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Worldcom Scandal Hits Jobs,
Working people may again be the biggest fiscal victims of yet another major corporate scandal and and threatened bankruptcy, according to reports on the recent Worldcom crash.
Management firms for at least three Canadian pension plans have reported losses as a result of the closure of WorldCom, owner of numerous large telecommunications services, including the giant MCI in the United States.
Canada's largest fund The Caisse de Depot et Placement du Quebec revealed it had about $108 million invested in WorldCom as over the end of last year. The Ontario Teachers Pension Fund says it has lost around $10 million, and the Ontario Municipal Employees Retirement System reports it had a minimal $500,000 invested in the former communications conglomerate.
Lucie Frenier Of the Caisse, is unsure what will happen as a result of the losses. "I don't know what the portrait is now," she told reporters. But she did say that the Caisse, with over $130 billion dollars in investments, has an "active portfolio" of which its World Com investments are only a small part.
The trouble began when WorldCom senior bosses in the US revealed the firm had misrepresented about $3.8 billon in operating expenses as capital investments. The US Securities Commission has filed fraud charges, and the firm will have to restate its financial reporting for the last five quarters, which are expected to show huge losses.
The firm is expected to go under as a result. At least 17,000 direct jobs will be lost due to the closure. Bosses began issuing pink slips last week.
Numerous other Canadian companies are expected to suffer some level of disruption. Manulife Financial and Sunlife Canada are out a combined $215 million in WorldCom bonds. The firm also reportedly owes the ScotiaBank as much as $150 million.
The Columbia Journal
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