LONDON | Fri Jul 27, 2012 12:21pm EDT

LONDON (Reuters) - Auctioneer Christie's should return the sum of 1.5 million pounds ($2.4 million) paid by a wealthy Russian art collector for a painting that was probably fake, a High Court judge ruled on Friday.

Mr Justice Newey concluded that the painting, "Odalisque," which shows a nude woman asleep on a bed, was probably not painted by Boris Kustodiev, a Russian artist who has been compared with English painter L.S. Lowry.

The judge ruled that Christie's had not been negligent, but should return the money paid for the work to Avrora Fine Arts Investment, a firm run by Russian businessman Viktor Vekselberg, the Press Association reported.

"It follows that Avrora is entitled to cancel its purchase of the painting and recover the money it paid," the judge said.

Kustodiev, who lived from 1878 to 1927, was much better known in Russia than outside, the judge said, adding one art expert had suggested Kustodiev was "to the Russians what Lawrence Stephen Lowry is to the English in terms of affection in which he is held".

Vekselberg's company bought the painting at a Christie's auction in London in 2005.

The work had been described in the sale catalogue as "one of the best examples of Kustodiev's idea of the provincial merchant class", and displayed the inscription "B. Kustodiev - 1919".

But Avrora took legal action against Christie's when an art dealer expressed doubts that the painting was genuine.

An expert called by Christie's thought the painting was authentic, although "not one of Kustodiev's best works".

Christie's lawyers insisted that Odalisque was authentic and the auction house could not be blamed if the painting was no masterpiece.

(Reporting by Alice Baghdjian; editing by Steve Addison)

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* Says no discussions taking place on nationalisation

* Move would have put UK's AAA rating at risk - analysts

* RBS braced for mis-selling IT provisions - Sky News

By Matt Scuffham

LONDON, Aug 2 (Reuters) - Britain has no plans to fully nationalise Royal Bank of Scotland, government sources told Reuters on Thursday, contradicting a report in the Financial Times.

The FT said senior government ministers were discussing the possibility of buying out private investors in the bank but sources told Reuters such a move was not on the agenda.

"There is no discussion on the table, there is no proposal, it is just not an active thing we are discussing at the moment at all," one of the sources said.

Mediobanca analysts said a full nationalisation would increase Britain's debt burden in relation to GDP and almost certainly cost the country its AAA credit rating.

"Having seen the taxpayer already suffer through the rescue of RBS, to saddle them with a book of questionable loans in the interests of political expediency is quite frankly ludicrous," they said in a research note.

Britain already owns 82 percent of the bank after bailing it out during the 2008 financial crisis. The remaining 18 percent of the bank is owned by private investors and would need to be bought out at a premium to the current market price. The shares are worth 4.2 billion pounds at Wednesday's closing price.

The FT report said ministers had become exasperated by the barriers they believe banks are placing on lending and some think taking full control of RBS and forcing it to lend could push other banks into action.

The government is under increasing pressure to stimulate the economy which official data has shown to be in a much deeper recession than previously thought.

The latest programme to get banks lending was launched on Wednesday offering banks 80 billion pounds worth of cheap funding on condition they lend it to small firms and households.

RBS reports first-half results on Friday.

Sky News reported that the bank will set aside a further 130 million pounds to compensate customers mis-sold loan insurance, take a hit of 125 million pounds for problems related to a computer systems failure and make a provision of 50 million pounds to settle claims by small firms wrongly sold interest rate hedging products.

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WASHINGTON | Thu Aug 2, 2012 11:41am EDT

Senate Majority Leader Harry Reid failed to come up with the 60 votes needed to cut off debate on cybersecurity legislation, dimming hopes for passing the bill this year.

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* Tourism is driving demand for suborbital thrill flights

* First commercial suborbital flights could start by 2014

* Advance fares range from $95,000 to $200,000 per seat

By Irene Klotz

CAPE CANAVERAL, Fla., Aug 1 (Reuters) - Commercial suborbital spaceflights should bring in between $600 million and $1.6 billion in revenue in their first decade of operations, according to a study commissioned by the U.S. and Florida governments and released on Wednesday.

Tourism drives about 80 percent of the demand for suborbital flights, which reach about 63 miles (100 km) above the planet's surface before plunging back through the atmosphere.

The thrill ride gives fliers a few minutes to float in microgravity and a view of the Earth set against the blackness of space.

