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Worldcom: Ebbers may lose pension
WorldCom Inc's board may rescind a severance package promised to former chief executive officer Bernard Ebbers two months before the telephone company was forced into bankruptcy amid an accounting scandal. The board was to hear a report yesterday from Richard Breeden, a court-appointed monitor, on Ebbers' US$1.5 million annual pension and the terms of a US$408.2 million loan he received from WorldCom, said Stuart Pierson, an attorney for director Stiles Kellett Jr. "I think the board has to go after this money, both the US$1.5 million and the US$408 million loan," said Lowell Peterson, a labor attorney representing former WorldCom employees trying to get severance payments. "WorldCom is in bankruptcy, which means that all payments to insiders are subject to scrutiny and repayment." WorldCom, the second-biggest US long-distance company, filed for bankruptcy in July after disclosing that it hid US$3.85 billion in expenses to mask losses. The company, which said it will seek a replacement for current CEO John Sidgmore, revealed another US$3.1 billion in misstated results last month.

Insider dealing: Martha Stewart faces probe
Martha Stewart may be investigated by the US Justice Department after a House committee decided to turn over the probe of the homemaking celebrity's sale of ImClone Systems Inc shares. The US House Energy and Commerce Committee has been investigating whether Stewart, chief executive of Martha Stewart Living Omnimedia Inc, had inside information when she sold 3,928 ImClone shares a day before regulators rejected the company's cancer-drug application. Stewart has said she did nothing wrong when she sold the shares.

Japan: Koizumi urges bank cleanup
Japan needs to accelerate efforts to clean up its financial system, which may lead to an increase in bankruptcies in the near future, Prime Minister Junichiro Koizumi said yesterday. Japanese banks are saddled with more than US$420 billion in bad debts. An advisory panel to the prime minister is debating whether the Japanese government should let weaker lenders fail and then take them over. "We have to get prepared to accelerate our efforts to write off bad debts," Koizumi told reporters. The government will "proceed with financial and tax reform as soon as possible." Pressure is mounting on Koizumi to do something about Japan's weak financial system.

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