IHT Quick Read: June 18

Europe and the U.S. start trade negotiations; touting Islam to draw votes in Indonesia; protests in Brazil's largest cities; the "Antwerp Six" return to their fashion school; and tough times for horse racing in Britain.

IHT Quick Read: June 17

NEWS A new set of classified documents disclosed Sunday suggested that Edward J. Snowden, the former National Security Agency contractor who has provided a trove of documents to The Guardian newspaper, had obtained a wider range of materials about government surveillance than had been known, including one document revealing how U.S. and British intelligence agencies had eavesdropped on world leaders at conferences in London in 2009. Scott Shane and Ravi Somaiya report.

The Turkish authorities widened their crackdown on the anti-government protest movement on Sunday, taking aim not just at the demonstrators themselves, but also at the medics who treat their injuries, the business owners who shelter them and the foreign news media flocking to cover a growing political crisis threatening to paralyze the government of Prıme Minister Recep Tayyip Erdogan. Tim Arango, Sebnem Arsu and Ceylan Yeginsu report from Istanbul.

Privacy guardians in Europe want the ability to erase some online material, known as “the right to be forgotten,” but archivists and historians object. Eric Pfanner reports from Serraval, France.

Car bombings and attacks across Iraq killed at least 33 people and wounded more than 100 on Sunday, security officials said, the latest in a wave of sectarian violence that has erupted across the country in recent months. Duraid Adnan reports from Baghdad.

A record seven million students will graduate from universities and colleges across China in the coming weeks, but their job prospects appear bleak â€" the latest sign of a troubled Chinese economy. Keith Bradsher reports from Hong Kong and Sue-Lin Wong from Beijing.

Three of Europe’s top military contractors urged the region’s governments on Sunday to support a joint program to develop a reconnaissance drone to reduce dependence on U.S. and Israeli manufacturers. Nicola Clark reports from Paris.

Three months into his papacy, Pope Francis took his first significant step on Saturday toward making changes at the troubled Vatican Bank, naming a trusted prelate to fill a key vacancy in an indication that the pope intends to keep a close watch on the institution. Rachel Donadio reports from Rome.

EDUCATION Universities in Japan are pushing to increase female enrollment in science and technology, despite a culture that pushes most women toward the humanities. Miki Tanikawa reports from Tokyo.

ARTS A lawsuit has exposed a fight between two organizations with diverging ideas of how to preserve the legacy of Anne Frank, who wrote her famous diary as a young girl in hiding from the Nazis. Scott Sayare reports from Amsterdam.

While conservative foes did their best to marginalize Norman Potter, today the British designer and poet is seen as a romantic figure by young designers. Alice Rawsthorn writes from Bristol, England.

SPORTS The golfer Justin Rose of England held off Phil Mickelson down the stretch at Merion Golf Club to win the U.S. Open, his first major championship. Karen Crouse reports.

The Brazilian soccer player Neymar, just 21, is expected to dazzle and restore an element of the footwork of the gods of Jogo Bonito as Brazil marches toward the World Cup. Rob Hughes writes from London.

China Court Ruling Could Threaten Some Foreign-Invested Companies

BEIJING â€" Some are calling it “bigger than Enron” and “a bit of a Ponzi scheme.” A recent ruling by the Supreme People’s Court, the highest in China, raises an important question: Is the future of more than half of the 200 Chinese companies listed on the New York and Nasdaq stock exchanges in question?

Earlier this month, my colleague, Neil Gough, wrote about the landmark ruling, in which the court found that contracts used by non-Chinese citizens to gain access to sectors of the Chinese economy that are protected from foreign investment were invalid.

Sectors the Chinese government considers sensitive, including finance, media, technology, the Internet and education, have long been largely off-limits to foreign investment. To get around that, some of the biggest companies in the country founded by Chinese people, including the Internet giants Baidu, Alibaba, Tencent and Sina, create variable interest entities, or V.I.E.’s, that give overseas investors de facto control over companies technically owned by their Chinese partners, as Neil reported. V.I.E.’s account for differing proportions of these companies’ income and assets, ranging from several percent to as much as 100 percent.

Problems arise if the Chinese partners decide they don’t want to follow the contracts any longer because, for example, they already have the money and know-how they were seeking, as has happened in several instances. When that happens, the foreign party most likely has no legal recourse.

“Chinese law has a very clear provision. A contract written to avoid the requirements of Chinese law is void and the court will not enforce it,” said Steve Dickinson, a partner at Harris & Moure and a co-author of the China Law Blog.

The Chinese government and industry insiders have warned for years about the dangers of V.I.E.’s. Last Friday, an article in the China Business News said the situation represented “a war for the right of control” between Chinese and overseas partners.

It’s a very insecure situation, lawyers said. “Every V.I.E. company - Baidu, Sina, Alibaba, Tudou, all of them - is operating by the grace of their Chinese partners. This mess is going to make Enron look like a trivial, little drop in the bucket,” Mr. Dickinson said.

Take for example New Oriental, one of the largest private education providers in China. Because New Oriental earns all of its income in its V.I.E., if they were forced to deconsolidate it from their accounts, it would demonstrate to investors that they don’t actually own the business, said Paul Gillis, an accounting professor at Peking University and the editor of the China Accounting Blog.

Others said that the case before the court was not exactly applicable â€" it involved a different company structure from the V.I.E. â€" lessening the likelihood that the ruling would affect the companies.

“This group of people will distinguish the recent Supreme People’s Court ruling because it was an earlier set of documents, not entirely the same as the V.I.E. structure,” Mr. Dickinson predicted. “But what the court said is that any contract that is designed to avoid the clear requirements of Chinese law is void from the very first step. That is what the V.I.E. is.”

Considering the possible wide-reaching implications of this recent ruling, is it being underplayed?

“Accountants, lawyers and stock brokers make a ton of money off I.P.O.’s so they have no incentive to slow them down,” said Dan Harris, a China lawyer with Harris & Moure and a co-author of the China Law Blog. “They have every incentive to keep the V.I.E. structure going.”

The local Chinese partner is likely to have less to lose than the foreign partner. Even if the court deems the V.I.E. contracts invalid, the Chinese partner, who is usually the founder of the company, will continue to own it, lawyers said.

“The local partner brings the market access and the foreigner makes some money for a few years but ultimately it’s kind of open season,” said Andrew Gilhom, the head of Asia analysis at Control Risks, a business risk consulting firm.

Will anything actually happen to these companies in light of the recent Supreme People’s Court ruling, or are V.I.E.’s now too big to fail?

“The only three successful U.S. I.P.O.’s from China in the past 15 months all have V.I.E. structures - LightInTheBox, YY and VIP Shop. Investor confidence has been strong in all of these companies,” said David Roberts, a partner at the law firm O’Melveny & Myers.

It is also unlikely that the Chinese government wants to turn the V.I.E. structure into a huge issue.

“They don’t want all the U.S.-listed stocks suddenly tumbling and companies failing and panic,” Mr. Gilholm said. “I don’t really see any signs that they are going to proactively go out and across the board say that all these structures have to be unwound.”