Skip to comments.Global Crossing Must Explain Actions
Posted on 03/12/2002 10:49:11 AM PST by kattracks
WASHINGTON, Mar 12, 2002 (AP Online via COMTEX) -- A congressional committee on Tuesday asked bankrupt telecommunications company Global Crossing Ltd. to explain its accounting practices and compensation packages for top executives.
The letter from leaders of the House Energy and Commerce Committee marked the first time congressional investigators have sought documents from Global Crossing, which filed for bankruptcy protection in January.
Lawmakers said they want to determine whether Global Crossing. concealed its true financial condition, similar to the way Enron Corp. has acknowledged misstating earnings, revenue and debt in recent years.
Global Crossing "may have engaged in similar accounting practices that had the effect of increasing Global Crossing's revenues without increasing its cash flow," the committee said in a letter to company chief executive John Legere.
Lawmakers noted that both companies used Arthur Andersen as their auditor.
The Securities and Exchange Commission and Federal Bureau of Investigation already are looking into Global Crossing's accounting practices.
Global Crossing, based in Bermuda but run out of offices in Beverly Hills, Calif., spent billions of dollars building a 100,000-mile fiber-optic network, only to see its fortunes decline amid weak demand for bandwidth and investors' increasing concerns about the company's debts.
Global Crossing spokeswoman Kirstin Orban confirmed that the company received the letter.
"We're currently reviewing it before commenting," Orban said.
By MARK SHERMAN Associated Press WriterCopyright 2002 Associated Press, All rights reserved
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