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McKesson sees coverup
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June 22, 1999: 3:41 p.m. ET
Firm says executives may have 'intentionally suppressed' irregularities
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NEW YORK (CNNfn) - Medical supplier McKesson HBOC Inc., struggling to recover from a series of scandals associated with irregularities on its books, said Tuesday financial information relating to its troubles may have been intentionally kept under wraps by company executives.
A McKesson spokesman told CNNfn that the company now believes its accounting problems stem from financial information that "appears to have been intentionally suppressed" by company executives. The spokesman added that the company is cooperating with a Securities and Exchange Commission investigation into the accounting irregularities on its books.
The news comes one day after a rapid-fire series of personnel changes at the troubled San Francisco-based drug supplier. Five key executives were fired Monday, including McKesson chairman Charles McCall and several officials at the company's information technology business unit, the division spawned from the purchase of health-care software producer HBO & Co. last year.
McKesson shares have shed almost half their value since it restated its fiscal 1999 earnings, not once but twice, and made public its internal accounting problems. McKesson reduced its earnings results once in April, then a second time in May because of improperly recorded software sales at its HBO & Co. software unit that shouldn't have been put on the books.
Evidence that company officials knew about the cooking of the books and did nothing to stop it could further the case against senior management and prompt further declines in the company's stock price, analysts said.
"Somebody had to pay the price for the HBOC acquisition," Michael Krensavage, a pharmaceutical analyst at Brown Brothers Harriman, told CNNfn Monday. He has a "hold" rating on McKesson stock.
The SEC has opted not to discuss the scandal publicly, though officials there have stated that the alleged financial fraud is a top priority for their enforcement division.
The company's shares fell another 3/4 Tuesday to 32-15/16, close to its 52-week low of 32. In the past three months the company's shares have tumbled almost 50 percent from the 68-70 range in late March, just before the accounting irregularities were disclosed. 
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McKesson
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