Interview: Worldcom
>> one of our top stories in the u.s. corporate world, former worldcom chief, bernard ebbers, convicted of directing an $11 billion fraud that led to the biggest chapter 11 in u.s. history. our reporter, allan dodds frank, outside of the federal courthouse in downtown manhattan. what went wrong for ebbers?
>> every charge went against him. like the weather here, cold and clear, that’s the jury verdict. they’ve wasted no time, after eight days of deliberation, today, in saying bernard ebbers was guilty on all nine counts. when the jury forewoman delivered the first guilty verdict on the conspiracy count, mrs. ebbers burst into tears. bernie ebbers tried to keep his composure. his stepdaughter started crying and it went quickly. ebbers, his wife and daughter came outside and tried to find a car, couldn’t do it, and he had nothing to say about the six-week long trial and then they went into the yellow cab and not long afterward, his lawyer came out and poke about scott sullivan―spoke about scott sullivan who testified against ebbers as prosecution’s star witness, sullivan saying all the fraud was directed at bernie ebbers’ behest. ebbers’ defense had been that he was not aware of what his subordinates were doing.
>> obviously, scott sullivan testified for five days and incriminated mr. ebbers for five days. we effectively dealt with it on cross examination. had the jury bought scott sullivan, they would have convicted him on the first day. ebbers’ lawyer said he had no trouble with his decision to put the former worldcom c.e.o. on the witness stand. ebbers testified for three days and the 63-year-old was apparently no match, according to the jury, for the testimony of his protege, scott sullivan. the judge does plan to appeal, saying―the lawyer does plan to appeal for ebbers as the judge, he says, did not allow important evidence in the trial for ebbers.
>> sullivan was the only witness to directly implicate bernard ebbers and he turned state witness. anybody making noise about the chances for bernie ebbers in the appeals process?
>> bernie ebbers has some chance. but lots of trials―he enjoyed turning state’s,vidence in order to get a better deal for himself. there were other executives who testified. at one point, the controller said ebbers apologized to him for having to put up accounting numbers that weren’t realistic.
>> allan dodds frank, on the case in the southern federal court in manhattan, new york city. ebbers with the text blinds facing up to a decade in prison. checking on world news outside the business world, ron madison is in tokyo with the update on this wednesday.
>> good morning. a bit of a change in position. u.s. president george w. bush leaving open the possibility, now, that hezbollah could play an expanded political role in lebanon if it proves it’s not a terrorist group in comments following the meeting with jordan’s king abdullah ii. bush says the u.s. has declared hezbollah a terrorist organization because of activities in the past but hopes it can change that by laying down arms. hezbollah has nine seats in the lebanese parliament and has sponsored two big pro syria marchers. there were thousands of pro-syria demonstrators protesting outside of the american embassy in beirut. a.p. says police and soldiers kept demonstrators from reaching the embassy. pro-syrian groups blame the united states for the pressure on syria to withdraw its military from lebanon. in the united states, now, a “washington post” office used to process government mail has been closed to test for anthrax after the bacteria was detected at a pentagon mailing center. 200 postal employees were told not to report to work and have been offered the antibiotic cipro as a precaution. no illnesses have been reported. samples taken at a central office tested positive for anthrax. four mail centers have been closed, including two at the pentagon. back to you.
>> cipro, one of the only antibiotics proven to battle anthrax successfully. still to come, the dollar at its highest in a week against the euro. our data says that fxmax made the most accurate currency forecasts in the fourth quarter. we’ll speak with the founder and chief executive next.
