|
SEC widens Xerox probe
|
 |
May 22, 2001: 7:04 a.m. ET
Agency eyes claims of 'unusual' deals between Xerox, Citibank: report
|
NEW YORK (CNNfn) - The Securities and Exchange Commission, in a widening probe of Xerox Corp., is investigating unusual transactions between the company and Citibank, which allegedly helped boost Xerox's revenue and profit, a newspaper report said Tuesday.
The Wall Street Journal, citing people familiar with the matter, said the SEC has subpoenaed Citibank, the banking unit of Citigroup Inc. (C: Research, Estimates), for records of the deals, which focus on Xerox's Brazil unit. Xerox has not publicly disclosed these transactions in its financial results, the paper said.
The report said a former Xerox finance executive alleges that Xerox improperly booked inflated revenue of about $140 million, and pretax profits of $80 million, in the company's second and third quarters from the Citibank deals, designed as sales to the bank of future revenue streams from Xerox copiers, the paper said.
A Xerox (XRX: Research, Estimates) spokeswoman said the transactions with Citibank and other banks were legitimate, the Journal said.
A Citigroup spokeswoman declined to comment on the specifics of the transactions, the report noted, but said the bank was cooperating with SEC inquiries and that subpoenas are simply requests for information and do not indicate Citibank had improper dealings with Xerox.
The probe of the transactions is just one part of the SEC's broad investigation into Xerox's accounting practices, which began last year after the company acknowledged accounting irregularities at its Mexico unit. Xerox launched its own investigation into the matter.
Shares of Xerox rose 44 cents to $11.35 Monday. 
|
|
|
|
|
 |
|
