December 11th, 2006, 23:26 Posted By: wraggster
Today, Take-Two announced that the preliminary findings in an investigation into the company's stock option granting practices and procedures have been reported by the Special Committee of its Board of Directors.
This Special Committee was put together by Take-Two's Board of Directors to look into stock option grants, the timing of such grants, and related accounting matters. The Special Committee is composed of three independent members of Take-Two's Board of Directors, and is being assisted by independent accounting firm BDO Seidman, as well as outside legal counsel Kasowitz, Benson, Torres & Friedman.
The Special Committee conducted a thorough investigation, which included a review and analysis of documents and e-mails, as well as an interview with current and former officers, directors, employees, and advisors to Take-Two. According to the results of the investigation, the Special Committee found that there were improprieties in the stock option granting and documenting process, and that incorrect measurement dates for certain stock option grants were used for financial accounting purposes. The Committee expects that it will release a final report detailing both its findings and recommendations for corrective actions.
Take-Two's Board of Directors and management have concluded that the company will need to restate its financial statements to catalogue non-cash charges for compensation expense relating to past stock option grants. Although the total amount of said charges and the resulting impact on the company's accounting has not been determined, all financial information for the company for periods between 1997 and 2006 has been deemed unreliable.
While certain improprieties were uncovered as a result of the investigation, no misconduct was found on the part of the company's current Executive officers, including Paul Eibler, Take Two's CEO and President, and Karl Winters, Take-Two's Chief Financial officer.
Additionally, Take-Two met with the NASDAQ Listing Qualifications Panel to petition for an extension of time to file its Form 10-Q, solicit proxies, and hold an annual meeting despite not complying with NADAQ filing requirements.
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