Virgin Galactic, an offshoot of Richard Branson's London-based Virgin Group, is one of six firms developing reusable suborbital spaceships, an analysis by The Tauri Group of Alexandria, Virginia, found.

Prices currently range from $200,000 for a ride on Virgin Galactic's SpaceShipTwo, a six-passenger, two-pilot vehicle currently undergoing testing, to $95,000 for a flight on privately held XCOR Aerospace's planned two-seater Lynx vehicle.

Virgin Galactic, which is aiming to begin commercial service around 2014, already has $70 million in deposits from 536 people, Chief Executive George Whitesides said at a related congressional hearing on Wednesday.

The Tauri Group believes there are about another 7,500 wealthy people waiting in the wings.

"“Our analysis indicates that about 8,000 high-net-worth individuals from across the globe are sufficiently interested and have spending patterns likely to result in the purchase of a suborbital flight - one-third from the United States," the report said.

"“We estimate that about 40 percent of the interested, high-net-worth population, or 3,600 individuals, will fly within the 10-year forecast," it added.

The study, which included surveys of 200 people with a net worth of least $5 million, valued the fledgling industry at $600 million in its first decade, based on current market conditions and interest.

The market could be worth nearly three times that if marketing and consumer interest grows in the wake of successful flights, the study said.

"“Further potential could be realized through price reductions and unpredictable achievements such as major research discoveries, the identification of new commercial applications, the emergence of global brand value, and new government (especially military) uses for suborbital reusable vehicles," the study said.

After tourists, the next biggest group of potential users are in the research community. Other potential markets include technology flight demonstrations, media and public relations, education, satellite launching, remote sensing and suborbital travel from one destination to another, a technology that is likely beyond the study's 10-year time frame.

The $277,000 study, titled “"Suborbital Reusable Vehicles: A Ten-Year Forecast of Market Demand," was paid for by the U.S. Federal Aviation Administration, which oversees commercial spaceflight, and the state of Florida, which is home to NASA's Kennedy Space Center. (Editing by Jane Sutton and Cynthia Osterman)

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HELSINKI | Thu Aug 2, 2012 10:04am EDT

HELSINKI Aug 2 (Reuters) - Google will invest 150 million euros ($184.5 million) in doubling the size of a data centre housed in a former paper mill in eastern Finland, the company said, as it responds to growing demand for its services.

Companies like Google have been expanding data centres due to the increasing popularity of cloud computing services, which allow users to store and process data at massive remote data centres instead of on their own computers.

Finland and other Northern European countries are popular sites for data centres, with vast amounts of hydro-power and cold climates which cut the need for cooling, the main cost for many data centres.

Google's data centre in Hamina uses a sea water cooling system that was part of the old paper mill which Google bought from Stora Enso in 2009.

Europe's top paper maker closed the loss-making mill in 2008 after nearly 53 years of operation. Older parts of the mill were designed by renowned Finnish architect Alvar Aalto.

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(Company corrects comments on Olympic corporate ticket packages in final paragraphs having originally said that it had a third of the packages left unsold and that about 95 percent of the tickets repackaged for sale to the public had now been sold.)

* Harriet Green says will tap on technology expertise

* Q3 operating loss 26.5 mln stg vs 20.1 mln stg profit yoy

* Says rainy weather boosted foreign holiday bookings

* Sees full-year results broadly in line with expectations

By Brenda Goh

LONDON, Aug 2 (Reuters) - Thomas Cook's new chief executive said technology would be the salvation of the struggling British tour operator and gave herself nine months to deliver a turnaround plan to end over a year of poor performance.

The company posted an underlying operating loss of 26.5 million pounds ($41.3 million) in the three months ended June, versus a profit of 20.1 million pounds in the same period last year despite a lift in foreign bookings from Britons exasperated with rainy weather at home.

Harriet Green, who joined the 171-year-old company from electronic parts distributor Premier Farrell in July, told reporters on Thursday she would be able to "bring a fresh pair of eyes" to existing industry problems.

"I don't think moving from one industry (to another) is so much of a challenge ... There are many things that are actually very similar and in my view of business, all roads ultimately lead to technology," she said.

Thomas Cook has been hit hard by tough trading conditions, particularly in Britain where its core customer base of families with young children is suffering in the economic downturn. It has also been affected by unrest in popular destinations such as Egypt, Tunisia and Morocco.

In May it reported half-year pretax loss of 328.3 million pounds and completed the sale and leaseback of 19 of its planes as it struggled to find cash.

