San Francisco sues PG&E for $5 billion

SAN FRANCISCO >> PG&E Corp. forced its Pacific Gas & Electric unit into bankruptcy by illegally transferring billions of dollars out of the utility, San Francisco's city attorney alleged in a lawsuit.

Bloomberg News reported the suit filed yesterday in San Francisco Superior Court claims California's largest utility gouged consumers with rate increases after its parent company moved the money in an effort to keep it from creditors.

PG&E should return up to $5 billion to its customers, the suit says. The city also seeks civil penalties.

Herrera's suit "closely mirrors" one filed earlier by state Attorney General Bill Lockyer and raises issues that have already been reviewed by independent auditors and the state Legislature, PG&E spokesman Greg Pruett said.

"Clearly it's politically motivated," he said.

Former takeover artist Posner dies at age 83

MIAMI >> Former corporate raider Victor Posner, who once owned Arby's and Royal Crown Cola, died yesterday of pneumonia at the Miami Heart Institute. He was 83.

Posner was once a fearsome corporate takeover artist whose empire was once valued at $4 billion.

But in 1994 a judge found Posner and his son, Steven, guilty of violating federal securities law by failing to disclose a fraudulent takeover scheme between them and Wall Street investment tycoons Michael Milken and Ivan Boesky.

The judge barred the Posners from serving as officers or directors of any publicly held company and ordered them to repay about $4 million they had received from Fischbach Corp., the New York electrical company targeted in the scheme.

In 1987, Victor Posner pleaded no contest to tax-evasion and was ordered to give $3 million to the homeless and serve meals in a shelter.

Nortel CFO resigns amid investment questions

TORONTO >> Nortel Networks' chief financial officer resigned abruptly yesterday amid questions about personal investments he made in a 401(k) retirement plan just ahead of corporate announcements that caused significant swings in the company's stock price.

Terry Hungle allegedly transferred about $78,500 from a stock fund invested primarily in Nortel shares to a fixed income fund prior to the company's announcement that it would cut 5,000 jobs and would not meet reduced profit forecasts.

Kawamoto's isle selloff expands to California

Japanese businessman Genshiro Kawamoto, who bought a slew of residential properties in Hawaii a decade ago, plans to exit the rental market and is selling hundreds of homes in Northern California.

Over the weekend, scores of residents of several neighborhoods in suburban Sacramento received 30-day eviction notices from Alston Hunt Floyd & Ing, Kawamoto's Hawaii law firm. The tenants had been living on month-to-month rental agreements. The letter said Kawamoto wants to "go out of the rental business."

Just last week, Kawamoto listed one-third of his 160 Hawaii residential properties for sale. The reasons still aren't clear. Calls to Alston Hunt Floyd & Ing have not been returned.

The Honolulu City Council is scheduled to discuss a resolution tomorrow to purchase part of a controversial property owned by Kawamoto in Kahaluu. Kawamoto has been in a dispute with his neighbors over driveways that were encroaching on the land. Kawamoto says he removed the driveways so he can build a home on his nearby 130-acre piece of conservation land. To build on the land, however, Kawamoto would need to get approval from the state, which would not be a simple process.

Kawamoto, who made billions during Japan's land boom, made headlines in the late 1980s when he bought Hawaii homes for astronomical prices. The businessman also financed the construction of at least 420 homes in Sacramento, according to the Sacramento Bee newspaper. Most of the California homes are valued at less than $200,000.

Telecom council signs two conference sponsors

The Honolulu-based Pacific Telecommunications Council has landed two global corporations as sponsors for its midyear meeting in British Colum- bia. Canada's Telus Corp. and Verizon Global Solutions Inc. will cosponsor "Building Strong Partnerships" at the Delta Whistler Resort June 24-27.

The seminar will focus on North America and how communications providers can build and use partnerships during a period of economic instability and industry changes, according to Puja Borries, marketing communications officer for PTC.

The council's midyear meeting takes place in a different country each year. Its largest annual conference takes place in Honolulu every January.

For more information, visit www.ptc.org.

Daiei plans to ax 1,400 jobs through severance plans

KOBE, Japan >> Daiei Inc., Japan's second-largest retailer, said it asked its labor union to back a plan to cut 1,400 jobs, or 4 percent of its work force, by offering payments to workers who agree to quit.

The Kobe-based supermarket operator, which operates four stores on Oahu, is struggling to pay its $17.2 billion debt. The firm would cut the jobs on a permanent basis, exceeding its earlier target of 1,000, said Daiei spokesman Mitsuru Sano. The plan is part of cuts Daiei agreed to last month in exchange for a bailout from its banks.

Japanese companies have increasingly offered so-called early retirement to workers in their 40s and 50s, in some cases giving two or three years pay. The plans increase the up-front costs of paring future payrolls, and in Daiei's case, the company needs to reduce its head count faster, an analyst said.

"The proposed job cuts are not enough," inasmuch as Daiei is closing almost one-sixth of its stores, said Mizuho Securities Co. analyst Toshio Takagi. He said he will maintain his "sell" rating on Daiei's shares.

Sano declined to disclose details of Daiei's proposal. The retailer plans to offer the incentive payments to workers between March and June, he said.