Russian reporter's children boycott trial

A RUSSIAN jury has begun hearing the case against five men suspected over the murder of anti-Kremlin reporter Anna Politkovskaya, despite a boycott of the trial by her children and their lawyers.

Judge Pavel Melekhin of the Moscow City Court on Wednesday declined to postpone the trial as requested by Politkovskaya's two children, who had warned the court that they would not be available to attend proceedings this week.

Politkovskaya's children have also complained that as the injured party their legal rights have been violated because they were not consulted over the composition of the jury.

"We have waited almost seven years for the killers to stand trial but the state could not wait a few days," Politkovskaya's daughter Vera and her son Ilya wrote in a statement published in the pages of their late mother's newspaper, the Novaya Gazeta.

"We refuse to take part in such a trial," the siblings said, calling on their legal representatives to also boycott the proceedings.

The case has dragged on for seven years after Politkovskaya was shot dead in 2006, in a killing linked to her reporting in the North Caucasus.

At the first session, the defendants pleaded not guilty after the judge declined to postpone the jury trial until the injured party and their lawyers can be present.

Some of the defendants also asked for their detention conditions to be improved, the Novaya Gazeta reported from the hearing.

Prosecutors accuse Chechen Lom-Ali Gaitukayev of organising a criminal group with his three nephews -- Rustam, Ibragim, and Dzhabrail Makhmudov -- to kill Politkovskaya.

Two police officers, Dmitry Pavlyuchenkov and Sergei Khadzhikurbanov, are accused of providing information about her address and schedule.

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Russia denies parole to Pussy Riot member

RUSSIA has denied parole to a jailed member of punk band Pussy Riot who has been sentenced to two years in jail for a protest against President Vladimir Putin in a Moscow church.

Maria Alyokhina, 25, had requested parole for the second time at a regional court in Perm, an industrial city more than 1100 kilometres east of Moscow, after a district court ruled to keep her in jail in May.

Alyokhina is one of three members of Pussy Riot who were sentenced to two years in prison after they sang a "Punk Prayer" against the Russian Orthodox Church's close ties with Putin in Moscow's central Church of Christ the Saviour in February 2012.

Alyokhina and a bandmate were convicted and sentenced to jail in August 2012, while the third woman was given a suspended sentence on appeal.

Observers had expressed some hope that the Perm court would free Alyokhina, who has a young son at home, because she was unexpectedly told to pack her belongings and moved out of her penal colony in the town of Berezniki on July 12 to participate in the parole hearing.

However, on Wednesday, she was denied a personal presence in the courtroom, speaking to the judge via a video link. Her lawyers suspect that she will be transferred to a different penal colony after the hearing to serve out the rest of her sentence.

The convictions of the women on charges of hooliganism motivated by religious hatred have been denounced as disproportionate by many liberal Russians and public figures around the world, from music legend Paul McCartney to Myanmar's democracy icon Aung San Suu Kyi.

More than 100 famous musicians including Madonna, Elton John and Sting signed an open letter released on Monday appealing for the women to be freed.

"While understanding the sensitivities of protesting in a place of worship, we ask that the Russian authorities review these harsh sentences, so that you may return to your children, your families and your lives," stars wrote in the letter coordinated by rights group Amnesty International.

The second jailed Pussy Riot punk Nadezhda Tolokonnikova, 23, is serving her sentence in a prison colony in the region of Mordovia, 500 kilometres southeast of Moscow and is due to attend a parole hearing in the regional capital of Saransk on Friday.

The third Pussy Riot member to be convicted, Yekaterina Samutsevich, 30, was freed on appeal with a suspended sentence after her lawyer argued she was grabbed by guards in the Moscow church before she could actually take part in the protest.

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Indian school head held in mass poisoning

POLICE have arrested the head of a school in eastern India where 23 students died after eating food contaminated with pesticide, an officer told AFP.

"The principal surrendered ... and we have arrested her for questioning," said Sujeet Kumar, police chief of Saran district in Bihar state where the children died.

"We need to talk to her first before framing charges," the official said on Wednesday by telephone.

The children, aged four to 12, died after eating a free lunch of lentils, potatoes and rice cooked at the school in a poverty-stricken village on July 16.

Oil used to cook the food contained an agricultural insecticide that was five times the strength sold in the market place, a forensic report found.

The head teacher fled and has been on the run since the incident in Gandaman village, which also left some 30 children ill in hospital and sparked angry protests.

Police raided the home of the head teacher last week where ingredients for the meal and cooking oil were kept, an officer has said.

