AremisSoft Stakeholder Irwin Jacobs Backs Away From Support of Firm
By DANIEL GOLDEN
Staff Reporter of THE WALL STREET JOURNAL
Minneapolis financier Irwin L. Jacobs Wednesday backed away from his
vociferous support of beleaguered software maker AremisSoft Corp. after
the company said it is cooperating with a federal investigation into its
accounting practices.
Mr. Jacobs, who owns 9.15% of AremisSoft and has repeatedly accused its
critics of conducting a smear campaign against it, said he is "stunned" and
"terribly embarrassed" by the company's announcement. "I'm not too proud
to apologize if I've made a mistake," he said, adding that he has not been
questioned in the Securities and Exchange Commission probe. "I never
misled anybody intentionally."
AremisSoft, based in Westmont, N.J. but largely operated from England,
also said Tuesday that its chairman had retired, its chief financial officer had
resigned, and its second-quarter and full-year revenue and income would fall
below expectations. It said its independent auditors had so far been unable to
confirm $5.4 million in fiscal 2000 revenue booked by the company in
connection with a contract to automate Bulgaria's health insurance system.
Trading in AremisSoft on the Nasdaq Stock Market has been halted at
$11.19 since Monday morning. Company executives were unavailable for
comment Wednesday.
AremisSoft, which makes enterprise software to help companies manage a
variety of operations, has been under siege since reports surfaced in May
and June questioning whether it overstated the value of contracts with
Bulgaria and the Indian army. Last month, it sued several short sellers and
online financial news site TheStreet.com in US District Court in San
Francisco, contending they had conspired to drive down its stock price. The
hedge fund managers and TheStreet.com have denied the allegations.
According to federal filings in June, Mr. Jacobs owned 3.6 million shares of
AremisSoft, some of it bought for about $12.50 per share. A trust controlled
by Mr. Jacobs' longtime associate, Carl Pohlad, owned another 4% of the
company, and Pohlad family members owned an additional 1.8%. Mr.
Pohlad is the owner of the Minnesota Twins baseball team.
Since he began investing in AremisSoft in late April, Mr. Jacobs has
repeatedly used his irwinljacobs.com web site (www.irwinljacobs.com) to
defend the company and attack the short-sellers -- often two or three times
a day. He asserted that company officials had shown him receipts and other
documents substantiating the revenue figures. On July 19, he stated that he
had bought another 200,000 AremisSoft shares that day and the day before
despite "all the orchestrated, negative, untrue rumors and innuendoes ...
since the shorts began their campaign in an attempt to destroy AremisSoft."
AremisSoft, he said in that day's posting, "has one of the best opportunities
for a growth software company than anything I've seen in the marketplace." |
