Waste-management company Safety-Kleen (SK) said late Monday that the preliminary results of an internal investigation into its accounting practices indicated there were irregularities affecting the firm's results dating back to fiscal 1998. Safety-Kleen said it was not able to quantify the extent of the irregularities.
The company also added that it was fully cooperating with a separate formal investigation begun by the
Securities and Exchange Commission
In addition, the Columbia, S.C.-based company said it did not have enough cash to finance its current operations without selling assets or taking short-term loans. Safety-Kleen, however, is in default under certain financial covenants in its credit agreements. The company is not able to borrow under those agreements without a waiver of such defaults from the lenders.
Safety-Kleen ended the day down 5/16, or 15.6%, at 1 11/16, after trading was halted Monday afternoon. Shares of
, the Canadian transportation company that owns a 44% stake in Safety-Kleen, were also halted. Laidlaw ended the day down 1/16, or 3%, at 2.
told Safety-Kleen that it was withdrawing its previously issued financial statements for the 1997, 1998 and 1999 fiscal years. For its part, Safety-Kleen suspected three top executives last week as it began its investigation.
Several class-action lawsuits have been filed against Safety-Kleen, contending that the company used materially false statements and overstated its revenue, income and earnings.