EDS settles SEC accounting inquiry

EDS settles SEC accounting inquiry

EDS agrees to settle an SEC investigation into its accounting practices.

Electronic Data Systems (EDS) has agreed to pay US$490,902 to settle a U.S. Securities and Exchange Commission investigation into accounting irregularities, the agency said Tuesday.

The SEC accused EDS of failing to disclose the cost of a US$225 million investment banking stock deal, maintaining inaccurate financial records, and failing to disclose an "extraordinary" transaction that made up more than 25 percent of the company's cash flow in the first half of 2002.

EDS, an IT service provider based in Plano, Texas, did not admit or deny wrongdoing as part of the settlement. "We're happy to put this historical matter behind us," said Robert Brand, the company's director of corporate public relations.

EDS replaced its chief financial officer and former Chairman and CEO Dick Brown in early 2003, after the SEC opened a formal investigation into EDS accounting practices in October 2002.

Separately, the SEC said a former official of an EDS subsidiary, accused of bribing officials in India, has also agreed to settle with the agency.

The SEC had accused Chandramowli Srinivasan, the former president of EDS subsidiary A.T. Kearney India, of directing a bribery scheme in which the company paid US$720,000 to senior employees of Indian state-owned enterprises between early 2001 and September 2003. The purpose of the bribes was to retain A.T. Kearney India's business with the government entities, the SEC said.

Srinivasan agreed to pay US$70,000 to settle the SEC charges. He also did not admit or deny the SEC charges.

Srinivasan's payment was part of the SEC investigation into the accounting practices at EDS, the SEC said.

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