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NYSE Moves To Delist HealthSouth

Mar 25, 2003 | FT.COM

The New York Stock Exchange is seeking to delist HealthSouth, the US healthcare group which is being investigated for financial impropriety.

The decision on Tuesday to ask the Securities and Exchange Commission for the delisting follows Monday's announcement from the company based in Birmingham, Alabama that its financial statements "should no longer be relied upon".

Its shares have not traded since last week's SEC fraud charges against the group and Richard Scrushy, chairman and chief executive. The government says HealthSouth and Mr Scrushy inflated earnings by $1.4bn and overstated assets by at least $800m. Mr Scrushy and the SEC were scheduled to reappear before an Alabama judge yesterday to discuss the freeze on his assets. HealthSouth placed Mr Scrushy on administrative leave last week, and would not say if he continues to be paid.

"At the hearing we will obviously be arguing that a freeze is warranted and should be continued," said Richard Murphy, an assistant district administrator at the SEC. The court issued an emergency order last week freezing most of Mr Scrushy's assets.

The NYSE said its decision was reached because of government investigations into HealthSouth "as well as the company's statement that its previously filed financial statements should no longer be relied upon".

HealthSouth said it had been "evaluating efforts to secure an ongoing market for our stock", knowing the NYSE had been reviewing its continued listing.

The company, whose $1.25bn credit line was cut last week, is attempting to meet a $345m bond refinancing next week.

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