Kmart Opens Probe of Former Executives

According to a published report, the inquiry is targeting Charles Conaway and others.
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Kmart's

(KM)

board is looking into some of the retailer's former senior executives, including the previous chief executive, Charles Conaway, for possible wrongdoing, according to a published report.

Dow Jones Newswires

reported that Kmart has suspended severance payments for the senior executives during the review. The review, which deals with "stewardship" issues, is separate from a company investigation into accounting practices, the report quoted a Kmart attorney as saying.

According to the report, the probe resulted from an

anonymous letter the company received days after it filed for bankruptcy in January. The board's audit and compensation committees are handling the inquiry, according to the report.

The company said Wednesday that it is delaying the release of its annual report because it may have to restate its 2001 financials. Kmart said the delay would allow new management to review accounting policies including the questions of "vendor allowances and rebates and general liability reserves."

The

Securities and Exchange Commission

opened a probe of Kmart's accounting in January just weeks after the big discount retailer sought Chapter 11 protection from creditors.

Shares of Kmart ended Thursday at $1.19, down 6 cents on the day.