Another major accounting scandal has cost a finance chief his job.

Felix Weber has resigned as CFO of Swiss-based Adecco SA, the temporary-employment giant, with Julio Arrieta departing as chief executive officer of Adecco Staffing North America.

The Adecco board has already launched a search for a permanent replacement for Weber. In the interim, Andres Cano, Adecco’s controller, will take over the CFO job.

Last Monday,Adecco dropped a bombshell when it announced that “possible accounting, control, and compliance issues” at its North American operations would stall the release of its financials.

The announcement brought fears that Adecco would become another Parmalat, whose rapid collapse has, for its part, raised comparisons with Enron.

In a Friday press release, Adecco acknowledged material weaknesses involving Adecco Staffing North America in IT system security; reconciliation of payroll bank accounts; application of accounts receivable; and revenue recognition.

The revenue-recognition woes included a lack of systematic documentation of agreed rates and hours; billing errors not identified and corrected in a timely way; and a lack of segregation of duties in the company’s branches that increased the likelihood of undetected errors.

Some of the problems “have already been corrected, and the balance are being actively addressed,” the company asserted. The company’s audit and finance committee has invoked “certain measures to help to identify any further weaknesses and permanently resolve them,” according to the release,

The aim of the measures is to probe Adecco’s accounting, control, and compliance issues in the United States and some other countries and investigate accusations made by whistleblowers here.

Last Monday, before his resignation, however, Weber told The New York Times that the company had overstated its woes in its statement of the delay in issuing its financials. “It doesn’t mean you have irregularities, but that the control environment is not so good,” Weber said, referring to statement. “It’s not a question of mistakes, but a question of judgment,” he added.

The controls on this side of the Atlantic leave something to be desired, according to Weber. “We do not feel comfortable that we can rely on the control environment in the U.S.A.,” he said.

The Adecco audit and finance Committee hired New York law firm Paul, Weiss, Rifkind, Wharton, and Garrison to conduct an investigation. In the release, the company pledged its “strong cooperation” with investigations being conducted by the Securities and Exchange Commission and the U.S. Attorney’s Office for the Southern District of New York.

In a related development, the Web site of London’s Evening Standard reported that Mike Sills, the Ernst & Young auditor of Adecco’s U.S. arm, had worked on the unit’s accounts for the firm’s former auditor, Arthur Andersen.

Adecco switched to E&Y from Andersen in 2001, around the time the Enron scandal began to unfold. Sills had been involved with auditing Adecco’s accounts at both firms, according to the Web site.

Ahold Finance Chief to Return Bonuses

Meanwhile, Dutch retailer Ahold, another European giant embroiled in an accounting scandal at its U.S. operations, said its former CFO, Michael Meurs, and its ex-CEO, Cees van der Hoeven, are willing to pay back past bonuses, according to Reuters.

Ahold spokesman Fritz Schmuhl would not, however, reveal to the news service the amounts the two former executives would give back. The pair, who resigned last February after the company admitted to accounting irregularities that eventually stretched to $1.27 billion. They are reportedly negotiating their exit packages through an arbitration committee.

The former executives’ pledges came one day after Ahold reportedly said current executive board members had agreed to give back any excess bonuses received over years when profits were overstated. The company had the board members to give back a part of the bonuses that were based on earnings figures for 2000 and 2001 that were later restated.

Boeing Capital Looks to Sell Financing Business

For some time now, the management of Boeing Capital Corp. has wanted to refocus the unit’s operations to provide more support for its parent, Boeing Co. In line with that goal, Boeing Capital executives took a step last week toward selling the non-airplane financing portion of the unit’s $12.2 billion portfolio.

The subsidiary’s managers have hired Credit Suisse First Boston to explore strategic options for Boeing Capital’s Commercial Financial Services group as a way of maximizing stakeholder value, they say. As of last September 30, that group had a portfolio of $2.3 billion, or 19 percent of Boeing Capital’s total. Most of the operations now based in Long Beach, California, also will be relocated to Renton, Washington, Boeing Capital’s headquarters.

For the most part, Boeing Capital arranges, structures, and provides financing for customers buying or leasing Boeing commercial aircraft. It also helps customers finance satellites, launch vehicles, and military aircraft through its Space and Defense Financial Services group. The part of the business Boeing Capital wants to unload or pare down involves financing for ships, drilling rigs, manufacturing machinery, and other heavy equipment.