"In our view they (new management) face a very difficult turnaround task. We expect early views from the new team in November and a detailed plan to be announced in the Spring," Numis analysts said.

Thomas Cook said foreign holiday bookings had picked up in recent weeks after subdued demand in April and May, as the sodden European summer drove rain-weary Britons, Germans and Russians to seek the sun in Greece and Tunisia.

UK bookings as of July 29 were flat versus the same time last year, while bookings in central Europe were 1 percent higher, boosted by demand from Germany.

In comparison, bookings in west Europe were down 9 percent compared with the same time last year, as trading, particularly in France, stayed tough.

Net debt at June 30 was 1.01 billion pounds, versus 902.5 million pounds at the same time last year. It has striven to pay down its debt through selling its Spanish hotel chain Hotels Y Clubs De Vacaciones and expects to complete the 87 million pound sale of its Indian unit by Aug. 22.

While the outlook remained challenging, the company said its quarterly financial trend was improving and it expects to post a full-year result broadly in line with expectations.

At 0943 GMT shares in Thomas Cook, which have fallen more than 70 percent over the past year, were down 1.5 percent to 16.32 pence, valuing the company at around 148 million pounds.

It also said plans to cash in on the Olympics by selling packages to corporate clients had not gone as well as expected after the implementation of the UK bribery act made corporates nervous about offering or accepting corporate hospitality.

It had originally allocated 25 percent of its tickets to corporate packages but has since repackaged more than half of these to sell to the public a nd said it has now so ld 99 percent of its Olympic tickets. ($1=0.6415 British pounds) (Reporting by Brenda Goh; Editing by Mark Potter and David Cowell)

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* Spanish tech start-ups expand beyond troubled home market

* Young entrepreneurs cheaper than in U.S., Britain

* New ventures aim to bring down sky-high jobless rate

By Clare Kane

MADRID, Aug 2 (Reuters) - Half of Spain's youth are unemployed, and yet at the Wayra business start-up project on Madrid's majestic Gran Via avenue, young people buzz around an office chatting animatedly, typing furiously and holding up trails of wire and computer parts.

These are Spain's technology entrepreneurs, and they're positive about the future - even as Prime Minister Mariano Rajoy tries to avert a full international rescue for a country beset by recession, a property market collapse and a banking crisis.

Almost all plan to expand beyond Spain's borders, if they aren't operating internationally already. For domestic and foreign investors in their ventures, the dire state of the nation can even be an advantage: put bluntly, young Spanish entrepreneurs come cheaper than their U.S. and British rivals.

"There is no crisis. The crisis is outside. But here what we have is people working, setting up companies and creating employment," said Gonzalo Martin-Villa, global head of Wayra.

Wayra is a project set up by Spanish telecoms giant Telefonica where about 40 people work for 10 companies in a minimalist open-plan office, housed in a building that was one of Europe's first skyscrapers when it opened in the 1920s.

They live in a world far removed from the grinding reality of a Spain beset by near-daily street protests against Rajoy's budget cuts and media reports fretting about the cost of government borrowing and the possibility of a state bailout.

Telefonica operates widely in Latin America - Wayra means "wind" in the Quecha language of the Andes - but it is not immune from Spain's problems. Last week it scrapped this year's dividend due to its weak home market, but it still believes entrepreneurs will bring in ideas to set Spain up for a better future.

Under Martin-Villa, who heads Telefonica Digital, the group is nurturing the young companies with start-up capital, accommodation and help with technology and marketing. It also supplies mentors from within Telefonica or brings in outside experts to offer advice.

This help is limited. After a year, the firms must leave Wayra and fend for themselves in the business world. However, Telefonica keeps a shareholding in return for the start up capital which the entrepreneurs must match by raising funds elsewhere.

FORTUNE IN MISFORTUNE

David Moreno, founder of online investment platform Impok, is one entrepreneur based at Wayra who is trying to create a successful business out of Spain's misfortunes.

Moreno and his team used to work in the financial sector and, seeing Spaniards' distrust of banks, decided to offer people the opportunity to invest directly, without the spin laid on by investment advisers, and share money-making ideas.

Moreno compares Impok with Napster, a website which originally allowed users to share music files online, although it ran into legal trouble over copyright infringements before changing its business model.

"What Napster did to music, we're going to do to banks," Moreno said, standing proudly in the firm's office in Wayra.

