Payday loan firms warned by OFT

20 November 2012 Last updated at 06:43 ET

David Fisher, Office of Fair Trading: “The industry as a whole certainly needs to raise its game”

The payday loan industry has been warned to improve the way it lends money and collects debts, or face fines or closures.

The Office of Fair Trading (OFT), in an interim report, says most of the 50 big firms it has been inspecting do not operate fully by its rules.

The OFT says it is worried by reckless lending and aggressive debt collection.

It has now begun formal investigations into several payday lenders over aggressive debt collection practices.

The OFT will publish its full report in the new year, when it has ended an investigation which it started in February 2012.

But David Fisher, the OFT’s director of consumer credit, said all 240 payday lenders have been put on notice to improve.

“What we are discovering is that right across the sector problems exist and the industry as a whole certainly needs to raise its game,” he told BBC News.

He added that recent estimates suggested that the industry was now lending £1.8bn a year, double the amount of a couple of years ago.

Updated rules

The OFT is worried about the “poor practices” which its enquiries have been uncovering, and which chime closely with many of the criticisms that consumer groups have been making of payday lenders.

Among the OFT’s concerns are that:

• lenders do not check properly if their borrowers can afford to repay the money they have borrowed


• too many loans are not repaid on time


• the loans are then extended too often


• lenders are too aggressive when borrowers fail to repay promptly

The regulator has become especially worried about the way payday loan firms use a type of repayment agreement called a continuous payment authority (CPA), using a credit or debit card to ensure they are repaid automatically.

The OFT has updated its rules for the industry to make it clear that if borrowers sign up for a CPA, it must be with their explicit agreement.

Borrowers must be told how a CPA works and how they can bring one to an end.

Lenders must not keep on trying to drain cash from their borrowers’ accounts if there is not enough money available to meet the debt.

Meggan Tile owes seven thousand pounds in payday loan debt and describes how the stress used to keep her awake at night

“Our report shows that a large number of payday loans are not repaid on time,” said Mr Fisher.

“Our revised guidance makes it absolutely clear to lenders what we expect from them when using continuous payment authority to recover debts and that we will not accept its misuse.”

The UK’s most high profile payday lender, Wonga, said it welcomed the OFT report and its recommendations, which add to a new industry code of practice that was announced in the summer and which comes into effect next week.

“Regarding continuous payment authority, which is also used by a broad range of businesses outside of consumer credit, we believe it is an important method of collection and we share the OFT’s concerns that it must not be misused,” said a Wonga spokeswoman.

‘Bad situation worse’

Joanna Elson, chief executive of the Money Advice Trust, welcomed the OFT’s interim report.

She said the experience of clients coming to the Trust for advice was that “payday loans have a habit of making a bad situation worse”.

“We have a lengthy list of concerns about the practices of many companies in the sector and we hope the OFT review will kickstart a more serious consideration of the problems payday loans create,” she said.

“Many thousands of people have come to us for help after having seen their debt problem made far more serious by taking out one or more payday loans,” she added.

The Financial Ombudsman Service (FOS) has found a small but increasing number of people complaining to it about payday loan firms.

A spokesman said the main reason for people complaining was that the loan had been unaffordable and should never have been granted in the first place.

“In the first half of this financial year – April to September 2012 – we received 271 new complaints; this compares to the 296 complaints brought to our service during the whole of last year (2011-12) – and we are currently upholding eight out of 10 cases in favour of the consumer,” said an FOS spokesman.

BBC News – Business

Read More..

AP Exclusive: Syrian rebels seize base, arms trove

BASE OF THE 46TH REGIMENT, Syria (AP) — After a nearly two-month siege, Syrian rebels overwhelmed a large military base in the north of the country and made off with tanks, armored vehicles and truckloads of munitions that rebel leaders say will give them a boost in the fight against President Bashar Assad‘s army.

The rebel capture of the base of the Syrian army’s 46th Regiment is a sharp blow to the government’s efforts to roll back rebels gains and shows a rising level of organization among opposition forces.

More important than the base’s fall, however, are the weapons the rebels found inside.

At a rebel base where the much of the haul was taken after the weekend victory, rebel fighters unloaded half a dozen large trucks piled high with green boxes full of mortars, artillery shells, rockets and rifles taken from the base. Parked nearby were five tanks, two armored vehicles, two rocket launchers and two heavy-caliber artillery cannons.

