Adecco, the world's largest employment-services group, said on Friday that its top financial executive and the head of its US operations had resigned, days after the Swiss company revealed accounting problems at its North American unit.
Felix Weber, the company's chief financial officer, said in a telephone interview on Friday that he took full responsibility for Adecco's accounting problems. He said his decision to tender his resignation at an extraordinary board meeting on Thursday had been a personal one.
Julio Arrieta also resigned as chief executive of Adecco's US operations, the company's board said in a statement.
Adecco's shares plunged 35 percent on Monday when the Swiss company said its earnings report for last year would be delayed while a new audit was performed. The US Securities and Exchange Commission and the US Attorney's office in New York began immediate investigations.
With no clear indication of the extent of Adecco's problems, panicky investors feared a major accounting scandal on the scale of Enron or Parmalat. By Friday, the company had not released any figure on the extent of the flawed accounting.
Adecco's directors apologized for creating "insecurity among investors and the general public," saying their public statements had been limited by legal restrictions. By Friday, the stock was down 38 percent from the previous Friday.
The directors said they were fully cooperating with the company's auditor, Ernst & Young, which is conducting a new audit, and with regulators to get to the bottom of what they called "certain material weaknesses."
After Thursday's board meet-ing, the company's chairman, John Bowmer, stepped in as executive chairman to take charge of internal investigations, while Jerome Caille, the chief executive, assumed responsibility for day-to-day operations.
The problems found so far were in the company's North American operations, a unit that covers its business in the US, Canada and Mexico. In 2000, Adecco acquired 500 Olsten branches in the US for US$1.6 billion in cash and stock, and operates 100 branches under that name in the US
"The chief focus of these measures is to investigate accounting, control and compliance issues in the US and in certain other countries, as well as to investigate accusations made by 'whistle-blowers' in the US," the board's statement said.
The company did not identify who had alerted it to the problems. Bowmer, in answer to questions, declined to say whether negligence or fraud was suspected.
Weber declined to say whether he had been pressured to resign.
"I offered the board my resignation because I take the ultimate responsibility when there are control issues," he said.
"In addition to that, my comments led to certain confusion in the market with consequences for the company," Weber added, referring to his remarks published Tuesday in The New York Times.
In the article, Weber said responsibility for the difficulties was shared by all, "from the CEO to regional management."
"I take all responsibility as CFO," he said on Friday, "and I think it's the right thing to do if something like this happens, that the top people take the consequences." He declined to say whether he thought others in management, like Caille, should also resign.
Analysts said the resignations were no surprise, but that the good news was the disclosure that Adecco's problems were largely confined to North America.
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