tyco 案例分析汇总.docx

tyco 案例分析汇总.docx

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tyco案例分析汇总

CaseStudy:

Tyco

TycoBackground

TycoInternationalhasoperationsinover100countriesandclaimstobetheworld'slargestmakerandservicerofelectricalandelectroniccomponents;thelargestdesignerandmakerofunderseatelecommunicationssystems;thelargermakeroffireprotectionsystemsandelectronicsecurityservices;thelargestmakerofspecialtyvalves;andamajorplayerinthedisposablemedicalproducts,plastics,andadhesivesmarkets.Since1986,Tycohasclaimedover40majoracquisitionsaswellasmanyminoracquisitions.

HowtheFraudHappened

AccordingtotheTycoFraudInformationCenter,aninternalinvestigationconcludedthattherewereaccountingerrors,butthattherewasnosystematicfraudproblematTyco.So,whatdidhappen?

Tyco'sformerCEODennisKoslowski,formerCFOMarkSwartz,andformerGeneralCounselMarkBelnickwereaccusedofgivingthemselvesinterest-freeorverylowinterestloans（sometimesdisguisedasbonuses）thatwereneverapprovedbytheTycoboardorrepaid.Someofthese"loans"werepartofa"KeyEmployeeLoan"programthecompanyoffered.Theywerealsoaccusedofsellingtheircompanystockwithouttellinginvestors,whichisarequirementunderSECrules.Koslowski,Swartz,andBelnickstole$600milliondollarsfromTycoInternationalthroughtheirunapprovedbonuses,loans,andextravagant"company"spending.Rumorsofa$6,000showercurtain,$2,000trashcan,anda$2milliondollarbirthdaypartyforKoslowski'swifeinItalyarejustafewexamplesofthemisuseofcompanyfunds.Asmanyas40Tycoexecutivestookloansthatwerelater"forgiven"aspartofTyco'sloan-forgivenessprogram,althoughitwassaidthatmanydidnotknowtheyweredoinganythingwrong.Hushmoneywasalsopaidtothosethecompanyfearedwould"ratout"Kozlowski.

Essentially,theyconcealedtheirillegalactionsbykeepingthemoutoftheaccountingbooksandawayfromtheeyesofshareholdersandboardmembers.

HowitWasDiscovered

In1999theSECbegananinvestigationafterananalystreportedquestionableaccountingpractices.Thisinvestigationtookplacefrom1999to2000andcenteredonaccountingpracticesforthecompany'smanyacquisitions,includingapracticeknownas"spring-loading."In"spring-loading,"thepre-acquisitionearningsofanacquiredcompanyareunderreported,givingthemergedcompanytheappearanceofanearningsboostafterwards.TheinvestigationendedwiththeSECdecidingtotakenoaction.

InJanuary2002,theaccuracyofTyco'sbookkeepingandaccountingagaincameunderquestionafteratipdrewattentiontoa$20millionpaymentmadetoTycodirectorFrankWalsh,Jr.Thatpaymentwaslaterexplainedasafinder'sfeefortheTycoacquisitionofCIT.InJune2002,Kozlowskiwasbeinginvestigatedfortaxevasionbecausehefailedtopaysalestaxon$13millioninartworkthathehadpurchasedinNewYorkwithcompanyfunds.Atthesametime,KozlowskiresignedfromTyco"forpersonalreasons"andwasreplacedbyJohnFort.BySeptemberof2002,allthree（Kozlowski,Swartz,andBelnick）weregoneandchargeswerefiledagainstthemforfailuretodiscloseinformationontheirmultimilliondollarloanstoshareholders.

TheSECaskedKozlowski,Swartz,andBelnicktorestorethefundsthattheytookfromTycointheformofundisclosedloansandcompensations.

WhereAreTheyNow?

KozlowskiandSwartzwerefoundguiltyin2005oftakingbonusesworthmorethan$120millionwithouttheapprovalofTyco'sdirectors,abusinganemployeeloanprogram,andmisrepresentingthecompany'sfinancialconditiontoinvestorstoboostthestockprice,whileselling$575millioninstock.Bothareserving81/3-to-25-yearprisonsentences.Belnickpaida$100,000civilpenaltyforhisrole.SincereplacingitsBoardMembersandseveralexecutives,TycoInternationalhasremainedstrong.

ThedifferenceintheTycocaseandsomeoftheothersisthatitismorerelatedtogreedthanaccountingfraud.Formoreinformationoncookingthebooksandrelatedtopics,checkoutthelinksonthenextpage.

TycoFraudInformation

TycoFraudInfoCenter

TycoInternational,Ltd.,acorporationthatmakesadiversityofproducts,fromhealthcaresuppliestoalarmsystems,hasrecentlyaccusedthreeformerhigh-levelexecutivesoffraud.Thethreeaccusedmanagers,formerCEOL.DennisKozlowski,formerChiefFinancialOfficerMarkSchwartz,andformergeneralcounselMarkBelnick,havebeenindictedforfraudandtheftbytheSecuritiesandExchangeCommission（SEC）aswellastheirformeremployer.Theyhaveallpleadedinnocent.

Whenwastheallegedfrauddiscovered?

Tyco’sfinancialaccountingfirstcameunderreviewinJanuary2002afteratipsuggestedthataless-than-legaltransactionmightbetakingplace.InJuneofthesameyear,Kozlowskiresignedjustbeforehewasaccusedoftaxevasiononsomeexpensiveartpurchases,allegedlymadewithcompanyfunds.OnSeptember12,2002,theSECformallychargedKozlowski,Schwartz,andBelnickofcivilfraud.

