Murdoch business faces accounting investigation

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The Independent Online

US financial regulators have launched an investigation into alleged accounting irregularities in a business controlled by Rupert Murdoch.

US financial regulators have launched an investigation into alleged accounting irregularities in a business controlled by Rupert Murdoch.

The Securities and Exchange Commission said late on Friday night that it was looking into a series of accounting issues at DirecTV, the satellite TV business which is run by Mr Murdoch's News Corporation, despite News Corp only owning 34 per cent of its shares.

In particular, the SEC was making inquiries about how DirecTV accounted for deals between itself and Thomson, the French electronics group, and with NRTC, a rural telecommunications group formerly owned by Pegasus Corporation.

Pegasus and DirecTV have been engaged in a legal battle since June last year after Pegasus accused DirecTV of attempting to destroy its business. DirecTV made cash offers to third-party distributors to persuade them to ditch Pegasus. In a turnaround, DirecTV agreed to buy the satellite TV assets of Pegasus for $938m (£500m) in August.

Thomson agreed last year to buy DirecTV's set-top box manufacturing unit for $250m. The SEC said it was also looking for more information from DirecTV to do with its $1.47bn write-down of its Spaceway satellite assets. This related to the withdrawal of DirecTV from a venture to provide high-speed internet via satellite to rural homes in the US.

The SEC said it was seeking clarification of the quarterly results filed by DirecTV for the three months to 30 June and to 30 September. DirecTV warned in a statement that the review could "adversely affect future results".

But a spokesman for DirecTV played down the significance of the SEC investigation. "It's a part of the normal review process from when we file our quarterly reports, and they had some general questions about some transactions that we entered into last year."

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