US local telephone company Qwest Communications was today told that the US Attorney's office has begun a criminal investigation of the company.
The US Attorney's office did not disclose the subject matter of the investigation, it said. Qwest said it planned to fully cooperate. Following the news, Qwest's shares fell by 35.6% to $1.67 on the New York Stock Exchange.
The company's announcement comes on the heels of a report by the Wall Street Journal last Friday that the US Department of Justice had launched a criminal investigation into Qwest.
Qwest has been under pressure for months as it struggles to cope with a cash crunch under a debt pile of some $26 billion. Credit rating agencies have slashed the company's debt to 'junk' status, and the US Securities and Exchange Commission is probing its accounting practices.
Qwest asked employees late last month to take unpaid leave in a move to cut costs. In mid-June, the company ousted chairman and chief executive Joseph Nacchio, seeking to soothe investors and boost its stock price.
