The latest international giant to be hit by a corporate governance lawsuit is Anglo-Dutch publishing conglomerate Reed Elsevier.
A suit has been filed against in Amsterdam by Dutch foundation SOBI (Foundation for the Investigation of Corporate Information), alleging the enhancement of results by reducing goodwill amortisation.
SOBI claims that Reed infringed accounting rules in its 2001 results by changing the period over which it amortises goodwill; also by omitting to amortise goodwill acquired with the €5bn purchase of Harcourt in July 2001.
The lawsuit edged RE shares down by a marginal 1.7%, losing £0.11 to £5.45 on the London Stock Exchange in a largely positive market.
One entrail-raker was dismissive of the SOBI action. Salomon Smith Barney analyst Patrick Wellington said that the writ “whilst factually correct and theoretically interesting, is not important unless you think goodwill amortisation is a key number for the company – which most institutional investors don't.”
Data sourced from: Financial Times; additional content by WARC staff
