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PwC 'Knew Of Tyco Loans'

Oct 21, 2002 | FT.com

PwC, the auditor for Tyco, knew about loans from the conglomerate to its former corporate counsel, according to court documents filed on Monday.

Mark Belnick, the former Tyco company lawyer, was indicted last month for allegedly falsifying business records. He is also being sued by the company and by the Securities and Exchange Commission for allegedly taking $14m in undisclosed, interest-free relocation loans.

Lawyers for Mr Belnick on Monday asked a Manhattan judge to dismiss the charges.

In supporting documents, the lawyers say Mr Belnick "consistently confirmed his relocation loans for Tyco's outside independent auditors [PwC], as well as other individuals inside and outside the company". The court filing was first reported by Reuters. PwC said it was its policy not to comment on such matters. Mr Belnick's lawyer did not return phone calls seeking comment.

Tyco's new management is trying to shake off any taint from corruption allegations against Dennis Kozlowski, former chief executive, and Mark Swartz, former chief financial officer.

They have pleaded not guilty to charges that they looted more than $170m from the company and obtained more than $430m through fraudulent stock sales.

Tyco has said that certain board members knew about the loans as early as February but only discovered later they had been forgiven, in breach of company policy.

PwC's role is being examined by the Manhattan district attorney, Robert Morgenthau, who indicted Mr Belnick, Mr Kozlowski and Mr Swartz.

But PwC says that it has been reassured by the district attorney that "there is no intention to bring any kind of charges against the firm" and that he is "not looking at bringing charges against individuals".

The allegations against Mr Belnick are that he took the loans to buy an apartment in Manhattan and another loan to buy a house in a Utah ski resort.


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