WorldCom Inc may further revise its financial statements by about US$2 billion, adding to the US$7 billion in accounting errors it's already disclosed, the Wall Street Journal said, citing people close to the situation.
The second-biggest US long-distance phone company may present revised figures to the Securities and Exchange Commission today, the newspaper said. The new revision may relate to writedowns of assets and improper accounting, the newspaper said.
WorldCom filed for bankruptcy in July after disclosing it hid US$3.85 billion in expenses to mask losses. The company, charged with fraud by US authorities, revealed another US$3.1 billion in misstatements last month. A federal grand jury has indicted former Chief Financial Officer Scott Sullivan in the scandal.
The firm may also write off US$50 billion linked to goodwill, the Journal said. WorldCom spokesperson Rachel Richards declined to comment on the article. The new restatement is partly due to the way WorldCom accounted for the results of foreign subsidiaries, according to the newspaper.
Its handling of sales from Embratel Participacoes SA, Brazil's largest long-distance phone company, may be one of the units in question, the paper said.
WorldCom, which owns 19 percent of the Brazilian company and a majority voting interest, consolidated Embratel's results until last year, when it posted a loss, the Journal said. At the time, WorldCom said US accounting rules no longer allowed it to account for the company's results. A WorldCom official familiar with the division said it may need to change the way it accounted for the unit, but that there was nothing fraudulent in Embratel's treatment, the Journal said.
The Clinton, Mississippi-based company last week said it will replace Chief Executive Officer John Sidgmore, who took over when Bernard Ebbers resigned in April, as the company seeks to emerge from history's biggest bankruptcy by the middle of next year.
WorldCom listed US$41 billion of liabilities and US$107 billion of assets in its July 21 bankruptcy filing. It is under scrutiny by the SEC and congressional committees.
CHIP WAR: Tariffs on Taiwanese chips would prompt companies to move their factories, but not necessarily to the US, unleashing a ‘global cross-sector tariff war’ US President Donald Trump would “shoot himself in the foot” if he follows through on his recent pledge to impose higher tariffs on Taiwanese and other foreign semiconductors entering the US, analysts said. Trump’s plans to raise tariffs on chips manufactured in Taiwan to as high as 100 percent would backfire, macroeconomist Henry Wu (吳嘉隆) said. He would “shoot himself in the foot,” Wu said on Saturday, as such economic measures would lead Taiwanese chip suppliers to pass on additional costs to their US clients and consumers, and ultimately cause another wave of inflation. Trump has claimed that Taiwan took up to
A start-up in Mexico is trying to help get a handle on one coastal city’s plastic waste problem by converting it into gasoline, diesel and other fuels. With less than 10 percent of the world’s plastics being recycled, Petgas’ idea is that rather than letting discarded plastic become waste, it can become productive again as fuel. Petgas developed a machine in the port city of Boca del Rio that uses pyrolysis, a thermodynamic process that heats plastics in the absence of oxygen, breaking it down to produce gasoline, diesel, kerosene, paraffin and coke. Petgas chief technology officer Carlos Parraguirre Diaz said that in
SUPPORT: The government said it would help firms deal with supply disruptions, after Trump signed orders imposing tariffs of 25 percent on imports from Canada and Mexico The government pledged to help companies with operations in Mexico, such as iPhone assembler Hon Hai Precision Industry Co (鴻海精密), also known as Foxconn Technology Group (富士康科技集團), shift production lines and investment if needed to deal with higher US tariffs. The Ministry of Economic Affairs yesterday announced measures to help local firms cope with the US tariff increases on Canada, Mexico, China and other potential areas. The ministry said that it would establish an investment and trade service center in the US to help Taiwanese firms assess the investment environment in different US states, plan supply chain relocation strategies and
Japan intends to closely monitor the impact on its currency of US President Donald Trump’s new tariffs and is worried about the international fallout from the trade imposts, Japanese Minister of Finance Katsunobu Kato said. “We need to carefully see how the exchange rate and other factors will be affected and what form US monetary policy will take in the future,” Kato said yesterday in an interview with Fuji Television. Japan is very concerned about how the tariffs might impact the global economy, he added. Kato spoke as nations and firms brace for potential repercussions after Trump unleashed the first salvo of