Paging Firm Reports Loss for Quarter

Southland Communications Inc., a financially struggling paging company that is facing civil and criminal investigations related to an alleged stock manipulation scheme, reported a third-quarter loss of $393,118 for the period ended July 31.

The loss compared to a year-earlier deficit of $244,062. Revenue for the third quarter was $1.6 million, up slightly from $1.5 million a year earlier. In a Sept. 14 federal filing, the company disclosed that its cash flow is in “extremely critical condition” and its working capital deficit rose to $6.5 million, up from $3.6 million on Oct. 31, 1989.

Southland said it has reduced its work force from 84 to 49 people. The company is being sued by Motorola Communications Inc. in Orange County Superior Court in Santa Ana for failing to make payments on $5.6 million worth of leased paging equipment. Southland has filed a countersuit against Motorola.

The Securities and Exchange Commission has filed civil charges against Ahmad N. Bayaa, Southland’s president, accusing him of conspiring to manipulate Southland’s stock price, which rose 91% in a three-week period.

In a filing with the SEC, Southland said it believes that Bayaa and the company could be targets of a criminal investigation by the Department of Justice and the FBI involving securities laws violations, mail fraud and wire fraud.

On Wednesday, the National Assn. of Securities Dealers denied an appeal by Southland that its stock continue to be traded on the NASDAQ exchange.