Tyco Int'l, another Benedict Arnold company that moved to Bermuda, is in hot water, according to big story in today's Wall Street Journal. Another example of a big business playing loose with the laws of the land, while the Republicans in Congress refuse to address the root causes of such. If the Democrats are smart, they will make this a big campaign issue in November, because Joe Investor is sick and tired of "big business as usual" and big business ties to the Republican Party.
Headline: CEO Kozlowski's Resignation Raises Worries About Tyco
By MARK MAREMONT, JOHN HECHINGER, JERRY MARKON and GREGORY ZUCKERMAN
Staff Reporters of THE WALL STREET JOURNAL
The resignation of Chief Executive L. Dennis Kozlowski touched off new doubt about the future of Tyco International Ltd., an overextended conglomerate that now faces a tricky effort to regain its footing and repay heavy debts amid questions about management integrity.
The 55-year-old executive resigned abruptly for what the company called "personal reasons." But he had told board members on Friday that he was the subject of a criminal investigation of possible evasion of sales taxes in New York.
At some companies, such a disclosure wouldn't necessarily have been enough to prompt a chief executive's departure. But at Tyco, which has lost immense credibility this year -- and $86 billion in market value -- amid concerns about strategic flip-flops and aggressive accounting, it was enough to topple Mr. Kozlowski. The Tyco CEO had already been the target of compensation critics for the hundreds of millions of dollars he has reaped in stock and options awards.
Tyco named Mr. Kozlowski's predecessor, board member John F. Fort, to take the reins pending a search for a new CEO. It said no other officers were under scrutiny. Tyco's shares -- which in December traded above $60 -- fell $5.90, or 27%, to $16.05 on Monday. The news helped pull down the entire market.
A criminal probe of Mr. Kozlowski, first reported by the New York Times, was confirmed by the office of the Manhattan district attorney in New York. The inquiry focuses at least in part on alleged failure to pay taxes on expensive artwork, said people familiar with it.
The investigation began several months ago after the district attorney's office received a tip about Mr. Kozlowski's art purchases, according to someone familiar with the matter. This person said the DA's interest also was piqued by Tyco's offshore base in Bermuda, which enables it to avoid some taxes. The artwork being looked at includes Old Masters and Impressionists, the person said, including individual works valued at as much as $4 million ....
(for the rest of story, go to wsj web site) |
