Tyco chief quits amid scandal

The news increased investor fears over financial wrongdoing at the company, and Tyco stock plunged by 27% during the day's trading.

The company said on Monday that Mr Kozlowski was stepping down for "personal reasons", and later stressed that the probe was on a personal rather than a corporate level.

Mr Kozlowski, a former accountant, is to be replaced by Tyco board member and previous chief executive John Fort.

"During his tenure, Dennis Kozlowski grew Tyco to a $36bn dollar manufacturer and service provider operating in over 100 countries," Mr Fort said in a statement.

"We wish him well and thank him for his contributions."

Bowing out

Mr Kozlowski, who ran Tyco for nearly ten years, is credited with transforming the company from a small manufacturing firm into an industrial giant with interests ranging from fire alarms to medical equipment.

But his strategy of aggressive acquisition-led growth fell out of favour earlier this year amid mounting concerns that the company's complex structure could be masking its true financial position.

Tyco shares have lost about two thirds of their value since the beginning of the year.

The collapse late last year of US energy trading giant Enron, which concealed hefty debts using a series of external partnerships, has heightened investor concerns over the transparency of corporate earnings statements.

Investor confidence received a further dent in April when Tyco reported a hefty first-quarter loss, and scrapped plans to split into four separate companies.