Four former Halliburton employees filed a securities class action lawsuit against Halliburton Company on behalf of shareholders claiming that fraudulent accounting practices occurred at the company from 1998 to 2001.
The lawsuit, filed on Tuesday in U.S. District Court in Dallas, claims that Kellogg Brown & Root, Halliburton’s engineering and construction unit, inflated its financial results by over billing for services, overstating its accounts receivable due from customers and understating accounts payable owed to vendors, the New York Times reported.
Vice President Dick Cheney who was Halliburton’s chief executive from 1998 to 2000 was not named as a defendant in the class action lawsuit.
The former finance employees also contend that Halliburton misled investors in the fall of 2001 about asbestos liabilities faced by the company’s subsidiary, Harbison-Walker, which it had acquired in the September 1998 purchase of Dresser Industries.
“What we found to be compelling about this is that there appeared to be a series of schemes designed to bolster Halliburton’s financial health that did not allow people to really understand the true financial picture at the company,” said David Scott, a lawyer at Scott & Scott in Colchester, Conn. “We found that this was not just one isolated event; it appears to be a course of conduct designed to deceive the public.”
Halliburton on Tuesday agreed to pay $7.5 million to settle a Securities and Exchange Commission investigation involving its 1998 and 1999 disclosure of an accounting for the recognition of revenue from unapproved claims on long-term projects, Halliburton said in a statement.
(via New York Times)
Comments on this entry are closed.