Associated Press reports that Motorola Inc. has been contacted by federal
authorities investigating Adelphia Communications over transactions that may
have been used by Adelphia to inflate revenue.
The Securities and Exchange Commission and the Justice Department have
contacted Motorola officials to discuss the sale of tens of millions of dollars
in set-top digital boxes to the cable television company, Motorola spokeswoman
Jennifer Weyrauch reportedly confirmed on Thursday.
Investigators want to know how Adelphia wound up counting a $25-per-box
rebate as profit in its books, she reportedly said.
Adelphia bought the boxes for $125 apiece and later received the rebate.
The rebate was to be used for marketing support, but Weyrauch said Adelphia
officials are accused of using it to inflate their recorded profits instead.
'Motorola is fully cooperating with the SEC and the Justice Department,'
Weyrauch was reported to have said.
Shares of Motorola rose 20 cents to close Friday at $12
on the New York Stock Exchange.