Business & Finance
MCI, formerly WorldCom, will pay a record fine to settle charges by the Securities and Exchange Commission related to its $11 billion accounting fraud, published reports said, with an announcement considered imminent. The exact amount was unclear, but Bloomberg.com reported it probably would exceed the $400 million penalty levied against Citigroup last month. The deal is expected to improve MCI's prospects for emerging this fall from the largest bankruptcy filing in US corporate history because it removes a key obstacle to restructuring.
A lawsuit that accuses 34 multinational corporations of aiding and abetting the former apartheid regime of South Africa in repressing the nation's black majority was to be filed in New York Monday, the Financial Times reported. At least two prominent US companies - Citigroup and IBM - are among those targeted in the suit, which seeks more than $100 billion in compensation. It is, however, opposed by South Africa's current government on grounds that it could damage long-term business prospects. The legal team behind the case includes Ed Fagan, who last year won a $1.25 billion settlement from Swiss banks for families of Holocaust victims.
British Airways became one of the few companies in its industry to post a profit for fiscal 2002. But although the carrier announced earnings of $136 million for the year ending March 31, it did so chiefly via deep job cuts and other austerity moves that offset declining ticket sales. Analysts said, however, that the company's $320 million fourth-quarter loss and the $134 million it has spent to retire its supersonic Concorde fleet this fall, suggest that 2003 will be a difficult year.
Sega Corp., the maker of video games that was considering merger terms with two other companies as recently as May 8, announced a small net profit for the 2002 fiscal year. Sega said it earned $26 million, a reversal of the $152.5 million loss of 2001. But it acknowledged that was largely because of eliminating money-losing subsidiaries and abandoning production of its Dreamcast game console, which failed in competition with Sony's PlaySation2. Sega, which is based in Tokyo, makes Sonic the Hedgehog games.