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Maple Leaf Foods Inc. has agreed to bring the CEO of West Face Capital onto its board of directors in a move to satisfy complaints about some of the directors

Oracle Corp. has agreed to pay $46 million to settle a lawsuit over alleged kickbacks to win government work.

The Department of Justice charged that Sun Microsystems Inc., which Oracle bought last year, and other technology companies paid kickbacks to Accenture PLC for Accenture to recommend that federal agencies buy Sun products.

The Justice Department said last year that the lawsuit covered software contracts that ran from 1998 to 2006 and were worth hundreds of millions of dollars.

Six other companies including Hewlett-Packard Co. have settled similar charges.

The settlement by Oracle’s America unit also resolved claims that Sun provided incomplete and inaccurate information to government contracting officers during negotiations over contracts with the U.S. Postal Service and two resellers of Sun products. The government said regulations and contracts required Sun to explain how it did business so that contracting officers could negotiate a fair price for government customers.

Government officials said kickbacks and inaccurate information during contract negotiations cost taxpayers money.

Allegations against Sun were first raised in a lawsuit brought by two whistle-blowers, and the government joined their case in 2007.

Shares of Oracle, a software company based in Redwood Shores, Calif., rose 3 cents to close at $32.03.

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A semiautonomous regional government in Somalia on Friday defied the central government’s decision to end relations with a private security company linked to the founder of Blackwater Worldwide, underscoring the weakness of the authorities in Mogadishu.

Somalia’s Minister of Information Abdulkareem Jama insisted on Friday that the decision to end the relationship with Saracen International applies to regional governments.

“The decision is binding on all Somali territories. That will apply to all parts of Somalia,” said Jama.

But Abdirizak Ahmed, the head of the counter-piracy program in the semiautonomous northern region of Puntland, said it does not necessarily recognize the authority of the federal government to make that decision. Saracen International has already begun training forces in Puntland, whose administration has been distancing itself from the Mogadishu-based government, saying it hasn’t delivered security and services.

“I don’t think the decision they have made will change anything in Puntland,” Ahmed said. “I don’t think it will have an impact on the relationship Puntland has with Saracen … it’s not a (national government) issue.”

Other Puntland officials did not immediately return calls seeking comment.

Last week The Associated Press reported on links between Saracen International and Erik Prince, who founded Blackwater Worldwide. Killings by Blackwater guards in Afghanistan and Iraq _ including a 2007 incident in Baghdad in which 14 Iraqi civilians were shot dead _ raised global concerns over the lack of accountability of private security contractors in war zones.

Lafras Luitingh, the chief operating officer of Saracen International, sent a statement which seemed to recognize that the Saracen deals, at least with Somalia’s federal government, are over.

“We are proud of the work we performed for the Somali government who invited us to provide important counter-piracy and humanitarian assistance. We are ready to serve again if called upon to do so,” it said. Luitingh did not return calls Friday seeking comment.

Saracen has already begun training a force of over 1,000 men in Puntland that is supposed to go after pirate gangs on land. It may also be deployed against Islamist insurgents in the region.

Saracen also signed a deal with a previous Somali government to train a presidential guard and possibly a second antipiracy force of over 1,000 men in the Somali capital, but the new administration voted on Thursday to abandon the deal.

The AP reported last week that several companies linked to Saracen International had given authorities false addresses or registration information. Saracen has declined to identify those funding their multimillion dollar project but Luitingh said last week that the donors are in the process of notifying the U.N. A person familiar with the project and an intelligence report said Prince was involved in the multimillion-dollar program financed by several Arab countries, including the United Arab Emirates.

Saracen has declined to elaborate on its relationship with Prince. A statement by Prince’s spokesman said simply that he has provided advice to several antipiracy operations.

If the Puntland government defies the national government’s decision to ax the Saracen deals, it could lead to a serious breach between the two regions. Puntland is generally considered more stable, and the U.S. has indicated it would be willing to funnel more aid to the region. But most international donors still focus heavily on the Mogadishu-based government, which controls only a few neighborhoods in the capital and is under assault by an Islamist militia linked to al-Qaida.

