Accessibility links

New Zealand Approves Telecom Split Plans

U.S. investment bank Lehman Brothers is suing the prominent Japanese trading company Marubeni over what Lehman says was a massive fraud. And New Zealand has approved a three-way split of its dominant telecommunications company. Claudia Blume in Hong Kong has more on these and other business stories from the Asia-Pacific region.

Lehman Brothers has alleged that two Marubeni employees persuaded the U.S. investment bank to invest in a hoax. Lehman says it sank $350 million into a project that was to refurbish hospitals, and never saw a cent in return.

Lehman has filed suit in a Tokyo court.

Marubeni, one of Japan's oldest and most respected trading houses, has denied any wrongdoing.

The government has approved a plan to split the Telecom New Zealand, the country's leading telecommunications company, into three parts. The separation of the company into wholesale, retail and network units is part of regulatory moves to break up Telecom's monopoly.

New Zealand Communications Minister David Cunliffe says he expects the move to foster competition.

"We expect to see a much wider variety of service providers across a range of products, including, one would hope, even basic telephone line provision at some point as well as underpinning competition in mobile and other markets - so lower prices, more choice, because of a more level playing field that means that others can compete better," said Cunliffe>

Australian airline Virgin Blue announced a new budget flight service between Sydney and Los Angeles in the United States. Virgin Blue's new carrier V Australia will begin the daily flights in mid-December.

The announcement came a few weeks after Australia and the United States signed an open skies agreement that allows Australian and U.S. airlines to fly freely between the two countries. The lucrative trans-Pacific route has been dominated by Australian carrier Qantas and America's United Airlines. Virgin Blue's founder, Richard Branson, says the route needs more competition.

"I actually think on the trans-Pacific route the fares have been incredibly high for years," he said. "There hasn't actually been enough capacity on that route, so - and you have also got Australia going through boom times at the moment and a lot of people wanting to come to Australia because Australia is so special."

In other news from the aviation industry, Cambodia and the Gulf state of Qatar have agreed to establish direct flights between the two countries. Cambodia hopes the deal will boost tourism in the country. A date for the start of the flight service has not been set.