Interpublic files restatement for $181.3m charges
NEW YORK - Interpublic has filed a restatement of its accounts for 2001, as it looks to draw a line under the financial scandals that have forced its share price down.
In the restatement, the Interpublic Group of Companies, the world's second-largest advertising group, reiterates that it is taking charges of $181.3m (£115m) for the period between 1996 and June 2001, mainly relating to accounting errors at McCann-Erickson WorldGroup in Europe. The company still faces an informal inquiry by the Securities and Exchange Commission.
"As a result of the reviews undertaken, the company is in the process of terminating certain employees, implementing other personnel changes and strengthening certain control processes in order to prevent the situations leading to the restatement from recurring," Interpublic said in the statement.
The scandal has seen McCann-Erickson's chief financial officer Sal LaGreco lose his job and vice-president David Bell moved sideways. The company announced last week that it was appointing a chief risk officer, Thomas Dowling, currently the group's senior vice-president for financial administration, to look at issues of financial controls. His appointment follows that of Art D'Angelo, who joined from Cordiant Communications to take over as chief financial officer at as McCann-Erickson WorldGroup.
An internal review discovered $101m of intra-company charges at McCann-Erickson WorldGroup. On top of this, there is $36.3m relating to estimates of insurance proceeds not yet realised, write-offs and costs that had been capitalised rather than expensed. An additional $44m at subsidiaries other than McCann were also found.
Both John Dooner, chairman and chief executive officer, and Sean Orr, chief financial officer, are to appear at this week's UBS Warburg media conference, as well as at a presentation hosted by Credit Suisse First Boston on Wednesday morning in New York.
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