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Friday, 23 August, 2002, 09:54 GMT 10:54 UK
AOL Time Warner inquiry widens
AOL's different business interests
The Securities and Exchange Commission's inquiry into the stricken media and entertainment giant AOL Time Warner is widening, according to press reports.

Swap transactions with the troubled telecoms company Qwest are among the issues being investigated, reported The New York Times.

Deals between AOL and the scandal-hit telecoms giant WorldCom are also being scrutinised, the paper said.

In addition, several optimistic profit forecasts made by AOL company executives last year are being looked into, according to the Financial Times.

AOL Time Warner's reported links with Qwest and WorldCom will do little for its image.

The SEC has charged the WorldCom with fraud, while Qwest's accounts are under investigation.

Both companies have admitted using improper accounting methods.

Realistic forecasts?

The AOL executives' optimistic predictions have raised suspicion because they came during a period when the company admitted it might have overstated its advertising revenues by $49m (32m).

Several senior AOL officials sold their shares while at the same time expressing optimism about the group's future.

"Fifteen senior executives and directors of AOL... made profits totalling almost $500m by selling shares between February and June last year," the FT reported.

But "there is no suggestion the directors did not believe forecasts could be met when they sold their shares, or that they were aware of improper accounting," the FT said.

AOL Time Warner is facing a separate investigation by the US Justice Department.

During the first three months of the year, the firm was forced to make a record write-down of $54bn, effectively admitting that it had over-valued the assets it had bought.


Politics of regulation

Worldcom goes bust

Enron fall-out

Andersen laid low

FORUM
See also:

15 Aug 02 | Business
09 Aug 02 | Business
29 Jul 02 | Business
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