Seitel Issues Statement
HOUSTON--(BUSINESS WIRE)--June 25, 2002--Seitel, Inc. (the "Company") today announced that during a recent internal investigation of financial activities at the Company, it was discovered that the former Chairman and CEO, Paul A. Frame, and the former CFO, Debra Valice, may have improperly converted corporate funds to their personal use.
The investigation was conducted by the Company's newly hired outside counsel, Fulbright & Jaworski L.L.P., and PricewaterhouseCoopers LLP, which was retained by Fulbright to assist in the investigation. As a result, Seitel's Board of Directors has withdrawn its offer to enter into the previously disclosed long-term promissory notes with these individuals and is demanding immediate repayment of these amounts to the Company. The Board has also instructed Fulbright to continue to investigate the financial activities of the Company and actively pursue disgorgement of all funds improperly obtained by anyone. It is estimated that the amounts that will be sought by the Company from Mr. Frame and Ms. Valice will exceed $4 million in the aggregate.
In addition, the Board has instructed Fulbright to notify appropriate governmental authorities regarding the findings of the ongoing investigation, and to conduct an investigation of the Company's business practices and financial accounting controls to identify opportunities for improving the same.
"The Company is acting expeditiously to address these issues and will continue to take whatever future action is necessary based on the results of a comprehensive investigation," according to Fred Zeidman, Chairman of the Board.
The Company also disclosed that Ms. Valice had initiated litigation against the Company alleging wrongful discharge. The Company believes this litigation is without merit and will defend it vigorously. |
