| In the interest of speed and timeliness, this story is fed directly from the Associated Press newswire and may contain spelling or grammatical errors. |
Jeans maker Levi Strauss accused of inflating profits
Tuesday April 15, 2003SAN FRANCISCO (AP) Levi Strauss & Co. defended the accuracy of its earnings Tuesday following a lawsuit by two former employees alleging the jeans maker inflated profits by claiming hundreds of millions of dollars in questionable income and tax deductions.
The defense came a day after two former Levi tax-department managers alleged they were fired in December for refusing to conceal financial information to outside auditors and the Internal Revenue Service.
``The claims these individuals have made are completely false,'' said Jeff Beckman, a spokesman for the San Francisco-based clothing company.
In a lawsuit filed in state court here late Monday, plaintiffs Robert Schmidt and Thomas Walsh allege privately held Levi Strauss should have reported a 2002 net operating loss of $336 million instead of posting a $25 million profit for the fiscal year ended Nov. 24.
Beckman said the pair were fired for personnel reasons ``completely unrelated'' to the allegations.
``When they brought their concerns to our attention, we launched a thorough investigation with outside counsel. That investigation found absolutely nothing to support the allegations,'' Beckman said.
In response to the suit, Clark Orsky, an analyst at KDP Investment Advisors Inc., downgraded Levi's corporate bonds from buy to hold status.
The case is Schmidt v. Levi Strauss, 03-419398.
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