Global Business

SEC Officially Investigating Goodyear

The tire maker is also expanding its own probe from its European operations to other overseas business segments.
Stephen TaubFebruary 13, 2004

The Securities and Exchange Commission has upgraded its informal inquiry of Goodyear Tire & Rubber’s restatement of five-plus years of results to a formal order of investigation, according to the company.

The probe stems from the company’s Oct. 22 announcement on that it would restate its results for the five years ended 2002 and for the first and second quarters of 2003. As a result of the restatement, 36 lawsuits have been filed against the company and some of its current and former directors and officers, Goodyear said in an 8-K filed Wednesday.

Goodyear said it is cooperating fully with the SEC and providing them information. As it normally does, the SEC hasn’t told Goodyear when the investigation may be concluded.

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Further, Goodyear has expanded its internal probe into potential improper accounting in the company’s European Union business segment to other overseas locations, the tire maker said in the 8-K. Company officials are unsure whether that investigation will have a material impact on the company’s financial statements.

Goodyear, however, did warn that the internal investigation is likely to cause delays in the completion of audited financial statements and the filing of its 2003 annual report. It added there is a substantial probability that the annual report will not be filed by the March 15, 2004 due date or within the 15-day period by which the due date may be extended.

Depending on the length of the delay and the Goodyear’s ability to get waivers from creditors, the lag could cause the company to lose its borrowing rights under certain debt facilities. The company could also default under certain debt instruments and other sources of credit could be affected, Goodyear warned.

In December, the company restated results for the second time in three months as a result of the “improper accounting issues” in Europe.