In truth, the damage does not look enormous: shareholders’ equity is dented by
€85m-€95m, and 2012 net profits by €45m-€55m, or 25 per cent of the
consensus forecast figure. Accounting irregularities make up only part of
this; a tax issue and stock writedowns also played a part. The flaws
themselves, meanwhile, seem to centre on the timing of sales recognition and
on how customer accounts were deemed overdue.
But the case underscores – yet again – how much can change once companies
become subject to fresh, detailed scrutiny. In DE’s case, new management
took over shortly before the spin-off – which cost $30m in fees, including
$21m for accounting work – although PwC have remained the auditors
throughout. Investors with long memories can probably recall a laundry list
of ownership changes that subsequently triggered unhappy revelations.
These would include the acquisition of British truckmaker ERF by Germany’s MAN
in 2000. Discovery of two frauds followed, as did expensive litigation.
Ahold’s purchase of US Foodservice is another example, unearthing big
problems with “vendor rebates”. Cartels, too, have come to light once new
owners were in place.
All of which is grist to the mill for critics of conglomerates – where
problems may often result less from a lack of industrial logic than from the
difficulties of managing multiple businesses efficiently. Audit rotation
advocates may also feel emboldened. Sometimes, the more things change, the
less they stay the same.
Dit artikel is oorspronkelijk verschenen op z24.nl