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IR housecleans after CEO's departure

Posted: 05 Oct 2007 ?? ?Print Version ?Bookmark and Share

Keywords:IR CEO resignation? accounting scandal? internal initiatives?

Following the recent resignation of its CEO, International Rectifier Corp. outlined several initiatives to get the chipmaker back on track.

As reported, amid an accounting snafu, IR this week announced the resignation of Alex Lidow as CEO and a director, effective immediately.

In April, IR discovered some accounting irregularities at a foreign subsidiary. These accounting irregularities include premature revenue recognition of product sales and other issues, according to IR.

Following an accounting snafu, IR terminated its chief finance officer, while another executive resigned from the chipmaker. In August, IR said that Lidow went on a ''leave of absence'' with pay pending the resolution of a previously announced accounting snafu.

In response to an accounting issue, the company this week said it plans to shift reporting of the internal audit function to the audit committee of the board of directors and the general counsel.

The company plans to appoint a lead independent director and devise a special committee of the board to advise and support the acting chief executive officer.

IR will evaluate independent third-party consulting firms to document and assess the design effectiveness of processes and controls. And it will change the reporting relationships at the company's Japan subsidiary to improve oversight of the subsidiary.

Jack Vance, International Rectifier's lead independent director, said the moves would rectify the company's troubles.

''During this period of transition for the company, the audit committee and I are working diligently to bring the internal accounting investigation to a resolution,'' he said in a statement.

''We are also taking steps to implement meaningful changes to our internal controls and governance policies,'' he said.

- Mark LaPedus
EE Times

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