Impok users can see others' portfolios and returns (although not the amount invested) and make decisions based on others' financial performance. The firm is hoping for 1.5 million euros in its second round of financing, after raising 460,000 euros in initial capital from business angels, Wayra and public funding.

Impok will now target investors in Spain, the rest of the Europe and the United States to raise further funds.

Telefonica is not alone in Spain. Oil major Repsol also has a start-up hub and brewer Mahou-San Miguel has offered to help young people with business ideas.

Likewise, travel firm Pullmantur will mentor Seville-based Past View, which offers tourists the opportunity to see what a city looked like in the past through 3D goggles.

INVESTMENT ON THE CHEAP

Foreign investors are drawn to Spanish tech companies, unworried by the crisis, as location is generally not important for start-ups planning to operate internationally.

Spain's problems can even work to their advantage. While overall unemployment is just short of 25 percent, the highest in the euro zone, the rate among young people is double that. In short, unemployed talent can be contracted cheaply.

While the price may be low, the quality is not. Many of the entrepreneurs interviewed by Reuters studied at top universities abroad, especially in the United States and Britain, before returning home to Spain to work.

Tech companies can also offer an attractive investment alternative to Spain's troubled stock market and government debt. I f successful, innovative products can rapidly bring high returns. Global expansion is often more straightforward than in other sectors as tech by its nature crosses borders easily.

It's a phenomenon also seen in Ireland, which suffered an even deeper banking crisis after its property market collapsed, like Spain's. Dublin has also encouraged people to set up businesses to revive the fallen Celtic Tiger economy, and data company EMC has predicted Ireland is on the verge of a new tech boom that will create thousands of jobs.

Irish brothers John and Patrick Collinson attracted millions of dollars of investment from the likes of venture capitalist Peter Thiel for their Silicon Valley-based Internet payments system Stripe, something Spanish entrepreneurs hope to emulate.

ProFounders Capital, a venture capital fund run by entrepreneurs including lastminute.com co-founder, Brent Hoberman, says Spain is fertile investment territory.

It put up $750,000 in financing for Blink Booking, a Spanish-based venture that offers a hotel reservations app and is now present in several European countries.

"It's horrible to say, but actually it's a slight advantage because Blink is able to recruit high quality people at fair prices, so that works well from their side," said Sean Seton-Rogers, of ProFounders Capital.

Although no specific figures are available, people in the start-up sphere say activity has picked up since the beginning of this year, with investors buying up more small Spanish companies, although the amount of money pouring into firms has fallen off since 2010.

"The technology and the teams are equivalent to what you can find in the United States or the UK but it is much cheaper," said Juan Jose Guemes, President of the International Centre for Entrepreneurial Management at IE Business School in Madrid.

READY FOR CHANGE

Madrid remains a long way culturally from Silicon Valley. Rebeca Minguela, a co-founder of B link, said Spain needs a shift in mentality. Many young people there still prefer the supposed security of working at large, well-known companies, even though many of these are now laying people off, she said.

"We give our employees stock options, but people don't value them, it's a completely different mentality compared to the U.S.. You always have to pay your employees in cash, which is terrible for a start-up," she said.

Many start-ups in the United States and elsewhere initially pay employees in stock options to preserve capital for expansion.

Blink pays its staff in a mixture of cash and stock options, but, given the choice, the majority of workers prefer to receive cash, Minguela said. All permanent employees have stock options.

In the lively neighbourhood of La Latina, Andres Burdett and Jamie Dick-Cleland - who founded language-learning start-up uSpeak - enthuse about Madrid becoming a start-up centre and the opportunity they have to offer cheap English language tuition to Spain's unemployed as the government makes cuts in education.

uSpeak, which will offer personalised mobile language learning when it launches officially in October, settled in the capital following Startupbootcamp Madrid in 2011 and is housed alongside several foreign start-ups.

The firm is promising to teach Spaniards initially for free, and then for a low price, i m proving their job prospects in a country where English is less widely spoken than in many other Western European countries.

"There's something going on...people are ready for change," said Dick-Cleland.

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TORONTO | Wed Aug 1, 2012 11:27pm EDT

TORONTO Aug 1 (Reuters) - Research in Motion refuted on Wednesday a new round of Indian media reports, which claim that the BlackBerry maker has granted the Indian government the encryption keys to its secure corporate email and messaging services.

