Bankrupt Telecom Group WorldCom. WorldCom’s creditors have in the past few weeks quietly chipped away at the remnants of authority held by Ron Beaumont, the bankrupt telecommunications group’s former chief operating officer, relegating the one-time insider to a consultant position.
The demotion about two weeks ago happened just days after Mr Beaumont was named head of strategy and business development, according to a person close to the group.
WorldCom yesterday refused to comment on whether Mr Beaumont had been granted a severance package after losing his full-time employee status or how long he would remain in his current position.
Creditors at the group are understood to be eager to focus on the restructuring of the company and rid it of the top executives present during the time Scott Sullivan, former chief financial officer, allegedly engineered a $7bn fraud in its accounts.
Mr Beaumont first came under fire when people who had worked closely with him questioned how he could not have known about discrepancies in the company’s books.
The executive was more recently criticised for his close relationship with Bernie Ebbers, former chief executive and founder.
News that Mr Ebbers had given Mr Beaumont a $650,000 personal loan after he ran into financial trouble illustrated to some industry insiders just how cosy relationships between the top executives were.
Conflicts of interest ran rampant at the group, according to former employees. Some recall how Mr Beaumont would hold company meetings at his Texas ranch that were later compensated for by WorldCom.
On Sunday Stiles Kellett, a long-time WorldCom director, stepped down from his position as pressure mounted for him to break his ties to the group.
Mr Kellett, who had headed the group’s compensation committee, was criticised for granting more than $400m in personal loans to Mr Ebbers. Mr Kellett was also criticised by Richard Breeden, a former Securities and Exchange Commission official appointed by a court to monitor WorldCom, for his role in Mr Ebbers’ $1.5m per year severance package.
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