The U.S. had previously raised concerns over the lack of transparency in the Saracen deals, saying it was unclear who was funding them, who was responsible and what the new forces would be used for.

Jama said the Somali government does not even have a copy of a signed contract with Saracen, although Luitingh has said the contract was signed on March 1 by the then-deputy prime minister and minister of finance and witnessed by the Somali ambassador to Kenya.

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World shares were mixed Tuesday ahead of the U.S. Federal Reserve’s first interest rate meeting of the year and as concerns lingered China will take new moves to cool economic growth.

Oil prices hung below $88 a barrel, extending losses after the Saudi oil minister hinted the world’s biggest oil producer may raise supplies to put the brakes on higher oil prices. In currencies, the dollar fell against the yen but rose against the euro.

European stocks were mixed in early trading. Britain’s FTSE 100 was marginally lower at 5,940.47. Germany’s DAX rose by 0.2 percent to 7,084.74 and France’s CAC-40 was up 0.3 percent to 4,043.60.

Wall Street was headed for a lower opening after gains the day before. Dow futures were down 0.2 percent to 11,909. Broader S&P 500 futures were down by 0.2 percent to 1,285.50.

Asian stocks presented a mixed picture. Japan’s Nikkei 225 stock average added 1.2 percent to close at 10,464.42 after the Bank of Japan kept its key interest rate unchanged at virtually zero, hoping to protect a still-fragile economy from veering off track. Exporters rose as Wall Street optimism offset a stronger yen. Sony Corp. jumped 2.3 percent and Canon Inc. gained 0.7 percent.

South Korea’s Kospi rose 0.2 percent to 2,086.67. Australia’s S&P/ASX 200 gained 0.5 percent to 4,807.80. Sentiment was bolstered by the country’s latest inflation reading, which fell below expectations and reduced the chances of a rate hike by the Australian central bank.

Hong Kong’s Hang Seng index dropped less than 0.1 percent to 23,788.83. Indexes in Singapore, India and Thailand were also down.

Shares on mainland China were notably down as investors continued to worry about further attempts by the government to slow growth as it tries to get inflation under control.

The Shanghai Composite Index fell 0.7 percent to 2,677.43 and the Shenzhen Composite Index for China’s smaller, second market was down 1.2 percent to 1,136.58.

The Dow’s rise gave stocks a boost but Chinese shares are “capping Asia momentum,” said Castor Pang, research director at Cinda International payday loan lenders.

“The worry is still there in China, especially if they (investors) guess inflation in January and February is still high,” which could mean that authorities may announce an interest rate hike around Chinese New Year, Pang said. The holiday starts Feb. 3.

Figures last week showed growth picked up in the fourth quarter to 9.8 percent from 9.6 percent in the previous quarter. The government also reported the inflation rate at 4.6 percent in December.

Investors had other factors to weigh Tuesday. Later in the day, the U.S. Federal Reserve was to start a two-day meeting to discuss interest rates. Few expect any major shifts, even though two new members to the Fed’s policymaking panel have been skeptics of the Fed’s $600 billion Treasury bond purchase plan to help stimulate the economy.

Also Tuesday, some major U.S. companies will release quarterly earnings, including: E.I. DuPont de Nemours & Co.; Johnson & Johnson; United States Steel Corp.; and Yahoo Inc.

In New York on Monday, the Dow Jones industrial average closed within 20 points of 12,000 Monday, its highest point since June 2008.

Technology stocks rose after Intel Corp. increased its dividend and said it would buy back more of its stock. The company gained 2 percent.

The Dow gained 108.68 points, or 0.9 percent, to 11,980.52. The last time the average closed above 12,000 was June 19, 2008.

The broader Standard and Poor’s 500 index rose 7.49, or 0.6 percent, to 1,290.84. The Nasdaq composite gained 28.01, or 1 percent, to 2,717.55.

In currencies, the dollar fell to 82.39 yen from 82.49 yen late Monday. The euro dropped to $1.3593 from $1.3638.

