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Charter Rebuts Shareholder Suit

By Kent Gibbons -- Multichannel News, 8/1/2002 2:42:00 PM

Charter Communications Inc. said late Thursday that a shareholder lawsuit had been filed against it in federal court in California claiming that the MSO used 'misleading accounting practices that had the effect of misrepresenting its results of operations.'

Charter said the lawsuit, seeking class-action status, was filed in the U.S. District Court for the Central District of California July 31. It did not name who filed the suit, nor specify the claims in the suit.

Senior vice president of communications David Andersen said in a prepared statement: 'Our financial statements comply with generally accepted accounting principles in all material respects, and they and the related SEC [Securities and Exchange Commission] filings provide an accurate picture of the company, its financial condition, results of operations and the assumptions underlying them.'

He continued, 'KPMG [International] was retained as our new outside independent auditors April 22, 2002. They have issued a review report that will be included with our second-quarter 10-Q filing with the SEC. In this report, KPMG has indicated that they are not aware of any material modifications that should be made to the financial statements they have reviewed in order for our financial statements to be in conformity with generally accepted accounting principles.'

Andersen added, 'We intend to vigorously defend ourselves against this action, and we believe our financial reports and disclosures will be validated.'

Merrill Lynch & Co. analyst Jessica Reif Cohen recently downgraded Charter's stock, partly due to concerns over the MSO counting some cable-modem-only customers as basic-video customers and to Charter's practice of accounting for launch fees paid by cable networks as advertising revenue.

At the company's annual meeting July 23, CEO Carl Vogel strongly defended Charter's accounting practices.

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