Criminal investigation into Qwest

THE US authorities have begun criminal investigations into another major American telecoms company, undermining still further confidence in corporate accounting.

Qwest Communications, already being investigated by the Securities and Exchange Commission, said today the US Attorney's office in Denver had begun a criminal investigation.

The SEC probed Qwest's accounting for so-called swaps of long-distance network capacity with rivals after investors suggested that Qwest used the transactions to boost figures for turnover.

Qwest, the fourth-biggest US local phone company, has been under pressure for months as it struggles under a debt pile of $26bn. Credit rating agencies have slashed the company's debt to 'junk' status.

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.

Qewst shares were suspended before today's announcement.