Tyco details illegal bonuses

The group has also alleged that the company's former chief executive Dennis Kozlowski, who was indicted last week, tried to hamper an investigation into the payments.

The findings were submitted to the Securities and Exchange Commission, following an investigation into fraud at the company, whose products range from security systems to medical devices.

They give details for the first time of the so-called "loans forgiveness programme", whereby staff were given large bonuses - without board approval - which in effect cancelled out earlier loans they had take from company's relocation programme.

Buying silence

The filing notes that Mr Kozlowski instructed personnel to pay $56m to 11 Tyco employees, claiming that the board had approved this.

A lawsuit filed by the company has alleged that the money was used in part to buy employees' silence over Mr Kozlowski's own excesses.

Payments were "used to induce their co-operation or buy their silence," said the company.

The company said: "This pattern of illegal and improper activity occurred for at least five years prior to June 3 2002, when former CEO Dennis Kozlowski resigned, and his activity was concealed from the board and its relevant committees."

Expensive tastes

According to the lawsuit, Mr Kozlowski invented a new bonus program for himself and select executives in November 2000, and that $50m was paid to the chief executive and the company's former chief financial officer Mark Scwartz.

Both were indicted last week for embezzling nearly $600m from the company.

Details of the former chief executive's personal expenses, using company money, included $97,000 on flowers, $2,900 for coat hangers, and $15,000 for dog umbrellas.

All change

Despite the costly fraud, Tyco has said it will not need to restate its financial results this year.

However, the scandal has cost the company dearly in terms of share value.

Tyco stock has slumped more than 70% in the last year on the New York stock exchange and fell another 33 cents to $16.21 as details of the fraud emerged on Tuesday.

The company has voted in favour of a board reshuffle which will result in the departure of nine of its 11 members.

Only chief executive Edward Breen and Jack Krol, former chairman at DuPont, are to be nominated and backed for re-election.