Lernout & Hauspie Founders Step Down
BRUSSELS, Belgium (AP) _ The founders of embattled Lernout & Hauspie Speech Technology NV stepped down Thursday from day-to-day management of the company.
Pol Hauspie and Jo Lernout, the founders of the Ieper, Belgium-based company that is considered a pioneer in speech technology, are stepping away from their positions as co-chairmen and managing directors, but are remaining on the board, the company said.
John Duerden, who became chief executive in August, will become the sole managing director.
``L&H faces different challenges today as a global leader in speech and language technologies than it did in its entrepreneurial stage, and we are certain that these management changes are appropriate for a company of this size and stage of development,″ founders Lernout and Hauspie said in a joint statement.
The company also announced it would have to restate 1998 and 1999 results because of errors and irregularities found by an audit inquiry. The company has said it is cooperating with investigators, a point reiterated by Duerden.
``In light of the ongoing investigation by the U.S. Securities and Exchange Commission, I remain committed to a policy of full and complete transparency and cooperation,″ said Duerden.
The company, which also has headquarters in Burlington, Mass., makes products that, among other things, allow people to use their normal speaking voice to dictate documents and control their computers. It also makes translation software and software that reads text documents on a computer out loud.
The Wall Street Journal has reported that the SEC is seeking information about a range of matters, including recent large increases in the company’s sales in Korea and Singapore.
Analysts welcomed the news because Hauspie and Lernout have been linked to a great many problems besetting the company and they expect Duerden might be able to clear away some of the fog surrounding the sales questions.
``It’s good because they want to regain credibility and create a new company and a new image,″ said Patrick Michielsen, an analyst with Fortis Bank in Brussels.
L&H also issued its second profit warning in a month on third-quarter results, saying revenue will be at least $40 million below the previously expected range of $165 million to $185 million. That itself was a downgrade from a previous forecast of $220 million.
Investors punished L&H, sending shares down 41 percent to $3.70 on Europe’s Easdaq at one point before they recovered slightly in the afternoon to trade at about $4.30, down 31 percent.
Shares traded on the Nasdaq Stock Market were halted at $6.22.
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