- The Washington Times - Saturday, July 6, 2002

JACKSON, Miss. (AP) WorldCom Inc. will continue its in-house investigation of accounting problems, despite a Department of Justice request that the ailing telecommunications firm desist, a source familiar with the company said yesterday.
The primary motivation is to get to the bottom of the company's finances and there is no race to be first, said the source, who spoke on the condition of anonymity.
The Wall Street Journal reported yesterday that the Justice Department had asked WorldCom to curtail its internal inquiry, citing concern about witness tampering, while the government investigates.
A company spokeswoman, Julie Moore, declined to comment.
The Securities and Exchange Commission filed civil fraud charges last week against WorldCom after the company disclosed that it had hidden nearly $4 billion in expenses and inflated its earnings.
A judge appointed former SEC Chairman Richard Breeden as a monitor to make sure WorldCom doesn't destroy documents and its executives don't receive outsized payouts from the faltering company.
Also yesterday, the Journal reported WorldCom's bondholders are considering a proposal that would call for them to swap their debt for equity in a prearranged Chapter 11 bankruptcy filing. The news story, which cited unidentified people familiar with the plan, reported that if such a deal were approved, it would leave bondholders who hold $26 billion in bonds with a "greater influence" over the company if it filed for Chapter 11.
Miss Moore said WorldCom also had no comment on the bondholders report.
Shares of WorldCom gained 3 cents to close at 25 cents on the Nasdaq Stock Market, which has begun proceedings to delist the stock. WorldCom has requested a hearing; the stock will continue to trade in the interim.
The New York Stock Exchange suspended trading of several trusts belonging to WorldCom before the market opened yesterday. The NYSE said its decision was based on a review of recent events at the company.


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