Accounting woes at the world’s largest job services company, Adecco, have eaten into its first-quarter net income, which fell 53 per cent to €30 million (SFr45.8 million).This content was published on June 4, 2004 - 08:48
Adecco on Friday also announced a board revamp, in an attempt to bolster its credibility after months of negative publicity.
ABB chairman Jürgen Dormann, former French finance minister Francis Mer and Coca Cola executive Peter Ueberroth are among the proposed new Adecco board members.
The current chairman, John Bowmer, will step down.
"I think Bowmer has to take responsibility for the mess. It is logical and a positive step," said Claude Zehnder, an analyst at Zurich Cantonal Bank.
In January, the firm delayed the announcement of its 2003 annual results, amid concerns about bookkeeping issues at its North American division.
Last year, Adecco's net profit rose 26 per cent to €305 million (SFr466 million).
The problems triggered a collapse in the company's share price, as investors feared it would join the ranks of Enron, Parmalat and other firms reduced to rubble by improper accounting.
Earlier this week, Adecco released its much-delayed 2003 results and said it would not need to restate its earnings.
Shares in the group have steadily recovered since January, but remain down by almost a quarter on the level they stood at prior to the news of accounting problems. Shareholders have lost some SFr3.5 billion.
€100 million bill
The company said the delays, along with costs linked to auditing its books as well as adviser fees, cost €36 million in the first three months of 2004.
There are expected to be more bills associated with the crisis, which saw two senior executives lose their jobs.
Adecco said that it anticipated having to pay a total of €100 million to resolve the issue.
In a statement released on Friday, the firm said first-quarter income – excluding the accounting charge and amortisation – was €96 million.
The board revamp will also see the departure of four of Adecco's Swiss members. They are Conrad Meyer, Christian Jacobs, Andreas Schmid and Ernst Tanner.
Major shareholders Klaus J Jacobs and Philippe Foriel-Destezet will continue to serve on the board.
swissinfo with agencies
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