In a letter sent Thursday to the White House, WorldCom Inc. CEO John Sidgmore agreed with President Bush for voicing “outrage” over the telecommunication giant’s accounting woes. And he vowed the company would continue towards a path of restoring “trust.”
“Yesterday you rightly expressed outrage and concern about past accounting irregularities at WorldCom,” wrote Sidgmore, who replaced former CEO Bernie Ebbers nearly two months ago. “I want you to know that we, the current management team, are equally surprised and outraged.
“That is why we immediately brought this matter to the attention of the SEC and the public. I am proud that our own people discovered these irregularities and had the courage and professionalism to act quickly.”
In what could be one of the largest fraud cases in U.S. history, Congress, the Securities and Exchange Commission and the Justice Department have vowed to launch separate probes into WorldCom’s disclosures Tuesday that the company had inflated earnings by $3.8 billion during the past five quarters.
WorldCom, the Clinton, Miss.-based carrier Ebbers built into a global giant through more than 60 acquisitions durig the last decade, may have to file for Chapter 11 bankruptcy protection. The company is in “close consultation” with its banks to secure additional credit lines to finance its $32 billion debt load, Sidgmore said.
Ebbers left WorldCom in May following months of hardships besetting the company and criticism over hundreds of millions of dollars in personal loans WorldCom granted the former CEO.
Sidgmore told the Bush that he remains committed to restoring the company’s credibility, a task he did not envision would be so daunting.
“Seven weeks ago as I assumed the position of CEO of WorldCom, Bert Roberts, our Chairman, and I pledged to restore trust in the company,” Sidgmore wrote. “Never did we imagine it would be put to such a test. However, part of restoring trust means being straight about problems as we discover them -– and aggressively solving them. This is the only way we will rebuild our company’s credibility. You have our commitment that we will continue to do this.”