Free lunches are offered to about 120 million school children throughout India in what is the world's largest school feeding program.

Bihar is one of the country's poorest and most densely-populated states.

Educators see the midday meal scheme as a way to increase school attendance. But children often suffer from food poisoning because of poor hygiene in kitchens and occasionally sub-standard food.

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EU may be rising from recession: survey

THE eurozone may be on the road out of recession, business data shows, but more evidence is needed to say if Europe will soon cease to be a drag on the global economy.

A key survey of business activity switched back into growth in July for the first time for 18 months.

Markit chief economist Chris Williamson said on Wednesday: "The best PMI reading for one-and-a-half years provides encouraging evidence to suggest that the euro area could - at long last - pull out of its recession in the third quarter."

Recession in the eurozone is widely regarded as a main drag on global economic momentum.

This has been underlined recently by the big economies in the Group of 20, the Organisation for Economic Cooperation and Development and the International Monetary Fund.

European stock markets advanced on the upbeat data with London gaining 0.81 per cent and Paris up one per cent. The euro edged up to $1.3233.

The latest survey of sentiment among purchasing managers, the people responsible for buying materials and products for businesses, is a leading indicator.

The latest findings contrast with consumer gloom, largely a result of record high eurozone unemployment which is a lagging indicator of how the economy performed in past months.

The Markit Eurozone Composite Purchasing Managers Index logged 50.4 points, above the 50-mark signalling growth, and a bigger-than-expected rise according to analysts after posting 48.7 points in June.

The survey, which had given negative readings since February 2012, is closely watched as a reliable pointer to the trend of business activity.

Economists said cautiously that findings for July could be a sign that recession was on the wane.

The outcome, the fourth monthly rise in a row overall, was also marked by a two-year high logged in the manufacturing sector, which recorded 50.1 points, up from 48.8.

The rate of job losses eased, Markit said, while the feedback from star economy Germany showed that rising output there was at a five-month high level.

But the French economy, the second-biggest in the eurozone, still showed contraction although at a slower pace, giving a reading of 48.8, up from 47.4 in June.

Taken together, the data provides a "summer filip to policymakers," Williamson said, given political or financial turmoil in Italy, Cyprus, Greece and Portugal.

Williamson said that although manufacturing had led the revival, there were also "promising signs of stabilisation in the service sector, which hints at some much-needed upturns in domestic demand."

The services sector gave a survey reading of 49.6 points, up from 48.3.

Record eurozone unemployment is tipped to reach 12.3 per cent at the end of 2014 by the Organisation for Economic Cooperation and Development, with under-25s the hardest hit.

Williamson said that although jobs were still being lost, there was also "welcome news in that companies are cutting back on headcounts to a lesser extent than earlier in the year."

While cautioning that there have been "false dawns" before, Ben May of London-based Capital Economics said the eurozone economy appeared to be "on the mend and might perhaps soon exit recession."

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Tokyo bourse to pay $115m over blunder

A JAPANESE appeals court has ordered the Tokyo Stock Exchange to pay $US107 million ($A115.78 million) compensation over its failure to stop a $US400 million trade blunder in 2005, upholding the initial verdict.

The lawsuit against Asia's largest bourse was filed by Mizuho Securities - part of Japanese mega bank, Mizuho Financial Group - which demanded Y41.5 billion ($A450.72 million) in compensation.

The Tokyo District Court ruled that the TSE must pay Y10.7 billion to the securities firm, saying Mizuho must bear part of the responsibility after one of its employees placed an erroneous - and very costly - order.

The trader punched in a sell order for 610,000 shares in a telecom firm at one yen each, instead of one share at Y610,000, briefly causing turmoil on the Tokyo bourse, whose head resigned soon afterwards to take responsibility.

The TSE had admitted that a fault in its system prevented the trader from cancelling his command, leaving his firm saddled with a loss of more than Y40 billion.

Mizuho Securities said its claim against the TSE reflected losses on sales completed after the cancel instruction was made, and argued that the exchange was entirely culpable for the loss.

But the lower court said the trading firm bore some responsibility and the Tokyo High Court on Wednesday upheld that ruling.

Last month, a German court heard how a bank employee had fallen asleep on his keyboard and accidentally transferred 222 million euros ($A318.42 million), instead of the 62.40 euros he had intended.

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Assault on Iraq jails kills 41

MILITANTS attacked two Iraqi prisons in a bid to free inmates, sparking all-night clashes in which at least 41 people were killed, officials have said.

