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Report cites Ebbers` `near imperial` reign at Worldcom
New York, Aug 27: The top executive of bankrupt telecom giant Worldcom was allowed `nearly imperial reign` that led to the largest fraud in US corporate history, a court-appointed monitor`s report has said.
New York, Aug 27: The top executive of bankrupt telecom giant Worldcom was allowed "nearly imperial reign" that led to the largest fraud in US corporate history, a court-appointed monitor's report has said.
The report by court monitor Richard Breeden said the company, now called MCI, should take 78 steps to restore trust, including tight compensation limits for executives and
a fully independent board, to avoid future scandals and emerge from bankruptcy.
The report said that the company succumbed to the biggest corporate fraud in US history owing to "the sad fact that there were not checks and balances" on former chairman and chief executive Bernie Ebbers. The report was delivered yesterday to the federal bankruptcy judge handling the MCI case. MCI said its board unanimously accepted the recommendations and that it has already implemented many of them.
The report said that the board of directors "consistently ceded power over the direction of the company to Ebbers."
As CEO, Ebbers "was allowed nearly imperial reign over the affairs of the company, without the board of directors exercising any apparent restraint on his actions, even though he did not appear to possess the experience or training to be remotely qualified for his position," the report said. "One cannot say that the checks and balances against excessive power within the old worldcom didn't work adequately. Rather, the sad fact is that there were no checks and balances."
Bureau Report
The report said that the company succumbed to the biggest corporate fraud in US history owing to "the sad fact that there were not checks and balances" on former chairman and chief executive Bernie Ebbers. The report was delivered yesterday to the federal bankruptcy judge handling the MCI case. MCI said its board unanimously accepted the recommendations and that it has already implemented many of them.
The report said that the board of directors "consistently ceded power over the direction of the company to Ebbers."
As CEO, Ebbers "was allowed nearly imperial reign over the affairs of the company, without the board of directors exercising any apparent restraint on his actions, even though he did not appear to possess the experience or training to be remotely qualified for his position," the report said. "One cannot say that the checks and balances against excessive power within the old worldcom didn't work adequately. Rather, the sad fact is that there were no checks and balances."
Bureau Report