Time Warner faces SEC scrutiny

AMERICA'S Securities and Exchange Commission has subpoenaed senior Time Warner executives, including chairman and chief executive Richard Parsons and former chairman Steve Case, as part of an inquiry into suspected false accounting.

The news came as the media giant reported a sharp recovery in third-quarter profits to $541m (£323.5m) from $57m.

The SEC investigation is looking at a $400m payment to Time Warner by German media group Bertelsmann. The subpoenas do not necessarily mean the executives will be charged. A parallel investigation into Bertelsmann ended with no result several months ago.

Most of the improvement in Time Warner's third-quarter results came in its traditional media business, while AOL, the online service provider that bought Time Warner two years ago, continued to languish. AOL's sales fell 33% as it lost 638,000 subscribers.

Group results were boosted by special items such as a $127m gain from selling equity investments.