MIDDAY UPDATE: NZ arrests file-sharing kingpin for FBI

Jan. 20 (BusinessDesk) – Kim Dotcom, the founder of file-sharing site megaupload.com, has been arrested in Auckland this morning as part of an operation led by the US Department of Justice targeting large scale criminal copyright infringement and money laundering.
Dotcom, born Kim Schmitz, was arrested alongside four others by the New Zealand Organised & Financial Crime Agency and the New Zealand Police, after a request was made by the United States to arrest extradite the parties. Dotcom has New Zealand residency, but the Overseas Investment Office last year declined his bid to purchase property in Coatesville.
Hackers attacked and brought down the USDoJ website in response to the arrests, with responsibility claimed by the hacker organisation Anonymous.
The file-sharing co-founder is wanted by the United States Federal Bureau of Investigation for allegedly facilitating and engaging in criminal copyright infringement and money laundering of more than US$500 million. US Federal authorities have charged seven people and two corporations in the US with running an international organised crime enterprise, and the remaining three people are still at large, the FBI said in a statement.
“The FBI contacted New Zealand Police in early 2011 with a request to assist with their investigation,” said Grant Wormald, detective inspector of the New Zealand Police. “All the accused have been indicted in the US. We will continue to work with the US authorities to assist with extradition proceedings”
More than 20 search warrants were executed across eight countries, and some US$50 million in assets were seized.
New Zealand police seized luxury cars with an estimated total value of about $6 million. More than $10 million has been seized from NZ financial institutions.
Among property named subject to forfeiture in the FBI Indictment include local accounts with Bank of New Zealand, Kiwibank and HSBC.
The four parties will appear in the North Shore district court this afternoon.
The megaupload.com website is currently down. The online storage and file delivery service it was previously the 13th most visited website on the internet, claiming to have more than one billion visitors.

Ports of Auckland staff to face redundancy
Ports of Auckland told its 350 workers they face redundant as it seeks to hire outside contractors following a formal consultation with the Maritime Union of New Zealand this morning.
The meeting between the two parties was used as an opportunity for the union to share the details of a request for proposal issued to several outside contracting companies last week.
The meeting was “about the vision for the proposal,” ports spokeswoman Catherine Etheredge said.
A sixth union 24-hour strike planned for Jan 31 was called off on Wednesday night after ports agreed to let MUNZ hold a stop-work meeting for four hours on the same day. However, the union expects to give notice of another strike if the proposal to pursue outside contracting is continued.
The RFPs issued by the port is expected to be returned to the company by the end of the month.
Union president Garry Parsloe has previously said if redundancies go ahead he doesn't know where ports will find an equally skilled workforce and warns that a high number will likely leave New Zealand.

NZ dollar dips below 62 euro cents on bond auctions
The New Zealand dollar dropped below 62 euro cents for the first time in more than a week following successful bond sales in France and Spain, boosting optimism the regions sovereign debt crisis is being maintained.
The New Zealand dollar was traded at 61.86 just before midday, down from 62.01 euro cents just before 8.30 and 62.37 cents at 5pm yesterday. The kiwi remained little changed on 80.27 US cents from 80.23 US cents.
The euro rallied after French borrowing costs declined as the nation sold 7.97 billion euros in its first sale of medium and long term debt since losing its AAA rating from Standard & Poor’s last week. Spain sold 6.6 billion euros of bonds due in 2016, 2019 and 2022, exceeding the maximum 4.5 billion euro target set for the auctions. It issued debt due in 2022 at an average of 5.4 percent, down from 6.9 percent in November.
“The euro had a very good night with the market focusing on good bond sales,” said Stuart Ive, currency strategist at HiFX. “The yield falling shows there is more resistance in euroland – it was the first real test after the downgrades.”
Greek Prime Minister Lucas Papademos will enter a second day of talks with private creditors in an attempt to lower the nation’s debt levels. Papademos is racing to secure a deal to finance a package for the cash-strapped country before a March 20 bond repayment of 14.5 billion euros.
“We will be watching the headlines as per normal,” Ive said. “Any news, positive or negative, is going to have a massive effect on the currencies.”

GPG appoints new director to its board
Guinness Peat Group, the investment company which is in the process of selling back its assets, has tapped investment bank Scott Malcom to join its board as a new independent director.
Malcom, a partner at Sydney-based advisory firm Greenstone Partners, will take over the gap left opened by ASB chairman Gavin Walker in July. The group, founded by Ron Brierley, has been selling its assets after shareholders last year agreed to a plan that would return their funds. Having sold its stake in fruit marketer Turners & Growers last month, its last New Zealand asset is a 35 percent stake in insurer Tower.
“Scott brings wide-ranging experience to the GPG board during the implementation of its strategy to realise value,” chairman Rob Campbell said in a statement.
Murray founded Greenstone Partners in 2003, having previously worked for Credit Suisse on a broad range of mergers and acquisitions.
The shares remain quoted at yesterday's closing price, 54.5 cents.



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