Around 20 Syrian soldiers captured in the battle were put to work carrying munitions boxes, barefoot and stripped to the waist. Rebels refused to let reporters talk to them or see where they were being held.

“There has never been a battle before with this much booty,” said Gen. Ahmad al-Faj of the rebels Joint Command, a grouping of rebel brigades that was involved in the siege. Speaking on Monday at the rebel base, set up in a former customs office at Syria’s Bab al-Hawa border crossing with Turkey, he said the haul would be distributed among the brigades.

For months, Syria’s rebels have gradually been destroying government checkpoints and taking over towns in the northern provinces of Idlib and Aleppo along the Turkish border.

Rebel fighters say that weapons seized in such battles have been essential to their transformation from ragtag brigades into forces capable of challenging Assad’s professional army. Cross-border arms smuggling from Turkey and Iraq has also played a role, although the most common complaint among rebel fighters is that they lack ammunition and heavy weapons, munitions and anti-aircraft weapons to fight Assad’s air force.

It is unclear how many government bases the rebels have overrun during the 20-month conflict, mostly because they rarely try to hold captured facilities. Staying in the captured bases would make them sitting ducks for regime airstrikes.

“Their strategy is to hit and run,” said Elias Hanna, a retired Lebanese army general and Beirut-based strategic analyst. “They’re trying to hurt the regime where it hurts by bisecting and compartmentalizing Syria in order to dilute the regime’s power.”

The 46th Regiment was a major pillar of the government’s force near the northern city of Aleppo, Syria’s economic hub, and its fall cuts a major supply line to the regime’s army, Hanna said. Government forces have been battling rebels for months over control of Aleppo.

“It’s a tactical turning point that may lead to a strategic shift,” he said.

At the 46th Regiment’s base, about 25 kilometers (15 miles) west of Aleppo, the main three-story command building showed signs of the battle — its walls punctured apparently from rebel rocket attacks. The smaller barracks buildings scattered around the compound, about 2.6 square kilometers (1 square mile) in size, had been looted, with mattresses overturned. A number of buildings had been torched.

Reporters from The Associated Press who visited the base late Monday saw no trace of the government troops who had been defending it — other than the dead bodies of seven soldiers.

Two of them, in camouflage uniforms, lay outside the command building. One of them was missing his head, apparently blown off in an explosion.

The rest were in a nearby clinic. Four dead soldiers were on stretchers set on the floor, one with a large gash in his arm, another with what appeared to be a large shrapnel hole in the back of his head. The last lay on a gurney in another room, his arms and legs bandaged, a bullet hole in his cheek and a splatter of blood on the wall and ceiling behind him as if he had been shot where he lay.

It could not be determined how or when the soldiers had been killed.

The final assault that took the base came after more than 50 days of siege that left the soldiers inside demoralized, according to fighters who took part.

Working together and communicating by radio, a number of different rebels groups divided up the area surrounding the base and each cut the regime’s supply lines, said Abdullah Qadi, a rebel field commander. Over the course of the siege, dozens of soldiers defected, some telling the rebels that those inside were short of food, Qadi said.

The rebels decided to attack Saturday afternoon when they felt the soldiers inside were weak and the rebels had enough ammunition to finish the battle, Qadi said. The battle was over by nightfall on Sunday. Seven rebel fighters were killed in the battle, said al-Faj of the rebels’ Joint Command. Other rebel leaders gave similar numbers.

It remains unclear how many soldiers remained in the base when the rebels launched their attack and what happened to them.

Al-Faj said all soldiers inside were either killed or captured. He said he didn’t know how many were killed, but that the rebels had taken about 50 prisoners, all of whom would be tried in a rebel court. Aside from the 20 prisoners seen at the rebel’s Bab al-Hawa base, the AP was unable to see any other captured soldiers.

The Syrian government does not respond to requests for comment on military affairs and said nothing about the base’s capture. It says the rebels are terrorists backed by foreign powers that seek to destroy the country.

Disorganization has plagued the Syrian opposition since the start of the anti-Assad uprising in March 2011, with exile groups pleading for international help even when they have no control over those fighting inside of Syria.

A newly formed Syrian opposition coalition received a boost Tuesday, when Britain officially recognized it as the sole representative of the Syrian people.

