- DALLAS - Shares of Halliburton
Co. (HAL) traded as much as 7.5 percent lower on Wednesday after the oilfield
services and construction company said securities regulators were investigating
its practice of accounting for cost overruns on some construction projects
as revenues.
-
- The Dallas-based company said late on Tuesday that the
U.S. Securities and Exchange Commission had begun a preliminary investigation
and that it expected to receive a formal request for documents or a subpoena
in the next few days.
-
- Halliburton said it planned to cooperate fully with the
investigation, which it believes was triggered by a New York Times article
on May 22 alleging that the company adopted "aggressive" accounting
policies to boost its revenues.
-
- Shares of Halliburton dipped to $17.90 in early trading
but later recovered and closed at $18.72, down 63 cents, or 3.3 percent.
The stock was the seventh most actively traded on the New York Stock Exchange,
with 10.6 million shares changing hands.
-
- The accounting policies under investigation were adopted
in 1998 while Vice President Dick Cheney was chief executive of Halliburton.
He held that post from 1995 to 2000.
-
- Cheney spokeswoman Jennifer Millerwise referred questions
about the SEC probe to Halliburton.
-
- The New York Times article quoted accounting specialists
who said Halliburton had stretched, and may even have broken, accounting
rules.
-
- Halliburton said it believed the accounting practices
under investigation are in accordance with generally accepted accounting
principles for the construction industry.
-
- Under the policy adopted in 1998, Halliburton began to
recognize some of its unresolved claims against engineering and construction
clients as revenue, even though the amounts of money at stake were still
in dispute.
-
- Halliburton's shares came under heavy selling pressure
in December and early January, touching a 15-year low of $8.75 on Jan.
4, because of investor concerns about the company's exposure to hundreds
of thousands of asbestos damages claims.
-
- The shares subsequently recovered following repeated
management reassurances that the company will not be ruined by its asbestos
liabilities.
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- http://www.foxnews.com/story/0,2933,53925,00.html
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