Whattypesoffraudarethemenaccusedofcommitting?

TheSECandTycoInternationalhaveindictedtheformerexecutivesonchargesofcivilfraudandtheft.Theyareaccusedofgivingthemselvesinterest-freeorlowinterestloansforpersonalpurchasesofproperty,jewelry,andotherfrivolities.AccordingtotheSEC,theseloanswereneverapprovedorrepaid.

KozlowskiandSchwartzarealsoaccusedofissuingbonusestothemselvesandotheremployeeswithoutapprovalofTyco’sboardofdirectors.ItisallegedthatthesebonusesactedasdefactoloanforgivenessforemployeeswhohadborrowedcompanymoneyorwereusedtobuythesilenceofthosewhosuspectedtheformerCEOandCFOoffraud.AccordingtoTyco,theindividualswhoreceivedloanforgivenesswerenotawarethattheywereparticipatinginanythingillegal;theyweretoldtheprogramhadtheboard’sapproval.TycoandtheSECsayitdidnot.

Kozlowski,Schwartz,andBelnickarealsobeingindictedonchargesofsellingtheircompanystockwithouttellinginvestors,despitetheirobligationtodosounderSECrules.Insum,thethreeareaccusedofstealing$600milliondollarsfromTycoInternational.

Whatisthecurrentstatusofthecase?

Kozlowski,Schwartz,andBelnickhavebeenindicted,andallthreehavepleadedinnocent.AllthreeformerTycoexecutiveshavebeenreleasedonbailbondsforthetimebeing.AlthoughajudgefrozetheassetsofKozlowskiandSchwartzinSeptember,Kozlowskihassincebeengivenamonthlylivingexpenseofover$14,000.Hewasalsoallowedtopayover3milliondollarsinstatetaxes.ThetrialforthethreeistentativelysetforJune1,2003.

AsforTyco,aninternalinvestigationhasconcludedthat,althoughaccountingerrorshaveoccurred,thereisnosystemicfraudproblem.Asashowofgoodfaithandinefforttorestoreconfidenceinthecompany,Tycohasspentthepastseveralmonthsreplacingitstopboardmembers

Tyco-AcorporategovernancefailurePresentationTranscript

1.ACorporateGovernanceFailurePreparedByKaranBhagatwala:

RollNo.09HarshitBhinde:

RollNo.12MeghanaBhogle:

RollNo.13SonaliGohil:

RollNo.35AvinashKadam:

RollNo.52SnehalKadam:

RollNo.53

2.September12th2002MeghanaBhogle（13）

3.TYCOHistoryInvestmentcompanyfocusedonScienceandEnergyconversion.1964:

PublicTrading.1968:

Acquisitions.1982:

Re-organizationofBusinessSegments.1986:

Growththroughacquisitions.Priortoscandal:

$38billionOR&2,40,000employeesworldwide.MeghanaBhogle（13）

4.RiseofDennisKozlowski1975:

AssistantController1987:

BOD1992:

CEO1993:

ChairmanMeghanaBhogle（13）

5.RobertMorgenthau:

SherlockHolmesIn1999,theSECinitiatedaninquiryintoTycospractices.InJanuary,2002,questionableaccountingpracticescametolight.RobertkeptdiggingintotherecordkeepingofTycoandKozlowski.Noindividualwhistleblower.Scandalhadalreadyspreadextensively.SnehalKadam（53）

6.CourtroomDramaKozlowskihiredanattorneythatdefendedhisactions.Askingforlenientsentencecitinghisimmensecharitabledonations.OwenHeimeraskedthejudgethatnoleniencybeshowntoKozlowski.Citinghisexcessivespendingspreeanddisregardfortheshareholdersofthebusiness.SnehalKadam（53）

7.TYCO:

CorporateGovernanceSystemCompositionKozlowskiFirm’sboardofdirectorsincluding:

MarkSwartz,CFO;LordMichaelAshcroft,whojoinedwiththeADTmerger;RichardS.Bodman,aventurecapitalist;StephenW.Foss,CEOofatextileconcern;FrankE.Walsh,Jr.HarshitBhinde（12）

8.KeyDetailsofMisconductFrankE.Walsh,Jr.received$20millioncommission.Walshalsoheldcontrollinginterestin2firmsthatreceived>$3.5millionforsupplyingaircraftandpilotservicestoTyco.StephenFossreceived$751,101forsupplyingaircraftandpilotservicestoTyco.LordMichaelAshcroftused$2.5millioninTycofundstopurchaseahome.CEOandCFOhadsold100milliondollarsworthofshares,andthenstatedtothepublicthattheystillownedthem.HarshitBhinde（12）

9.KeyDetailsofMisconductKozlowskireceived$81millioninunauthorizedbonuses.Tycoforgavea$19million,no-interestloantoKozlowski.Kozlowski’sincometaxesontheloanwaspaidbyTyco.KozlowskiusedTycotoavoidaround$1millionimporttaxesafterpurchasing$14millioninrareartwork.$2.1millionforthebirthdaypartyofKozlowskiswifewasbilledtoTyco.Kozlowskigranted$106milliontoemployeesthrough“loanforgiveness”andrelocationprograms.HarshitBhinde（12）

10.CriminalChargesonCEO&CFOInall38felonycounts.For:

Allegedlystealing$170millionfromTyco.Fraudulentlysellinganadditional$430millioninstock