GM is subpoenaed by the SEC :noes:

Discussion in 'OT Driven' started by mucky, Oct 27, 2005.

  1. mucky

    mucky .

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    :noes: :run:

    SEC subpoenas GM over accounting
    Regulators investigating the automaker's reporting of pension benefits, transactions with Delphi.
    October 26, 2005: 7:55 PM EDT

    DETROIT (Reuters) - General Motors Corp. said Wednesday it has been subpoenaed by the Securities and Exchange Commission as part of a probe into accounting practices and other matters, dealing the latest blow to the automaker.

    GM (Research) said the subpoenas relate to its financial reporting for pension and other post-employment benefits, and transactions between the company and auto parts supplier Delphi Corp.

    They also relate to the SEC's interest in GM's recovery of various costs from suppliers and supplier price credits, and any obligations to fund pension and post-employment benefits costs related to Delphi's Chapter 11 bankruptcy proceedings, the company said in a statement.

    It said SEC and federal grand jury subpoenas had also been served on entities linked to its finance arm, General Motors Acceptance Corp., in connection with insurance industry probes into products that may help companies smooth earnings.

    GM, which has lost about $3.8 billion through the first nine months of 2005, said last week that it was exploring the possible sale of a majority stake in GMAC.

    Such a sale, which could now potentially be delayed by ongoing investigations and legal wrangling, is aimed at shoring up the credit rating of GMAC which was cut -- along with that of its parent company -- to high-yield or "junk" status earlier this year.

    In its statement, GM said both the automaker and its subsidiaries were cooperating with all the ongoing investigations. It added that the company, which is mired in worst financial crisis since it skirted bankruptcy in 1992, had no further comment at this time.

    The news from GM comes a day after DaimlerChrysler (Research) said that it received a subpoena in September relating to the pension accounting practices at GM.

    The German automaker said in a filing with the SEC Tuesday that the subpoena it received related to the discount rate and discount rate methodology used for accounting for pension benefits.

    In the SEC filing, DaimlerChrysler said regulators are also seeking communications it might have had with GM, Ford Motor Co. (Research) and U.S. automotive supplier Delphi Corp. regarding the discount rate and discount rate methodology used for accounting for pension benefits.

    The issuance of the subpoena suggests the SEC has upgraded its investigation into GM's pension accounting practices to a formal status from an informal status.

    Under such a formal status, which must be first approved by the SEC commissioners, staff investigators are provided with powers to subpoena a company for documents and subpoena officials to provide testimony.

    http://money.cnn.com/2005/10/26/news/fortune500/gm.reut/index.htm?cnn=yes
     
  2. Bloke

    Bloke Banned

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    i dont see the relationship of DaimlerChrysler's involvment in this?
     
  3. mcr205

    mcr205 New Member

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    I'm pretty sure DC is being subpoenaed because they are trying to get an industry comparison. I believe both DC and GM have similiar accounting practices.
     

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