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In the interest of speed and timeliness, this story is fed directly from the Associated Press newswire and may contain spelling or grammatical errors.
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Jeans maker Levi Strauss accused of inflating profits
Tuesday April 15, 2003
SAN 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.
(Copyright 2003 by The Associated Press. All Rights Reserved.)
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