Business & Finance
Extending an inquiry into Xerox Corp.'s alleged accounting irregularities, the Securities and Exchange Commission notified two former Xerox executives and a partner with its ex-auditor, KPMG LLP, that it may pursue civil charges against them, the Wall Street Journal reported. Xerox fired KPMG six months ago. Last week, the Stamford, Conn.-based copiermaker agreed to pay a record $10 million fine and restate its 1997-2000 earnings to settle SEC claims that included fraud. In doing so, Xerox neither admitted nor denied the allegations.
Saying the move was consistent with reforms "to build the audit firm of the future," troubled Arthur Andersen LLP confirmed a tentative deal to sell its tax operations to San Francisco-based Fox Paine & Co. Meanwhile, an exodus of clients and overseas affiliates continued. Andersen branches in Britain, Poland, and Mexico, announced merger plans with rival "Big Five" accounting firms. Walgreen Co., International Paper Co., and Oracle Corp. joined the more than 100 clients that have dropped Andersen since it was charged with obstruction of justice in connection with the Enron Corp. collapse last month.
After losing nearly $1.8 billion due to the Sept. 11 terrorist attacks, the reinsurer Swiss Re reported a net loss of $98.6 million for 2001. The loss was lower than expected, however, and Zurich, Switzerland-based Swiss Re said it expected a sharp upturn in earnings for 2002.
The telecom company Global Crossing Ltd. said it would take an $8 billion goodwill write-down for the fourth quarter to reflect the drop in value of some of its assets. The bankrupt firm also warned of a multibillion dollar write-down of tangible assets. Meanwhile, the identities of more than 50 companies that have expressed confidential interest in acquiring Global Crossing are no longer secret to one another, due to an e-mail sent to all 50 that inadvertently named each of the recipients, the New York Times reported. Verizon Communications also joined the growing list of telecom carriers to report big losses.