IDB’s Sudikoff Confirms SEC Probe of Firm : Telecommunications: The chief executive calls the investigation into resignation of auditors an ‘informal inquiry.’

IDB Communications Group confirmed Friday that the Securities and Exchange Commission is looking into the resignation of the firm’s auditors last week following an apparent dispute over IDB’s accounting practices.

In an interview, Chief Executive Jeffrey P. Sudikoff described the SEC probe as “an informal inquiry” following the Culver City-based telecommunications company’s announcement earlier this week that the accounting firm Deloitte & Touche dropped IDB’s account.

“It’s a local guy. He said, ‘Tell me what everybody said to everybody.’ He called as a result of what he read in the newspaper,” Sudikoff said.

The SEC declined to comment. The agency typically does not discuss its inquiries.

Meanwhile, sources said IDB had been close to a deal to sell its broadcast division--the original IDB business--until the Deloitte flap.

The broadcast unit, which transmits TV and radio programming for the three major networks and numerous other clients, brought in $73 million in sales last year, or 24% of IDB’s total revenue.

But broadcast revenue has been flat for several years, and because of the relatively low margins in the business, analysts have expected IDB to jettison it and focus instead on its faster-growing international long-distance phone business.

The potential buyer for the broadcast unit is believed to be a U.S. company with some foreign backing. If IDB can salvage the deal, it should help the company’s financial credibility because the buyer would be expected to review IDB’s books on its own.

IDB’s stock tumbled Wednesday by more than 50%, from $14.50 a share to $7.125, in the wake of Deloitte’s resignation. In Nasdaq trading Friday, IDB shares jumped as high as $9.05 before pulling back to close at $8, off 31 cents from Thursday.

Deloitte’s resignation has raised questions about IDB’s financial statements and whether the firm’s accounting practices have overstated its growth, especially in its global long-distance business. IDB says its accounting disagreements with Deloitte were minor, but Deloitte has yet to provide its side of the story.

Separately, IDB is now the target of shareholder lawsuits claiming the company misled investors with its financial reports, news releases and interviews. IDB said it has not seen any of the suits.

Sudikoff recently made news when he and Joseph Cohen, an IDB director, bought 72% of the Los Angeles Kings hockey team for $60 million from financially ailing sports mogul Bruce McNall. On Friday, Sudikoff reiterated that the plunge in IDB’s stock will not affect his Kings investment.

The Kings sale was financed largely by a $50-million loan from Bank of America, with the franchise itself serving as collateral.

* LIABILITY LAND MINES? Accountants are becoming frequent targets of lawsuits. D2