CSC Attracts Buyer And Fraud Penalties
July 1, 2015
According to the Reuters article “Exclusive: CACI, Booz Allen, Leidos Eyes CSC’s Government Unit-Sources,” CACI International, Leidos Holdings, and Booz Allen Hamilton Holdings
have expressed interest in Computer Sciences Corp’s public sector division. There are not a lot of details about the possible transaction as it is still in the early stages, so everything is still hush-hush.
The possible acquisition came after the news that CSC will split into two divisions: one that serves US public sector clients and the other dedicated to global commercial and non-government clients. CSC has an estimated $4.1 billion in revenues and worth $9.6 billion, but CACI International, Leidos Holdings, and Booz Allen Hamilton might reconsider the sale or getting the price lowered after hearing this news: “Computer Sciences (CSC) To Pay $190M Penalty; SEC Charges Company And Former Executives With Accounting Fraud” from Street Insider. The Securities and Exchange Commission are charging CSC and former executives with a $190 million penalty for hiding financial information and problems resulting from the contract they had with their biggest client. CSC and the executives, of course, are contesting the charges.
“The SEC alleges that CSC’s accounting and disclosure fraud began after the company learned it would lose money on the NHS contract because it was unable to meet certain deadlines. To avoid the large hit to its earnings that CSC was required to record, Sutcliffe allegedly added items to CSC’s accounting models that artificially increased its profits but had no basis in reality. CSC, with Laphen’s approval, then continued to avoid the financial impact of its delays by basing its models on contract amendments it was proposing to the NHS rather than the actual contract. In reality, NHS officials repeatedly rejected CSC’s requests that the NHS pay the company higher prices for less work. By basing its models on the flailing proposals, CSC artificially avoided recording significant reductions in its earnings in 2010 and 2011.”
Oh boy! Is it a wise decision to buy a company that has a history of stealing money and hiding information? If the company’s root products and services are decent, the buyers might get it for a cheap price and recondition the company. Or it could lead to another disaster like HP and Autonomy.
Whitney Grace, July 1, 2015
Sponsored by ArnoldIT.com, publisher of the CyberOSINT monograph
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I have been persevering cloudhashing contracts for the past 8 months. I started with a contract I bought off genesis-mining and to be sensible about it they delivered without any problems, the biggest issue was making back the initial investment {let alone|least