Listen to this article
Turmoil at two of the world’s biggest computer makers deepened on Monday after Dell and Hewlett-Packard revealed they were the subject of separate investigations by US federal prosecutors.
Dell said it had received a subpoena from the US attorney in southern New York for documents related to financial statements dating back to 2002. The request from federal prosecutors followed a request last month for information by the Securities and Exchange Commission.
The announcement came as the company postponed a meeting with Wall Street analysts due on Wednesday. The meeting had already been rescheduled from April after the company said it needed more time to get to grips with stumbles that have led to a string of missed results this year.
Dell also said it would delay filing its quarterly 10-Q report with US regulators and would suspend its share buyback programme.
Andrew Neff, analyst at Bear Stearns, said: “This is the second meeting they’ve cancelled. What’s important is visibility and we’re not getting increased visibility, we’re getting less.”
Dell said investigations by the SEC and internal auditors had uncovered possible flaws in the company’s financial statements that may affect previous financial results. Dell’s shares fell up to 5 per cent before recovering to trade down 1 per cent at $21.44 by midday in New York.
Dell said it was working to file its official results for the August quarter “as soon as possible”.
A spokesman declined to elaborate on the nature of the suspected problems.
Dell’s reputation for outperformance has been battered this year by disappointing results and the recent recall of more than 4m faulty Sony batteries.
Shares in the company, which have fallen more than 60 per cent over the past 13 months.
Michael Dell, Dell’s founder and chairman, said the company was co-operating with investigators, and that it was working to solve “any and all questions . . . as quickly as possible”.
In August, Dell reported sales growth of just 5 per cent – below that of its resurgent rival, Hewlett-Packard, and well below Dell’s traditional track record of 15-20 per cent sales growth. The company is investing millions to combat perceptions of poor customer service and has announced plans to accelerate a planned $3bn cost-cutting drive.
Separately, Hewlett-Packard said it had been contacted by the US attorney in northern California regarding an investigation into boardroom leaks that has exposed a rift at the top.
Revelations that private investigators impersonated board members and journalists to obtain private telephone records have prompted calls for the resignation of Patricia Dunn, HP’s chairman. An emergency meeting convened to discuss the board’s response to the crisis was set to resume on Monday night after failing to reach a decision on Sunday.
Get alerts on Technology sector when a new story is published