In other items: Nokia handset batteries to have holograms; Indian airline may buy 30 Airbus planes; and Toshiba's new memory chip cuts power use in half.
Fannie Mae’s board met yesterday to discuss a possible executive shake-up as the mortgage giant responds to regulators’ criticisms and faces a likely restatement of $9 billion or more in earnings.
Pressure to resign has been building in recent weeks on Seattle native Franklin Raines, chief executive of the government-sponsored company, and its chief financial officer, Timothy Howard. A review by the Securities and Exchange Commission found last week that Fannie Mae must restate earnings back to 2001 because it violated accounting rules for derivatives, financial instruments used to hedge against interest-rate swings, and for some prepaid loans.
A $9 billion restatement, which Fannie Mae had said would be likely if the SEC found its accounting was flawed, would wipe out about one-third of reported profit since 2001 at the biggest U.S. buyer and guarantor of home-mortgage loans.
Washington-based Fannie Mae did not issue a statement about the special board meeting, which lasted most of the day. Company spokesman Chuck Greener declined comment.
As CEO and CFO, respectively, Raines and Howard have certified in sworn written statements the accuracy of Fannie Mae’s financial results during the period in question.
Handset batteries to have holograms
Nokia, the world’s largest handset maker, plans to mark its original batteries with a hologram as part of the fight against unsafe, counterfeit mobile-phone batteries some of which have exploded in users’ hands.
The hologram labels will help customers identify an original Nokia battery, thus ensuring the safe use of handsets, Nokia said.
“We are directly attacking the counterfeiters who manufacture potentially unsafe batteries,” said Razvan Olosu from Nokia’s multimedia division.
The label includes a holographic image and an authentication code hidden under a scratch-off area on the label. Sales of the hologrammed batteries have already begun and all new Nokia batteries will be equipped with holograms, Nokia said.
Nokia maintains that reported cases of overheating batteries that have damaged both batteries and phones were counterfeit or nonoriginal products.
Indian airline may buy 30 planes
Deccan Aviation, owner of India’s only low-cost airline, plans to buy up to 30 Airbus planes, an order worth $1.8 billion, said G.R. Gopinath, managing director of Air Deccan.
The airline is in the final stage of negotiating for single-aisle aircraft in the A320 series, Gopinath said in a telephone interview from Bangalore, India. Airbus SAS Chief Commercial Officer John Leahy, said the two hoped to wrap up negotiations soon.
Airbus, the world’s largest plane maker, has been outpacing Boeing this year in winning orders from low-cost operators. Leahy said Airbus has won 87 percent of all new-aircraft orders from low-cost airlines this year. Boeing’s 737 series competes with Airbus’ A320 series in that business.
If Airbus wins the order, it will be the second large Indian plane contract for the company in a week. Saturday, India’s UB Group placed an order for 10 single-aisle planes and took options for 20 more in an order worth up to $1.8 billion. The aircraft will be used by UB’s new low-cost carrier, Kingfisher Airlines.
New memory chip cuts power use in half
Toshiba, Japan’s second-biggest chipmaker, and NEC said they have developed technologies for a new type of memory chip that can cut power consumption by half.
The Tokyo-based companies have been developing the magnetoresistive random-access memory, or MRAM, since 2002, they said in a statement. The MRAM chip combines the attributes of flash and dynamic random-access memory chips in a single device. Like flash, MRAM can store data minus an electric charge. Similar to DRAM, the chip can read and write data at high speeds.
Compiled from Knight Ridder/Tribune Information Services, The Associated Press, Reuters and Bloomberg News.