IDB Confirms Probe by Federal Grand Jury : Investigation: Company’s first-quarter results and information on resignation of its auditors have been subpoenaed.

IDB Communications, a fast-growing telecommunications firm whose controversial accounting practices have been under investigation by the Securities and Exchange Commission, confirmed Wednesday that a federal grand jury is also probing its activities.

Senior Vice President Peter Hartz said the Culver City company is cooperating with the investigation, but he did not elaborate. He said he did not know if any IDB executives were targets of the investigation.

In a filing with the SEC, however, IDB shed some light on the probe. The company said that the U.S. attorney’s office in Los Angeles issued subpoenas in October seeking documents on IDB’s first-quarter results as well as information surrounding the abrupt resignation in May of the accounting firm Deloitte & Touche as IDB’s auditors.

IDB is headed by Chairman Jeffrey Sudikoff, best known lately for buying--along with entertainment executive and fellow IDB director Joseph M. Cohen--72% of the Los Angeles Kings hockey team from Bruce McNall last May for $60 million. In March, Fortune magazine listed Sudikoff among an elite group of “America’s smart young entrepreneurs.”

The development is yet another twist in what has been a year of turmoil for the ownership of the Kings. McNall, who remains a minority partner, himself has been entangled in a separate federal criminal probe through much of this year and has agreed to plead guilty to four criminal counts stemming from a bank fraud investigation.

A spokesman for the Kings said the IDB probe does not involve the team or Cohen, who is currently chairman of the club.

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The resignation by Deloitte & Touche that the grand jury is looking into triggered a 50% plunge in IDB’s stock, resulting in a flurry of shareholder lawsuits and raising questions about the company’s aggressive accounting methods.

Specifically, questions have been raised by investors and critics about whether IDB overstated its growth, especially in the global long-distance business, thereby boosting the company’s stock price.

Earlier this week, IDB and Mississippi-based LDDS Communications, which is planning to buy IDB in a $721-million stock swap, agreed to pay $75 million to settle the IDB shareholder lawsuits. Hartz said the merger is going forward despite the investigation.

IDB has previously disclosed that the SEC was looking into its practices, but characterized the probe as informal.

But in its latest filing, IDB reveals that on June 9 the SEC issued a formal order of investigation looking at a broad range of issues, including IDB’s finances, records, internal controls and “trading in IDB securities on the basis of non-public information.”

The probe into trading in IDB stock had not been disclosed publicly, and the company did not elaborate. Previously, investors have criticized IDB President Edward Cheramy for being a heavy seller of the stock this spring and reporting it late, although it is unknown if that is the subject of the SEC probe.

The company also disclosed that the National Assn. of Securities Dealers “and other self-regulatory bodies” have also launched inquiries.

Founded 11 years ago with a $15,000 loan, IDB grew to a $311-million company by 1993 with a satellite network that transmitted everything from baseball games to results of notorious criminal trials for news organizations. The company also has been aggressively moving into the long-distance phone market.

IDB was a Wall Street darling until the feud with Deloitte sent the company’s stock crashing. In a letter filed in June with the SEC, Deloitte said that its auditors founds “weaknesses in internal controls and procedures.”

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The accounting giant added that it clashed with IDB over the company’s first-quarter results. IDB disputed Deloitte’s claims initially, but later restated its result to scrap $6 million in income.

Deloitte in its letter said it challenged millions of dollars in pretax income IDB claimed, adding that IDB’s response was to keep presenting to Deloitte new, previously unrecorded items showing millions of dollars more in income to make up for it.

IDB’s stock closed at $8.81 1/2, down 18 3/4 cents.