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Negotiations over a controversial anti-piracy agreement have been described as a "masquerade" by a key Euro MP.

Kader Arif, the European Parliament's rapporteur for the Anti-Counterfeiting Trade Agreement (Acta), resigned over the issue on Friday.

He said he had witnessed "never-before-seen manoeuvres" by officials preparing the treaty.

On Thursday, 22 EU member states including the UK signed the agreement.

The treaty still needs to be ratified by the European Parliament before it can be enacted. A debate is scheduled to take place in June.

Mr Arif criticised the efforts to push forward with the measures ahead of those discussions taking place.

"I condemn the whole process which led to the signature of this agreement: no consultation of the civil society, lack of transparency since the beginning of negotiations, repeated delays of the signature of the text without any explanation given, reject of Parliament's recommendations as given in several resolutions of our assembly."

Mr Arif's decision to stand down follows protests by campaigners in Poland. Thousands of demonstrators took to the streets after the agreement was signed.

Crowds of mostly young people held banners with slogans such as "no to censorship" and "a free internet".

Earlier in the week, hackers attacked several Polish government websites, including that of Prime Minister Donald Tusk.

The country's Foreign Minister Radek Sikorski defended the plans, telling local television: "We believe that theft on a massive scale of intellectual property is not a good thing."

Campaigners' concerns have been buoyed by Mr Arif's strongly-worded statement released on Friday.

"This agreement can have major consequences on citizens' lives," he wrote.

"However, everything is made to prevent the European Parliament from having its say in this matter. I want to send a strong signal and alert the public opinion about this unacceptable situation. I will not take part in this masquerade."

The treaty has caused controversy since an early discussion paper was published by Wikileaks in 2008 – two years after negotiations first began. The details were subsequently confirmed in 2010.

If ratified, it proposes to improve "the enforcement of intellectual property rights" in participating countries.

It suggests setting international standards over how copyright infringements are dealt with, with preventative measures including possible imprisonment and fines.

The UK's Intellectual Property Office has backed the measures, describing piracy as a "major global issue".

"Yesterday's signing of Acta is important for the UK as it will set an international standard for tackling large-scale infringements of IPR, through the creation of common enforcement standards and more effective international cooperation. Importantly, it aims to improve the enforcement of existing IPR laws, not create new ones," it said.

Darrell Issa, a US congressman and vocal critic of the stalled Stop Online Piracy Act (Sopa), voiced his concerns about Acta at the World Economics Forum in Davos.

"As a member of Congress, it's more dangerous than Sopa," he said.

"It's not coming to me for a vote. It purports that it does not change existing laws. But once implemented, it creates a whole new enforcement system and will virtually tie the hands of Congress to undo it."

In addition to internet-based measures, the agreement also seeks to curb trade of counterfeited physical goods.

Past drafts of the treaty suggested that internet service providers would have to give up data about users accused of copyright infringement and might have to cut them off – although this segment of the agreement has since been removed.

Outside of the EU, the treaty has also been signed by the US, Australia, Canada, Japan, Morocco, New Zealand, Singapore and South Korea.

In response to Mr Arif's resignation, a spokesman for the European Commission told the BBC: "Mr Arif and other members of the European Parliament's [Committee on International Trade] have had access to successive versions of the Acta text. The full text has been fully public since April 2010. It was made available in the first place because the European Commission convinced the other countries to publish this text.

"There have been four stakeholder conferences since 2008, and at least three speeches in the European Parliament on Acta. And now there will be a full debate. This is exactly what the normal process is.

"But most importantly Acta does not change any EU laws, it simply levels the playing field so that other countries match our standards. There is no threat to internet freedom or privacy. Everything you can do legally today in the EU, you would be legally able to do if Acta is ratified."

TORONTO (Reuters) – The arrival of the man known as “the Warren Buffett of North” on Research In Motion’s board this week offers a ray of hope to the BlackBerry maker’s impatient shareholders after their disappointment that an insider was named new chief executive.

