MiniScribe's investigators determine that 'massive fraud' was perpetrated
Article Abstract:
Internal investigators at MiniScribe Corp blame senior management for the company's unreliable sales figures, and claim the management team behaved fraudulently toward the company's directors, outside auditors and investors. The investigative committee of outside directors said they found fraud within the company dating back to the 1985 arrival of chairman Q.T. Wiles, although the committee did not specifically fault Wiles. Wiles abruptly resigned early in 1989, and several top officers were dismissed at the same time. The investigation began because the company announced at the time of Wiles' resignation that sales results for prior years had been overstated and it could not give reliable financial results. MiniScribe shipped bricks as disk drives and claimed them as $4.3 million in sales, and packaged 6,100 contaminated disk drives to inflate inventory in 1988, the committee reported.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1989
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MiniScribe hasn't lost any big buyers despite fraud allegations, chief says
Article Abstract:
Miniscribe Chmn and CEO Richard Rifenburgh claims the data disk drive manufacturer has not lost any major customers despite allegations of fraud. Rifenburgh predicts a return to profitability by 1st qtr 1990. Industry analysts remain skeptical, citing Miniscribe's refusal to identify customers as well as outstanding convertible debentures and trade debt. Miniscribe is hoping its new one-inch-tall 3.5-inch disk drive will help turn the company around. Analysts point out that Miniscribe's next generation of drives, a 2.5-inch model, probably will not reach the marketplace in time to gain the market share needed. Rifenburgh describes Miniscribe's cash situation as 'pretty good,' but he admits cash flow has come at the expense of inventory and that Miniscribe's short-term credit line of $70 million is exhausted.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1989
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Cooking the books: how pressure to raise sales led MiniScribe to falsify numbers
Article Abstract:
MiniScribe Corp reported fabricated sales and bloated inventories, giving the illusion that the disk-drive company, under direction of CEO Q.T. Wiles, was doing better than it really was. In Oct 1988, when other disk-drive companies were in a slump, MiniScribe receivables rose from $109 million to $173 million, a 59 percent increase; inventories rose from $93 million to $141 million. The news shocked Wall Street. Q.T. Wiles had been viewed as a reputable expert who had saved other ailing companies, but a different story is now emerging. Apparently, Mr. Wiles's unrealistic sales targets and abusive management style created so much pressure on managers that they were driven to fix the books or be fired.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1989
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Comment about this article or add new information about this topic:
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