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DPL Exec Says He Turned Over All Files

May 12, 2004

DAYTON, Ohio (AP) _ The chairman of DPL Inc. says he turned over all relevant information for a review of top management by investigators, who said they found hundreds of files were erased from his personal laptop computer.

About 740 files were erased from Peter Forster’s laptop days after investigators asked managers to keep documents related to their review of the utility company’s finances and executives’ compensation, the investigation found.

Forster said in a statement issued late Tuesday that his computer contained some personal materials unrelated to DPL. He said his lawyer reviewed all of the files, printed those related to DPL and gave them to investigators.

Files were deleted in April using ``scrubbing″ software, according to a report by Taft, Stettinius & Hollister, a Cincinnati law firm DPL hired to conduct the review.

The firm’s 58-page report to DPL’s board, obtained first by the Dayton Daily News, did not make clear who erased the material.

DPL is the parent company of Dayton Power and Light Co., which serves about 500,000 customers in western Ohio. DPL had 2003 sales of $1.19 billion.

DPL’s audit committee hired Taft on March 17 to investigate concerns raised in a memo by DPL Controller Daniel Thobe after he declined to sign off on DPL’s 2003 annual report.

The investigators’ report said DPL should have reported to the Securities and Exchange Commission a business deal between DPL and a private company owned by Forster and chief financial officer Caroline Muhlenkamp that ensured the pair would continue to be paid if DPL was sold.

Forster said DPL’s board approved the business deal and that he doesn’t believe it was necessary to disclose it to the SEC.

The report also said that an analysis of reported personal use of corporate aircraft by Forster, Muhlenkamp and chief executive Stephen F. Koziar Jr. showed they could have unreported taxable income totaling $335,000 from 2001-2003.

Forster said he is entitled to travel expenses and can document that the trips were business-related.

The report also questions whether Forster and Koziar gave DPL board members enough information when they recommended a change in DPL’s deferred-compensation plan for top management that allowed Forster, Muhlenkamp and Koziar to receive $33 million in cash in December, years ahead of schedule. Forster said he provided more than enough information to the board.

Muhlenkamp said Tuesday in a statement that she is submitting information on business expenses and travel to the audit committee and expects the issues to be resolved. A message seeking comment also was left for Koziar.

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On the Net:

DPL: http://www.dplinc.com

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