July 3, 2002 – “It Looked As If The Sky Was On Fire” – Jets Collide Over Germany – The Vivendi And Worldcom Crises
July 3, 2002 – A Russian passenger airliner collided late Monday night with a Boeing 757 cargo plane over southern Germany, exploding in a fireball and killing all 71 people aboard the planes, the police said.
The Russian plane, a Tupolev Tu-154 operated by Bashkirian Airlines, and the Boeing 757, operated by the DHL courier network, crashed into each other at 11:43 p.m. over Baden-Württemberg State in southwest Germany, said Wolfgang Wenzel, a state police spokesman in Tübingen.
German officials at a news conference said that air traffic controllers had told the Russian plane three times to lower its altitude to avoid a collision, but that there was no response. They said the Boeing had made efforts to avoid the accident.
The fireball from the collision lit up the night skies over one of Germany’s favorite summer vacation spots, Lake Constance, on the border with Switzerland. There were no immediate reports of casualties on the ground.
Stanislav D. Borolof, the night supervisor at Domodedovo airport near Moscow, identified the Tupolev flight as Bashkirian Flight 2937, which left Moscow at 10:48 p.m. Monday bound for Barcelona, Spain. It was a charter flight carrying a crew of 12 and 57 passengers, 49 adults and 8 children, he said.
In other news; disasters of the Economic kind – Vivendi Universal, the troubled French media conglomerate, was expected to put parts of the company up for sale, but any auction was likely to be a tamer affair than it would have been just a few years earlier. The corporate ambitions and market forces that spurred Vivendi and other media companies like AOL Time Warner to collect company after company in the pursuit of a digital future had been transformed.
The media conglomerates became loaded with debt. The high-tech dreams of easy money from delivering all manner of media over the Internet or wirelessly had faded. And the companies’ shares, the currency for the huge deals of the recent past, were battered as investors recoiled from what they once embraced.
And another former giant, Worldcom was still reeling from one of the largest scandals yet during a time when almost every week seemed to call forth another case of corporate wrongdoing. Telecom firm WorldCom, the No. 2 U.S. long-distance telephone and data services provider, announced on June 25 that it would have to revise its recent financial statements to the tune of $3.85 billion. Investors, analysts, and the public were left shaking their heads as previously reported profits suddenly turned out to be losses. The accounting irregularities were brought to light during an internal audit.
On July 1, WorldCom provided the SEC (Securities and Exchange Commission) with a statement detailing what the company knew to date about its accounting problems. The statement explained that in 2001 as well as the first quarter of 2002, WorldCom had taken line costs — mostly fees associated with its use of third-party network services and facilities — and wrongly booked them as capital expenditures.
Those transfers were apparently discovered by Cynthia Cooper, WorldCom’s vice president – internal audit. When informed about what happened, both the company’s current auditor, KPMG, and its former auditor, Andersen, agreed that these transfers were not in accordance with generally accepted accounting principles (GAAP). Following a review by the company’s audit committee, WorldCom’s board terminated Sullivan and accepted the resignation of David F. Myers, senior vice president and controller. The SEC suit came a day later, on July 2nd.
2002 was shaping up to be the Year Of The Scandal.
And that was just a little of what happened on this July 3rd in 2002, as reported by BBC World Service News.