HealthSouth chair steps down
HealthSouth Corp. chairman Bob May, who led the health care company through a massive accounting scandal, announced his resignation, effective Oct. 1. The company said that director Jon Hanson has been elected to replace May, who had been named to the board in 2002. In January, May was named interim chief executive officer of Charter Communications Inc., a cable company based in St. Louis.
Former chief executive Richard Scrushy was acquitted in late June on all of the three dozen counts he faced in connection with the $2.7 billion accounting scandal, though he still faces civil charges from the Securities and Exchange Commission. More than a dozen former executives pleaded guilty in connection with the earnings overstatement, but Scrushy has maintained his innocence and said that he wants to return to the company he founded in some capacity.
BearingPoint announces SEC probe
BearingPoint Inc., KPMG's former consulting business, said that the Securities and Exchange Commission has launched a formal investigation of the company. In a statement, BearingPoint said that it believes that the matters involved are the same as those in an informal investigation that it announced in March.
The company said that it now expects its 2004 statements will be completed in late October, and the first two quarters of 2005 will be filed shortly afterward. The company had previously planned to finish the review in September. In March, the company said that Sarbanes-Oxley Section 404 requirements had led it to discover internal control deficiencies that it believed would have been classified as material weaknesses.
Aronson merges in Bethesda firm
Aronson & Co. announced a merger with Capron Associates LLP, a small public accounting firm based in Bethesda. Capron concentrates on closely held businesses, nonprofits, business valuations and forensic accounting, and services to individuals. Its employees, including four partners, will be absorbed into A&C's current structure and join a staff of almost 200. Aronson ranked No. 52 on Accounting Today's 2005 list of Top 100 Firms, with revenues of $32.9 million.
Shell wraps up investor lawsuit
Royal Dutch Shell PLC said that it will pay $9.2 million and adopt some corporate governance changes to settle shareholder lawsuits related to an oil reserves scandal.
The agreement resolves four lawsuits pending in federal courts in New York and New Jersey. Shell was forced to restate the size of its proven oil and gas reserves last year, after announcing that it had overstated them by around 20 percent The scandal cost the company almost $150 million in fines, and led to the firing of three senior executives and a number of criminal investigations. Under the terms of the settlement, Shell said that it would adopt board, reporting, governance and ethics policies and standards.
Corrections
"Everyone wants suites - but what exactly are they?" (Aug. 22-Sept. 4, 2005, page 22) said that Microsoft Business Solutions has three enterprise resource planning systems, when in fact it has four; the ERP system that went unmentioned was Solomon 6.0.
Due to ambiguous language in the Energy Tax Incentives Act of 2005, "New rules for alternative vehicle purchases, leases" (Sept. 5-25, 2005, page 10) reported that a consumer who leases a hybrid vehicle qualifies for tax credit; in fact, the Joint Committee says that qualification in a lease situation only goes to the lessor who leases the vehicle to the consumer. (For more, see page 10.)