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Listen Market briefing --- Bernie (slow)
Australia market --- David (slow)
welcome to “ live,” thanks for tuning in, i’m bernie lo in hong kong this morning. the chief executive of the i.m.f. will tell you why the fund thinks china should ease its currency peg. as c.e.o.’s from boeing, a.i.g. and h.p. get the ax, the head of executive search firm, headhunter korn/ferry, will address the c.e.o. shuffle in america and address what’s going on in the asia-pacific area, as well. we’ll also speak with the president of far eastone. and wang lei lei will join us. we’ll wrap up the show with former world bank chief economist joe stiglitz. former worldcom chief bernard ebbers guilty of directing the $11 billion fraud that caused the largest u.s. bankruptcy in history. details of the jury verdict and details live from the new york courthouse with our bloomberg news reporter on the scene. the pentagon closed four mail mailrooms on concerns they were contaminated with anthrax. higher oil prices also contributing to the drop. the s&p 500 and nasdaq tech component also falling .75%. a.i.g., among the dow components, the biggest loser of the third after hank greenberg resigned. fitch lowered the long-term credit rating on the company. semi cons also fell. turning to debt, treasuries, the 10-year note fell with the government revising upward january retail sales figures from a drop to a gain. the treasury department report showed japan sold a net of $10.2 billion worth of notes in january. oil rose above $55 a barrel in nymex trading as opec pledged to pump more of the stuff. prices jumped to within 12 seconds of their record high on speculation the cartel’s planned increases won’t keep up with demand. the president of the organization says members will raise output by half a million barrels.
>> i think we can have the tools together, create the 500 now and to have another 500 during the next two months.
>> ahead of today’s opec meeting in on or the opec president added the group has two million barrels of spare capacity. saudi’s oil minister says his country plans to expand its capacity beyond the 11 million barrels they pump already.
>> we said we are concerned about the price. it is high. and we are concerned about its impact on consuming nations, particularly the underdeveloped countries, developing countries. we are also concerned about the impacts on demand.
>> saudi arabia is the world’s largest oil producer. the dollar is up to one against the euro and cutting earlier losses against the yen in new york composite trading. the u.s. dollar strengthened on signs foreigners are buying u.s. assets. asia-pacific stocks down in u.s. trading. canon, taiwan semi con and b.h.p. billiton dropping. the bank of new york indexes tracking asian stocks all down. nikkei futures point to a start at or around 11,755, 50 south of the cash close from yesterday in tokyo. yahoo! japan will be added to the nikkei 225 component. the operator of japan’s most visited website joining the average march 28 along with tugi pharmaceutical. the stock is expected to rise as money managers buy the shares to keep even keel with benchmarks. other shares to watch are mitsubishi corp., in talks with a refiner to merge liquified petroleum gas units. australia’s stock market opens in about an hour and futures point to a lower open for the 200. we’ll check with david tweed on what’s going on to drive the market .
>> it looks as if the market is open, if we do follow what the futures are doing, and they are trading around about .2% lower. it looks as if investors are looking at b.h.p. billiton and rio tinto. in the light of rio tinto’s report, though, remark from its annual report lodged from the australian stock market yesterday, rio saying even though it expects commodity prices to ease from record levels, it forecasts the prices will remain above long-term average prices so we saw rio tinto falling in london and b.h.p. billiton american depository receipts dropping 2%% -in new york.% that said, we saw 1.7% increase in the price of copper traded in new york after the report out of china yesterday that showed that industrial production for the first two months of the year there increased 17%, higher than the 15% that was expected by economists, the five economists at bloomberg news. i’d like to bring your attention to a couple of downgrades today, bernie. newcrest mining has been cut. this is australia’s biggest gold miner, cut to neutral from outperform at csfb, citing the 16% increase we saw in the share price of that company since february 9 compared to the 1.3% increase for the asx 200 index. the other one is 10 network, lowered to market perform at goldman sachs, concerned it will have difficulty clawing back audience share it’s lost to channel 7. goldman sachs said the 5% dividend yield of 10 will probably support it.
>> when i went to bed last night, the counting wasn’t over, patrick corporation had 47.1% of virgin blue air yesterday morning. did they gain majority control while i was counting sheep?
>> no, they’re still below -- below 3% of getting control, which is why they’ve extended their bid for a week. interestingly thing is that they haven’t changed their share price they’ll pay to shareholders, although they have said they will speed it up to five days of acceptance, so there’s a week to accept. they’re still offering $1.90 a share and they’re still trading at $1.90. back to you.
>> another week to go. we’ll wait for that. david, we’ll check with you in the next hour. our reporter is standing by at the courthouse where the former worldcom chief, bernard ebbers, found guilty of directing an $11 billion fraud.
