June 21 2002 – Reliant Resources Inc. has been advised by the Securities and Exchange Commission (SEC) that it has issued a formal order in connection with its investigation of certain financial reporting by the company.
Reliant Resources understands the investigation to be focused on so-called “round trip” trades and on the transactions that led to a restatement of the company’s 2001 financial results earlier this year. These matters were previously the subject of an informal investigation by the agency.
Reliant Resources and its parent, Reliant Energy, Inc., intend to continue cooperating fully with the SEC staff. A formal order of investigation authorizes the SEC staff to compel testimony and production of documents, including from individuals who are not or are no longer affiliated with Reliant Resources or Reliant Energy.
The order addresses Reliant Resources’ 2001 financial statements. In addition, the order, which is also directed to Reliant Energy, addresses Reliant Energy’s financial statements for 1999 and 2000, when the businesses that are now part of Reliant Resources were held by Reliant Energy.
Reliant Energy also continues to work with appropriate SEC staff regarding the proposed restructuring of Reliant Energy and the spin-off of Reliant Resources. The companies remain optimistic that they will receive the necessary action by the SEC and complete the spin-off in the near term.