Baker Hughes stock hit by report on GE

The Houston-based oil-field services company Baker-Hughes, which has a significant presence on the Kenai Peninsula and in Alaska, saw its stock drop by 6 percent Thursday after a well-known fraud expert accused its parent company GE of using it to hide billions of dollars in losses.
    GE’s stock sank 11 percent on the news.
    In a story first reported Thursday by the Houston Chronicle, Harry Markopolos, a financial analyst who was the first person to expose Bernie Madoff, released a report scrutinizing General Electric's finances. The company closed 2018 with a $22.8 billion loss, but Markopolos said the losses should have been much higher.
    GE acquired a 62.5 percent share in Baker Hughes in 2017, though reduced its ownership in late 2018 to 50.4 percent, a majority position that Markopolos said should have prompted General Electric to use a different set of accounting practices where it could no longer include the financial results of Baker Hughes as part of its own.
    By sticking with the older practices, Markopolos says GE was able to write off $9.1 billion in losses in 2018 alone that the parent company incurred. He claims the total losses to be $38 billion.
    In a statement, GE said, “The claims made by Mr. Markopolos are meritless.
    GE stock Friday regained about 8 percent of Thursday’s 11 percent drop.
    Coincidentally on Thursday, Baker Hughes took further steps towards becoming independent again. GE and Baker Hughes executives signed a series of separation agreements that sets up a long-term collaboration.
    In his paper, Markopolos does not accuse Baker Hughes of wrongdoing.