May 3, 2001

Vodafone will issue $4.3 billion in new stock to help it acquire stakes in Japan and Spain that British Telecommunications must sell; Vodafone will pay 3.7 billion pounds ($5.3 billion), for British Telecommunications' 20 percent interests in Japan Telecom Co and its wireless unit, J-Phone Communications, raising its stakes to about 45 percent and giving it effective control; buying British Telecom's 17.8 percent of Airtel, leading wireless company in Spain, for 1.1 billion pounds ($1.6 billion) will bring Vodafone's stake in Airtel to about 92 percent; photo (M)

Former Soviet republics try to strengthen their armies to thwart annual attacks by radical Islamic insurgents financed from Afghanistan and operating with ever greater precision and sophistication from remote mountain bases; shadowy rebels are known as Islamic Movement of Uzbekistan; they have mounted deadly raids into Kyrgyzstan and Uzbekistan, aiming to put shaky states on defensive and to carry their cause gradually eastward, toward repressed Muslim minorities of western China; these guerrillas are latest armed band to emerge from ruins of conflict between American-backed rebels and Russians in Afghanistan; rebels' leader is Juma Namangani, who became radicalized during service as Soviet paratrooper in Afghanistan and trained opposition soldiers in civil war in Tajikistan; rebels' goal is to carve Islamic state from territory of some Central Asian countries; estimates of guerrillas' strength range from few hundred to several thousand; for now, biggest fear is expanded fighting will create thousands of refugees, increasing ethnic tensions among Kyrgyz, Tajiks and Uzbeks who live side by side; photos; map (L)

Former chairmen of Sotheby's and Christies, A Alfred Taubman and Sir Anthony Tennant, are indicted on federal antitrust charges stemming from conspiracy in which two giant auction houses fixed commission fees charged to more than 130,000 customers over six years; indictment says two were masterminds of scheme that involved fixing fees to sellers of fine art, jewelry and furniture and trading information that virtually nullified bargaining power of customers in $4 billion worldwide auction market; four-year investigation has turned auction world upside down; Taubman and his top aides have resigned their positions with Sotheby's, and Sotheby's and Christie's have paid more than $500 million to settle civil suit brought by customers; Sotheby's has pleaded guilty to price-fixing charges and received $45 million fine; Christie's won amnesty by turning over documents and other evidence to Justice Dept, in effect admitting collusion; Sotheby's is now for sale, and Christie's is thought to be for sale; Taubman's indictment was expected ever since his protegee, Diana D Brooks, pleaded guilty to antitrust violations and agreed to make case against him; indictment of Tennant comes as surprise because of expected difficulty of extraditing him from Britain, where antitrust laws are markedly different; photos (L)

Interview with Paul McCartney, former member of the Beatles, whose first book of poetry, Blackbird Singing, has just been published in US; photos (M)

Friends Provident Life Office plans to raise as much as 1.4 billion pounds ($2 billion) when it sells shares to public July 9; will use proceeds for expansion, which could include acquisitions of fund-management companies (S)

New generation of architects is reviving built-in furniture, popular through 1960's, not only to contain chaos but, even more important to provide custom-tailoring for home; photos (M)

Small but apparently growing number of parents are bringing suit to stop corporal punishment in their children's public schools; in Zwolle, La, two suits have been filed, leaving close-knit logging town of 2,000 pondering practice as old as time; corporal punishment in schools remains legal in 23 states; United States Education Dept's most recent data show that 365,000 children were paddled during 1997-98 school year, most in swath of Southern states; some school districts and states say they must increasingly rely on physical discipline as public pushes for crackdown on student misbehavior; Pres Bush's education package includes legislation that could expand practice by giving teachers and principals broad protection from liability for disciplinary actions; photo; graph (M)

David Pogue State of the Art column explores Microsoft's new, upgraded software suite, Office XP; recommends XP upgrade to those who work in teams, produce heavily formatted documents or work extensively on Outlook screens (M)

British American Tobacco says it may open factory in China, which has 300 million smokers, or one-third of world's total; company reports income before one-time items fell 23 percent in first quarter, to 191 million pounds ($274 million), compared with restated 247 million year earlier (S)

Infant science of face-recognition, in which software compares digitized video, photographic or drawn representations of faces, works reasonably well in identifying those wishing to log onto computers or pass through security checkpoints; its technology needs refining to yield consistent results in law enforcement and surveillance; as it improves, issues of privacy are likely to burgeon; photos (M)

Auto insurance rates in New York are about to become most expensive in nation, prompting politicians in Albany to scramble to find legislative remedies; many of state's insurance companies are seeking large rate increases, which they say they need to cover costs of extensive fraud by swindlers in major cities taking advantage of holes in insurance laws; Gregory V Serio, state's acting insurance commissioner, says part of problem is that insurers set artificially low rates to attract customers; Sheldon Silver, Assembly speaker, releases Democratic plan to combat fraud and calls for two-year freeze on rates; Senate majority leader, Joseph L Bruno, has introduced Republican package of bills to fight insurance fraud and Gov George E Pataki, who is expected to seek re-election, is working on raft of regulatory changes and legislative measures that would crack down on insurance fraud and cut automobile rates; anti-fraud campaign is similar to one New Jersey carried out after its last governor's race, when auto insurance costs nearly thwarted re-election effort of Gov Christie Whitman (M)

The office of Secretary of Defense Donald H. Rumsfeld ordered the suspension of all military exchanges and contacts with the Chinese armed forces, then abruptly reversed the order after the White House objected, Pentagon officials said.