The National Coalition of the Syrian Revolutionary and Opposition Forces was formed in the Gulf nation of Qatar on Oct. 11 under pressure from the United States for a stronger, more united opposition body to serve as a counterweight to more extremist forces.

British Foreign Secretary William Hague said Tuesday the body’s members gave assurances to be a “moderate political force committed to democracy” and that the West must “support them and deny space to extremist groups.”

The United States and the European Union have both spoken well of the body but stopped short of offering it full recognition.

Key to the body’s success will be its ability to build ties with the disparate rebel groups fighting inside Syria. Many rebel leaders say they don’t recognize the new body, and a group of extremist Islamist factions on Monday rejected it, announcing that they had formed an “Islamic state” in Aleppo.

Anti-regime activists say nearly 40,000 people have been killed since Syria’s crisis started 20 months ago.

___

Associated Press write Elizabeth Kennedy contributed reporting from Beirut, Lebanon.

Middle East News Headlines – Yahoo! News

Read More..

News Summary: India outrage over Facebook arrests

WHAT HAPPENED: As India‘s financial capital shut down for the weekend funeral of a powerful politician linked to waves of mob violence, a woman posted on Facebook that the closures in Mumbai were “due to fear, not due to respect.” A friend of hers hit the “like” button. For that, both women were arrested.

THE RATIONALE: The arrests were seen as a move by police to prevent any outbreak of violence by supporters of Bal Thackeray, a powerful Hindu fundamentalist politician who died Saturday.

THE REACTION: But analysts and the media are slamming the Maharashtra state government for what they said was a flagrant misuse of the law and an attempt to curb freedom of expression.

Social Media News Headlines – Yahoo! News

Read More..

Charlie Chaplin’s bowler hat and cane fetch over $60,000 at auction

NEW YORK (Reuters) – One of Charlie Chaplin’s bowler hats and a cane, the staple of Hollywood silent-era comedy, were auctioned for $ 62,500 on Sunday, said auction house Bonhams.

Chaplin’s hat and cane, which fetched more than the initial estimate of $ 40,000-60,000, are synonymous with his “Little Tramp” character in films such as “City Lights” and “Modern Times.”

Bonhams memorabilia specialist Lucy Carr said earlier it is unknown how many of Chaplin’s bowlers and canes still exist. Those auctioned on Sunday are from a private collection but have a direct link to Chaplin, Carr said.

The waddling and bumbling “Little Tramp” character propelled Chaplin to global fame. The character, Hollywood legend says was created by accident on a rainy day at Keystone Studios, first appeared in 1914′s “Kid Auto Races at Venice” and lastly in 1936′s “Modern Times.”

Chaplin’s hat and cane are the highlights of an auction of popular culture artifacts that is still in progress. Other items include a handwritten letter from John Lennon in which the Beatle sketched himself and wife Yoko Ono nude. There is also an archive of Marilyn Monroe photographs, an early Charles Schulz “Peanuts” comic strip, and a wicker chair from Rick’s Cafe in “Casablanca.”

(Additional reporting by Eric Kelsey; editing by Christopher Wilson)

Celebrity News Headlines – Yahoo! News

Read More..

U.S. ITC will review Apple, Samsung patent decision

WASHINGTON (Reuters) – The U.S. International Trade Commission will review a judge’s decision which found that Apple did not violate patents owned by Samsung Electronics in making the iPod touch, iPhone and iPad.

An administrative law judge at the ITC had said in a preliminary ruling in September that Apple was innocent of violating the patents. The ITC, which could have opted to simply uphold the judge’s decision, said that it would take up the matter. A final decision is expected in January.

If Apple is found to infringe, its devices can be banned for sale in the United States.

Apple and Samsung have taken their bruising patent disputes to some 10 countries as they vie for market share in the booming mobile industry.

Apple won a huge victory in August when a U.S. jury found the South Korean firm had copied key features of the iPhone. Apple was awarded $ 1.05 billion in damages. That ruling is under appeal.

In its announcement that it would review the case, the ITC asked for briefings on how it should consider standard essential patents, which are normally expected to be licensed widely and on fair, reasonable and non-discriminatory terms. The use of standards helps companies ensure devices are interoperable.

Some antitrust enforcers have argued that it is wrong for companies which own standard essential patents to ask for infringing devices to be barred from the country except in extreme instances.

The commission is reviewing a decision by ITC Judge James Gildea, who said in September that Apple did not violate the four patents at issue in the case, which was filed in mid-2011.

