Sec Probes Morrison Knudsen Boise-Based Company Faces Two Separate Inquiries

The Securities and Exchange Commission has begun issuing subpoenas in its previously-disclosed investigation of Morrison Knudsen Corp., the financially troubled construction and engineering company.

Morrison Knudsen is undergoing a major restructuring and faces a March 31 deadline to repay hundreds of millions of dollars in debt or risk bankruptcy.

Last spring, Morrison Knudsen said the Securities and Exchange Commission was conducting an informal inquiry under its broad powers to regulate publicly traded companies.

On Tuesday, Morrison Knudsen said the federal agency was conducting two separate inquiries, although company Vice President Richard Parry said company policy prevented him from discussing the investigations.

Parry said one Morrison Knudsen officer had received a Securities and Exchange Commission subpoena for information, but declined to identify the officer.

Sandra Harris, the SEC’s associate regional director in Los Angeles, said it was routine for the agency to issue subpoenas during formal investigations.

One inquiry reportedly involves a Morrison Knudsen subsidiary’s involvement in construction at the trouble-plagued Denver International Airport.

The second probe reportedly involves Morrison Knudsen Rail Corp., which is 65 percent-owned by Morrison Knudsen. The company said in April the affiliate was the subject of an informal inquiry.

Morrison Knudsen’s stock has fallen from a high of $29.37-1/2 a share nearly two years ago to $3.25 a share as of the end of trading Tuesday on the New York Stock Exchange. It was down 12-1/2 cents a share to $3.12-1/2 on Wednesday.

Last year, William Agee was ousted as chairman as losses grew and a new management team was installed.