Bealeaguered database supplier Informix is set to be kicked off the US stock market listing while it tracks down two years' worth of accounting errors.
Informix faces the penalty for delaying the filing of its latest financial statement with the regulatory authorities, while it sorts out the restatement of two years of accounts - not just one, as it had previously indicated.
The troubled software firm's stock price went into a nosedive on Monday - losing 25 per cent - when its chief executive Bob Finocchio issued a statement revealing that the firm has to restate both its 1995 and 1996 fiscal results. The firm had previously limited the restatement to 1996.
The news adds weight to industry rumours that the company will have to report a further $250 million worth of losses - $200 million for 1996 and $50 million for 1995. Irregularities in internal revenue recognition practices have been blamed for the need to restate the previous year's results. The restatement will also alter the first two quarters of 1997.
Informix has requested an exemption from the US regulatory body, the Securities and Exchange Commission, so that it can delay filing its 10-Q quarterly financial paperwork until the restatement is complete. But on Monday afternoon, the Nasdaq stock exchange began proceedings to delist the company.
The restatement was initiated by Finocchio shortly after he took up the CEO's post two months ago. He had intended to have completed an audit of the company books by now, but has now decided to restate more types of revenue related to the company's reseller channels. In his statement on Monday, he said: "I more than anyone want to complete the restatement processes as quickly as possible. But it's important that we do it right."
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