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Xerox stumps up $670m to settle lawsuit
Xerox is to pay $670m to settle a securities lawsuit which dates back to 2000, without admitting any wrongdoing.
The
world’s biggest provider of grey copier boxes said yesterday that it
had been granted preliminary court approval to settle the Carlson v.
Xerox Corp lawsuit.The case had been brought on behalf of investors who
bought up stock and bonds in the company between 17 February 1998 and
27 June 2002.Xerox spent a lot of time in the early Nineghties
hopping in and out of court over its book-keeping practices. In 2002
the firm paid a $10m penalty to settle US Securities and Exchange
Commission charges that Xerox had fluffed its numbers to inflate
less-than-pretty profits. Eventually, it was forced to restate half a
decade’s worth of results.The company said that it planned to take an
after-tax charge of $491m in the first quarter of this year and added
that it has put reserves in its piggybank for other pending
securities-related cases. It will stump up the cash for the settlement
in five instalments this year.Former independent auditor and
co-defendant in the lawsuit KPMG will pay $80m into the settlement
fund.Xerox boss Anne Mulcahy sought to ease shareholders’ concerns
about the painful settlement. She said: “Our strong financial position
gives us the flexibility to resolve this issue while continuing to
deliver shareholder value through share repurchase, dividends and
acquisitions.”Last November Xerox restored its quarterly dividend after
a six-year hiatus.
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