BBC News Online: Business

Global Crossing accounts under fire

Global Crossing hopes for a rescue takeover

Global Crossing has been asked to hand over documents to a Congressional committee which is exploring similarities with the Enron affair.

Global Crossing also faces a Congressional hearing from another committee on 21 March.

Congress gets tough

Mr Tauzin's committee has made explicit its concern that Global Crossing's accounting practices may have served to conceal its financial weakness from investors.

In a letter to the telecoms firm's chief executive John Legere, it said Global Crossing "may have engaged in similar accounting practices [to Enron] that had the effect of increasing Global Crossing's revenues without increasing its cash flow".

"Further allegations surround omission of material disclosures that would be necessary for investors to understand Global Crossing's true financial condition", the letter said.

High-speed failure

Global Crossing said it was reviewing the letter and did not wish to comment at this stage.

Global Crossing grew rapidly during the 1990s by building a network of high-speed fibre optic cables, linking more than 200 cities in 27 countries.

It filed for bankruptcy protection on 26 January with debts of $12.4bn.

The firm already faces two inquiries, one by the US Securities and Exchange Commission and the second from the Federal Bureau of Investigation.

The House Financial Services Committee will hold a hearing on 21 March into Global Crossing's collapse.

"This is a huge bankruptcy and its gotten very little Congressional attention", said an aide to Financial Services Committee chairman Mike Oxley.