DISH Subject of Accounting Probe, Set Back in TiVo Case (SkyREPORT) 03.10.05

[bradley]

source: http://www.mbc-thebridge.com/

BREAKING NEWS: DISH Subject of Accounting Probe, Set Back in TiVo Case (SkyREPORT) 03.10.05

(SkyREPORT) Bloomberg reported this morning that EchoStar is the subject of an internal probe concerning the company's accounting. The company wouldn't comment on the report.

The business wire service said an investigation by EchoStar's audit committee was prompted by KPMG, which allegedly uncovered evidence of improper booking of transactions and other issues while auditing the company's 2004 financials. Bloomberg also said the Securities and Exchange Commission has opened an inquiry into CEO Charles Ergen's role in EchoStar's accounting.

With the internal investigation, the audit committee must present findings to Ergen, and KPMG then must decide whether EchoStar is going far enough to address the issue or refuse to sign off on the company's accounts, Bloomberg reported.

Meanwhile, a federal court denied motions by EchoStar to a dismiss patent infringement case filed by TiVo against the satellite TV company.

 

[Threv]

See also CNN
http://money.cnn.com/2005/03/10/technology/echostar.reut/index.htm

Shares of EchoStar Communications Corp. fell as much as 8 percent Thursday after a report that the No. 2 satellite television service has launched an internal accounting probe and was the subject of an SEC inquiry.

EchoStar (down $2.08 to $28.51, Research) may have improperly booked transactions with suppliers and made questionable consulting payments to a friend of the company's chief executive, Bloomberg reported Thursday, quoting unnamed sources.

 

[Threv]

Now whether or not it affects the deal between Cablevision and E* for the VOOM bird and Uplink, remains to be seen.

 

[jbphoenix]

See also CNN
http://money.cnn.com/2005/03/10/technology/echostar.reut/index.htm

Shares of EchoStar Communications Corp. fell as much as 8 percent Thursday after a report that the No. 2 satellite television service has launched an internal accounting probe and was the subject of an SEC inquiry.

EchoStar (down $2.08 to $28.51, Research) may have improperly booked transactions with suppliers and made questionable consulting payments to a friend of the company's chief executive, Bloomberg reported Thursday, quoting unnamed sources.

It is interesting that the sec has started an investigation of E* within a week of starting an investigation of CVC...
Maybe something was attempted "under the table" in E* purchase of Rainbow1?

yet another chapter in the V*, CVC and E* Saga......

 

[yanks2402]

Now whether or not it affects the deal between Cablevision and E* for the VOOM bird and Uplink, remains to be seen.

Not unless thee accounting in question is directly related to the purchase of the Voom assests, which it is probably not.

 

[bradley]

Perhaps this may place all Echostar submissions to the Commission in a holding pattern, especially being Charlie is one of the main focuses of the investigations. Revenue generated in this accounting "error" and future finds may be quite substantial.

I tell you, ever since becoming a Voom customer back in March'04, I never though for one moment just how entertaining it would be becoming a subscriber. This is simply amazing, There is more scandal and intrigue as a bonus than you could ever imagine.

 

[Jamey K]

I tell you, ever since becoming a Voom customer back in March'04, I never though for one moment just how entertaining it would be becoming a subscriber. This is simply amazing, There is more scandal and intrigue as a bonus than you could ever imagine.

Oh me either. I found this forum about a week before all of this started going down and I haven't hung on the computer this much since I first discovered email in the 90's.

I can't wait until the movie. In HD of course.

 

[vurbano]

I think D* was recently under investigation too for some writeoffs on sats.

 

[cfarm]

Perhaps this may place all Echostar submissions to the Commission in a holding pattern, especially being Charlie is one of the main focuses of the investigations. Revenue generated in this accounting "error" and future finds may be quite substantial.

I tell you, ever since becoming a Voom customer back in March'04, I never though for one moment just how entertaining it would be becoming a subscriber. This is simply amazing, There is more scandal and intrigue as a bonus than you could ever imagine.

