BearingPoint’s announcement that it will likely have to restate at least the first three quarters of fiscal 2004 and will have to report material weaknesses in its internal financial controls was pushed to the background by the naming of a new CEO to head the company.
BearingPoint said a review of its internal financial controls has identified material weaknesses that will have to be disclosed in the annual report to the U.S. Securities and Exchange Commission.
The company said it did not know when it would file its annual report, the deadline for which passed on March 16. The company also said it will likely miss the deadline for filing a quarterly report for the period ending March 31.
However, it was the appointment of former Oracle Corp. Chief Financial Officer Harry You as the company’s new CEO that generated the most buzz. It prompted speculations among analysts that BearingPoint might be getting ready for a sale due to You’s experience with mergers.
Prior to Oracle You was chief financial officer at Accenture. Before joining Accenture in 2001, You was managing director in charge of the Computer and Business Services Group at Morgan Stanley, where he assisted in BearingPoint's initial public offering in February 2001.
Company executives have denied that You was hired to arrange a potential sale, and You himself has told Reuters that the company is not considering or soliciting any offers at the time.
In addition to the potential restatements for the first three quarters of 2004, the company said there could be restatements for past periods as well. It did not specify how far back those revisions may go.
The company also said it expects to report a loss for the fourth quarter of 2004 and possibly for the entire year. But it said gross revenue in 2004 was about $3.45 billion, up from $3.15 billion the prior year.