Benchmark crude for March delivery was down 19 cents at $87.68 a barrel in electronic trading on the New York Mercantile Exchange. The contract lost $1.24 to settle at $87.87 a barrel on Monday.

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Associated Press business writer Kelvin Chan in Hong Kong contributed.

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The U.S., the U.K., France and Germany must control spending on pensions and health care to keep their debt burdens stable over the long term, Moody’s Investors Service said.

“All four countries face dramatic increases under their existing policy commitments arising from aging-related pension and health-care subsidies,” the ratings company said today in an e-mailed report from New York. “Future costs must be brought under control if these countries are to maintain long-term stability in their debt-burden credit metrics.”

The four nations are the biggest in the world to enjoy Moody’s top AAA grade. As public finances tighten, “countries have lost some time, so the pressure is somewhat higher for them to adjust as soon as possible,” Moody’s sovereign-debt analyst Alexander Kockerbeck said by telephone.

U.S. President Barack Obama on Dec. 17 signed into law an $858 billion bill extending for two years Bush-era tax cuts for all income levels. The measure also continues expanded jobless- insurance benefits to the long-term unemployed for 13 months and pares payroll taxes for workers by 2 percentage points in 2011.

“With respect to shorter-term considerations, the U.S. has taken a different approach than the other three in its response to the economic and fiscal problems,” Moody’s wrote in its Aaa Sovereign Monitor report. “The U.K.’s coalition government has introduced a strong program of deficit reduction to address the steep increases in government debt as a result of the financial crisis.”

Retirement Age

The U.K. has pushed through the biggest spending cuts in 60 years since David Cameron’s government came to power last May. Business Minister Ed Davey said in a statement today that Britain will put an end to compulsory retirement at age 65, dismissing concern the plan may keep young people out of work and make it harder for companies to fire unproductive staff.

European Union leaders agreed in December to amend the bloc’s treaties to create a permanent debt-crisis mechanism in 2013 in an effort to stem contagion that began after Greece’s near-default last year. Europe’s most-indebted countries have started to force through austerity programs to convince investors they can get their budgets under control.

Deficit Cuts

“France and Germany recorded significant debt increases, but have on balance moved toward deficit reduction, France less aggressively so than Germany,” Moody’s said.

France’s standing as one of the world’s safest debt issuers was affirmed by Moody’s competitor Standard & Poor’s on Dec. 23, reflecting confidence that the euro-area’s second-largest economy will rein in its budget deficit. S&P said France deserves its AAA sovereign credit rating because of the “wealth and depth” of its economy and the view that President Nicolas Sarkozy’s government will consolidate its budget gap.

The U.S., the U.K., France and Germany “still possess debt metrics, including the debt affordability” to keep their AAA ratings, Moody’s said in the report.

“The important message is that in spite of the policy divide between the U.S. and other AAA-rated sovereigns on fiscal austerity and the promotion of growth, the debt metrics are compatible with AAA ratings,” Sarah Carlson, vice president- senior analyst in Moody’s sovereign-risk group, said by phone.

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The recall beat continues at Toyota but the auto giant says it thinks the biggest public relations nightmare in its history is behind it.

The automaker, seen by many as the best of its breed, issued recalls 17 times last year to alert owners of more than 700,000 Canadian vehicles about the need for dealer inspections and possible repairs on defective parts or conditions.

It reached the point where some industry watchers felt Toyota was unnecessarily undermining its reputation and entrenching negative perceptions with disclosure and repairs on minor glitches.

They said the notices would just make it harder for Toyota to sell cars and trucks for a longer time.

A few recalls involved parts that rival automakers also used but those rivals didn

Pacific Investment Management Co., which manages the world’s biggest bond fund, is buying Australian notes backed by home loans in the secondary market to profit from higher yields as European investors dump the bonds.

Pimco’s Australian unit, which manages about A$32 billion ($32 billion), this month bought AAA rated residential mortgage- backed securities yielding as much as 165 basis points more than the bank bill swap rate, Robert Mead, Sydney-based head of portfolio management, said in an interview. New bond sales pay about 110 basis points, or 1.1 percentage points, he said.