The coordinated attacks on Taji prison, north of Baghdad, and the Abu Ghraib facility, west of the Iraqi capital, were launched on Sunday night and raged for around 10 hours, officials said.

A police colonel said seven inmates escaped from Abu Ghraib during the clashes but were later arrested, while jihadists claimed on the internet that thousands of prisoners were freed.

Officials said at least 20 members of the security forces were killed and 40 wounded in the attacks.

Justice ministry spokesman said that 21 inmates were killed and 25 wounded during rioting at the prisons, without specifying whether they were bystanders or taking part in the fighting.

It was not immediately clear how many of the militants who attacked the prison were killed, wounded or captured.

The attacks were launched at around 9:30 pm (1830 GMT) on Sunday when the gunmen fired mortar rounds at the prisons.

Four car bombs were detonated near the entrances to the jails, while three suicide bombers attacked Taji prison, said the police colonel.

Five roadside bombs also exploded near the prison in Taji.

Fighting continued throughout the night as the military deployed aircraft and sent in reinforcements around the two facilities.

The situation was eventually brought under control on Monday morning, according to the colonel.

"The security forces in the Baghdad Operations Command, with the assistance of military aircraft, managed to foil an armed attack launched by unknown gunmen against the ... two prisons of Taji and Abu Ghraib," the interior ministry said in a statement late on Sunday night.

"The security forces forced the attackers to flee, and these forces are still pursuing the terrorist forces and exerting full control over the two regions."

But comments posted on social networking websites, including some Twitter accounts apparently operated by jihadists, said thousands of prisoners had escaped.

The attacks on the prisons came a year after Al-Qaeda's Iraqi front group announced it would target the Iraqi justice system.

Abu Ghraib became notorious after photographs showing Iraqi detainees being humiliated and abused by their US guards were published in 2004.

It also served as a torture centre under executed dictator Saddam Hussein's ousted regime.

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Karzai contests sacking of minister

Afghanistan's interior minister Mujtaba Patang has been sacked less than a year after taking office. Source: AAP

AFGHAN President Hamid Karzai has contested parliament's decision to sack his interior minister for failing to stem rising Taliban attacks.

MPs sought to oust Mujtaba Patang as Afghan forces increasingly replace US-led NATO troops, scheduled to withdraw next year, and as the government searches for ways to open peace talks with the insurgents.

Patang, who took office less than a year ago, lost a vote of confidence by 136 to 60 in the lower house of parliament, or Wolesi Jirga.

"He's lost the vote of confidence and I on behalf of the Wolesi Jirga request the President of the Islamic Republic of Afghanistan to introduce another individual to the parliament for a vote of confidence," said speaker Abdul Rauf Ibrahimi.

Patang, a former deputy interior minister and a career police officer, was dismissed a month after the Afghan government formally took over responsibility for nationwide security from foreign troops.

He has been widely accused of incompetence since taking on the portfolio. Unlike former warlords who dominate Afghan politics, he lacks a strong personal power base.

Karzai announced in a statement that although it was the MPs' right to pass a vote of no confidence, he was appealing to the Supreme Court before deciding whether or not to accept Patang's dismissal.

"He emphasises that the giving no confidence vote should be justified and according to the law," said Karzai's office.

"For clarification the president decided to refer the issue to the Supreme Court, and after the Supreme Court rules, he will decide on it," it added.

Patang defended his record in response to a barrage of accusations from the floor, saying that his police force of 157,000 was on the frontline of the war.

He said 2,748 Afghan police had been killed since March 21, in what would be an astonishing rate of around 22 a day.

A spokesman for the ministry later told AFP that the figure included police who had been injured as well as killed.

Afghanistan's 350,000-strong security forces are suffering a steep rise in attacks as the NATO combat mission winds down, with police and army casualties previously said to have increased by 15-20 per cent since 2011.

Patang likened the ministry he had inherited to "an old car with a broken engine". Afghan and foreign money had been wasted, he said, because there was no system.

"In eight months I have created a system. I have made 122 policies and strategies for the interior ministry," he said.

Instead, other people were responsible for insecurity, he said.

In another example of Afghan officials lashing out at their US backers, Patang said an American convoy had paid $US1 million to the Taliban in bribes to get to Badghis province when he was police commander of northern Afghanistan.

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UBS settles US mortgage lawsuit

Swiss banking giant UBS has settled a lawsuit linked to US subprime housing mortgages. Source: AAP

SWISS banking giant UBS says it has settled a lawsuit linked to US subprime housing mortgages which sparked the 2008 global financial crisis.

