SEC to probe Elan's accounting

DUBLIN, Ireland - Elan Corp., Ireland&#39;s biggest pharmaceuticals company, announced Thursday that the U.S. Securities and Exchange Commission has begun a probe into its accounting practices following a highly critical Wall Street Journal report. <br> <br> &#34;Today&#39;s announcement of the SEC&#39;s investigation is not surprising given the events of the past few weeks. We welcome this opportunity to explain our operating practices and we intend to cooperate fully,&#34; Elan spokesman Max Gershenoff said in a telephone interview. <br> <br> In the past month shares in Elan, Ireland&#39;s third-largest company, have tumbled on exchanges in New York, London and Dublin, starting when the Dublin-headquartered firm announced that trials of a new Alzheimer&#39;s treatment had to be suspended after four people in the tests suffered unexpected side effects. <br> <br> Much more damaging was a report two weeks ago in The Wall Street Journal that accused Elan of Enron-style accounting practices. It said some of Elan&#39;s loss-making enterprises were registered in the accounts of myriad partnerships rather than Elan&#39;s own accounts. <br> <br> Elan chiefs sternly rejected the report, insisting their accounts conformed to internationally accepted standards. <br> <br> &#34;The Wall Street Journal report was one-sided, and omitted the promise of our many pipeline products in our strategic partnerships,&#34; Gershenoff said. <br> <br> But Elan shares suffered once again in world markets Monday when the company published its 2001 accounts and predicted much lower profits this year than analysts had forecast. Elan foresaw 2002 earnings per share of $1.55 to $1.65, down on 2001&#39;s performance of $1.91 per share and far below the $2.35 that analysts had expected. <br> <br> On Thursday, Elan shares in Dublin fell $1.70 to close at $13.75. Elan&#39;s after-hours confirmation that an SEC investigation had begun appeared certain to put more pressure on shares when the stock resumes trade at 0800 GMT Friday in London, 0900 GMT in Dublin. <br> <br> Until last month, Elan was considered among the highest fliers on the Irish stock market. Late last year it reached a new high of $63.80, making it for a time Ireland&#39;s No. 1 company in market capitalization. It reached a low of $11.70 earlier this week. <br>

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