3 companies pass SEC review

AOL, Bristol-Myers, Reliant certification OK'd

Mirant not in compliance

August 20, 2002|By BLOOMBERG NEWS

WASHINGTON - The Securities and Exchange Commission accepted accounting certifications from top executives at AOL Time Warner Inc., Bristol-Myers Squibb Co. and Reliant Energy Inc. yesterday while listing one from Mirant Corp. as not in compliance.

Mirant, the biggest North American natural-gas trader whose accounting is under review by the SEC, joined 12 other companies whose certifications were listed earlier as not in compliance.

AOL Time Warner and Bristol-Myers were checked as acceptable although they have said their financial results may need to be restated. Reliant's trading arm, Reliant Resources Inc., is under SEC investigation on accusations that it made sham trades and other transactions.

"All companies get the same review" from the SEC's Division of Corporation Finance, which initially looks at whether the language of the certifications matches language prescribed by the SEC, agency spokeswoman Christi Harlan said. Whether a company is under investigation by the SEC's enforcement division does not affect how its certification is treated, Harlan said.

The certifications are part of the SEC's effort to restore investor confidence after accounting scandals at Enron Corp., WorldCom Inc. and other companies. Chief executive officers and chief financial officers at large U.S. companies whose fiscal year corresponds with the calendar year were required to file sworn statements with the SEC by Aug. 14.

The agency had posted certifications from about 760 companies on the Web site with several companies still under examination. Most of the certifications were reviewed last week.

Cendant Corp., one of the companies whose certification is still under review, said yesterday that it will make changes to its annual and quarterly financial statements. The biggest franchiser of hotels and real estate brokerages is filing an amendment to recent SEC filings "to remove certain non-financial disclosures," the company said.

Cendant's statement said the amendment "will satisfy SEC certification requirements." A Cendant spokesman couldn't immediately be reached for comment.

Harlan said the SEC staff is not negotiating with companies to get them in compliance. She declined to confirm that changes by Cendant would clear the way for SEC approval of its certification. "We'll let the companies speak for themselves," Harlan said. "There are no negotiations in connection with any of these statements."

Reliant Energy, whose certification was accepted today, said earlier it was making a clarification to some of its filings. Reliant spokeswoman Sandy Fruhman said the SEC asked the third- largest U.S. power company to clarify an issue related to the reports covered by the certification. "It was just a wording issue," Fruhman said.

AOL Time Warner, the world's biggest media company, and Bristol-Myers, the fifth-biggest drugmaker, have announced that their accounting is under investigation by the SEC. Their certifications, filed with the agency Wednesday, followed the SEC's prescribed wording for CEOs and chief financial officers to vouch for their companies' financial reports under oath.

Mirant's statements, signed by Chief Exectuive Officer S. Marce Fuller and Chief Financial Officer Raymond Hill, certified the accuracy of the company's filings for last year and its first-quarter filing with the SEC for this year. The company said Wednesday that an accounting review turned up mistakes that may have boosted its balance sheet by as much as $1.1 billion.

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