Marvell Clears Itself of Fraud, Finds Revenue Timing Issueby
Marvell Technology Group Ltd., a chipmaker that last year announced an internal investigation into its accounting and internal controls, said its board’s audit committee found no evidence of fraud, but concluded that some revenue had been recognized prematurely.
The investigation found that the company had issues with the “tone at the top,” which included pressure put on sales and financial staff to meet revenue targets and the failure to raise concerns about Chief Executive Officer Sehat Sutardja’s assertion of personal ownership of patents, the company said Tuesday in a statement.
Marvell, which last month announced it had agreed to pay $750 million to end a patent infringement dispute with Carnegie Mellon University, is also the subject of activist investor interest after Starboard Value took a 6.7 percent stake in the chipmaker.
“The audit committee did identify a limited number of transactions that had the effect of recognizing revenue prematurely, generally involving the extension of payment terms beyond Marvell’s customary terms,” the company said in the statement. “Marvell is evaluating whether any of these errors were material to any previously reported financial period.”
Marvell began the investigation last year and its board audit committee hired external forensic accountants to examine its internal practices. In October, PricewaterhouseCoopers LLP resigned as its external accounting firm.
Two of Marvell’s top 10 largest shareholders are Sutardja, who is also the company’s founder, and his brother, Pantas Sutardja, according to data compiled by Bloomberg. Weili Dai, Sehat Sutardja’s wife, is the company’s president.
Marvell shares rose 2.1 percent to $9.75 at the close in New York. They plummeted 39 percent in 2015.