The Korean subsidiary of Belgian speech recognition software
company Lernout & Hauspie fraudulently inflated sales figures
by 70% according to an investigation. The parent company is said to
be considering legal action against four Korean banks and some of
its own former executives.
An investigation was launched by PricewaterhouseCoopers into the
Korean business because revenues of $100 million were apparently
missing. It revealed that the subsidiary misrepresented its real
income between September 1999 and June 2000 through agreements with
customers and banks.
The parent company’s recently appointed chief executive,
Philippe Bodson, described the fraud as very sophisticated. His
appointment came after the company filed for bankruptcy protection
late last year when it admitted to accounting irregularities.
KPMG, the company’s auditors during the period of the fraud, are
suing the former management in Belgium, alleging that senior
executives deliberately misled the firm.
