From Staff and Wire Reports

Newswatch.....ON BUSINESS

July 01, 1992

Saudi banker indicted in BCCI case

The chief operating officer of Saudi Arabia's biggest bank has been indicted on charges of defrauding $300 million from depositors and customers in the BCCI banking scandal, the Manhattan District Attorney said today.

Sheikh Khalid Bin Mahfouz of National Commercial Bank of Saudi Arabia and an associate were charged with scheming to defraud depositors, regulators and auditors of the Bank of Credit and Commerce International from 1985 to 1991, District Attorney Robert Morgenthau said.

Mr. Mahfouz invested at least $840 million in BCCI and its entities in the mid-1980s in order to prop the bank up. But he later secretly withdrew the money and left depositors facing huge losses when the bank collapsed, Mr. Morgenthau charged.

The National Commercial Bank of Saudi Arabia, principally owned by the Mahfouz family, is the largest commercial bank in Saudi Arabia and operates a branch in New York.

Hughes layoffs

Hughes Aircraft Co., a large defense electronics company, said yesterday that it will lay off 9,000 employees, shed businesses and products, and consolidate its facilities in an effort to remain competitive.

Hughes, a General Motors Corp. unit whose stock trades separately, said it will take an after-tax charge of $749.4 million in the second quarter related to the restructuring and another charge of $40 million to cover a change in the way it accounts for certain commercial businesses.

The layoffs, 15 percent of Hughes' work force, will take place over the next 18 months.

Layoffs at Alcoa

Aluminum Co. of America said yesterday that it will lay off 2,100 blue- and white-collar employees, mostly in the United States, in a bid to shore up its competitive position.

The cuts, amounting to 3 percent of Alcoa's worldwide payroll, are scheduled to be completed by the end of the year.

Alcoa, the world's biggest aluminum producer, has more than 65,000 employees, about 36,000 of whom work in the United States.


Aetna Life & Casualty Co. said today it paid $20,750,000 to holders of Eurobonds issued by an affiliate of Canadian real estate giant Olympia & York Developments to finance a property in New York City.

The payment was required under terms of a surety bond issued by The Aetna Casualty and Surety Co. to Olympia & York Water Street Finance Corp., Aetna said.

As a result of the payment, the insurance company said, it will take a $45.7 million pre-tax charge against its second-quarter earnings for the full amount of its obligation under the surety bond.

O&Y, the world's biggest real estate development company, filed for bankruptcy court protection in Canada in May.

Jaguar picks Baltimore

Jaguar Cars Inc. has switched its East Coast port of entry from New York to Baltimore and will import 5,000 to 6,000 cars a year through the Dundalk Marine Terminal, Jaguar officials say. Jaguar, a subsidiary of Ford Motor Co., has switched to Baltimore to take advantage of Ford's facility here that processes imported cars, says Richard Tate, Jaguar's national distribution manager. The car company continues to use Port Huemene, Calif., for its West Coast imports.

PSC ruling appealed

Cogen Technologies, a Houston builder of power plants, has filed for a rehearing of the Maryland Public Service Commission's decision that opened up bidding on new electric power plants for Baltimore Gas and Electric Co.

Cogen had challenged BG&E's plans to build a power plant in Perryman in Harford County. A PSC hearing examiner ruled that BG&E must give Cogen another chance to bid. But in May, the full PSC opened the bidding to all companies. Cogen says the decision violated federal and state laws to encourage co-generation operations.

Hotel bids to be opened

Bids will be opened today for the Radisson Plaza Lord Baltimore Hotel, a landmark building that was taken over by federal thrift regulators this year after its former owners did not repay the loan that allowed them to renovate the hotel.

William Roohan, a vice president at CB Commercial, which is handling the sale for the Federal Deposit Insurance Corp., says bidding closed yesterday with a 5 p.m. deadline for sealed bids of $6.9 million or more. But Mr. Roohan said the FDIC had asked CB Commercial to keep confidential the number of bidders.

Cryomedical products

Cryomedical Sciences Inc., a Rockville biotechnology company, marked a rite of passage yesterday from a research and development company to a company with products for sale. The company shipped its first AccuProbe product to a hospital. The device, which sells for $150,000, is used to treat liver cancer and prostate cancer by freezing tumors, which the body then absorbs, so that no surgery is needed.

Tomato patent reviewed

The U.S. Patent and Trademark Office has decided to re-examine a Calgene Inc. patent that is key to the company's much-ballyhooed effort to develop a spoilage-resistant tomato. The government's decision, made June 11, was announced yesterday in a news release by ICI Seeds, a rival of Calgene based in Wilmington, Del. ICI Seeds is racing to develop a long-lasting, genetically engineered tomato.

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