A report analysing the past actions of WorldCom made this damning criticism of Ebbers’ management of WorldCom, after he led the company through a score of increasingly large acquisitions throughout the 1990s, culminating in the purchase of MCI Communications Corporation, a company more than two and half times its size.
The strategy was based on insuring a ‘consistently increasing stock price’ and the acquisition trail only stopped when the proposed purchase of Sprint Corporation was blocked because of antitrust objections.
However Ebbers was ‘spectacularly unsuccessful’ in his ability to manage the internal operations of what was then an immense company, and to do so in an industry-wide downturn, the report claimed.
The investigation also claimed that Ebbers fed Wall Street ‘expectations of double-digit growth’, and demanded that subordinates meet those expectations too, but did not ‘provide the leadership or managerial attention that would enable WorldCom to meet those expectations legitimately’.
Ebbers is alleged to have provided a ‘a substantially false picture to the market, to the board of directors, and to most of the company’s own employees.
It also alleged that Ebbets reported ‘vigorous growth’ based ‘internal information that was increasingly inconsistent with those projections and reports’. He is also accused of not disclosing the persistent use of non-recurring items to boost reported revenues and of knowing that WorldCom was meeting revenue expectations through ‘financial gimmickry’.
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Steve Absolom and Will Wright from KPMG Restructuring have been appointed joint administrators to City Motor Holdings and associated companies
Partners from Johnston Carmichael have been appointed as joint administrators to Axon Well Interventions Products UK
Begbies Traynor have been appointed administrators of William Anelay Ltd, York, one of Britain’s longest-established construction and heritage restoration companies