The two standard essential patents in the complaint are related to 3G wireless technology and the format of data packets for high-speed transmission.

Apple has a parallel complaint filed against Samsung at the ITC, accusing Samsung, a major Apple chip provider as well as a global rival, of blatantly copying its iPhones and iPads. An ITC judge said in that case that Samsung infringed on four Apple patents. The full ITC will issue a final decision in February.

Apple has waged an international patent war since 2010 as it seeks to limit growth of Google’s Android system. The fight has embroiled Samsung, HTC and others who use Android.

Google’s Android software, which Apple’s late founder Steve Jobs denounced as a “stolen product,” has become the world’s No. 1 smartphone operating system.

Samsung is the world’s largest smartphone maker, while Apple is in third place. Many experts consider Samsung’s Galaxy touchscreen tablets the main rival to the iPad, although they are currently a distant second to Apple’s devices.

Samsung is also a parts supplier to Apple, producing micro processors, flat screens and memory chips – both dynamic random access memory (DRAM) chips and NAND memory chips – for the iPhone, iPad and iPod. Apple has reduced orders from Samsung for chips and screens.

The case at the International Trade Commission is No. 337-794.

(Reporting By Diane Bartz; Editing by Bernard Orr and David Gregorio)

Business News Headlines – Yahoo! News

Read More..

Turbulence on Cuba-Italy flight leaves 30 bruised

ROME (AP) — An airliner flying from Havana to Milan abruptly plunged some 1,000 meters (3,300 feet) when it hit unusually strong turbulence over the Atlantic on Monday, terrifying passengers and leaving some 30 people aboard with bruises and scrapes, airline officials said.

The flight continued to Milan’s Malpensa airport after the plane’s captain determined that it suffered no structural damage and two passengers who are physicians found no serious injuries, Giulio Buzzi, head of the pilots division at Neos Air, told Sky TG24 TV.

The ANSA news agency quoted bruised passenger Edoardo De Lucchi as saying meals were being served when suddenly there was “10 seconds of terror.” He recounted how plates went flying and some passengers not wearing seatbelts bounced about.

Buzzi had said that the drop measured some 3,000 meters (10,000 feet) in a cloudless sky. But Milan daily’s Corriere della Sera’s web site, quoting Neos official Davide Martini, later reported that the plane first bounced up some 500 meters (1,650 feet), then dropped some 1,000 meters (3,300 feet) to some 500 meters (1,650 feet) below the original altitude.

Europe News Headlines – Yahoo! News

Read More..

Google should not be accused of “unfair” acts: lawmakers

WASHINGTON (Reuters) – Two lawmakers urged the Federal Trade Commission on Monday to steer clear of expanding its authority as it investigates allegations search engine company Google violated antitrust law.

The two California Democrats in the House of Representatives, who count Google as a major campaign contributor, asked the FTC not to accuse the company of “unfair” acts if it believes it broke antitrust law.

Anna Eshoo, on the Energy and Commerce Committee, and Zoe Lofgren, who is on the Judiciary Committee, said there were reports to suggest the FTC planned to use the unfair standard to avoid proving some elements required in an antitrust claim.

They said such a move could lead to over-broad authority for the FTC that could create legal uncertainties for firms and stifle economic growth.

“Such a massive expansion of FTC jurisdiction would be unwarranted, unwise, and likely have negative implications for our nation’s economy,” the lawmakers wrote in the letter, which was dated November 19 and sent to the five FTC commissioners.

The FTC is looking into a long list of complaints brought by rivals of Google, which is also accused of using its dominance to squash competitors in vertical search areas such as shopping and travel.

The FTC staff has reportedly given the commission a report urging them to file a complaint against Google for suing competitors based on standard essential patents and asking for injunctions to stop the sales of their products. Standard essential patents are supposed to be broadly licensed at a fair rate.

Google is the seventh largest contributor to Eshoo, donating $ 13,000 during the 2012 election cycle, according to data from the Center for Responsive Politics. It is the third largest contributor to Lofgren, who got $ 14,500 from Google. The donations came from a Google political action committee and employees and lobbyists associated with Google.

Complaints about Google to the FTC over standard essential patents arise from a raft of litigation between Apple Inc, Google and Microsoft Corp, which have sued each other numerous times in various countries, each alleging that their respective patents are being infringed upon by rivals in the highly competitive smartphone market.