FWIW, Cablevision has also gone through(going through?) a SEC accounting probe. It's almost commonplace anymore. Stock price takes a temporary hit, etc. Only if the accounting probe uncovers some serious negligence or criminal activity does it have a lasting affect.

 

[Walter L.]

Investigators probe EchoStar's accounting practices
Knight-Ridder / Tribune Business News

Mar. 11--A surprise accounting probe has hit satellite giant EchoStar and its maverick leader Charlie Ergen.

Investors slammed EchoStar yesterday, sending shares down $1.87, or 6 percent, to $28.72 after a report revealed the company is the subject of an internal and SEC investigation.

Investigators are looking to see whether the company acted improperly in the way it books the deals it makes with suppliers.

The probe also is focusing on Ergen himself, who may have made inappropriate consulting payments to friends, according to a report from Bloomberg News.

EchoStar spokesman Steve Caulk declined to comment.

This is a major setback for the nation's No. 2 satellite company behind Rupert Murdoch-owned DirecTV. EchoStar's Dish system has been showing considerable success swiping customers from cable operators like Time Warner Cable.

The Dish system made a name for itself as the cheapest guy on the block while providing similar programming to cable and DirecTV.

Depending on the findings of the probe, EchoStar may be forced to reduce its past profits. Ergen might even take the fall, though analysts said they don't expect EchoStar's co-founder to lose control of his company.

Wall Street analysts said they were shocked to learn of the investigation.

"EchoStar historically has been the most conservative in accounting of any company I've seen," said SG Cowen analyst Tom Watts, noting that Ergen is an accountant by training. "This is the last company you would expect to have these issues."

He also called Ergen "one of the cheapest guys around," raising doubts as to whether the EchoStar boss would put any friends on the company payroll.

The trouble for EchoStar began with an audit by its accounting firm KPMG.

The accounting probe was just one headache for Ergen yesterday. He also had a big setback in court. A federal court in Texas denied EchoStar's motion to dismiss a patent infringement claim by TiVo.

Meanwhile, Cablevision's money-losing satellite system Voom got another boost.

Cablevision said its chairman, Charles Dolan, plans to start selling some of his own Cablevision stock to raise cash to support his bid to buy Voom for himself.

Cablevision's board has given him until the end of the month to come up with the cash before it shuts Voom down.

Fulcrum Global Partners analyst Richard Greenfield said Dolan's stock sales could be the first step before Dolan decides to sell Cablevision altogether.

"We continue to believe Time Warner and Comcast are the two most likely buyers of Cablevision, if it is put up for sale," he said.

 

[Walter L.]

Class Action Suit Filed against EchoStar

ATLANTA, March 11, 2005 - Chitwood & Harley LLP, a national class action law firm, announces that it has filed the first securities fraud class action complaint in the United States District Court of Colorado against EchoStar Communications Corporation (“EchoStar” or the “Company”) (NASDAQ: DISH), Charles W. Ergen, David Rayner, Michael R. McConnell, Paul W. Orban and David Moskowitz on behalf of purchasers of DISH securities during the period between August 10, 2004 and March 9, 2005 (the “Class Period”).

 

[James Long]

It is interesting how much Voomers insist on talking about other topics than Voom.
Oh well. Perhaps E* will be your next satellite service.

JL

 

[Aldous]

It is interesting how much Voomers insist on talking about other topics than Voom.
Oh well. Perhaps E* will be your next satellite service.

JL

I think what makes this so interesting to Voomers (me being a Voomer for a little over a month now, along with Dish) is that this is the company that will likely own the bird that may be essential to continued Voom service. If the sale goes thru, it could seriously hurt chances of Voom continuing in it's current form. If the sale doesn't go thru, it could make it extremely hard for Chuck to buy and fund the company himself. So actually, I think this topic is very much Voom related. Just my opinion though.