GM confirms SEC probe into pension-related accounts

GM confirms SEC probe into pension-related accounts
NEW YORK - General Motors Corp. issued a statement on Wednesday confirming that the Securities and Exchange Commission has subpoenaed records from its accounts divisions. This confirmation caused panic among the already nervous investors and the Dow Jones Industrial Average component fell by 5 percent to $27.73 in early trading.

"These matters include GM's financial reporting concerning pension and OPEB (Other Post-Employment Benefits), certain transactions between General Motors and Delphi, GM's recovery of recall costs from suppliers and supplier price reductions or credits," GM said in a statement that was issued late on Wednesday.

The world's largest automaker disclosed that the pensions issue was also under the scanner of the SEC. The Delphi bankruptcy was also being looked at with deals between GM and Delphi assuming prominence here.

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GM has disclosed that the healthcare costs and retiree benefits were being monitored after DaimlerChrysler had revealed in its own filing with the SEC that the agency had issued a subpoena related to its probe of GM's accounting practices.

Both the pensions and the healthcare issues have dogged GM in recent times and the company recently reached an agreement with the United Auto Workers union to reduce these costs by $1 billion a year. Unconfirmed rumors were doing rounds that GM itself was considering filing for bankruptcy. These statements were quickly dismissed as "rubbish."

"GM and its subsidiaries are cooperating with all these investigations. GM has no further comment at this time," the statement issued by GM concluded. In the backdrop of these admissions, GM shares dipped $1.43, or 4.9 percent to $27.74 in the early morning trading on the New York Stock Exchange.