:00:05. > :00:15.Those are the latest headlines. Now for the latest financial news
:00:15. > :00:19.
:00:19. > :00:24.Hello and welcome. You are with World Business Report. The
:00:24. > :00:29.headlines: An American dream turned nightmare. Rajat Gupta, the former
:00:29. > :00:35.Goldman Sachs director, was today sentenced for insider trading.
:00:36. > :00:40.And the slowdown catches up with Volkswagen.
:00:40. > :00:50.And, after a turbulent day it on the markets, Asian shares are
:00:50. > :00:53.
:00:53. > :00:58.Good to have you with us. Since arriving in the US, Rajat Gupta has
:00:58. > :01:03.lived the American Dream, reaching the pinnacle of the corporate world.
:01:03. > :01:06.He was the chief executive of the consultancy group and was on the
:01:06. > :01:11.board of Goldman Sachs and Procter & Gamble, but in June he was found
:01:11. > :01:16.guilty of insider trading. Today he returns to court to be sentenced
:01:17. > :01:20.and faces eight to ten years in prison.
:01:20. > :01:25.The American dream has turned into a nightmare for Rajat Gupta, a
:01:25. > :01:29.well-known figure in the corporate world. He is to be sentenced for
:01:29. > :01:33.insider trading charges. In June he was found guilty of sharing company
:01:33. > :01:39.secrets he obtained as a director of Goldman Sachs with his friend,
:01:39. > :01:43.the former hedge fund manager Raj Rajaratnam. With that information,
:01:44. > :01:48.Raj Rajaratnam made a profit on the stock market. There is a rumour
:01:48. > :01:58.that Goldman Sachs might look to buy a commercial bank. This was a
:01:58. > :01:58.
:01:58. > :02:03.big discussion at the board meeting on whether we might buy a
:02:03. > :02:07.commercial bank. This was one of the phone conversations played to
:02:07. > :02:12.the jury which prosecutors used to illustrate their relationship. Raj
:02:12. > :02:15.Rajaratnam is serving an 11-year prison sentence. This is one of the
:02:15. > :02:20.first cases I remember where such a high-profile person was indicted
:02:20. > :02:23.and convicted almost completely on circumstantial evidence - there
:02:23. > :02:29.wasn't a single witness who took the stand who could testify about
:02:29. > :02:37.the conversations where Rajat Gupta was apparently leaking confidential
:02:37. > :02:39.information. More familiar with boardrooms than courtrooms, project
:02:39. > :02:43.doctor was the chief executive of McKinsey and on the board of
:02:43. > :02:47.Goldman Sachs and Procter & Gamble. Now some of his high-profile
:02:47. > :02:53.friends have written to the judge asking for leniency. There were
:02:53. > :02:57.some very prominent people like Bill Gates, Kofi Annan, and their
:02:58. > :03:01.letters were, let me give you a sense of this guy be on his
:03:01. > :03:05.business career, and talked about his humanitarianism. Then there was
:03:05. > :03:10.another group of letters from family and friends that talked
:03:10. > :03:14.about what a terrific person he was. Rajat Gupta it is the most
:03:14. > :03:19.influential figure caught up in the government's crackdown on insider
:03:19. > :03:23.trading over the last four years. When he appears before the judge in
:03:23. > :03:29.this lower Manhattan court has, he will learn whether his high-stakes
:03:29. > :03:35.relationship with Raj Rajaratnam has cost him his freedom.
:03:35. > :03:39.In France, another rogue trader will get his day in court. It is
:03:39. > :03:44.Jerome Kerviel's final appeal against his 2010 conviction on
:03:44. > :03:49.charges of forgery, breach of trust and unauthorised computer use. He
:03:49. > :03:53.was at the centre of the world's biggest trading scandal when he
:03:53. > :03:57.lost 4.9 billion euros while working for society general in 2008.
:03:57. > :04:00.Today's decision will determine whether he goes to jail or walks
:04:00. > :04:04.free. It seems Europe's economic slowdown
:04:04. > :04:09.has finally caught up with the huge and highly profitable German
:04:09. > :04:13.carmaker Volkswagen. In a few hours it is expected to announce its
:04:13. > :04:17.first quarterly fall for three years, down by as much as a fifth
:04:17. > :04:22.in the last 12 months. The slump in demand for cars in Europe means it
:04:22. > :04:28.has had to cut sales targets and production.
:04:28. > :04:32.The grand plan for VW is that, in 2018, it will overtake Toyota as
:04:32. > :04:36.the world's number one carmaker, turning out 10 million cars a year.
