Business & Finance
The Justice Department asked WorldCom to suspend its internal investigation into $3.8 billion in accounting irregularities, The Wall Street Journal reported, so that the government can question executives at the troubled telecommunications firm first. Rival IDT Corp., meanwhile, complained that WorldCom hasn't responded to its $5 billion offer for MCI, the nation's second-largest long-distance carrier, and two other units worth $52 billion when WorldCom acquired them.
Troubled Qwest Communications said there's "no reason to believe" it's the subject of a Justice Department investigation, despite a report to the contrary by The Wall Street Journal. The company's share price has tumbled 97 percent in the past two years. It also recently ousted chief executive Joseph Nacchio amid a Securities and Exchange Commission inquiry into its accounting practices.
Reliant Resources Inc. engaged in energy trades that artificially inflated revenues to the tune of $7.8 billion between 1999 and 2001, the Houston-based company said in an earnings restatement filed Friday. Reliant is one of several companies under scrutiny by federal regulators for "round trip" trades, in which electricity is sold, then repurchased at the same price to increase volume.
With a national election 11 weeks ahead, the government of Germany was considering whether to help prop up another bankrupt major employer. Engineering giant Babcock Borsig AG filed for protection from creditors Friday, citing an immediate need for $195 million just to cover payroll expenses for 22,000 workers. It is Germany's fifth major company to fail so far this year, after construction-industry leader Philipp Holzmann, aircraft builder Fairchild Dornier, the Kirch Media conglomerate, and Herlitz AG, a leading maker of stationery. Analysts said Chancellor Gerhard Schröder and his Social Democrat-led coalition, which faces a tough reelection fight, can ill afford more bad economic news. But any state aid to Babcock Borsig almost certainly would draw intense scrutiny from European Union regulators.