WORLDCOM - Heute Online Diskussion mit John Sidgmore - 500 Beiträge pro Seite

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Wenn das kein Signal ist, ich sehe das Engagement von John Sidgmore sehr positiv !

Vielleicht kann er auch schon über die Entscheidung der Banken was sagen.

Ich werde jedenfalls heute wieder einsteigen.

Washington Techway Live
Discussion with John Sidgmore, President and CEO of WorldCom Inc.

Thursday, July 11, 2002; 1 p.m. EDT

WorldCom CEO John Sidgmore has committed to take questions from the public for the first time since the company`s $3.8 billion accounting scandal broke late last month. Sidgmore will field questions for one hour in a Live Online discussion this Thursday, July 11.

Sidgmore`s appearance will fulfill his pledge to reschedule a Live Online that he postponed on June 21, shortly before WorldCom`s accounting problems became public.

Submit Your Questions and Comments: Sidgmore will take questions in a Live Online discussion on Thursday, July 11, at 1 p.m. Writer Keith Epstein, who profiled Sidgmore for a cover story in the latest edition of Washington Techway magazine, will moderate.

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11 Jul 2002, 03:49 AM EDT

WorldCom`s Loans to Ebbers Defy Any Explanation, Breeden Says
By Rob Urban

New York, July 11 (Bloomberg) -- WorldCom Inc.`s board of directors failed shareholders when it loaned former Chief Executive Officer Bernard Ebbers more than $400 million to buy Canadian timberland, the company`s court-appointed monitor said.

Richard Breeden, named last week by U.S. District Judge Jed Rakoff to make sure WorldCom doesn`t pay executives too much or destroy documents, commented on the directors` actions yesterday at a roundtable discussion on corporate governance. Breeden, a former Securities and Exchange Commission chairman, said he`d just come from a WorldCom board meeting.

``How do you explain the fact that the board thought that it was consistent with its fiduciary duties to lend the CEO $400 million so that he could try and buy every tree in northern Canada?`` Breeden asked. ``It`s a rather curious exercise of business judgment to conclude that that`s an appropriate use of shareholder money at this telecommunications company.``

WorldCom, being sued by the government for fraud after it admitted to misreporting $3.85 billion in expenses, has said the loans were made so Ebbers wouldn`t have to sell his stock to pay other obligations, and thus drive down the share price.

WorldCom`s loans to Ebbers, the subject of an SEC investigation, totaled $408.2 million as of May, according to the company`s 10-Q filing with the SEC. The first loans were made to Ebbers in 2000 by WorldCom to guarantee a margin loan by Bank of America, using Ebbers` once-valuable stock as collateral.

`Good Faith`

``We certainly respect Mr. Breeden`s position and look forward to working with him through this issue and others that the company faces,`` said WorldCom spokesman Brad Burns. ``We`re hopeful that he`ll be able to understand that our board was acting in good faith and with shareholder value in mind when the loans were granted back in 2000.``

Ebbers, a native of Edmonton, Alberta, bought 164,000-acre Douglas Lake Ranch in British Columbia in 1998, for about $60 million, Business Week magazine reported, citing brokers who worked on the transaction. His investment company bought 460,000 acres of timberland in the Southeast U.S. in 1999 from Kimberly- Clark Corp. for about $400 million, Business Week said.

Earlier this week, WorldCom`s current CEO John Sidgmore said in testimony in Congress that he now believes the board shouldn`t have approved the loans to Ebbers. Sidgmore was vice chairman of the board in 2000, when the loans to Ebbers were approved.

``If I had to vote for it again, I would not vote for it,`` Sidgmore testified.

`Executive Excess`

The board`s willingness to lend to Ebbers may have been an indication of other troubles at the company, said Ken Bertsch, a director of corporate governance at TIAA-CREF, the biggest U.S. teacher`s pension fund, with $275 billion under management.

``This reinforces the need for a strong oversight role for boards,`` Bertsch said in a June 27 interview. ``In that light, it probably reinforces the notion that where boards appear to be complacent with executive excess, it probably reflects deeper problems.``

WorldCom faces fraud charges from the Securities and Exchange Commission for hiding $3.9 billion of expenses over five quarters and inflating profit, and is under investigation by the Justice Department and at least two congressional committees.

