Take-Two Interactive Software (TTWO - Get Report) said it will need to restate several years of historical financials to record charges for compensation expenses associated with past stock option grants.
As a result, the video-game maker, known for the Grand Theft Auto franchise, said its financial statements from 1997 through April 30 this year should no longer be relied upon.
The restatement plan was laid out after a special committee of Take-Two's board reported the preliminary findings of a review of the company's option awards. The committee had been established to conduct an investigation into the timing of Take-Two's option grants.
Take-Two said the committee "found that there were improprieties in the process of granting and documenting stock options and that incorrect measurement dates for certain stock option grants were used for financial accounting purposes."The probe didn't find misconduct by the company's current management, including Paul Eibeler, Take-Two's chief executive and president, and Karl Winters, its chief financial officer. The company said it hasn't yet determined the amount of the charges it will record. Dozens of companies have been probing their past financials to determine if any option awards were backdated. A number of firms have said they would have to restate some of their previously reported numbers.