Investors Relieved as EchoStar Absolved of Fiscal Breaches

21 March 2005

Share values in US satellite broadcaster EchoStar Communications have recovered after an internal investigation found no evidence of alleged breaches of accounting procedures.

Speculation about financial irregularities at the nation's number two satellite TV operator surfaced last week as a result of allegations made by an employee in a resignation letter.

Says a relieved chairman Charlie Ergen: "We would like to be perfect and were disappointed a review was necessary. At least in this instance [the process] worked."

The company's audit committee found one instance "where we take remedial action against an [unnamed] executive", but no "material weakness".

EchoStar has reported a sharp increase in subscribers for its Dish Network service, with 430,000 new customers signed in the fourth quarter. Q4 revenues of $1.93 billion (€1.44, £1bn) were slightly above expectations but EBITDA (earnings before interest, tax and depreciation) of $346 million were slightly lower, reflecting the competition for subscribers, which now number eleven million.

Ergen is also determined to hold on to the Voom satellite deal, which he signed with cable TV operator Cablevision's ceo, James Dolan. The deal is at the centre of a family feud between Dolan and his father, chairman Charles [WAMN: 16-Mar-05].

Data sourced from Financial Times Online; additional content by WARC staff