Business & Finance
In a new revelation about MCI's bankruptcy, the troubled telecommunications giant may have moved $19 billion in revenue through a Delaware-based subsidiary from 1999 to 2001 under an aggressive tax-shelter strategy devised by accounting firm KPMG, The Wall Street Journal reported. Court documents show that the former WorldCom recorded the money as royalties from 150 subsidiaries, thus avoiding taxes on profits in other states, the newspaper said. It quoted a KPMG spokesman as saying the "intangible holding-company structure" was common at the time and was "fully supported" under Delaware law.
Two federal lawsuits accused Caterpillar Inc. of tolerating racial and sexual harassment at plants in Illinois. One of the suits, filed Wednesday by the Equal Employment Opportunity Commission in Chicago, alleged white employees at a Joliet facility whistled at black co-workers "as if they were dogs." The other suit said at least three women in Aurora were fired for complaining about the "sexually offensive" behavior of a male supervisor. An official at the construction machinery giant based in Peoria, Ill., pledged "to defend vigorously" against the allegations.
Despite winning a $4 billion court judgment in a fraud case, cellphone giants Motorola and Nokia will have to submit to arbitration if they hope to collect, the head of a wealthy telecommunications family said. Hakan Uzan of Telsim, Turkey's No. 2 wireless enterprise, told the Associated Press he has no intention of complying with the July 31 order of US District Judge Jed Rakoff in New York that his family pay the cash to Motorola and surrender shares of stock in their company to Nokia. The two claimed in a suit filed in 2001 that the Uzans borrowed $2.7 billion from them to build a sophisticated wireless network in Turkey - with no intention of repaying. Rakoff also found the Uzans guilty of "an almost endless series of lies" and ordered several members of the family arrested if they return to the US. The suit was filed in New York because the Uzans own residences and conduct business there.
Another 4,700 jobs will be cut by Dresdner Bank, Germany's fourth-largest, over the next two years, the financial news service Bloomberg.com reported. The bank is a subsidiary of Allianz AG, the largest insurance company in Europe, but has been losing money for its parent since being acquired two years ago. Dresdner announced 11,000 layoffs last year.