IR fires CFO as accounting probe deepens
By Colleen Taylor, Contributing Editor - July 2, 2007
As the company conducts an ongoing internal accounting probe, power management technology player International Rectifier Corp. (IR) announced today that its board of directors has fired its executive VP and CFO Michael McGee. In addition, Robert Grant, the company's executive VP of global sales and marketing, has resigned.
In April, the El Segundo, Calif.-based company announced that an internal investigation had discovered accounting irregularities at an unnamed foreign subsidiary which included, among other things, premature revenue recognition of product sales.
Then in May, a company filing to the U.S. Securities and Exchange Commission (SEC) signed by then-CFO McGee said that the probe had found that those faulty sales figures were the result of unsubstantiated orders being entered at the foreign subsidiary which resulted in the shipment of products and the recording of sales with "no obligation by customers to receive and pay for the products." According to that filing, the fraudulent practice included routing certain product shipments to warehouses not on the company's logistical systems.
The investigation, which has thus far also determined that International Rectifier's financial statements for the past six fiscal quarters cannot be relied upon, is currently ongoing. The probe has also delayed the filing of its most recent quarterly report to the SEC for the period ended March 31.
When reached today, a company spokesman would not confirm or deny that the executive changes were related to the ongoing accounting investigation.
IR has appointed its VP of corporate finance Linda J. Pahl as acting CFO on an interim basis, effective immediately. Alexander Lidow, the company's CEO, will assume the duties of executive VP of global sales and marketing until a successor is appointed.