In former Delphi CEO J.T. Battenberg III’s recent testimony, he denies receiving a voicemail from its top lawyer in 2000 on concerns about how Delphi planned to report the details of a large payment to General Motors to investors.
In Battenberg’s civil fraud trial last month, Logan Robinson, Delphi’s general counsel at the time, told jurors that he left a voicemail warning his boss not to cover up details of a $237 million payment to GM that Delphi was about to make. The Securities and Exchange Commission’s case against Battenberg is based on how Delphi booked and disclosed that payment.
At the witness stand, Battenberg said that he typically gets up to 200 voicemails a week and that he doesn’t remember getting one that had contained this warning.
Robinson’s testimony is regarded as the strongest so far to suggest that Delphi’s top executives were concerned about how the supplier planned to account for and reveal the payment to GM.
The SEC asserts that the entire $237 million was meant to compensate GM for defective parts Delphi had given to GM before it was spun off in 1999.
The SEC believes that Delphi intentionally covered up most of it as pension-related costs linked to the spinoff, artificially inflating its profits. [via autonews - sub. required]