WASHINGTON, July 2: WorldCom chief executive John Sidgmore said Tuesday that the survival of the embattled telecom firm is in the public’s interest and a matter of “national security.”
In an opinion column written for the Knight-Ridder Tribune news service, Sidgmore said the new management team at the telecom giant is “outraged and angered” by the firm’s accounting scandal but was “totally committed to moving forward in an open and honest manner, and to operating with the highest integrity.”
The US telecom company sent world markets reeling last week when it revealed a 3.8-billion-dollar black hole in its accounts for 2001 and the first quarter of 2002, eclipsing even the Enron scandal.
WorldCom, which is the largest carrier of Internet data and owns MCI, the second-largest US telephone company, has seen its stock price melt and its credit rating plummet, raising concerns of a forced liquidation.
Probes are multiplying into the accounting at the firm and some reports suggest that all the misstatements at WorldCom may not have been revealed. The Wall Street Journal reported Tuesday that as much as one billion dollars more may be added to the company’s restatements.
The company faces a civil fraud investigation by the Securities and Exchange Commission and a criminal probe by the Justice Department.
But Sidgmore wrote that in addition to efforts to bring those responsible to justice, “it is equally important to save WorldCom.”
“I believe it is in the interest of our national security, American consumers and the millions of WorldCom’s customers and shareholders to make WorldCom’s survival a top priority,” he said.
He noted that WorldCom “plays an important role in America’s telecommunications infrastructure,” with some 20 million telephone customers and as the largest Internet carrier in the world.
“By many estimates, we carry over half the world’s Internet’s total traffic,” he said. “We also serve some of the largest agencies of the federal government, including the Defence Department, the State Department and the General Services Administration. What happens if WorldCom doesn’t survive?”
He said that the ripple effect of WorldCom’s demise “would put many other telecom companies in jeopardy” and result in a further depression of telecom industry assets.—AFP