Friday, March 4, 2005

Delphi CFO Forced Out Over Accounting Problems

Delphi Corp., a large auto supplier that had once been a part of General Motors, announced that its Chief Financial Officer, Alan S. Dawes, had been forced out over improper accounting at the company (press release here and SEC 8-K filing here).  The SEC launched an investigation of the company in 2004, and the accounting problems, which include possible round-trip transactions and cash payments to GM, have prevented it from filing it quarterly and annual financial statements while the accountants figure out the proper restatements.  According to the 8-K, the company's reported income in 2001 of $67 million should have only been $6 million, a rather significant difference.  Forcing out the CFO may indicate that the company is preparing to seek a settlement with the SEC, which may also be eased by CEO J.T. Battenberg's announcement that he will retire at the end of the year.  It would not be a surprise if the SEC was looking at Dawes' involvement in the accounting decisions, and he may be the focus of the investigation. (ph)

Investigations, Securities | Permalink

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Tracked on Apr 14, 2005 2:40:58 AM