In many cases, the companies ask that their rivals’ products be banned from stores. Many antitrust enforcers believe it is inappropriate for companies to ask for sales bans based on the infringement of essential patents.

FTC Chairman Jon Leibowitz, who is expected to leave the agency soon, said in mid-September that he expected a decision in the case by the end of the year. A decision could be in the form of a lawsuit or, more likely, a settlement.

Google has settled with U.S. law enforcement agencies in the past.

For example, it settled with the FTC following privacy gaffes during the botched roll-out of its social network, Buzz. Later, it paid $ 22.5 million to settle charges that it bypassed the privacy settings of customers using Apple’s Safari browser.

Google also paid a $ 500 million settlement in 2011 to the Justice Department for knowingly accepting illegal advertisements from Canadian pharmacies selling in the United States.

FTC spokesman Peter Kaplan confirmed that the commission had received the letter but said the agency declined comment.

(Reporting By Diane Bartz; editing by Andrew Hay)

Tech News Headlines – Yahoo! News

Read More..

Cablevision subscribers sue over Hurricane Sandy outages

LOS ANGELES (TheWrap.com) – Even as workers scramble to clean up the mess that Hurricane Sandy left in the Northeast two weeks ago, a legal mess is beginning to spill into the court system.

Cablevision subscribers Jeffery and Irwin Bard filed a class-action lawsuit against the cable provider in New York Supreme Court this week, seeking restitution for television, telephone and internet outages caused by Sandy, according to court papers obtained by TheWrap.

The suit, which alleges breach of contract and unjust enrichment, claims that Cablevision “continued to advertise falsely that it was providing services to its customers” even after the storm caused outages for its customers, and “could not restore services to many of its customers for days, or even weeks.”

Moreover, according to the complaint, Cablevision continued to issue bills for services it was unable to provide in the aftermath of the storm, and “instituted a secretive policy to offer ‘customer credits’ only to customers who affirmatively and actively demanded rebates on a discretionary basis,” rather than offer across-the-board rebates to its customers, even though it had access to which customers had lost power and for how long.

A spokesman for Cablevision told TheWrap that the lawsuit “misstates the facts and is without merit,” and that Cablevision has “an extremely broad and customer friendly credit policy following Sandy.”

“Blanket or arbitrary credits for cable outages could shortchange customers because each case is different and our policy covers the entire period of time when Cablevision service was out, including when the service interruption was caused by the loss of electrical power,” the spokesman said in a statement.

Cablevision does allow for customers to call and process their credit, or go to optimum.net/credit, where they can detail the period of their outage to receive credit.

The suit, filed Tuesday, seeks unspecified damages for each member of the class, plus attorneys’ fees and court costs, along with a permanent restraint barring Bethpage, N.Y.-based Cablevision from billing or invoicing customers when there’s a service outage of more than 24 hours.

(Pamela Chelin contributed to this report)

TV News Headlines – Yahoo! News

Read More..

Corporate China’s Black Hole of Debt

For China bulls, things are starting to look up. The property market has been showing signs of life, and October retail sales, investment, and industrial production have come in above forecasts. A manufacturing index also showed improvement, and exports increased 11.6 percent in October, the fastest pace in five months.

Yet one figure is going in the wrong direction: China’s corporate debt has risen from 108 percent of the entire economy last year to 122 percent in 2012, its highest level in 15 years, estimates GK Dragonomics, a Beijing-based economic consultancy. That makes China’s corporate sector one of the most debt-laden in the world. “Companies have seen their business slowing down and revenues were not what they had expected. They have bridged the gap by taking on more debt,” says GK Dragonomics Research Director Andrew Batson.

Key industries such as steel, construction machinery, aluminum, and coal are facing overcapacity, squeezed margins, and most alarmingly, debt. “That is dragging down corporate investment, and that matters for the overall economy,” says Louis Kuijs, chief China economist at Royal Bank of Scotland (RBS) in Hong Kong. “I don’t expect the uptick in growth to be very sharp.” He predicts fourth-quarter gross domestic product will rise 7.1 percent, below the average forecast of 7.7 percent in a Bloomberg survey of economists. Kuijs expects most companies to focus more on debt reduction than on building another plant or opening another mine.

