Qwest results 'exaggerated'

EXECUTIVES at Qwest Communications International made about $500 million selling company stock from 1999 to 2001, as the company was releasing results it now says were exaggerated and based on improper accounting, The New York Times said.

Joseph P Nacchio, Qwest’s chief executive until he was forced to resign last month, made $227 million, the paper said, citing Thomson Financial, a research company that tracks Securities and Exchange Commission filings.

Robert S Woodruff, the chief financial officer until last year, made $29 million, while Drake S Tempest, the current general counsel, made $13 million, the Times reported.

In addition, Philip F Anschutz, a member of Qwest’s board and the company’s largest shareholder, made almost $1.5 billion selling shares in May 1999, the paper said. Most of the largest stock sellers have resigned from Qwest in the last 18 months. Qwest’s new chief executive, Richard C Notebaert, said on Sunday the company had exaggerated revenue and understated costs over the last three years and would restate its results for 1999 to 2001 after it had completed an internal review of its accounting. Qwest’s acknowledgment of accounting problems could help the regional phone service provider restore investor trust, but analysts said big revisions in the bottom line for 2000 and 2001 could hurt the sale of a phone-directory business Qwest is counting on to reduce debt.

Officials of Qwest Communications International Inc, already under investigation for its accounting practices, said accounting errors made in 1999, 2000 and 2001 under policies approved by previous auditor Arthur Andersen LLP prompted an internal analysis earlier this year. Qwest hired auditor KPMG LLP in June to examine its books.