SMSF could not have or would not have entered in to the hypothetical arrangement, then ALL the ordinary or statutory income from the related party arrangement will be taken into account in assessing the SMSF's exposure to a NALI assessment; If the SMSF could have and would have entered into the hypothetical arrangement, then the NALI provisions may apply to the assessment of tax on the SMSF's taxable income, but only to the extent that taxable income is more than it would have been under the hypothetical situation. Factors the ATO considers concerning whether the SMSF 'could have' include: whether the SMSF's deed imposes any impediments and allows the borrowing arrangement; whether the SMSF has sufficient capital available; the ability of the SMSF to service the arm's length terms; and any legislative or regulatory impediments which might prevent the SMSF from acquiring the asset. Factors the ATO considers concerning whether the SMSF 'would have' include: whether the borrowing arrangement was consistent with the SMSF's investment strategy; whether the borrowing arrangement was the optimal use of the SMSF's funds; and whether the borrowing arrangement, taking into account future income and capital gains, would be earnings accretive. How does the ATO's revised position differ from its previous position? We described in our earlier article the ATO's previous position and explained our alternative view: we note that the ATO's new position corresponds with our alternative view. The ATO's previous position can be summarised as follows: The ATO's approach — of comparing the actual terms to hypothetical arm's length terms — was largely the same as set out above. The ATO asked, in respect of the non-arm's length parties, "have the parties, in respect of [the] dealing, dealt with each other as arm's length parties would do, so that the outcome of their dealing is a matter of real bargaining". [1] The key difference with the ATO's previous position, was that in answering that question, the ATO's position was that: "It might be expected that an arm's length lender would not lend any capital on the loan terms that form part of the scheme. Without that loan it might be expected that there would be no investment in the asset through the Holding Trust and so no ordinary or statutory income might be expected to be derived by the Fund from the asset." In contrast to its current position, the ATO's previous position was that it would not entertain an argument that the loan between the related parties would still have gone ahead, albeit on different terms, stating in the same ID that: "It is no answer to this conclusion to say that the Fund could have obtained a loan from an arm's length lender on different terms or that the Fund could have used other means by which to acquire the asset, as that is not the scheme into which the parties have entered." You will see from the above that: the ATO's revised position is to review the terms of the scheme between the non-arm's length parties and identify what the terms would have been in the hypothetical borrowing arrangement; whereas the ATO's previous position was to substitute the related party lender with an arm's length lender, apply the exact same loan terms, and decide whether or not the arm's length lender would make the loan. The implication of this was that, if the ATO took the view that an arm's length lender would not have provided the loan on the agreed terms, then all income from a non-arm's length LRBA was exposed to an assessment for NALI. The position is now very much in contrast: if one can demonstrate that the SMSF would have and could have entered into a hypothetical LRBA, then the exposure to a NALI assessment is limited to the additional income which the SMSF derives from the actual related party LRBA compared with the hypothetical LRBA. [1] ATO ID 2015/28 All the documents you need. Over 190 current and compliant legal documents are available on Cleardocs. The wide variety of legal documents available provides more clarity for your business while retaining the high quality, compliance and consistency you would expect. Join over 90,000 customers using the Australian legal document service you can trust. 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