Bristol-Myers Squibb is edging ever closer to settling a Department of Justice investigation into its inventory and accounting practices, according to Industry reports, with the US firm widely expected to agree to stump up almost $300 million dollars.
A source close to the situation told Reuters that news of the latest settlement could come early this week. The company is not expected to be criminally indicted under the settlement if it agrees to certain terms, the source reportedly added. The agreement, known as a “deferred prosecution”, effectively means that charges are likely to be dropped after two years, but B-MS will no doubt be required to put more stringent controls in place to monitor its ethics and corporate disclosure policies. B-MS’ chairman and chief executive, Peter Dolan, is also expected to have to relinquish part of the dual role he currently holds.
The investigation into B-MS’ inventory practices began back in 2002 when the company admitted to excessive wholesaler stocking of its products, making sales appear higher than they actually were [[05/04/02a]]. The company was subsequently forced to restate more than $2 billion worth of earnings accrued over the two-year period when it was accused of inflating its earnings performance in this manner [[25/10/02a]].
Last week, B-MS announced that it had settled a related case for some $89 million [[02/06/05a]]. At the time, the firm said that it would further boosting its litigation reserves this quarter to cover future liability. The fund has already had an extra $110 million added to its coffers this year [[10/05/05b]].