International Rectifier Corp. (IR) announced that on July 1, 2007, the employment of Michael P. McGee, Executive Vice President and Chief Financial Officer, was terminated by the company’s Board of Directors. In addition, on July 1, 2007, Robert Grant, Executive Vice President, Global Sales and Marketing, resigned from the company.
The company has announced the appointment of Linda J. Pahl as acting Chief Financial Officer on an interim basis effective immediately. Alexander Lidow, the company’s Chief Executive Officer, will assume the duties of Executive Vice President, Global Sales and Marketing until a successor is appointed. Since joining the company in January 1999 as Director of Global Finance, Pahl has served the company in various financial roles, most recently as Vice President, Corporate Finance since April 2006. Prior to joining IR, Pahl was Vice President and Chief Financial Officer of Blue Cross of California at Wellpoint Health Networks, Inc.
On April 9, 2007, the company announced that it was conducting an internal investigation of accounting irregularities at an unnamed foreign subsidiary which included, among other things, premature revenue recognition of product sales. In May, a company filing with the U.S. Securities and Exchange Commission (SEC) signed by CFO McGee said that the probe had found that those faulty sales figures were the result of unsubstantiated orders being entered at the foreign subsidiary which resulted in the shipment of products and the recording of sales with "no obligation by customers to receive and pay for the products." According to that filing, the fraudulent practice included routing certain product shipments to warehouses not on the company’s logistical systems.
The investigation, which has thus far also determined that IR’s financial statements for the past six fiscal quarters cannot be relied upon, is currently ongoing. The probe has also delayed the filing of its most recent quarterly report to the SEC for the period ended March 31.