The second-largest U.S. long-distance telephone company is conducting an internal accounting probe back to 1999 that lawmakers say may reveal more missteps. Representative Michael Oxley said this week the company may have hid another $1 billion of expenses.

The company has more than $30 billion in debt and is trimming 17,000 jobs and preparing to sell assets in Latin America. The stock has dropped 96 percent in three months to 20.2 cents. It had climbed to as high as $62 in June 1999.

More Scrutiny Needed

Ebbers helped found the company in 1985 as a small long- distance provider named LDDS Communications Inc. He was forced to resign as chief executive in April, and the company agreed to pay him a $1.5 million annual pension.

Breeden said that many companies have failed to pay sufficient attention to the qualifications of directors.

``Not much attention has been paid to who really is on the board and how many of them are cronies of the CEO and how many of them have been there for 25 years, and haven`t done much thinking in the last 15,`` Breeden said during the roundtable discussion, held by Edelman Public Relations Worldwide.

``This isn`t just about Enron, it isn`t just about WorldCom. It`s about YourCom. It`s about every single company out there, and being sure that they step back and take a look at who is on their board, how they were picked, and how they are paid.``

(Voluntary Disclosure: Position- Long; ST Rating- Strong Buy; LT Rating- Strong Buy)

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Es hat begonnen !

Name
Worldcom Grp
Last Price
0.2000
Net Change
-0.0020
Shares Matched
70,466
Orders Entered
2,036
Last Match Time
7:58:53.629
Market
NM
Previous Close
0.2020
Percent Change
-0.99%
Shares Entered
8,775,919
Open Orders
2,025
Last Order Time
8:01:51.974

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Hier das ganze Interview !

Keith Epstein: Welcome. Thanks for joining us. I`m Keith Epstein, contributing writer to Washington Techway. Even before going on today, we were absolutely flooded with questions -- more than 500 of them. As you can imagine, John, many were from distressed shareholders and your own anxious employees. What have you been hearing from them, and what have you told them about their seemingly failed investments and threatened livelihoods?

John Sidgmore: Obviously there are a number of groups that are concerned about our status. We are also concerned about their status. At this point and time we are trying to steer the best course for all of our constituents, including employees, customers and investors.



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New York, NY: Where were you Mr. Sidgmore when all this was happening? From what I remember, after Ebbers acquired MFS you were slated to run WorldCom with him. Unless you were hiding in the closet for the last six years you would have been intimately involved in the operations of Worldcom. So how did you not know?

In addition I saw you in a brief clip explaining that your CFO Sullivan, your Controller Myers and one `clerical person` engaged in the `cooking.` Is it possible for only three people to collude in the amount of $4 BILLION on the books of a multi-billion dollar multinational corporation?

John Sidgmore: I was Chief Operations Officer during 1997 and 1998. Since that time I have had decreasing involvement in the operations of the company and played primarily a strategy role in mergers and acquisitions since that time. Over the last two years my role has been almost exclusively speaking at Internet conferences on behalf of WorldCom.



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Cary, N.C.: At this point, are you currently leaning toward a debt-to-equity swap or leaning more toward the bank loans? What would be in the best interest for the future of WorldCom and would their be anything left for the shareholder if a debt to equity swap was inevitable.

Keith Epstein: Also, John, you`ve made references recently to potential "non-traditional" sources of financing? Can you be any more precise, or at least categorize what you`re talking about?


John Sidgmore: We are looking at all available options for financing and have been for the past two months - when I became CEO. We are cautiously optimistic that we will be able to obtain the financing required to ensure that the company can continue to provide service to all of our customers long into the future.



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Cary, N.C.: How deep will the next round of layoffs go?

John Sidgmore: We have no plans at this time for additional layoffs. Circumstances in this industry have proven to be very difficult to predict for all telecom providers, so we cannot make any promises. I want to also point out that the recent layoffs that were previously announced were unrelated to the financial restatement and were forced due to market conditions and market demand.



