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Adecco claims support from key shareholders

Adecco says accounting irregularities will not have a major financial impact Keystone

Adecco, the world’s largest employment agency, says it has won the backing of two key shareholders, helping ease market jitters about an accounting scandal embroiling the firm.

This content was published on February 26, 2004 - 12:22

Shares in Adecco rose sharply on Thursday amid news that the Swiss billionaire, Klaus Jacobs, would rejoin the company's board.

In another boost to investors, the agency also said it had found "no evidence demonstrating major misappropriations or irregularities."

Jacobs last month warned that management had until April to restore investor trust, severely damaged in mid-January when Adecco revealed book-keeping errors and delayed the announcement of its 2003 results.

Shareholders had been concerned that Jacobs was planning to sell his stake in Adecco, worth nearly 12 per cent.

But on Thursday, Adecco said Jacobs would retain his stake and would return to the board. The outspoken investor stepped down from the board in 2002 to make way for his son, Christian.

Investors welcomed news of Jacob’s commitment to the firm.

“It’s clearly positive for Adecco,” said Zurich Cantonal Bank analyst Claude Zehnder.

“We had all this speculation that Jacobs would sell his stake and now he will be re-elected into the board of directors and will not sell.”

Boardroom shake-up

In a statement, Adecco announced details of a proposed boardroom shake-up that would include the re-election of Philippe Foriel-Destezet from Akila Finance, another cornerstone Adecco shareholder.

"Adecco's two principal shareholders have reiterated their support and have conveyed to the company their intention to maintain their respective shareholdings," the company statement said.

The move followed unconfirmed reports this week that four current board members aligned to Jacobs would step down.

Analysts said Jacob's return was about regaining control of the troubled firm.

“They are trying to get together again and make a fresh start with the board of directors,” said Zehnder.

Shares in Adecco rose on Thursday by as much as six per cent, before settling at around SFr64.90, up nearly three per cent.

Adecco is facing at least four investigations and possible class action lawsuits from investors angry about the collapse of their investment after the company’s accounting announcement on January 12.

At the time, shares in Adecco fell by a third in one day.

The company has been slowly releasing more details on its investigation, but says legal constraints prevent it saying more.

The company has also declined to say when it will publish its 2003 results.

swissinfo with agencies

Key facts

On January 12, Adecco announced it had found accounting irregularities and would delay the publication of its 2003 results.
The company’s value dropped SFr7 billion soon after the announcement.
The problem was located in internal controls in Adecco Staffing North America.
The irregularities came to light during a routine audit of the company’s numbers.

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