Business briefs for June 12, 2002

Wednesday, June 12, 2002 | 11:26 a.m.

Mutual fund CEO out

DENVER -- Janus Capital Management LLC Chief Executive Officer Tom Bailey, who founded the money management firm in 1969 and oversaw its growth in the 1990s, is stepping down amid client defections and shrinking assets.

Bailey, 64, will relinquish his roles as president and CEO on July 1, and will remain as chairman of Janus funds, the company said in a statement. A five-person committee will manage Janus during the search for a new chief executive.

The resignation of Bailey marks a reversal from recent statements that he intended to stay as CEO, even after selling his remaining stake in the money manager last year. Janus's assets had dropped by more than half to $159 billion as of May 31, from $336 billion at their peak, leading some investors to say parent Stilwell Financial Inc. should take more control.

ICN founder to step down

COSTA MESA, Calif. -- ICN Pharmaceuticals Inc. founder Milan Panic will retire this month as the U.S. drugmaker's chief executive officer and chairman after years of battling shareholders and regulators.

Shares of ICN, which developed the ribavirin hepatitis C drug, had fallen 27 percent this year. ICN said last month that it was looking for a new chief executive and that it had hired Korn/Ferry International to assist in the search.

Panic, 72, who founded the company in a Los Angeles garage in 1959 and served briefly as prime minister of his native Yugoslavia in the early 1990s, last month lost a proxy fight with dissidents led by two of the company's largest investors over three board seats. In December, ICN agreed to plead guilty to securities fraud and pay a $5.6 million penalty to end a six-year investigation by the U.S. attorney's office in Los Angeles.

"Milan had been an integral part of the company, but ICN was a lightning rod in a era of heightened concern about corporate governance," said Eric Miller, a fund manager at Heartland Advisors Inc., which holds about 1.7 million ICN shares, or 2 percent of the company, according to Bloomberg data.

Panic plans to continue consulting for ICN and will stay on the company's board, ICN said in a statement today.

Report: Telecom firm faces probe

NEW YORK -- XO Communications Inc., operator of data and telecommunications networks in Las Vegas and other cities, is under investigation by the U.S. Securities and Exchange Commission, Reuters reported, citing documents.

The SEC is looking into sales practices at XO Communications. The investigation is described as an informal inquiry into possible securities law violations, Reuters said. An XO spokesman said it hadn't received notification from the SEC of any investigation and denied any wrongdoing, Reuters said. SEC officials wouldn't confirm or deny any investigation into XO.

The probe was in part prompted by allegations made by an XO salesman who was fired this year. Duane Zolnoski sued XO in Florida court in April under the state's whistleblower law. Zolnoski said he was fired in February because he raised questions about whether XO was properly paying state or federal excise taxes in Florida and other states, Reuters said, citing court documents.