An internal probe by
found evidence of bribery and theft in the company's Asia-Pacific division, the company said Tuesday.
Over 30 months ended in April 2002, BJ's Asia-Pacific controller stole $9 million from the company, a sum he has since repaid, the company said. The misappropriation was possible because of problems that qualify as significant control deficiencies under accounting rules and will delay the filing of a year-end financial report with the
"Based on results of the investigation to date, the misappropriations were possible because of internal control operating deficiencies, including approval procedures that were not being followed, as required by company policy, with respect to cash disbursements," BJ said in a statement.
A lawyer hired by the company's audit committee also found evidence of up to $1.5 million in illegal payments to government officials over several years, BJ said. Evidence of the theft and bribery was discovered following "whistleblower" allegations, the company said. The problems were confined to the Asia-Pacific unit.
The company has requested a 15-day extension of the deadline to file its annual report on form 10-K for the year ended Sept. 30, 2004. The new deadline will be Dec. 29.
BJ originally reported its fourth quarter on Nov. 2, saying earnings rose 42% from a year ago to $85.6 million, or 52 cents a share. The repaid $9 million will be booked as a gain in the current quarter, with prior-year periods already reflecting an "expense" where the funds were stolen.
"The company has expanded the scope of its review in order to investigate whether additional funds were misappropriated or whether other inappropriate actions occurred," BJ said. "As the company continues its investigation, further adjustments may be recorded in the consolidated statement of operations, but are not believed to be material at this time."