Michael Dell 'not involved' in accounting fraud
Buck, what buck? Must have passed it along...
Michael Dell, CEO of Dell Computers said Wednesday he was not involved in any of the accounting monkeyshines uncovered during an internal probe at the company.
Dell's remarks at the Citigroup technology conference in New York is the first time he has publicly commented on his participation — or lack of participation — in the financial scandal.
"I was not involved in or aware of any of the accounting irregularities," Michael Dell told investors at the conference. "Certainly I'm not proud of what occurred at our company, but I am proud of the company overall, and I take responsibility for making sure those issues are addressed."
The investigation, spurred by the US Securities and Exchange Commission's (SEC) recent war on Silicon Valley backdating, found that account balances were fixed to show quarterly performance objects had been met. This was revealed to be sometimes done at the request or with the knowledge of senior executives.
The company has yet to restate its revised financial results for the time in question (2003-2006), but total income is expected to be reduced by about $150m. The financial book-cooking occurred in years during which Dell was CEO, when he handed the spot to Kevin Rollins in 2004, and when Dell reclaimed the position in February of this year.
So will the corporate self-hand washing properly appease the feds? The SEC is still investigating Dell's accounting issues, but has yet to take any action against the company.
"What you have now at Dell is really a new team that is addressing all of the issues that were raised in the investigation," Dell said.
The company said it has since sacked, reassigned or reprimanded those involved — although they won't say who the executives are, and if they are still working for the company.
As previously seen at Apple, the blameless CEO arises — a virginal figurehead perched upon the prow of a blood-soaked pirate ship. Its eyes on the clear blue vastness ahead, cleanhanded and unawares of the skullduggery committed within its hull.
So we're waxing metaphorically, but it's hard not to when everyone paints such a pretty picture. ®
COMMENTS
Rachel . . .
The examples you give are all things affecting companies big and small, that are prevented by operational procedures and systems that require unfeasably many corrupt and colluding employees to circumvent. And of course the CEO would only be held accountable for detected lapses if no remedial action were taken.
What is of concern is how entire categories of transactions are treated in the accounts. There are many ways to mislead - e.g. reporting expenses as capital items; moving debts overseas, then off the balance sheet.
Two examples of things accountants do to massage the figures - did you know that if you buy and pay for a Dell computer, the computer is still shown as an asset in Dell's accounts for 3 working days after it is shipped and invoiced? That's $600m of assets most companies wouldn't show. Or maybe a billion if Dell wants it to be at quarter-end. They call this "not recognising the sale until the product reaches the customer". Did you know that in January Dell made an additional multibillion dollar share issue to an overseas subsidiary. They say this does not dilute shareholder value, because the shares are not open-market tradeable. But if I was a banker, wouldn't I sleep more comfortably lending Dell's subsidiary a few billion if I had those certificates lodged?
At one extreme it could be Dell is striving to describe a wonderful company in the best possible light. At the other it's something worse. Wall Street is heavily invested in Dell and can't get out easily. Adverse comments about Dell are rare in the financial press. But notice how first Intel, and now apparently LCD makers are gradually distancing themselves from Dell, despite its huge buying power.
May not mean anything, but then again . . .
Really?
"If he didn't know, then he should have. All directors/members are required to sign off on the published accounts and SEC returns. They are responsible - it's almost the definition of 'director'."
You do realize that Dell isn't a small business with a single office right?
I mean, if someone wrote in that they only spent 1000 dollars on office supplies, but actually spent 1200. Would you actually know that the printer they put down as 200 dollars actually costed 400?
If you were brought a report that stated they sold 100 computers for 500 dollars each to x and x company, and it sounds reasonable, would you know that the deal was actually 450 dollars each?
I don't follow Dell that well to know how many PCs, printer, servers, accessories etc.. that they sell each year in how many different locations. But I am sure that one person couldn't know for a fact that every single item on this list was correct without putting some trust in someone else.
Old dog
I swear, El Reg (and many of its commenters) remind me of an old, toothless dog. Can't bite any more but we can still annoy the hell out of everyone by pi$$ing on everything in sight.
I seriously doubt that "Michael Dell, CEO of Dell Computers said Wednesday he was not involved in any of the accounting monkeyshines" but then, El Reg wouldn't get its usual crowd of "anti-everything"s to even read the piece if it simply printed that Michael Dell was not CEO of the company for two of the three years in review.
As to the "He's got to be lying and I hate Dell computers anyway" crowd, jolly good - I'm sorry you had such a miserable experience and that you distrust so much a person you've never met and whose integrity you have no knowledge of whatsoever. I hope your life improves.
@ This is America
"Please don't judge people by your own standards. Don't assume that every boss is a crook with no principles."
How about if I judge them by my half-century of observation, some of it "in the trenches" at Intel?
I would say that no more than 97% of senior management in the Fortune 1000 are crooked. No more than 1% are honestly ignorant. The other 2% are dupes.
Increase the first figure for Sales And Marketing management to 99%. Eliminate the honestly ignorant there, and reduce the "dupes" to, at most, 1%.
Re: Sarbanes Oxley
No I am not an officer of Dell nor connected other than as a customer and I am not defending bad conduct. I do not have a brief for Michael Dell. However, I object to the knee-jerk reaction that someone "must be lying" because he earns a lot of money. The directors, including Michael Dell, may well have liability but the fact they have to sign off the accounts does not mean they must have known about (or indeed that they ought to have known about) a fraud. Fraudsters usually try to hide their actions as appears to have been the case here.
I doubt that Michael Dell is that concerned by his bonus - he will be more concerned about reputational damage to the company.
The earlier Reg article http://www.theregister.co.uk/2007/08/16/dell_probe_results_released/ states that senior people were sacked and that other changes were made. It is for the authorities to judge if that is sufficient action for the company to take but what evidence do you have that Michael Dell is not telling the truth?
