The chief executive of Belgian speech recognition vendor Lernout & Hauspie (L&H) has resigned following weeks of speculation surrounding the company's trading practices.
Gaston Bastiaens' sudden departure coincides with the resignation of Ellen Spooren, the company's head of investor and press relations. Bastiaens will be replaced by John Duerden, formerly chief executive of L&H?s recently acquired Dictaphone business.
Jo Lernout, one of L&H?s co-founders told analysts that the management changes have been under discussion for some time and denied there was any connection between Bastiaens' resignation and recent speculation surrounding L&H?s Korean business.
"We have been internally thinking of this for a couple of months, we know our company is in a stage of evolution," said Lernout.
The company's share price dropped $7.19 or 19.4 per cent on 8 August after the Wall Street Journal published an article claiming inconsistencies in its Korean business. The newspaper claimed that some companies, which L&H identified as Korean customers, denied doing any business with the firm.
It is believed that the problem was caused by an internal difficulty in making the correct information available about its Korean sales. Rob Stone, an analyst at investment bank SG Cowen, said: "I think the board is well aware about some miscues with certain journalists and the Street. [The appointment of Duerden] is a definite step in the right direction."
Although L&H has vehemently denied the allegations made in the article, Allan Forsey, the company's senior vice president finance and strategic planning confirmed essential facts concerning the value of specific deals in Korea. "This was an unfortunate matter ? you can be absolutely assured there will be no miscommunication in the future," he said.
L&H has appointed KPMG to perform a full mid-term audit of all its income. "This is not a skim over but a full audit under the same rules that apply at the year end," said Forsey.
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