Subject:  Halliburton to pay $6m to settle suits |
Author:
Dick Chainsknee
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Date Posted: 11:29:03 05/31/03 Sat
Halliburton to pay $6m to settle suits
By Sheila McNulty in Houston
Published: May 30 2003 20:02 | Last Updated: May 30 2003 22:57
Halliburton, the US oil-services company, is to pay $6m to settle about 20 shareholder class-action lawsuits over allegations of questionable accounting practices that began under the leadership of Dick Cheney, now US Vice- President.
Shares of Halliburton closed up 2.85 per cent to $23.81 on the deal, which has been agreed to by three of the four lead plaintiffs and is being evaluated by the fourth. But analysts said the entire oil field services sector was up, and Halliburton was underperforming the sector because of more important asbestos liabilities still outstanding.
James Stone, managing director of Oilfield Services Research at UBS Warburg, said he never thought there was much merit to the accounting lawsuits and did not believe the financial settlement would have any impact on Halliburton. Even symbolically, he said, the deal was undermined because of a continuing investigation of the matter by the Securities and Exchange Commission.
Perhaps most significant for those named in the lawsuits is that the agreement provides that Mr Cheney and all other current and former officers and directors are absolved of any responsibility for claims arising from the purchase of Halliburton stock from May 18 1998 to May 28 2002.
All the cases arose out of questions regarding the Houston-based company's accounting for revenues associated with unapproved claims and change orders on long-term, fixed-price construction projects. Halliburton does not admit to wrongdoing in the settlement, which must be approved by the court.
Halliburton said the total amount to be paid, including all costs and attorney's fees, was "immaterial" and would not affect the company's second-quarter results.
Halliburton is one of the world's biggest providers of products and services to the petroleum and energy industries.
It has been under considerable pressure in recent years because of uncertainty regarding these cases, asbestos lawsuits and its links to the White House.
Critics have suggested ties to Mr Cheney have helped Halliburton gain a toe-hold in Iraq. USAID had provoked controversy by inviting Halliburton and a handful of other politically-connected US engineering and construction companies to bid on $1.9bn in initial contracts to rebuild and administer Iraq's airports, roads, power plants and other vital infrastructure damaged by the conflict.
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