:04:36. > :04:40.For the past three years it has driven up production, offsetting
:04:40. > :04:45.the falling demand for cars in Europe with strong sales in China
:04:45. > :04:49.and the States, but now it expects to sell 140,000 cars fewer this
:04:49. > :04:55.year than it had originally forecast. It has cut production for
:04:55. > :05:00.some models. That is worrying but not yet the crisis. It's no secret
:05:00. > :05:04.what is going on in the world economy, especially Europe. We can
:05:04. > :05:08.see the strain reflecting on car sales and shower rooms throughout
:05:08. > :05:13.the region. The bottom line is that VW is in better shape than pretty
:05:13. > :05:19.much all of its peers. The European car sales have fallen by 7% this
:05:19. > :05:26.year. VW is on level pegging. It has sold just over 2 million cars
:05:26. > :05:35.to date, the same rate as the year before. The chief executive of its
:05:35. > :05:39.struggling rival, Fiat, has accused VW of bolstering sales for a policy
:05:39. > :05:46.of deep discounts, fuelling a price war among European car
:05:46. > :05:52.manufacturers. VW denies this but many others have gained the same
:05:52. > :05:54.impression. They have gone on record as saying some European
:05:54. > :05:59.carmakers will fail in the next three years, which will be good
:05:59. > :06:02.news for VW in many ways because they can take up the slack, so you
:06:02. > :06:10.can see the W being incredibly aggressive, to the anger of its
:06:10. > :06:13.rivals. Unlike its cash-strapped peers, VW has a $20 billion cash
:06:13. > :06:22.pile to help it Rideout the European downturn while continuing
:06:22. > :06:27.to invest heavily in brands like Porsche. Few expected to Europe to
:06:27. > :06:30.be much of a troubled at all in its drive to be the world's top
:06:30. > :06:38.carmaker. The markets have been volatile in
:06:38. > :06:45.Asia following sharp falls in the United States, and more bad news
:06:45. > :06:48.for the Spanish economy spooked investors. Let's go to our Asia
:06:48. > :06:55.Business Report in Singapore. The day started with heavy losses
:06:55. > :06:59.across the board but things seem to have recovered in certain markets.
:06:59. > :07:05.That's right. As you say, we saw a similar trend early this morning
:07:05. > :07:09.when Asian markets from Tokyo to Sydney to Hong Kong opened as what
:07:09. > :07:13.we sought overnight in the United States, but as you say, things are
:07:13. > :07:19.starting to calm down, especially after we sought China's
:07:19. > :07:22.manufacturing data coming in a lot stronger than expected. It showed
:07:22. > :07:27.that business activity is still slowing down but things are
:07:27. > :07:30.starting to improve, and that's great news for many of Asia's
:07:30. > :07:35.economies because China is the largest trading partner for many,
:07:35. > :07:43.including Japan and Australia, so currently most markets are flat,
:07:43. > :07:48.and in fact Japan and Hong Kong seem to have reversed.
:07:48. > :07:55.The another big story for Australia. They had data out which increased
:07:55. > :07:59.speculation the Australian Central Bank might cut interest rates soon.
:07:59. > :08:04.A that's after inflation data came and a lot higher than expected, the
:08:04. > :08:08.cost of living rising almost 1.5% in the third quarter, and that's
:08:08. > :08:14.prompted some analysts to speculate that the Central Bank may cut the
:08:14. > :08:18.cost of borrowing from the current 3.25 % to 3% next month. They were
:08:18. > :08:22.expecting to cut some time before Christmas, but they are now saying
:08:22. > :08:32.the move might happen sooner than later, and that's been pushing up
:08:32. > :08:34.
:08:34. > :08:41.the value of two Australian dollar - that has shot up against the US
:08:41. > :08:44.dollar. Shares in Facebook rose 9% in after-hours trading yesterday.
:08:44. > :08:50.It reported better-than-expected revenues for the third quarter, and
:08:50. > :08:54.the company said it made a profit of $1.6 billion in the year to
:08:54. > :08:57.September, slightly higher than the year before. What boosted
:08:57. > :09:02.confidence was the news that Facebook is making more money from
:09:02. > :09:06.advertising with an increase of 36%. It's said it has rolled up several
:09:06. > :09:11.advertising products in the last quarter. Shares have sunk by about
:09:11. > :09:17.50% since its stock market listing in May.
:09:17. > :09:21.One of its trade mark not so secret events - Apple unveiled a smaller,
:09:21. > :09:31.lighter version of the iPad as part of an overhaul of its range. It
:09:31. > :09:34.goes on sale next month, aimed at warding off mounting competition in
:09:34. > :09:42.the fast-growing tablet market from competing products from the likes
:09:42. > :09:45.of Google, Amazon and Microsoft. We saw a fairly heavy fall in the