Leonard Tow, the controversial investor who controls the second largest block of stock in struggling cable group Adelphia Communications after the yet more controversial Rigas family, has quit the group’s board after just two weeks.
His departure – and that of co-director Scott Schneider – follows hard on the heels of the revelation that the group’s accounts and subscriber data are open to question and the firing of its auditors Deloittte & Touche [WAMN: 10-Jun-02].
In a joint letter to Adelphia chairman and chief executive Erland Kailbourne, the departing duo declared that recent revelations of the “unreliability of corporate data, as well as the ongoing serial disclosures of wrongdoing, have made it impossible to contribute meaningfully to the restoration [of Adelphia’s credibility and financial stability]”.
The group, which has just four days in which to meet a number of major debt deadlines before being declared in default, is also under investigation by the Securities and Exchange Commission for failing to file its annual report. Two federal grand juries, in Pennsylvania and New York, are also conducting criminal investigations.
The probes concern allegedly questionable accounting practices, including more than $3 billion (€3.17bn; £2.05bn) of balancesheet-invisible loans made to John Rigas, the company’s founder, and other members of his clan.
Data sourced from: Financial Times; additional content by WARC staff