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| Business Words in the News
Friday 22 March 2002
Vocabulary from the business news. Listen to and read the report then find explanations of difficult words below.
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Global Crossing Bankruptcy
Summary: At a hearing in Washington, executives from the bankrupt telecommunications group Global Crossing have defended themselves against accusations of accounting irregularities. This report from Mark Gregory.
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| | The News | |
| | | The worry is that Enron's accounting malpractice could be just the tip of the iceberg, and that other American businesses maybe equally rotten. Global Crossing went bankrupt with over ten billion dollars of debt last January.
The key allegation is that it hid financial difficulties by doing deals with other firms in the industry and that they artificially inflated the amount of revenue apparently going through the books. These controversial agreements involved rival telecoms groups swapping unused high technology data transmission links with each other.
On paper, but maybe not in reality, the deals involved large sums of money. At the hearing, congressional investigators expressed doubts as to whether these deals had a legitimate business purpose apart from making the accounts look better.
But Global Crossing's chief executive John Legere, claimed the real problem was the collapse of the telecoms market after predictions of internet use had proved unrealistic. He said any similarities with what happened at Enron were purely superficial. But doubts will remain. One questioner asked how was it possible for such a big, apparently successful company to collapse so far and so fast, with so little warning, and that the scale of the disaster raised major questions about accounting practices.
Mark Gregory, BBC, Washington
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| | The Words
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| | | malpractice
behaviour of breaking the law or the rules of a profession to gain some advantage
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| | | the tip of the iceberg
a very small part of a much larger problem
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| | | went bankrupt
if a person or a company went bankrupt, they did not have enough money to pay their debts
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| | | key allegation
main statement suggesting that someone has done something wrong
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| | | doing deals
trading, negotiating business arrangements
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| | | artificially inflated
if you inflate something artificially (e.g. revenue) you make it appear larger than it is
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| | | rival
competing
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| | | the hearing
the official meeting held to collect facts and evidence about the problem
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| | | legitimate
lawful
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| | | purely superficial
if something is purely superficial, it is only the first impression and does not reflect what it’s really like
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