The buildup of Boeing Capital began after Boeing acquired rival airliner maker and defense contractor McDonnell Douglas five years ago. The commercial portfolio of McDonnell Douglas, which had based its financing operations on the General Electric model, was aggressive in its financing efforts.

Recently Boeing’s white-hot competition with European rival Airbus Industries had been mirrored on the customer-financing front. In those battles, Airbus has been winning decisively by adopting more conservative lending practices at a time of global turmoil in the airline industry.

Before his ouster from the Boeing CFO slot in late November, Michael Sears had served as chairman of Boeing Capital. Sears’s replacement by new CFO James Bell took place in the wake of a scandal in which Sears was alleged to have improperly discussed a Boeing job offer with a Defense Department acquisitions official.

Shortly after Sears’s ouster Boeing CEO Phil Condit resigned. Sears has maintained that he did not act improperly.

In a statement last week, Boeing Capital president Walt Skowronski said that late last year the subsidiary began “refocusing our strategic direction toward supporting the operations of Boeing’s business units.” He said the commercial finance business had been ” solid contributor to Boeing Capital’s success” but wasn’t “at the core of our strategic focus going forward.”

Skowronski said there wasn’t a fixed timetable for a decision on what to do with the group, but that options included sale of the operation itself, sale of all or part of the portfolio, or a “phased wind-down” of the portfolio.

PBGC’s Losses Swell

The Pension Benefit Guaranty Corp.’s insurance program for single-employer plans racked up a net loss of $7.6 billion in 2003. That loss boosted PBGC’s year-end deficit to a record $11.2 billion — more than triple the then-record deficit with which it started the year.

The whopping shortfall of the program stemmed largely from a $5.4 billion loss spawned by completed and probable pension-plan terminations and a $4.3 billion loss stemming from declining interest rates. The program insures the pensions of 34.5 million Americans in 29,500 plans.

Partly offsetting the program’s losses were investment income of $3.3 billion premium income and premium income of $948 million. Overall, the single-employer program had $34 billion in assets to cover $45.3 billion in liabilities. The previous year, the program had $25.4 billion in assets to cover $29 billion in liabilities.

To be sure, the program has enough in its assets to pay worker and retiree benefits for a number of years, according to Steven Kandarian, the PBGC’s executive director. But “the growing gap between our assets and liabilities puts at risk the agency’s ability to continue to protect pensions in the future,” he says, advocating “comprehensive reforms to put pension plans on a path to better funding.”

Merck to Scrap Staggered Board

Merck & Co. became the latest instance of a growing trend among companies to eliminate staggered boards of directors.

In staggered boards, also known as classified boards, directors are elected to three-year terms, and about one-third of the full board stands for election each year.

Merck recommended that the company return to a yearly election of directors, which it had in place before 1985. Many investors and shareholder activists believe that annual elections of the full board make management more accountable.

Merck’s move seems to be partly response to non-binding shareholder resolutions calling for such a policy at the company’s annual meeting, according to Georgeson Shareholder, a provider of proxy-solicitation services. The resolutions were supported by about two-thirds of votes cast, and about 41 percent of shares outstanding,.

The drug maker had opposed the resolution, noting in its proxy that a staggered board provides continuity and stability and a focus on long-term goals.

Strong Names Former KPMG Partner

Former KPMG partner Phillip Peterson has been named president of Strong Mutual Funds, in charge of monitoring compliance at the embattled company.

Peterson will oversee the chief compliance officer and the implementation of former SEC chairman David Ruder’s recommendations. Ruder was hired in November when company founder Richard Strong resigned as chairman after being accused of improper trading in the company’s funds. Strong resigned in December as chairman and chief executive of parent company Strong Financial Corp. and later said he would divest himself of majority control of the company.

Short Takes

• Advanced Marketing Services will restate its financials by between $3 million and $9 million for the five-year period ended March 31, 2003. The restatement relates mainly to incorrect revenue recognition and reversal of accrued liabilities.

• A preliminary investigation by SureWest Communications preliminary investigation triggered by the Dec. 17 resignation of an employee in the company’s corporate finance group revealed cash management and investment irregularities and violations of the company’s investment policies. The probe found that about $2 million of the company’s assets remain outstanding without proper documentation.

• SureBeam Corp., a money-losing maker of food-irradiation systems that faced a slew of shareholder lawsuits and an informal SEC investigation in the wake of an accounting dispute, shut down on Friday, terminating its 77 employees.

• Investors added $396 million to U.S. junk bond mutual funds in the week ended January 14, the 11th straight week of inflows, according to AMG Data Services.