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Adecco Investigation Continues

Date Class
18th Jan 2004 Fraud Investigation
 
Details
Swiss market authorities have launched an investigation into insider dealing at Adecco, the world's largest employment firm, which saw its stock plunge by a third last week.

The Federal Banking Commission said it had launched a "preliminary investigation", working alongside the US Securities and Exchange Commission, which is conducting its own inquiries. Felix Weber, who resigned as chief financial officer last week, took full responsibility for the accounting problems.

Mr Weber told the New York Times: "I take all responsibility as CFO and I think it's right if something like this happens that the top people take the consequences." Mr Weber had previously said the accounting problems were "procedural issues" rather than serious irregularities. Adecco has refused to comment on the nature or extent of the problems.

Mr Weber told the New York newspaper: "My comments led to a certain confusion in the market for consequences for the company." Swiss newspaper Sonntags Zeitung reported auditors going over the company's books have found no evidence of fraud despite last week's revelation of accounting irregularities at the Swiss multinational.

The newspaper said auditors had found discrepancies of between 40m and 50m from "differences between the booking of orders by Adecco and by its customers". The sum equates to around 10pc of the firm's earnings before interest, tax and amortisation of 411m in the first nine months of the year. It said the auditors had found no evidence of fraud. Adecco declined to comment.

John Bowmer, Adecco's chairman, said last week he would take over as executive chairman to deal with the internal inquiry into the accounting problems. Jerome Caille will continue as chief executive to manage the day-to-day business.

Adecco is facing two lawsuits in the US accusing the company of issuing false and misleading statements to the market. The lawsuits are seeking class actions on behalf of shareholders who bought Adecco shares between March 16 2000 and January 9 this year.

Adecco shares rose Sfr2.10 to Sfr56.10 (24.80).

 

 

 


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