Complicating matters is that many of the heavily indebted companies are state-owned, and the banks that lent to them are state-controlled, too. That means the government may have to pick up the tab if any of these companies is unable to manage its debt. The sudden bankruptcy of a giant state corporation would have political as well as financial consequences. This implicit government guarantee behind a portion of China’s corporate debt means the government’s actual obligations are likely higher than the 49 percent figure estimated by GK Dragonomics. Lump together corporate, public, and household debt, says the research firm, and you get a figure close to 206 percent of GDP.

One sign of how tough it is for companies is the return of a problem that plagued China in the 1990s: triangular debt. That’s when a manufacturer that hasn’t been paid for its product is unable to pay its suppliers, which in turn struggle to pay their suppliers. By Sept. 30, total accounts receivable—money owed for products already delivered—for China’s industrial companies had reached 8 trillion yuan ($ 1.3 trillion), up 16.5 percent from September 2011, according to the national statistics bureau. “China has already tipped over the precipice into a very bad debt crisis,” warns Anne Stevenson-Yang, co-founder of J Capital Research, a Beijing-based equities analysis firm.

The origin of this morass dates back to late 2008, when the country unleashed a massive wave of loans from its state-owned banks to the corporate sector. That stimulus helped Beijing avoid the major unemployment and dire downturn that afflicted much of the world. Hopes were that the surge in loans would be a temporary measure. Instead, China’s banks, trust companies, and other financing operations are on track this year to issue new credit equal to one-third of GDP, the fourth year in a row of such a sizable expansion, according to Fitch Ratings.

China’s banking assets will have grown by almost $ 14 trillion between 2008 and 2013 (Fitch includes an estimate of loans issued by the informal banking sector and offshore banks—data not included in Beijing’s official figures). “This is equivalent to replicating the entire U.S. commercial banking sector in just five years,” says Charlene Chu, head of Chinese bank ratings at Fitch, in a Nov. 8 note. “Rising leverage either will swamp borrowers’ ability to repay, or banks’ funding and capital needs will fall short of existing resources.”

Accounts are appearing in the Chinese press of litigation by companies that haven’t been paid. As of the end of September, a logistics unit of state-owned Anhui-based Maanshan Iron & Steel had filed 23 lawsuits for the recovery of money and goods it was owed, reported the official Xinhua News Agency. Maanshan announced on Oct. 8 that “the logistics company has become insolvent.” Maanshan did not respond to requests for comment.

In August, state media reported that China’s central bank, as well as various commissions and ministries, had launched an investigation to uncover the scale of corporate indebtedness among state and private companies. “The lurking debt risk, which once hit China in the 1990s, could take a huge toll on the real economy,” warned Xinhua on Oct. 28. At China’s top four listed steel companies, debt as a percentage of equity now averages 80 percent, with anything above 50 percent considered very high, says Helen Lau, senior analyst for metals and mining at UOB Kay Hian (UOBK), a Singapore-based securities company.

Any turnaround in the corporate sector will involve tackling overcapacity. Lau estimates that the steel industry has 900 million tons of productive capacity, some 200 million tons too much. Yet shuttering the excess production lines may not happen anytime soon. “All the big producers have strong backing from the state banks. That is why they have been adding new capacity. This is not a commercial decision but a political one,” says UOB’s Lau. It’s happening because “the government wants to boost local economies.”

One likely result: a jump in bad bank loans. Standard & Poor’s (MHP) is predicting that the portion of nonperforming loans will grow from about 2 percent of total bank lending at the end of 2011 to 3 percent by the end of the year. That could rise to 5 percent by yearend 2013, says S&P’s Liao Qiang, director of ratings for financial institutions in the Asia-Pacific region. “The challenge for China,” says GK Dragonomics’ Batson, “is to look for ways to not just mobilize vast amounts of money but to put their money in the right places.”

The bottom line: Total accounts receivable in China rose 16.5 percent, to $ 1.3 trillion, from a year ago, a worrying sign for companies.

Businessweek.com — Top News

Read More..

Rebels in Congo reach door of Goma

GOMA, Congo (AP) — A Rwandan-backed rebel group advanced to within 3 kilometers (1.8 miles) of Goma, a crucial provincial capital in eastern Congo, marking the first time that rebels have come this close since 2008.

