Starwood Hotels to drop Andersen as auditor

WHITE PLAINS, N.Y. >> Starwood Hotels & Resorts Worldwide Inc, which operates or markets about a dozen hotels in Hawaii, including some of the best known properties in Waikiki, said yesterday it will drop Arthur Andersen as its auditor. In doing so, it will become the first of the nation's top three hoteliers to drop the beleaguered accounting firm

White Plains, N.Y.-based Starwood, whose brands include Westin and Sheraton, said it decided to appoint Ernst & Young as its independent auditor "after careful consideration of several firms."

Starwood's two biggest rivals, Marriott International Inc . and Hilton Hotels Corp. also use Andersen, and have not publicly announced any plans to replace the company.

Meanwhile, Andersen and U.S. prosecutors met for several hours yesterday to discuss settling a charge that the firm illegally destroyed Enron Corp. documents sought by investigators, people familiar with the negotiations said. Both sides declined to comment on possible progress or future talks.

Feds probing Enron's Lay for alleged insider trades

HOUSTON >> The FBI's investigation into former Enron Chairman Ken Lay is focusing on allegations he illegally sold stock after learning his company's finances were unraveling, sources close to the case said yesterday.

The close examination of Lay's stock dealings is part of an overall federal investigation into Enron's former management team for possible misconduct and fraud, the sources said. But in Lay's case, the stock dealings are seen as the most promising avenue for investigators looking for potential crimes, they said.

Walter Hewlett suit goes before judge tomorrow

Wilmington, Del. >> Hewlett-Packard Co.'s dissident director Walter Hewlett, who sued the company last week alleging vote-buying in an $18.6 billion plan to acquire Compaq Computer Corp., asked a judge to clear the case for trial.

Hewlett's lawyers told Judge William Chandler III in papers filed yesterday in Delaware Chancery Court that the world's second- largest computer maker improperly persuaded Deutsche Bank AG to change its vote and support the buyout to gain future business.

Company lawyers have said the suit fails to make a case against Palo Alto, Calif.-based Hewlett-Packard, in part because the bank owns only about 1 percent of the stock. A hearing on the company's request to dismiss the suit will be held Sunday, and a three-day trial is scheduled to start April 23 if the case survives.

Reliant Resources says SEC probing restatement

Houston >> Reliant Resources Inc. said it is being investigated by the Securities and Exchange Commission after the energy trader restated earnings for the second and third quarters last year. Reliant Resources, 82 percent owned by Reliant Energy Inc., restated second- and third-quarter results, adding $134 million to net income from January to September, the company said.

Cendant's Avis eliminates some travel agency fees

New York >> Cendant Corp., owner of the Avis rental car and Days Inn hotel businesses, said it will no longer pay base commissions to North American travel agents on certain car rentals.

The move, which will mostly affect U.S. and Canadian corporate and government accounts with individually negotiated rate agreements, was made to reduce expenses, said Avis spokesman Ted Deutsch. The policy doesn't affect travel agency commissions for leisure car rentals, association rentals, or business rentals, Avis said.

In other news . . .

Armonk, N.Y. >> IBM Corp. said it cut an unspecified number of computer-repair and maintenance jobs in the 150,000-worker Global Services unit. A union put the total fired at more than 600.