Lernout & Hauspie faces financial probe

The US Securities and Exchange Commission (SEC) has launched an investigation into Belgian-based voice recognition specialist Lernout & Hauspie (L&H) following recent speculation about its accounting practices.

Jo Lernout and Pol Hauspie, the company's joint founders and chairmen, said in a statement that L&H is co-operating fully with the investigation. "We look forward to working with SEC and our auditors to ensure full compliance with all US laws and regulations," they said.

The probe comes a month after L&H commissioned an independent audit following concerns about the financial results of its Korean division. In August, a US newspaper report claimed that some companies, which L&H identified as Korean customers, denied doing any business with the company. An employee of LG Electronics, one of 18 alleged customers the newspaper contacted, said LG had never bought products or licences from L&H.

The company reported 1999 sales of $143.2m from contracts in Korea and Singapore, up from less than $300,000 in 1998. Total revenue for 1999 was $344.2m.

Gaston Bastiens stepped down as chief executive about two weeks after the audit was commissioned, and the results have yet to be published.

L&H was unavailable for further comment.