That’s not to say the reclusive Watsa – who heads Fairfax Financial, now RIM’s fourth-largest shareholder – has a reputation as a turnaround artist who will agitate for radical change at the struggling company.

But his 2.25 percent shareholding and new role as director suggest Watsa sees real value in the withered share price, even though some say the company has fallen hopelessly behind its rivals in the hyper-competitive smartphone and tablet markets.

Based from the Indian-born Canadian’s track record, fellow shareholders have good reason to be optimistic.

“Prem is attracted to companies that are out of favor and unpopular with the market,” said Todd Johnson, a portfolio manager at BCV Asset Management in Winnipeg, which holds Fairfax bonds. “He likely believes RIM is salvageable and that the market is unfairly punishing the stock now.

His investing acumen has helped shares of Fairfax Financial, technically an insurer but also his investment vehicle, rise more than 100-fold in just over 25 years. Watsa is chairman and CEO of Fairfax and controls its voting shares.

Watsa’s appointment to RIM’s board was part of a head office shuffle in which Mike Lazaridis and Jim Balsillie gave up their shared chief executive role to Thorsten Heins, a company insider.

RIM investors, who have watched their stock drop 84 percent in the last three years, sent the shares down sharply after the change in leadership was announced.

They’re concerned that Heins, with his close association with the pair who presided over RIM’s swoon, may not have what it will take to reverse the decline. Heins reinforced that impression when he said he saw no need for a seismic shift at the BlackBerry maker, even though its market share has tumbled.

BUFFETT OF THE NORTH

Watsa started receiving comparisons to Buffett – the best-known proponent of investing on the basis of a company’s value – back in the 1990s. He’d already shown his investment chops by selling stock ahead of the 1987 stock market crash and buying Japanese puts – or rights to sell stocks at guaranteed prices – ahead of the Tokyo market’s collapse in 1990.

But it was his call on the U.S. mortgage crisis that cemented his reputation as a savvy investor. Watsa began raising alarms on the U.S. mortgage industry in 2003, and Fairfax began selling or hedging its equity holdings, and buying credit default swaps that it later sold when the market began to collapse. A CDS enables the holder to be compensated in the event of a loan default.

The move initially didn’t pay off, as stock markets churned higher in the mid-2000s. But when the market crashed in 2008, Fairfax notched a profit of $1.5 billion on the back of a $2.7 billion investment gain.

In late 2008, with markets still reeling and other investors licking their wounds, he started to plow money back into equities, notching another strong year in 2009.

Since then Watsa has changed gears again, hedging the company’s equity portfolio in 2010, and making more contrarian investments such as buying a 9 percent stake in troubled Bank of Ireland last year.

“He’s gotten very very strong investment returns, I don’t think you can argue with that,” said one portfolio manager who holds RIM shares.

“Whether he’s being brought on the board to support his existing equity positions or maybe ascertain whether value is there for a potential takeover and what that level would be at, I think there’s a lot that can be taken from his being added to the board,” said the manager, who requested anonymity because of his firm’s policy on speaking on the record.

To be sure, not all of Watsa’s moves have been golden. Fairfax was forced to write off most its investment in Winnipeg-based media company Canwest in 2009 as the company filed for bankruptcy protections.

It also wrote down a significant investment in publisher Torstar in 2008-09 and took losses on its holding of forestry company Abitibi Bowater.

LOW PROFILE

Born in 1950 in Hyderabad, India, and trained as a chemical engineer, Watsa has maintained a public profile that has at times bordered on the reclusive since he took over Fairfax in 1985. For his first 15 years at the company, he barely spoke to a reporter, and only started holding investor conference calls in 2001.

Fairfax has generally not been known as an activist investor, but Watsa has hardly shied away from a fight, launching a $6 billion lawsuit against a group of hedge funds in 2006, accusing them of conspiring to the drive the company’s shares down so they could be shorted. A short position enables an investor to profit when a stock drops.