Congolese army spokesman Col. Olivier Hamuli said the fighting has been going on since 6 a.m. Sunday and the front line has moved to just a few kilometers (miles) outside the city. After more than nine hours of violent clashes the two sides took a break, with M23 rebels establishing a checkpoint just 100 meters (yards) away from one held by the military in the village of Munigi, exactly 3 kilometers (1.8 miles) outside the Goma city line.

Contacted by telephone on the front line, M23 rebel spokesman Col. Vianney Kazarama said the group will spend the night in Goma.

“We are about to take the town. We will spend the night in Goma tonight,” said Kazarama. “We are confident that we can take Goma and then our next step will be to take Bukavu,” he said mentioning the capital of the next province to the south.

The M23 rebel group is made up of soldiers from a now-defunct rebel army, the National Congress for the Defense of the People, or CNDP, a group made-up primarily of fighters from the Tutsi ethnic group, the ethnicity that was targeted in Rwanda‘s 1994 genocide. In 2008, the CNDP led by Rwandan commando Gen. Laurent Nkunda marched his soldiers to the doorstep of Goma, abruptly stopping just before taking the city.

In the negotiations that followed and which culminated in a March 23, 2009 peace deal, the CNDP agreed to disband and their fighters joined the national army of Congo. They did not pick up their arms again until this spring, when hundreds of ex-CNDP fighters defected from the army in April, claiming that the Congolese government had failed to uphold their end of the 2009 agreement.

Reports, including one by the United Nations Group of Experts, have shown that M23 is actively being backed by Rwanda and the new rebellion is likely linked to the fight to control Congo’s rich mineral wealth.

The latest fighting broke out Thursday and led to the deaths of 151 rebels and two soldiers. On Saturday U.N. attack helicopters targeted M23 positions in eastern Congo.

Also on Saturday, United Nations Secretary-General Ban Ki-Moon had called Rwandan President Paul Kagame “to request that he use his influence on the M23 to help calm the situation and restrain M23 from continuing their attack,” according to peacekeeping chief Herve Ladsous who spoke at the U.N. headquarters in New York on Saturday.

North Kivu governor Julien Paluku said Saturday that the Congolese army had earlier retreated from Kibumba, which is 30 kilometers (19 miles) north of Goma, after thousands of Rwandans, who he says were backing the rebels, attacked early Saturday.

“Rwandan forces bombarded our positions in Kibumba since early this morning and an estimated 3,500 crossed the border to attack us,” he said Saturday.

In downtown Goma, panicked residents had come out to try to get more information on what was happening. A 45-year-old mother of five said that she has nowhere to go.

“I don’t really know what is happening, I’ve seen soldiers and tanks in the streets and that scares me,” said Imaculee Kahindo. Asked if she planned to leave the city, she said: “What can we do? I will probably hide in my house with my children.”

Hamuli, the spokesman for the Congolese army, denied reports that soldiers were fleeing.

In 2008 as Nkunda’s CNDP rebels amassed at the gates of Goma, reporters inside the city were able to see Congolese soldiers running in the opposite direction, after having abandoned their posts. The Congolese army is notoriously dysfunctional with soldiers paid only small amounts, making it difficult to secure their loyalties during heavy fighting.

“We are fighting 3 kilometers from Goma, just past the airport. And our troops are strong enough to resist the rebels,” said Hamuli. “We won’t let the M23 march into our town,” he said. Asked if his troops were fleeing, he added: “These are false rumors. We are not going anywhere.”

U.N. peacekeeping chief Ladsous said that the rebels were very well-equipped, including with night vision equipment allowing them to fight at night.

Reports by United Nations experts have accused Rwanda, as well as Uganda, of supporting the rebels. Both countries strongly deny any involvement and Uganda said if the charges continue it will pull its peacekeeping troops out of Somalia, where they are playing an important role in pushing out the Islamist extremist rebels.

The U.N. Security Council called for an immediate stop to the violence following a two-hour, closed-door emergency meeting. The council said it would add sanctions against M23 rebels and demanded that rebels immediately stop their advance toward the provincial capital of Goma.

“We must stop the M23″ because Goma’s fall “would, inevitably, turn into a humanitarian crisis,” said France‘s U.N. Ambassador, Gerard Araud. He added that U.N. officials would decide in the coming days which M23 leaders to target for additional sanctions.

___

Associated Press writer Maria Sanminiatelli at the United Nations and Rukmini Callimachi in Dakar, Senegal, contributed to this report.

Africa News Headlines – Yahoo! News

Read More..