Feeds

Peregrine top two quit after $100m hole uncovered

Irregularities

  • alert
  • submit to reddit

Internet Security Threat Report 2014

ComputerWire: IT Industry Intelligence

A huge financial scandal has engulfed Peregrine Systems Inc after its auditors uncovered revenue recognition "irregularities" involving as much as $100m in the last two financial years.

Chairman and CEO Steve Gardner and CFO Matt Glass quit the CRM and asset management software developer yesterday after the irregularities were brought to light by auditors KPMG, who replaced Arthur Andersen at Peregrine in April after the accountants were disgraced by the Enron affair.

San Diego, California-based Peregrine caused a stock market panic last week when it delayed filing its fourth quarter figures, saying KPMG needed more time to finalize the accounts after it took over from Arthur Andersen. Investors' worst fears were realized when the board said yesterday it had authorized its audit committee to investigate the irregularities.

Peregrine said the transactions under investigation were recorded initially as revenue from its indirect channels and "may have been written off in later quarters." It said it had informed the SEC of its inquiry and will keep the regulators informed of progress.

Certainly, during 2001 Peregrine's revenue held rock steady during a period when other software companies were fighting a slide in sales. In the last four quarters Peregrine reported revenue of $175.2m, $175m, $172m and $171m.

Such reliability did no harm to its share price, which was a major boon to an acquisitive company. In March 2001, it paid $168m for B2B relationship management software developer Extricity Inc and then in June it splashed out $1.09bn for CRM vendor Remedy Corp.

Peregrine's share price, which has been as high as $33.5 in the past year, crashed yesterday by 60% to $1. This means a predatory company, which boasted a 10,000-strong customer base will now be prey to bargain hunters, once it has extricated itself from its current financial mess.

At the same time, the Peregrine affair is bound to increase the suspicion that has inevitably attached itself to those companies in the industry whose accounts were audited by Arthur Andersen.

Peregrine directors have appointed Rick Nelson as acting CEO and Fred Gerson as acting CFO.

© ComputerWire. All rights reserved.

Providing a secure and efficient Helpdesk

More from The Register

next story
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
'Cowardly, venomous trolls' threatened with TWO-YEAR sentences for menacing posts
UK government: 'Taking a stand against a baying cyber-mob'
Doctor Who's Flatline: Cool monsters, yes, but utterly limp subplots
We know what the Doctor does, stop going on about it already
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
Arab States make play for greater government control of the internet
Nerds told to get lost in last-minute power grab bid at UN meeting
Zippy one-liners, broken promises: Doctor Who on the Orient Express
Series finally hits stride, but Clara's U-turn is baffling
Don't bother telling people if you lose their data, say Euro bods
You read that right – with the proviso that it's encrypted
Apple SILENCES Bose, YANKS headphones from stores
The, er, Beats go on after noise-cancelling spat
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.