“We think the cheapest asset across Australian fixed- income is secondary market RMBS,” Mead said. “Distressed areas of Europe are now net sellers of Australian RMBS, which we are benefiting from.”

As much as a quarter of the RMBS sold annually by Australian lenders between 2002 and 2007 was denominated in euros to attract European investors, according to data from Standard & Poor’s. The region is now battling a sovereign debt crisis that’s seen Greece and Ireland accept financial bailouts and forced the European Union to create a 750 billion-euro ($987 billion) emergency fund.

Moody’s Investors Service lowered Ireland’s credit rating five levels to Baa1 from Aa2 on Dec. 17, with further downgrades possible, as the government struggles to contain losses in the country’s banking system. Moody’s said last week it may lower Spain from Aa1 and also placed Greece’s Ba1 rating on review for a possible downgrade.

‘Selling Priorities’

When institutions are undercapitalized and don’t have access to new sources of funding, they “need to sell assets to reduce their balance sheet size,” Mead said. “They often focus on high dollar price, liquid assets as selling priorities.”

Many offshore structured investment vehicles, which made up a “sizeable share of the international investor base” for Australian RMBS before the 2007 credit freeze, were forced to liquidate their portfolios during the crisis and sell the notes on the secondary market, Reserve Bank of Australia Assistant Governor Guy Debelle said in a Nov. 30 speech.

Secondary market RMBS spreads widened to as much as 450 basis points amid the financial crisis, from 20 basis points before the U.S. subprime collapse roiled markets, according to the speech.

Wide Bay Australia Ltd., a non-bank lender, paid 105 basis points more than the bank bill swap rate on A$138 million of AAA rated RMBS, with a weighted average life of 1.5 years, according to an e-mailed statement last week from Australia & New Zealand Banking Group Ltd., which helped manage the sale.

ANZ Bank, Australia’s third-largest bank by market value, paid a 70 basis-point spread to sell A$100 million of three-year bonds last month, according to data compiled by Bloomberg.

House Prices

Pimco bought Australian mortgage bonds denominated in U.S. and local dollars and the euro, Mead said. The bond investor prefers to buy RMBS in the secondary market because home owners who borrowed the underlying mortgages which back the notes have proven they can meet repayments, he said.

“The nice thing about those securities is that house prices have gone up since, so already conservatively structured loan to valuation ratios have become even more conservative,” he said. “Our strong preference is the seasoned secondary market opportunities.”

House prices in Australia have risen 20 percent since the start of 2009, according to the statistics bureau.

Even as Gerard Minack, a Sydney-based developed markets strategist at Morgan Stanley, warned in August that homes are about 40 percent overvalued, the Reserve Bank of Australia said in a June report no rated portions of the nation’s mortgage bonds have suffered a default.

Australian Dollar

Pimco also sees Australian financial bonds as attractive, and maintains an overweight position to the nation’s dollar, Mead said.

The currency has gained 10 percent against the greenback this year, the second-best performer of 16 major currencies tracked by Bloomberg. Financial debt has returned 7.03 percent this year, according to a Bank of America Merrill Lynch index. The benchmark S&P/ASX 200 Index of stocks has returned 1.3 percent including reinvested dividends, according to data compiled by Bloomberg.

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Spain completed the final bond sale of the year with the threat of a credit rating downgrade, undermining the government’s efforts to convince investors the nation and its lenders can meet their refinancing needs in 2011.

Today’s auction of 10-year and 15-year bonds raised 2.4 billion euros ($3.2 billion), missing the maximum goal of 3 billion euros, after a surge in borrowing costs led the Treasury to reduce the usual target of as much as 4 billion euros. The yield on 10-year bonds rose five basis points after the auction to 5.56 percent as of 11:46 a.m. in Madrid.

Moody’s Investors Service said yesterday it may lower the country’s Aa1 rating less than three months after the previous cut. Spain’s central government, regional administrations and banks collectively require 290 billion euros of financing next year, leaving the country “susceptible to further episodes of funding stress,” the company said.

