Schering-Plough chief executive Richard Jay Kogan stepped down as chairman and will retire "by mutual agreement" with the company by April. Board member Richard de Jongh Osborne, 68, has been named chairman and will oversee the effort to find a CEO. Schering-Plough is struggling to fix production flaws after paying a record $500 million fine to the government in May. The company is also one of several drugmakers facing Justice Department investigations for pricing practices, and the Securities and Exchange Commission is looking into comments Kogan made to small groups of investors before the company cut a profit forecast.
Adelphia Official to Plead Guilty
Adelphia Communications' former vice president of finance was scheduled to plead guilty today in connection with alleged corporate looting at the troubled cable television company, according to court records. James Brown was indicted in September on charges of securities fraud, wire fraud and bank fraud, and he pleaded not guilty. It was not immediately clear whether Brown had agreed to cooperate against the company's founder, John Rigas, and his sons, Michael and Timothy Rigas, who are charged with running a scheme to siphon millions of dollars from the company for their own use.
The Securities and Exchange Commission refiled charges that Ernst & Young violated auditor-independence rules, after the first case was dismissed because only one commissioner voted. The accounting firm was charged for a second time with compromising the independence of its audits of PeopleSoft by entering a business venture with the software company. Ernst plans to contest the charges. Separately, a judge ruled that Robert Herdman, who just quit as chief accountant for the SEC, must give pretrial testimony about Ernst & Young's role in an accounting scandal at Cendant. Herdman worked at Ernst for 28 years before taking the SEC job.
Simon Property Group, the largest mall owner, made an unsolicited bid to buy rival Taubman Centers for about $3.8 billion, setting the stage for a battle between two pioneering families in the retail development business.
IBM was selected over Electronic Data Systems to negotiate with J.P. Morgan Chase for a computer services contract that is reportedly worth more than $5 billion.The services contract may include running J.P. Morgan data centers, an IBM spokesman said.
Deborah Willingham, Microsoft's highest-ranking female executive, will retire in February to pursue personal interests. Willingham, senior vice president for human resources, has been at Microsoft for almost a decade.
Walt Disney Co. chief executive Michael Eisner said he does not plan to designate a potential successor anytime soon, despite reported pressure to do so. "When you announce a successor, you become a lame duck," Eisner told a gathering of media executives, investment advisers and reporters in New York. Eisner, 60, said a successor should be named when a chief executive plans to step down in six to nine months, not a longer period such as "three years out."
Interpublic Group, the world's second-largest advertising-agency owner, increased the amount of pretax profit it will restate, to $181.3 million over five years, almost three times the initial figure it stated in August. The completed restatement covers 1997 through 2001, Interpublic Chief Financial Officer Sean Orr said on a conference call, mainly to reflect billings between different units that were improperly expensed. Orr said he's "confident the review process is complete."
Arthur Andersen, the accounting firm felled by the Enron scandal, will get about $190 million under an agreement to terminate long-term contracts with Accenture, its former consulting arm. The contracts, signed in 2000, called for Accenture to purchase services from Arthur Andersen over six years at premium rates. The companies said last month that they will end the contracts, citing Arthur Andersen's circumstances.
The interest rate on four-week Treasury bills fell to 1.19 percent, its lowest level since the government started selling the securities in July 2001. The rate was 1.43 percent a week earlier.
Media mogul Barry Diller is expanding his duties at Vivendi Universal, helping to oversee the company's video-game and music divisions, in addition to his role managing Universal's film, theme-park and television properties, people familiar with the situation said. Diller has been named co-chairman and chief executive of a new management division to be called Universal Entertainment, one source said, and will share power with Vivendi Universal Chairman Jean-Rene Fourtou.
Lockheed Martin offered to provide $8 billion of investments to persuade Poland to order 48 F-16 fighter planes. Bethesda-based Lockheed, which made the highest bid, is competing against Gripen International and Dassault Aviation. Bidders are committed to buying Polish goods and services at least equal to the value of the sale.
Allegheny Energy, the Hagerstown, Md.-based energy company, will suspend construction of a $400 million Indiana power plant that is 38 percent complete because of low electricity prices and a weak economy.
Federated Department Stores, citing lower markdowns and reduced expenses, said third-quarter profit soared to $106 million, compared with $3 million a year ago. The results included a special after-tax gain of $31 million.
Wal-Mart Stores reported a 23 percent increase in third-quarter profits, to $1.82 billion. Revenue rose to $59.33 billion from $53.19 billion. Same-store sales were up 3.5 percent.
Compiled from reports by the Associated Press, Bloomberg News, Dow Jones News Service and Washington Post staff writers