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Last Updated: Monday, 2 June, 2003, 22:23 GMT 23:23 UK
IBM in SEC probe

IBM, the world's largest computer company, has admitted its accounting practise is being investigated by the US Securities and Exchange Commission (SEC).

The group said the probe related to the way it had accounted for revenue in 2000 and 2001.

IBM shares fell more than $2 to $85.10 in after hours trading after news of the investigation emerged.

"This is big news because it goes back to the old accounting scandals that have shaken investor confidence, starting with Enron," said Burton Schlichter, a senior market analyst with Lind-Waldock & Co.

Enough information?

IBM issued a statement saying it believed the investigation had arisen from a separate SEC investigation into a customer of IBM's Retail Store Solutions unit.

The Retail Solutions unit is part of IBM's personal systems division but IBM does not break out the revenue for that unit.

A spokesman for the company, Bill Hughes, said; "The SEC is seeking information relating to revenue recognition in 2000 and 2001 primarily concerning certain customer transactions."

Mr Hughes would not name the customer in question.

IBM's accounting practice has come into question in recent years as investors criticised its lack of transparency.

The company responded last year by increasing the amount of information it provided for investors.

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