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Huntington Beach, Calif.: The consensus among the investment community is that the debt load has to be drastically reduced by paying down with free cash flow, asset sales, and so on. It appears that the most meaningful way to do this would be through a debt-for-equity swap. This has been mentioned as a possibility in a prepackaged bankruptcy. Could a debt-for-equity exchange be done without filing for bankruptcy? If there was a bankruptcy filing, where would this leave the common shareholder? Would it be possible for a debt-to-equity exchange where bond holders received 80-90% of the equity and existing shareholders received 10-20% of the equity be a possibility? I am both a shareholder and bond holder of WorldCom and feel that this would be more favorable to everyone than just bondholders receiving all equity.

John Sidgmore: We are looking at all options at this time and cannot get into all of the details of our negotiations and strategy. However, there is no doubt that we need to reduce our debt long term to achieve a healthy financial position. There are many ways to accomplish this.



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Keith Epstein: John, I think what New York was trying to get at earlier concerned less the positions you held and more the state of your awareness of what was going on at WorldCom through the time you served as COO and later as vice chairman. How much did you know, what did you suspect, how much of this came as a surprise?

John Sidgmore: My positions at WorldCom were reflective of my involvement in operations. Obviously, the board reviewed highlights of the financial condition and key ratios - at each board meeting. There was nothing to suggest that this problem was looming, and I was totally taken by surprised and outraged.



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London: When you took over as CEO you instigated a 60-day strategy review which should now be coming to conclusion. Your aim was to publish this information and confirm what parts of Worldcom were seen as core business and therefore strategic -- and what was not considered core.

In light of your comments of entering in Chapter 11, it is increasingly important as a customer to be informed about what is and what is not core to WorldCom. Therefore, when will the results of your review be available?

John Sidgmore: We have laid out our strategic plan for the business and have announced which pieces of the business we don`t feel are core assets for the future. These include our wireless resale business, certain other wireless technologies, Latin American assets and some real estate. We believe that our large corporate customers will unaffected by our strategy.



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Charles Town, W.V.: Mr. Sidgemore, if UUNET is sold, won`t that be the end of WorldCom as a telecom giant? Is UUNET on the table or is it completely off limits?


John Sidgmore: UUNET is not under consideration for sale.




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Knoxville, Tenn.: Is the company making any effort to identify persons still with the company who designed, executed and protected the deceptions? If not, why not? If yes, what action will you direct the company to take regarding those individuals? What instructions have you given concerning cooperation with investigative efforts from inside or outside the company?

Do you think CEOs and their accomplices should be able to helicopter off the titanic while thousands drown? What will you do to prevent this deception in the future?

Do you think executives and boards should be allowed to engage in undisclosed extraction of wealth from employees and stockholders and continue to live in ease and luxury with impunity? Where is the linkage of their fate to the fate of those working under them, and those who financed them?

John Sidgmore: At management`s direction, our audit committee hired the former head of enforcement for the Securities and Exchange Commission to fully investigate the situation. In addition, we are cooperating with several other investigations that have been undertaken by other government agencies. Our position is that we want all the facts to come out, we want to make sure all that were responsible are punished and we want the other 60,000 employees within the company to move on with their lives with WorldCom.



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Keith Epstein: It seems, from what you and others have said, that the multibillion dollar misstatement came as much of a surprise internally as to the public and to investors. Perhaps you can explain to outsiders how it is possible that such a problem could arise without many significant players, including members of the board, having sufficient awareness of the brewing storm?

John Sidgmore: The company attempts to protect itself in a number of ways. First, the board of directors typically reviews highlights of the financial information quarterly in order to attempt to detect if any major changes have occurred in the health of the business. Secondly, the board has an audit committee to specifically audit the financial statements. Finally, the board has outside auditors who review all of the details our our accounting operations and accounting statements each quarter. We would have EXPECTED that this problem would have come up from the detailed review of the financial statements -- by the auditor.



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Lady Lake, Fla.: Mr. Epstein, do your job and be a real journalist. Ask Mr. sidgmore what will happen to the common shareholder. Rather would ask, Cronkite would ask, Murrow would ask, "60 Minutes" would darn sure ask. Be a journalist and ask Mr sidgmore.

Keith Epstein: OK John, what will happen to the common shareholder?


