Viacom directors vow to fight any moves to dismiss them – The Boston Globe

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May 31, 2016

MEDIA

Viacom directors vow to fight any moves to dismiss them

Viacom’s directors vowed Monday to fight any potential moves by the ailing media mogul Sumner M. Redstone and his daughter, Shari Redstone (right), to eject them from the company’s board. As a power struggle looms over Sumner Redstone’s $40 billion empire, Viacom’s lead independent director said in a letter that an attempt to remove directors “would be completely inconsistent with Sumner’s lifetime commitment to an independent board  and professional management for Viacom after his incapacity or death.” The board has sided with Philippe P. Dauman, Viacom’s embattled chief executive, in a fight over Redstone’s companies. Sent on behalf of Viacom’s independent directors, the letter preempts any public moves by Sumner Redstone or Shari Redstone to remove board members. Changing Viacom’s board would signal a step toward dismissing Dauman. The proclamation continues the dramatic turn of events that has seized Sumner Redstone’s companies. Dauman was ousted May 20 from Sumner Redstone’s trust and the board of National Amusements, the private Massachusetts theater chain company through which Sumner Redstone controls 80 percent of the voting stock in Viacom and CBS. That control will pass to an irrevocable trust if he dies or is declared incompetent. Dauman promptly filed a lawsuit, challenging whether Redstone had the mental capacity to make such moves and suggesting Redstone had been manipulated by his daughter. In the letter, directors took a direct shot at Shari Redstone. Frederic V. Salerno, lead independent director, said an attempt to remove Viacom’s board would be inconsistent with Sumner Redstone’s “stated judgment for many years that his daughter, Shari, should not control Viacom or his other companies.” Spokesmen for the Redstones declined to comment. — NEW YORK TIMES

TAXES

Mass. amnesty program is ending

State officials say thousands of Massachusetts taxpayers have taken advantage of a tax amnesty offer. A two-month amnesty during which individuals and businesses who owe back taxes can pay off their debts without paying penalties comes to an end on Tuesday. The state Department of Revenue said that once the deadline passes, there are no plans to offer another amnesty in the near future. That means delinquent taxpayers could face stiff penalties — even criminal prosecution — if they continue to avoid paying taxes they owe. Revenue Commissioner Michael Heffernan said the agency is about to launch a new computer system that will improve tracking of unpaid taxes. — ASSOCIATED PRESS

OIL

Producers expected to stick with Saudis

OPEC members gathering in Vienna Thursday are expected to go along with a Saudi Arabia-led policy focused on squeezing out oil-producing rivals amid signs the strategy is working. That means the meeting may be less fraught than the summit in December, which ended with public criticism of the Saudi position from Venezuela and Iran. By allowing prices to fall, high-cost producers are being forced out, easing the supply glut and spurring a rally of more than 80 percent since January to about $50 a barrel. All but one of 27 analysts surveyed by Bloomberg said the Organization of Petroleum Exporting Countries will stick with the strategy. An alternative proposal — to freeze output — was rejected in Doha last month. The group may also choose a secretary general to replace Abdalla El-Badri, whose term has been extended after members failed to agree on a successor. In recent months, three new hopefuls have emerged to try and break the impasse: Nigeria’s Mohammed Barkindo, Indonesia’s Mahendra Siregar, and Venezuela’s Ali Rodriguez. — BLOOMBERG NEWS

ECONOMY

Puerto Rico official says debt jeopardizes essential services

Puerto Rico’s budget director says the US commonwealth cannot pay off its debt and provide essential services at the same time. Luis Cruz Batista spoke Monday during a public hearing in San Juan as Puerto Rico legislators debated a proposed $9.1 billion budget. He warned that nearly 3,500 public employees would have to be laid off if the island were required to meet all its debt obligations. Cruz said other scenarios include reducing the workweek and making deeper cuts to the health, public security, and education sectors. The proposed budget sets aside only $209 million to help pay interest tied to a $2 billion debt payment due July 1. Puerto Rico is mired in a 10-year economic slump and its government is grappling with $70 billion in public debt. — ASSOCIATED PRESS

AVIATION

Two more airlines suspend flights to Venezuela

Venezuela has for years seen airlines reduce capacity to the South American country as they struggle to repatriate revenue. Now, two airlines are calling it quits altogether. Latam Airlines Group, Latin America’s largest carrier, said Monday that it would cut all flights to Caracas by August. A day earlier, Deutsche Lufthansa said it would suspend its three weekly flights to Venezuela next month “until further notice.” The German airline’s spokesman, Andreas Bartels, pointed to the challenge of repatriating revenue from Venezuela and a sharp dropoff in ticket demand, especially among business travelers. The nation is mired in its third year of a deep recession. Carriers have struggled for years to transfer back profits from Venezuela, leaving billions trapped in bolivars, the local currency. Latam also highlighted economic conditions. “The companies of the Latam group consider Venezuela to be a relevant market and will work to reestablish operations as soon as global conditions permit,” the company said. Lufthansa and Latam join American Airlines, which announced in March that it was canceling its Caracas-New York route, just three months after reinstating it, because of low demand. Venezuela’s economy is projected by the International Monetary Fund to contract by 8 percent in 2016, with the average rate of inflation expected to surge to almost 500 percent.
— BLOOMBERG NEWS

ECONOMY

Europeans unlikely to expand stimulus program

Europe’s economy is finally showing signs of increasing strength, after years of sluggishness and false starts. That means the European Central Bank probably won’t have to step up its ongoing $1.93 trillion stimulus program when it meets this week. The chief monetary authority for the countries that use the euro will go on pumping newly printed money into the European economy in an effort to raise inflation. But that’s only due to measures that were decided at previous meetings, and which are either still running or just now being implemented. Analysts don’t expect any new stimulus to be announced at Thursday’s meeting of the bank’s 25-member governing council in Vienna. Some economists don’t expect anything more for the rest of this year, if at all. The ECB is holding steady just as the US Federal Reserve seems to be moving close to a rate increase. The US recovery is more advanced, so the Fed can contemplate withdrawing some stimulus. Europe’s inflation is still way too low, at minus 0.2 percent, and unemployment is painfully high at 10.2 percent. But the economy in the 19 countries that share the euro is showing signs of a somewhat more robust and lasting recovery. The eurozone grew 0.5 percent in the first quarter from the quarter before. It finally regained the level of output it had in the first quarter of 2008, before the global financial crisis and before a crisis over high debt in some countries that almost broke up the currency union. Figures published Monday showed that business and consumer optimism rose to a four-month high in May. Auto sales have risen for 32 straight months. Second, oil prices have crept up. That should give the ECB a bit of help by raising inflation. — ASSOCIATED PRESS

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