US software firm faces finance probe

Supply chain software maker i2 Technologies confirmed that the US Securities and Exchange Commission (SEC) is now probing its...

Supply chain software maker i2 Technologies confirmed that the US Securities and Exchange Commission (SEC) is now probing its finances.

The company said the SEC had opened an "informal inquiry" into its 2000 and 2001 financial reporting. According to a company spokeswoman, the SEC notified i2 in December that it was launching the investigation, which is still pending.

The SEC is following up on i2's own filing from last November in which i2 announced it was conducting a re-audit of its finances, which was prompted by two former i2 vice-presidents, Reagan Lancaster and Claudio Osorio, who had complained to the board of directors about a wide variety of improprieties.

The allegations included bad accounting and revenue-recognition procedures and inadequate financial controls. An internal audit committee found the allegations to be groundless, but i2 ordered its own external auditor, Deloitte & Touche, to re-audit the numbers as well.

I2 chief executive officer Sanjiv Sidhu downplayed the chances that the company's financial picture would be radically different.

"There is the possibility of readjustment to those numbers," he said, adding that the company would have presented its quarterly financial report yesterday "only if we had basic comfort in their stability".

Gartner analyst Karen Peterson was upbeat about i2's fortunes. "The SEC inquiry is informal, so there is no major investigation at this time."

"While this could defocus i2, it should have little effect on the user base. Actually, the news of a re-audit has masked the fact that i2 actually did better than expected last quarter, good news for users that are counting on i2 to be around for years to come."

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