“Spain had to pay much higher yields for this auction, and that’s to be expected in the light of what Moody’s did earlier this week,” said Philipp Jaeger, a fixed-income economist at DZ Bank AG in Frankfurt.

The nation today sold 1.78 billion euros of 10-year bonds at an average yield of 5.446 percent, compared with 4.615 percent last time the securities were issued on Nov. 18, the Bank of Spain said today in Madrid. It also sold 618.7 million euros of 15-year debt at 5.953 percent, compared with 4.541 percent when the paper was last sold on Oct. 21.

Borrowing Needs

Spain is prefunding for 2011 as it has covered this year’s needs, according to Salgado. The budget shows gross issuance of 192 billion euros for the central government next year, although asset sales announced on Dec. 1 may raise 14 billion euros to help reduce the potential borrowing. Even as Moody’s says the country will meet its budget-deficit goals for 2010 and 2011, the rating company highlighted the risks posed by the banks’ requirement to roll over 90 billion euros of debt.

“The sovereign is OK, in terms of debt dynamics and even going forward in terms of the debt trajectory, it’s the banking system that’s a problem,” said Mohit Kumar, a fixed-income strategist at Deutsche Bank AG in London.

The extra yield investors demand to hold Spanish 10-year bonds over German bunds rose nine basis points to 251 basis points at noon today in Madrid. That compares with a euro-era closing high of 283 basis points on Nov. 30. The cost of insuring Spanish debt against default fell 5.6 basis points to 318, according to CMA prices.

Bank Buying

Spanish banks may provide some potential support for future bond auctions, as they have reduced holdings of government debt since June, which may leave them room to soak up new issuance no fax cash advance. Lenders lowered their holdings of Spanish government debt by 15 percent to 131.9 billion euros in October from 155.6 billion euros in June, according to data from the Treasury. Their share of Spain’s debt shrank to 26 percent in October from 33 percent in June, while non-residents boosted their share to 48 percent from 43 percent.

“Reduced exposure by those institutions should ultimately be a good thing in terms of auction participation going forward,” said Sean Maloney, a fixed-income strategist at Nomura Holdings Inc. in London. “It probably leaves a bit of room for the traditional supporters of these auctions to come forward.”

Spanish banks also have reduced their dependence on funding from the European Central Bank, cutting borrowings to 61.1 billion euros in November, the lowest since January, from a peak of 130.2 billion euros in July, according to Bank of Spain data. Deputy Finance Minister Jose Manuel Campa said yesterday he doesn’t foresee “problems of market access” for lenders next year, while Spain hasn’t seen any “lack of appetite” for public debt and he doesn’t expect it to next year either.

Brussels Summit

The auction comes as European leaders gather in Brussels today to discuss the creation of a permanent mechanism to support countries with financing difficulties beginning in 2013 when the temporary facility set up in May expires. Amid concerns that the existing 750 billion-euro fund may not be big enough if more countries seek help, Germany is hardening its opposition to expanding the facility, shifting more pressure onto the ECB and its bond-buying program.

Moody’s analyst Kathrin Muehlbronner said in an interview yesterday that a bailout for Spain isn’t “likely,” though she declined to “rule it out.” Juan Jose Toribio, a professor at IESE business school and former head of financial policy in the finance ministry, puts the chances of Spain needing a bailout at 30 percent, rising to 50 percent if Portugal seeks help.

Moody’s threat to cut Spain’s rating came two weeks after the government announced a series of measures, including partial privatizations, benefits cuts and a reduction in taxes for small businesses, aimed at bolstering growth and slashing the deficit by 50 percent in two years. The Socialist government had already lowered public wages and announced a pension freeze in May after Greece’s near-default.

“What it means is that it doesn’t believe in the package of measures,” Toribio said. “It’s all about the date.”

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A resolution of the Irish debt crisis may shift the burden of speculation to Portugal.