The bank did not specify how much the settlement amounted to, but said it has set aside 865 million Swiss francs ($A1.01 billion),in the second quarter to meet litigation costs including the case.

"The full cost of the settlement is covered by litigation provisions established by UBS during the second quarter of 2013 and in prior periods," Switzerland's biggest bank said.

UBS and 17 other financial institutions were sued by the US Federal Housing Finance Agency in September 2011 for violating federal securities laws when selling residential mortgage-backed securities to government-backed lenders Fannie Mae and Freddie Mac.

The agency accused the 18 firms of misleading Fannie and Freddie about the credit-worthiness of the assets.

"UBS has reached an agreement in principle with the Federal Housing Finance Agency," UBS said.

The bank added that the deal, which still requires a final go-ahead from the different parties, would settle claims connected to the securities between 2004 and 2007.

Despite setting aside massive provisions, the bank, which is due to announce its second quarter results on July 30, said it would post a net profit of around 690 million francs for the three months ending June.

That is a jump of 62.5 per cent from a year ago and a stark improvement over the first quarter, when net profit slid 4.5 per cent. In the fourth quarter of 2012, UBS posted a loss of 1.9-billion francs.

The bank said its operating profit before tax would reach about 1.02 billion francs, an increase of 7.3 per cent over the second quarter in 2012.

Analysts hailed the better-than-expected results and the settlement of the mortgage securities suit, with Panagiotis Spiliopoulos of Vontobel predicting "juicy dividend payouts in the years to come".

Following the announcements, the bank's stocks jumped 3.4 per cent to 18.21 francs in midday trading, outperforming the Swiss stock exchange's main index, which gained just 0.12 per cent.

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Plain packs reduces allure of cigs: study

Plain packaging for cigarettes diminishes the appeal of smoking, according to medical research. Source: AAP

SCIENTISTS say they have evidence that plain packaging for cigarettes diminishes the appeal of smoking, as anti-tobacco campaigners suggest.

European countries are considering whether to follow Australia, which last year became the first country in the world to sell cigarettes in plain packets.

Cigarettes are now sold in identical olive-brown packets bearing the same typeface, in addition to health warnings.

Researchers questioned 536 smokers in Victoria during the transition phase, when both branded and plain-pack products were on sale.

Nearly three-quarters of those interviewed were smoking from plain packets, and the others from branded packets.

Plain-pack smokers were 66 per cent likelier to think their cigarettes were of poorer quality compared with a year earlier, and were 70 per cent likelier to say they found them less satisfying.

They were also 81 per cent likelier to have thought about quitting at least once a day during the previous week and to rate quitting as a higher priority in their lives compared to smokers using brand packs.

The study, published on BMJ Open by the British Medical Journal, did not follow up these smokers, to see what they thought or did after the transition period.

But, it says, the "early indication" is that drab packaging takes the gloss off cigarette brands.

"Plain packaging is associated with lower smoking appeal, more support for the policy and more urgency to quit among adult smokers," it says.

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Customs denies boat tied up to WA platform

CUSTOMS denies claims that an asylum seeker boat tied itself to an oil and gas platform off the West Australian coast.

Customs and Border Protection said the passengers on the wooden boat were waving at workers on the Santos-operator MODEC Venture II FPSO vessel off Dampier last week, but did not approach the platform.

But West Australian Premier Colin Barnett has heard otherwise.

"I obviously am concerned," he told reporters on Monday.

"The fact that, as far as I understand, it was actually tied up to the platform, that was an extremely dangerous situation.

"Had there been a fire, had there been an explosion, that could have been extremely dangerous and risky for the people on the platform, let alone the asylum seekers."

But Customs denies this claim.

"At no stage did the vessel tie up alongside the oil and gas floating platform," a spokesperson said in a statement.

Santos last week said it would not comment on the matter.

Mr Barnett said he understood Australian surveillance and security forces were "absolutely stretched" at the time.

The asylum seekers, believed to be Vietnamese, will be the last group processed on Christmas Island as they were intercepted and brought ashore before Prime Minister Kevin Rudd announced his dramatic Papua New Guinea plan on Friday.

Mr Barnett also said he thought the PNG deal would likely discourage people smugglers and asylum seekers considering a dangerous sea journey to Australia.

"Wait and see, I guess," he said.

"It certainly is a strong reaction.

"I think the public were crying out for stronger measures to be taken.

"Whether it becomes a permanent or long-term solution I think remains to be seen."

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