Dell Delays SEC Filing Pending Investigation of Accounting Errors
Former Dell CEO Kevin Rollins flew away from the nest just in time before the storm
DailyTech originally reported on the unplanned resignation of former Dell CEO Kevin Rollins earlier this year. Rollins announced his resignation to the surprise of many, including those inside Dell. The company had been doing fairly well over the last several years and only recently lost some market share to rival HP. However, the day after Rollins’ announcement, Dell received a class action lawsuit from its investors accusing the company of receiving secret kickbacks from long-time partner Intel.
Today, Dell announced yet that it will delay its 10-K filing with the Securities and Exchange Commission due accounting inconsistencies. The company is not confirming whether or not the account misconduct is in relation to the Dell-Intel scandal or if it is a completely separate incident.
While Dell had a long history of partnership with Intel, the company only recently started to officially support AMD-based products. Intel received industry flak when it was revealed that it had either bullied or bribed a number of system integrators and stores to sell only Intel brand products.
According to Dell, an internal investigation has been launched and is looking into “certain accounting and financial reporting matters.” While this usually means that there have actions committed along the lines of stock-options backdating or fibbed financial results, Dell remained ambiguous about its investigation. Dell’s press release stated:
The Audit Committee’s investigation has identified a number of accounting errors, evidence of misconduct, and deficiencies in the financial control environment. The Audit Committee is working with management and the company’s independent auditors to determine whether the accounting errors necessitate any restatements of prior period financial statements, and to assess whether the control deficiencies constitute a material weakness in Dell’s internal control over financial reporting.
Industry analysts say that there is a definite link between the Rollins resignation and the complaint that was filed about Dell’s partnership with Intel. According to the complaint, Dell received more than $1 billion on an annual basis so that it would continue to sell Intel-based products exclusively. Despite the news, both Dell and Intel remained quiet about their partnership.
Dell said that it will delay its filing even after the April 18th extension and indicated that the investigation will require significant time. “As we move toward the conclusion of our investigation, we are committing the time and resources required to ensure a thorough and comprehensive review and resolution of all identified issues and the implementation of appropriate remedial measures,” said Thomas W. Luce III, chairman of Dell’s audit committee.
Source: www.dailytech.com
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