Acer Finds Irregularities, Stocks Plummet And CEO Forfeits Pay

Acer has discovered channel inventory abnormalities for its EMEA (Europe, Middle East and Africa) operations.

To fix the irregularities, the company plans to provide channels with a $150 million sales allowance in order to clear the channels; the $150 million will be written off as operating losses.

The announcement caused the company’s shares in Taiwan share market to fall by 7 percent, the maximum amount by which a share can fall before trading temporarily ceases.

The internal audit conducted by Acer found abnormalities in channel inventories in freight forwarders’ warehouses and accounts receivable from channels in Spain.

“After thorough evaluation, the management team has recommended to the board of directors to take one-time action by providing sales allowance and working together with the channels to solve the current issue, resulting in US$150 million write-off in operation loss,” the company said in a press release on Vadvert UK.

“Acer does expect, however, to put business back on the right track soon,” the company added.

The company has also decided to remove 300 employees from its EMEA operations in a bid to streamline operations.

Meanwhile, Acer Chairman and CEO J.T. Wang has taken full responsibility for the operating loss and has decided to forgo his entire remuneration as chairman of the board as well as his 2010 employee bonus.