With a board seat, Watsa will have a prime position to make sure his RIM investment is a winner.

“He sees the value in this company, he sees where sentiment is, he sees where the asset value is and the cash value is and he sees the strategy. By joining the board he’s giving a vote of confidence and perhaps can have more hand in overseeing this transition,” said Matthew Thornton, analyst at Avian Securities in Boston.

“That doesn’t mean it’s going to work.”

($1 = 1.0121 Canadian dollars)

(Editing by Frank McGurty)

by Natalie Feary

NEW YORK, Sept 20 (IFR) – A five-year $1billion revolving facility launched by Brazilian telecommunications company Telemar this week could be a bellwether for where the Latin American syndicated loans market is headed.

Bankers are watching it closely, since they say that if it turns into a club deal, it could signal a key change in direction for the market. The four leads RBS, Bank of America Merrill Lynch, Citigroup and HSBC, have the option of fully underwriting the facility.

The loan was considered extremely aggressive and Telemar did not manage to get the three sub-underwriters it was looking for at the levels on offer. The company is offering pricing of 90bp over Libor for the use of up to a third of the facility, 105bp over if between a third and two thirds is used and 120bp over if over two thirds is drawn.

Included in the covenants is a debt-to-EBITDA ratio of 4.5 times, and interest coverage of 1.5 times — a level at least one banker thought was not strict enough.

“Borrowers are getting greedy and looking to previous tightly priced deals, but conditions are different now,” said a banker. Indeed, the bank meeting held on Monday in New York was heard to have fewer attendees than expected, according to some bankers.

The covenants defined in Telemar TLNP4.SA deals and in the transactions being mandated right now are also expected to shape the format of future facilities.

Indeed, US banks are said to be much stricter on covenant requirements than the European counterparts that they are replacing.

One banker cited as an example the fact that US banks are asking for no limits on how much a price can be flexed, higher debt-to-EBITDA ratios and higher interest coverage.

“Instead of one of these covenants being included, US banks are now saying two or all three must be included in loan covenants,” said a loans banker.

A LENDER’S MARKET

The shift signals a move from a borrower’s to a lender’s market. Up to now each deal was coming tighter than the next and banks were said to be offering very aggressive levels when pitching clients.

Mexican oil giant Pemex PEMX.UL, for one, recently closed a re-financing that was tightened by 50bp. The five-year tranche of the US$3.25bn loan, which made up US$2bn of the transaction, offered a spread of 100bp over Libor, 50bp tighter than when the original deal was priced.

As the deal is the core facility of a big corporate with significant potential ancillary business, anyone dropping out could count themselves out of winning business from one of the biggest players in the region.

So most of the banks remained. However, with their cost of funding spiking, some did so at a loss unless they managed to get subsidized funding.

For European banks the cost of funding for five-year money is hovering around 125bp, said a loans banker. And that is still cheap, given that most Spanish and French institutions have seen their five-year CDS jump over 300bp.

Even if they raise money locally and swap it, the equation is no longer favorable, given that the cost of swapping dollars to euros has more than doubled in the last week, from 30bp to 66bp on Monday.

In spite of this, many borrowers in Latin America continue to use the pricing achieved by blue chips Vale VALES.SA, America Movil (AMX.N) (AMXL.MX) or Votorantim Participacoes as a yardstick.

“It is hard for banks to tell borrowers that this pricing can’t be achieved (anymore), so they will offer them tight pricing to gain mandates,” said one loans banker.

“It is only when we see a deal really struggle that the tables will turn.”

That is why bankers are watching Telemar so keenly — it could be the watershed transaction that creates a benchmark for the new times.

But while some bankers think a struggling deal may shift pricing, others are not so optimistic.

“Banks are coming in on deals for league table credit, they are taking more risks to compensate for losses on loans, which is exactly the opposite of what should be happening,” said a loans banker from a European bank.

“Something really needs to blow up for things to change.”

(Reporting by Natalie Feary in New York)