Tyco International CEO Dennis Kozlowski Quits
The chairman, CEO and board member of Tyco International Ltd. (Pembroke, Bermuda), L. Dennis Kozlowski, has resigned amid mounting criticism of his corporate strategy and a report that he is under investigation for avoiding personal taxes. The company said in a statement that Kozlowski left for "personal reasons," and that former CEO John Fort, a current board member who headed the company from 1982 to 1992, would assume "primary executive responsibilities" for an interim period while a permanent successor to Kozlowski is sought.
The New York Times reported that Kozlowski is the focus of a criminal investigation into whether he avoided paying New York State sales taxes. The investigation is led by the office of state prosecutor Robert Morgenthau, the newspaper said, citing unnamed attorneys involved in the probe. Kozlowski has been under criticism since the beginning of the year, as a result of questions about Tyco's accounting, an earnings shortfall, debt worries, and several changes in corporate strategy. Kozlowski ran Tyco for nearly a decade and was instrumental in building it from a little-known company into an international conglomerate through hundreds of acquisitions.
"Mr. Kozlowski was probably not the right person to run this company going forward under the new strategy," said Steve Altman, a fixed-income analyst for Commerzbank Securities (New York). "Mr. Kozlowski was a deal maker and consolidator, and the new strategy of organically growing the company after the focus on acquisitions might be better suited for some other executive."