While officials such as European Central Bank Vice President Vitor Constancio predict a bailout of Ireland will reduce financial pressures in the euro region, analysts from Citigroup Inc. and Nomura International Plc say any relief would be short-lived as investors turn their focus to the next-weakest peripheral nation.

The markets indicate that country is Portugal with 10-year bond yields of 6.92 percent, compared with 8.31 percent in Ireland and 11.71 percent in Greece, which received rescue funds in May from the European Union and International Monetary Fund. Portuguese Finance Minister Fernando Teixeira dos Santos said Nov. 15 that while “there is a risk of contagion,” that doesn’t mean the country will seek financial aid.

“Portugal isn’t in the situation that it is now because of Ireland,” said Steven Mansell, director of interest-rate strategy at Citigroup Global Markets Ltd. in London. “If Ireland reaches an agreement to tap the European Financial Stability Facility or some other mechanism to support its banking sector, I don’t think that will alleviate the pressure on Portugal.”

The government has forecast that economic growth in Portugal will slow to 0.2 percent in 2011 from an estimated 1.3 percent this year. Portugal has made less progress at taming its deficit than some of the other peripheral nations. In the first nine months, the central government’s deficit rose 2.3 percent from a year earlier. That compared with a decline of more than 40 percent in Spain and more than 30 percent in Greece.

Record Yields

While Portugal has no plans to sell more bonds this year, so-called market vigilantes drove up yields on its debt during the past month amid doubts about the country’s efforts to reduce the budget deficit. The 10-year yield reached a euro-era record of 7.25 percent on Nov. 11, 484 basis points higher than benchmark German bunds of similar maturity.

Investors who push up yields to alter government policy are known as vigilantes, a term coined in 1984 by economist Edward Yardeni, president of Yardeni Investments Inc. in New York. They were credited with forcing Bill Clinton to cut the U.S. deficit after he came into office in 1993, helping drive 10-year Treasury yields down to about 4 percent by November 1998 from above 8 percent in 1994.

While Irish and Portuguese bonds probably would rise with a bailout agreement for Ireland, any gains wouldn’t change the underlying problems for peripheral Europe, according to Charles Diebel, head of market strategy at Lloyds TSB Corporate Bank.

Greece Than Ireland

“Wait a few weeks and the markets will just go for someone else, with Portugal at the front of the queue,” London-based Diebel said. “The vigilantes pushed Ireland into the same situation Greece is in. Why would you conclude they won’t do the same to Portugal?”

Ireland’s debt crisis was triggered by the rising cost of bailing out the nation’s banks, including Anglo Irish Bank Corp. and Allied Irish Banks Plc. While Portugal doesn’t face a crisis in its financial industry, it has a larger debt burden and the country has almost 10 billion euros of debt that comes due during the first half of 2011, data compiled by Bloomberg show.

Teixeira dos Santos, the finance minister, said in parliament two days ago that Portugal wants to continue financing itself in the markets.

‘Significantly at Risk’

“Portugal needs more cash than Ireland does because they go to the market on a regular basis,” said Nick Firoozye, head of interest-rate strategy at Nomura in London. “The market may move onto Portugal at some point because it’s significantly at risk.”

While Ireland started to reduce spending in 2008, Portugal has been slower to address its fiscal deficit, the fourth- largest in the euro region, and the government failed to reach an agreement with its biggest opposition party on the 2011 budget plan until the end of last month.

Portugal has proposed to lower its total wage bill for public workers by 5 percent, freeze hiring and raise the so- called value-added tax by 2 percentage points to 23 percent.

The government is counting on exports such as paper and wood products to support expansion. Portugal’s economy unexpectedly grew 0.4 percent in the third quarter from the previous three months, beating economists’ estimates for a contraction, as exports rose and imports grew at a slower pace.

Still, the Organization for Economic Cooperation and Development yesterday forecast the economy will swing to a contraction of 0.2 percent next year.

“Their view on fiscal consolidation is still premised on an excessively-optimistic growth projection,” Citigroup’s Mansell said. “Portugal is hugely reliant on the fortunes of its neighbors and it takes a huge stretch of the imagination to see growth remaining buoyant.”

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