Tip-off triggers probe at Kmart

KMART, the giant US discount chain forced to seek bankruptcy protection this week, has launched an internal investigation after receiving an anonymous tip-off raising concerns about its accounts.

The group said the letter - purportedly from employees - was addressed to the US Securities and Exchange Commission, Kmart's auditors and board of directors.

Kmart's audit committee has called in outside counsel and accounting consultants to conduct the probe. It has also contacted the SEC. PriceWaterhouseCoopers is listed as the group's accountant in its latest annual report.

A casualty of the slump in the US economy and vicious competition in the retail sector, Kmart suffered a fall almost as dramatic as that of energy trading giant Enron. After a Wall Street analyst said on 2 January that Kmart could be forced into bankruptcy, the company's stock fell almost 70% in just over two weeks. Enron's collapse is being investigated by Congress, the FBI and the SEC.