As the US markets delivered another beating to companies with accountancy issues yesterday, the chairman and chief executive of Elan, Mr Donal Geaney, arrived in the United States to undertake a week-long series of meetings with investors to talk up his shattered pharmaceutical company. Conor O'Clery, International Business Editor, reports from Wall Street.
Tyco International, which like Elan has had its accountancy secrets stripped bare in scathing investigations by the Wall Street Journal, lost nearly a quarter of its market value on the New York Stock Exchange yesterday.
In Washington the heat on accountancy firm Arthur Andersen was turned up at a Congressional hearing on the collapse of Enron, where chief executive Mr Joe Berardino was subject to the anger of one Congress member, who warned him "your ship is going to go down" unless he started talking.
The atmosphere was no less comfortable for Mr Geaney when he arrived to gave a long-scheduled address to hundreds of investors at a global pharmaceutical conference in New York's Grand Hyatt Hotel yesterday morning.
Reporters were excluded from the conference, organised by Merrill Lynch. Mr Geaney refused a request to talk to The Irish Times.
Moody's has put the shares on notice for possible downgrade. Tyco shares plunged after Standard & Poor's downgraded the troubled conglomerate's debt from A to BBB, two notches above junk status. In the last month, the Bermuda-based company has lost more than half of its market value over questions about undisclosed transactions.
Mr Berardino attempted yesterday to distance Andersen from an Enron internal report issued on Saturday, which criticised the accounting firm for failing to make known its reservations about Enron's complex system of hiding debt in third-party transactions.
The report on the collapse of the Houston energy trader said Enron's long-time auditor was closely involved in the creation of the partnerships that Enron executives used to hide losses and enrich themselves. It was prepared by a committee of Enron directors
Mr Berardino complained that the directors ignored efforts by Andersen to tell its side of the story, Mr Berardino repeatedly pleaded ignorance before the House Financial Services capital markets subcommittee about who knew what and when at Andersen, and how employees came to destroy thousands of Enron-related documents and e-mails.
This provoked New York Democratic Representative Mr Gary Ackerman to snap at Mr Berardino: "Your ship is going to go down and you're going to be lashed to the mast unless you start talking to us." Enron's collapse in the autumn was the biggest bankruptcy in history and left investors and employees devastated. Former employees gave tearful testimony yesterday about how their life savings disappeared.
Mr Berardino said they knew about the partnerships but did not help develop them.
Former Enron chairman Mr Kenneth Lay yesterday agreed to appear before Congress next week in response to a subpoena calling him to testify on the company's collapse, according to Congressman Mr Michael Oxley, the Ohio Republican who chairs the House Financial Services Committee.
The panel has asked Mr Lay to appear on February 14th after he refused to show up for a hearing yesterday. Mr Lay is expected however to use his Fifth Amendment right not to testify.
