WorldCom accounting disaster doubles
Ooops, there goes another $3.3 Bn
Embattled telecoms monstrosity WorldCom has just announced the discovery of an additional $3.3 billion minrepresented in falsified financial reports, adding to the $3.6 billion scam revealed earlier in which operating expenses were slyly listed as capital expenses.
Additional shenanigans of that sort have been disclosed, in addition to another scam whereby the company was maintaining a vast slush fund out of which it moved cash to cover bad debts and conceal profit disappointments.
It's not illegal to maintain a cash reserve; Microsoft, for example, exhibits considerable pride in the gargantuan pile it has stored up for rainy-day needs. But covering bad investments and faking profits are quite illegal; and if it can be proven that WorldCom used its 'reserves' in this way it's only a matter of time before its old guard brass end up in prison stripes.
For a final horror, WorldCom warns that once its earnings are restated, it may have to write-off up to $50 billion as the actual value of its many over-inflated investments and acquisitions is painfully calculated and revealed.
One wonders if the bankruptcy settlement now in the works will actually prove feasible, what with all this bad news piling on. For the sake of the company's deceived and patronized investors, and its many sacked workers, one certainly hopes it will. ®
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