Westar Energy added yet another investigation to its already long list, disclosing in its 10-Q filing Thursday that the Securities and Exchange Commission (SEC) intends to take a closer look at the restatement of the company’s first and second quarter financial results. The company said earlier this month it will restate its quarterly financials to reflect an additional impairment (a charge of $93 million) at Protection One Inc., a home security company in which the Topeka, KS-based company owns an 88% stake (see Power Market Today, Nov. 4). The charge increased its first-half loss to $737.1 million, or $10.31 a share, Westar said.

Meanwhile, Westar CEO David Wittig remains on unpaid leave after being indicted last week by a federal grand jury on charges of money laundering, conspiracy and four counts of submitting false books to a federally insured bank in Topeka, KS (see Power Market Today, Nov. 8). In its 10-Q, the company said its board intends to appoint an acting president and CEO “promptly.” Currently, a committee senior executive officers appointed by the board is performing CEO functions, including certification of financial results.

Westar also is still under grand jury investigation for the use of aircraft leased by subsidiaries and matters related to its annual shareholder meetings (see Power Market Today, Sept. 30). In addition, the company faces a further inquiry by Kansas regulators into affiliate contracts with unregulated operations.

The Kansas Corporation Commission (KCC) already had been looking into an affiliate transactions, but the restructuring order released last week by the KCC launches a new investigation into how to regulate Westar’s non-utility businesses. It also requires Westar to submit a plan within 90 days to transfer its Kansas Power & Light Co. division to a utility-only subsidiary and to institute interim standstill protections to keep unregulated operations from harming the utility. In addition, it requires Westar to pay down debt and reserves the option for the KCC to initiate a full management audit.

In Section 2 of its 10-Q Thursday, Westar said that Protection One, Arthur Andersen LLP, its former independent auditor, and Westar were advised on Nov. 1 by SEC staff there would be an inquiry into the accounting practices of Westar Energy with respect to the restatement of its first and second quarter 2002 financial statements and the related announcement that Westar’s and Protection One’s 2000 and 2001 financial statements would be reaudited. Westar said it intends to cooperate with the SEC in the inquiry. Despite the continuing negative news, Westar shares rose 3.6% to $9.48.

©Copyright 2002 NGI, Inc. Allrights reserved. The preceding news report may not be republishedor redistributed, in whole or in part, in any form, without priorwritten consent of NGI, Inc.