John Sidgmore: We are still working through negotiations of various types and therefore we cannot predict at this time what will happen to our common shareholders. We are still reviewing all of our options. The main goal is to keep our company intact and to provide service to our customers.



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Ashburn, Va.: As an employee of WorldCom, I`d like your honest assessment. Can this mess be turned around? Is it time to look for another job?

John Sidgmore: We remain committed to keeping this great company fully operational and as I said before we have no plans at this time for additional layoffs. There are no guarantees what the future can bring, but we understand how critical our employees are to providing great service to our customer base.



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Arlington Va.: At yesterday`s congressional hearing, the Arthur Andersen auditor said that his company was forced to rely on numbers that your company provided. How then can you blame the auditors for dropping the ball?

John Sidgmore: Mr. Melvin Dick is that you???



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Falls Church, Va.: Do you blame Arthur Andersen and other auditors for failing to catch the problems?

John Sidgmore: Typically, a company hires an outside auditor to make sure that the company`s financial management team produces accurate financial statements - they are the primary check and balance in this system.



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San Francisco, Calif.: You never did answer the question from New York. How is it possible that only three people would try and hide $4 Billion, and the bigger question is why would they? No one believes that they would act alone without Ebbers knowledge, your knowledge, and some of the board`s. Please stop being a politician and answer the question. How and why would these guys act alone? (From a WorldCom employee)

John Sidgmore: We would love to know all the answers right now, but we simply don`t and won`t until the investigations are completed. We are as eager as you are to get to the bottom of this.



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Fairfax, Va.: Mr. Sidgmore, I am actually a customer of UUNET. You had responded to an earlier question regarding UUNET`s fate, and you had stated that UUNET is not under consideration for sale. Can you be more specific in terms of whether you are considering closing down smaller UUNET data centers around the nation? Are you looking at consolidating your web hosting business in fewer data centers? If so, it would affect me, your customer, tremendously. Please comment. Thank you.

John Sidgmore: We are not prepared to predict the details surrounding our future strategy at this time. UUNET is central to our future and is certainly one of our greatest strengths as a company. You should NOT be concerned about any impact to your service level or quality.



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Colorado Springs, Colo.: As an employee who has worked several late nights and weekends so that my department`s bottom line was the best it could be, I am very upset with the `cooking of the books.` We have a great customer base, talented and hardworking core of employees. How do you see WorldCom improving its image and how long do you think it will take?

John Sidgmore: We have to first assure our customers and employees that our future is secure. Then we have to make it clear to the world that we are an honest, ethical organization that is deeply committed to providing innovative products and excellent services. We cannot allow the world to think negatively about WorldCom because of the actions of a few.



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Newark, Del.: Please ask Mr. Sidgmore this. Bill Gates could approach Warren Buffett to buy it all. Gates would own the Internet. Gates could unilaterally rename the telecom soap opera, All My Fibers. What about Gates or Buffett to the rescue?

John Sidgmore: We continue to look at all options including traditional sources of financing and various strategic partners. We have reviewed many, many sources of capital over the last couple of months, including non-traditional sources.



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Keith Epstein: So, John, are you saying a Gates or a Buffett is a possibility?

John Sidgmore: No.



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Cleveland, Ohio: `We cannot allow the world to think negatively about WorldCom because of the actions of a few.` Wouldn`t a bankruptcy filing accomplish just that?

John Sidgmore: We do acknowledge that there is the possibility of a Chapter proceeding if all of our other options run out. In many cases, Chapter proceedings are beneficial to a great majority of the stakeholders associated with the business. It provides continuation of service and future for the business that is sometimes not otherwise possible. However, let me reiterate, this is not our desired path.



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Boston: Is Digex up for sale and how much per share if it sold?

John Sidgmore: Digex is not up for sale at this time.

We would like to thank everyone for their time today and appreciate your continued interest in our company.

Regards - John Sidgmore

Keith Epstein: Thanks, John, for your time.

And thanks to everybody else. We received more than 1,410 questions -- obviously far too many to deal with in an hour. But I will send them all on to him.

If you want to get in touch with me, please email me via [e-mail].

Thanks!