Tyco's board ‘didn't approve' $17m bonus

Tyco International Ltd.'s board never approved a $17 million bonus for former general counsel Mark Belnick, a former director told jurors in Belnick's criminal trial in New York.

Manhattan prosecutors say the bonus was unauthorised and Belnick stole the money from Tyco.

Joshua Berman, a Tyco director for 25 years, said the board would not have approved the 2000 bonus for Belnick because L. Dennis Kozlowski, then the chief executive, wanted to fire him within months of his hiring in 1998. “It didn't happen,” Berman testified. “That to me would be extraordinary.”

Prosecutors say Belnick got the bonus, plus $15 million in no-interest company loans, so he wouldn't tell Tyco directors and government regulators about frauds Kozlowski committed, including abuse of company loan programs. Belnick, 57, claims the bonus was a reward for helping Tyco through an accounting investigation by the Securities and Exchange Commission.

He's charged with grand larceny, stock fraud and falsifying business records. Belnick faces up to 25 years in prison if he's convicted.

ACE unit to redeem preferred shares

ACE Ltd. subsidiary Capital Re LLC will redeem all $75 million of preferred shares, using some of the proceeds of a recent debt offering.

Capital Re's 7.65 percent Cumulative Monthly Income Preferred Shares, Series A at $25 per share plus accumulated and unpaid dividends to the redemption date.

Capital Re will pay its normal dividend of $0.159375 per share on June 30, 2004 to holders of record as of June 29, 2004, the company said.

The redemption is being funded by a portion of the net proceeds of certain senior notes recently sold by ACE INA Holdings Inc., ACE said.

AWAC opens branch office in New York

Allied World Assurance Company (US) Inc., a subsidiary of Bermuda-based Allied World Assurance Holdings, Ltd., has set up a branch office in New York City.

Initially, the new office will focus on AWAC's management liability products in the US for commercial and middle market businesses. AWAC has appointed senior vice president John McElroy head the facility. He has over 15 years insurance experience in the professional lines business. For the past 12 years he has worked for Gulf Insurance Group where he most recently served as senior vice president and head of its management liability department.

“Mr. McElroy's initial team will consist of Jerome Brendle, Daniel Fahmy, Thomas Kennedy, Michael Piccione, Peter Sherman, Neil Sonnet and John Verhoorn,” said the announcement. AWAC president and chief executive Scott Carmalani commented: “We are very excited to bring on this talented team of insurance professionals that will further expand our distribution in the US and increase our penetration into this important segment of the professional liability business in these markets.”

China Merchants in selling mood

China Merchants Holdings International Co., the port arm of the mainland's communications ministry, said it plans to sell its toll-road and tanker businesses this year.

The company, which owns seven tankers through a Bermuda-registered unit, said it's in talks to transfer the vessels to controlling shareholder China Merchants Group Ltd., which owns 52 percent of the company. The oil tankers, worth about HK$1.28 billion ($164 million), had profit of HK$145 million in 2003, up 16 percent from a year earlier, the South China Morning Post reported yesterday. China Merchants said it's also in talks to transfer its toll- road business to an unidentified listed company outside Hong Kong.