IBM transactions under investigation
Published: 03 Jun 2003 10:11 BST
The US Securities and Exchange Commission is investigating certain transactions at IBM, the company announced on Monday.
The federal agency is seeking information relating to how IBM recognised revenue, and is concentrating on certain transactions in 2000 and 2001. The tech giant says it believes that the investigation relates to a relationship between its Retail Store Solutions unit, which makes cash registers and other point-of-sale products, and one of the customers of that division.
The SEC has been investigating issues concerning the unnamed customer for some time, and IBM has been cooperating in that investigation, said an IBM representative.
Big Blue says the SEC calls the action a fact-finding investigation and has not reached any conclusions related to this matter. IBM has been cooperating fully with the agency and will continue to do so, the company said, adding that it believes that its business and accounting practices comply with applicable regulations.
In the past three years, IBM's point-of-sale division has signed deals with a wide variety of customers, including Kmart (a US retailer), Virgin Entertainment, Boots and many others.
An SEC representative declined to comment, saying agency staff are not allowed to comment on pending investigations.
Shares of IBM dropped more than two dollars in after-hours trading on Island ECN, changing hands at $84.93 on Monday afternoon. IBM shares ended regular trading at $87.33, down 71 cents for the day, a drop of less than 1 percent.
News.com's Ian Fried contributed to this report.
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