India is one of the Canadian smartphone maker's few growing markets, where it is expanding aggressively. The company is facing falling sales elsewhere as customers abandon the BlackBerry in favour of Apple's iPhone and a slew of devices using Google Inc's Android software, leading to RIM's shares falling by more than 50 percent over the past one year.

RIM, which has been grappling with the Indian government for years, reiterated that it cannot provide access to its enterprise email and messaging services as the company itself does not possess the encryption keys for the same and these remain in the control of its corporate clients.

The Economic Times, in a report on its website that cited a telecom department official and certain documents reviewed, said that RIM had provided the Indian government a solution that gave it access to corporate emails.

RIM categorically denied this claim in a statement. It has more than once refuted similar claims in India over the last two years.

"RIM is providing an appropriate lawful access solution that enables India's telecom operators to be legally compliant with respect to their BlackBerry consumer traffic, to the same degree as other smartphone providers in India, but this does not extend to secure BlackBerry enterprise communications," said Waterloo, Ontario-based RIM in a statement.

RIM gave India access to its consumer services, including its Messenger services, in January last year after authorities raised security concerns, but said it could not allow monitoring of its enterprise email.

The Indian government is fearful that encrypted BlackBerry services could be used to foster unrest or allow militants to organize or carry out attacks.

'SECURE AND ENCRYPTED'

David Paterson, RIM's head of government relations, said he is positive that the Indian government recognizes encryption is fundamental to attracting and maintaining international business in the country and that it would not make any demands that could jeopardize foreign investment in India.

"The fact is that BlackBerry enterprise communications in India remain secure and encrypted. No change has been made or ever can be made in India or anywhere," he said in an interview.

RIM has also faced similar political pressures in the Middle East and elsewhere. It also blocked pornographic sites on its browsers in Indonesia last year following government pressure.

Enterprise clients -- corporations and government agencies signed up to the BlackBerry Enterprise Server -- are assigned encryption keys stored only on individual user accounts. For such users, any data sent from a BlackBerry is scrambled at the source and reconstituted on arrival at the receiving device.

RIM has long maintained that only the sponsoring business or organization has the technical capability to grant access to encrypted enterprise email.

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n" readability="62">Aug 2 (Reuters) - The following bids, mergers, acquisitions and disposals involving European, U.S., Canadian and Asian companies were reported by 1330 GMT on Thursday.

** South Korea decided to suspend the sale of its 6 trillion won ($5.2 billion) controlling stake in Woori Finance Holdings after failing to evoke interest from potential buyers, a Financial Services Commission official said on Thursday.

** A group of Chinese investors will pay 55 million euros ($67 million) for a 15 percent stake in Inter Milan, becoming the second-biggest shareholder of the Italian premier league football club, sources close to the situation said.

** AT&T Inc has agreed to buy the equity of NextWave Wireless Inc for up to $50 million in cash in an effort to expand its spectrum needed for high-speed wireless services.

** Prime Acquisition Corp said it would buy Yuantong Investment Holdings Ltd in a proposed $42 million transaction.

** Ryder System Inc bought UK-based Euroway Group Ltd for about $20.2 million.

** Avnet Inc, an industrial distributor of electronic components, enterprise computer and storage products bought Pepperweed Consulting and expects the transaction add to earnings immediately.

** German sports apparel company Adidas said it was not planning to sell struggling unit Reebok and that it hopes to return the division to growth in 2013.

** China's Hanlong Group is in talks to reduce the A$1.7 billion ($1.79 billion) price tag it agreed to pay for Australian iron ore miner Sundance Resources, following a drop in both Sundance's share price and the price of iron ore.

** Dutch bank and insurer ING, which has been forced to sell assets in return for receiving state aid during the financial crisis, said it is considering the sale of its online banking businesses in the UK and Canada.

** Japan-based communications service provider Dentsu Inc said it has received regulatory approval from Australia's Foreign Investment Review Board (FIRB) to acquire Australian telecommunications hardware maker Aegis.

** Chalco said it has decided to extend its offer for a majority stake in Mongolia-focused coal miner SouthGobi Resources Ltd for the second time, the Chinese aluminum giant said on Thursday, in the face of stiff political opposition in Mongolia.

** Alliance Pharma bought AstraZeneca UK's antimalarial brands paludrinetm, avloclortm and savarinetm and said it would pay 4.2 million pounds ($6.55 million)and up to 1 million pounds ($1.56 million) over the next 3 years.

(Compiled by Vishal Krishnan Menon in Bangalore)

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