MCI (formerly WorldCom) has achieved a final settlement with the Securities and Exchange Commission (SEC) regarding the civil lawsuit the organisation filed against MCI, following the misrepresentation of the company`s financial results towards the end of last year.
The settlement finds the company liable for a civil penalty of $1.5 billion, however, it will be satisfied by a payment of $500 million upon the effective date of MCI`s emergence from Chapter 11 protection.
While this settlement is still subject to final approval by a federal judge in Manhattan, scheduled for a conclusion hearing on 11 June 2003, it represents a significant milestone for MCI, one that will move the company one step closer to emerging from its Chapter 11 bankruptcy position. The agreement will represent an important departure from previous bankruptcy law.
Structured under the provision of federal law that allows the government to divert penalties destined for the Treasury to investors instead, it would permit shareholders to receive significant compensation ahead of creditors. Whereas, traditionally the claims of shareholders in bankruptcy cases are disregarded in favour of those filed by creditors.
David Meintjes, CEO of UUNET SA, a solely owned subsidiary of MCI said: "This prompt settlement not only reiterates MCI`s will to emerge from Chapter 11 as a stronger competitor but is also indicative of the company`s commitment and responsibility to the process of transparency.
"MCI`s continuous co-operation with all pending investigations, its commitment to reforming corporate governance systems and its continued focus on service excellence to customers has resulted in considerable progress in such a short period of time, which is positive," says Meintjes.
UUNET SA continues to operate financially independently of MCI and is demonstrating continued business expansion and growth within the African markets," concludes Meintjes. Within the upcoming weeks, two independent reports commissioned by the Special Committee of the Board and the Federal Examiner will be issued. These reports will highlight a more concrete conclusion of this settlement, one that MCI is confident will place it one step further to again becoming one of the world`s leading Internet service providers.
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UUNET SA, an MCI company, is southern Africa`s only pan-African provider of Internet-based network services and is the largest global carrier of Internet traffic. The company provides Internet connectivity and corporate network services to major corporations as well as access services to Internet service providers.
All UUNET SA products and services are delivered within the required regulatory conditions.
For more information, please visit the UUNET SA Web site at www.uunet.co.za.
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