Up Front: FUNNY BUSINESS
BAUSCH & LOMB ZOOMS IN ON ITSELF
BAUSCH & LOMB'S OUTSIDE directors have hired former Securities & Exchange Commission enforcement chief Gary Lynch to probe accounting shenanigans at the optical giant, BUSINESS WEEK has learned. Lynch, 45, gained renown for his sleuth work in many Wall Street scandals of the 1980s, including the Michael Milken affair.
Now a private attorney specializing in internal inquiries, Lynch drew flak last year by conducting a probe of the Kidder Peabody bond- trading scandal while also defending Kidder in a claim related to the case. Still widely respected, Lynch and two associates have already started looking into charges raised by BW that top B&L managers inflated sales by faking invoices and telling distributors they didn't have to pay for goods. His main task: to determine the culpability, if any, of B&L CEO Daniel Gill, who blames the problem on overzealous execs who have since left.
Meanwhile, Gill is getting knocked for ongoing profit woes. B&L announced Dec. 5 that fourth-quarter earnings of 40 cents to 50 cents per share would fall at least 35% below already reduced expectations. Next day, Gill fielded hostile questions from an overflow crowd of analysts and investors in New York. Gill's offer to cut his 1995 pay by 10% did not seem to assuage many.EDITED BY LARRY LIGHT, WITH PAUL ENG By Mark Maremont