Reputational Risk: Syncor under attack
When World Money Laundering Report: Online reported on the effects of an alleged foreign corrupt payment, few considered it a live issue. They should have watched more closely.
When World Money Laundering Report: Online reported (Reputational Risk: it exists (11 Nov 2002) on the effects of an alleged foreign corrupt payment, few considered it a live issue. They should have watched more closely.
Now things are getting heavy with the issue of a class action law suit against the company "specifically alleging that the Company's Chairman of the Board and the director of its Asian division made illegal payments to Syncor's overseas customers and that as a result, the Company's financials throughout the Class Period were artificially inflated. On November 6, 2002, the Company announced that it was conducting an internal investigation into these illegal payments and that the Justice Department and the Securities Exchange Commission had been contacted, and that its previously announced acquisition by Cardinal Health, Inc. was in doubt. As a result of these revelations, Syncor's stock price fell by over 40% and Nasdaq temporarily halted trading in the Company's stock," says a press release from the law firm that has commenced the action.
This Action is one of a series of such actions being launched by law firms in the US against companies where corporate governance issues are alleged to have affected the share price.
The Syncor announcement on the 6 November did not say that the "merger" was in doubt: the "merger" is a takeover and "Syncor noted, however, that Cardinal Health said it was reviewing the matter."
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