Between heightened certification requirements and shorter Securities and Exchange Commission filing deadlines, more CFOs may be hunting up excuses for filing late statements. Recent extension-request forms offer options from the mundane to the dire. Netsalon Corp., for instance, claimed the company president's travel schedule would interfere with its timely 10-K filing, while Appiant Technologies Inc. said "heavy turnover in the accounting department" derailed its quarterly filing. Celexx Corp. possessed "insufficient operating capital" to fund the completion of its annual report.
But it's unlikely any will top the sob story that Chris A. Dittmar, CFO of Adair International Oil and Gas Inc., told in his deadline- extension request last quarter. According to the company's explanation in its Form 12b-25, the newly appointed Dittmar arrived at work the day after Adair shareholders ousted the former CEO and CFO to find that the company's financial records had all but vanished. "Key computers containing the financial records of the corporation had been stolen and all data on any other computer left behind had been deleted," with backup tapes gone as well, the filing explains. Further, as a result of the theft, the entire staff had been dismissed.
What the filing didn't say was that a corporate surveillance camera allegedly caught two direct reports of former CEO John Adair and former CFO Jalal Alghani carting off the computers. "These were evidently not the smartest crooks in the world," says Dittmar. He claims the two took the information to cover up an alleged securities-fraud scheme.
After reconstructing its financials with information from one former accountant, along with documents gathered from its vendors, customers, and banks, Adair submitted its 10-Q within the extended deadline. It intends to press securities-fraud charges against the two former officers, while the shareholder group that overthrew them has submitted reports to the SEC, the Justice Department, and the IRS, among other federal agencies.
CFOs without such drama to offer can rest easy, though — filing a form gets a 15-day extension for 10-Ks and 5 days for a 10-Q. —Alix Nyberg
CFOs on the Move
Weston Hicks has departed as CFO of Chubb Corp. to become EVP of Alleghany Corp.... Russell J. Brennan has replaced John W. McGovern as CFO of Silicon Laboratories Inc.... Nationwide Mutual Insurance Co. has bid adieu to resigning CFO Robert A. Oakley.... AOL Time Warner CFO Joseph Ripp has been promoted to vice chairman; the company is seeking a new CFO.... Maureen O'Connell, former CFO of Barnes & Noble Inc., has joined research and consulting firm Gartner Inc. as its new finance chief.... A long search nets George Reyes as CFO for Google Inc.
Same Stuff, Different Day
By the time you read this, the members and chairman of the Public Company Accounting Oversight Board, mandated by the Sarbanes-Oxley Act of 2002, should have been named and approved. While the board's existence is groundbreaking, more amazing is how fast the board-selection process morphed from bipartisan cleanup crusade into politics as usual.
According to press reports, Securities and Exchange Commission chairman Harvey Pitt initially offered the board chairman's job to former head of the Federal Reserve Paul Volcker, who politely declined. Then Pitt was allegedly poised to name John Biggs, former head of the TIAA-CREF pension fund and a vocal supporter of accounting reform. But his appointment was reportedly derailed by private accounting-industry lobbying and pressure on Pitt by Rep. Michael Oxley (ROhio), co-sponsor of the board's enabling legislation. Two SEC commissioners were also allegedly miffed that they weren't more involved in the process. Days later, Pitt publicly denied offering the position to anyone at all.
At press time, the search was still on, and those in the know were keeping their mouths tightly shut. "There's already been far too much public comment on this as it is," says SEC commissioner Harvey Goldschmid.
Observers worry that the partisan politics may undermine the main purpose of the board. "I'm at a loss as to why they're being so clumsy on this process," says Frank Borelli, former CFO of Marsh & McLennan Cos., who has helped draft accounting-reform rules in the past. "I thought this would have been handled very smoothly, with the idea that these steps would improve the confidence level of the investor. The way this is being handled does not...improve confidence." —Kris Frieswick