FORT LAUDERDALE, FLA. (06/29/2000) - The U.S. Securities and Exchange Commission (SEC) will investigate Xerox Corp.'s business in Mexico, the company announced Thursday afternoon as U.S. financial markets closed. The news is the latest in a string of setbacks for the struggling U.S. maker of printers, copiers and document management software.
Xerox plans to "cooperate fully" with the SEC investigation, which will focus on "accounting issues related to the company's Mexico business," Xerox said in a brief statement.
An SEC official didn't confirm nor deny that an investigation is being launched and declined to comment on the matter, which he said is the agency's standard policy.
Xerox officials didn't return calls immediately seeking comment.
Xerox warned on June 16 in an SEC filing that second-quarter earnings would fall below expectations in part due "to unexpected provisions in its Mexico business." The filing didn't elaborate on the problems the company faces in Mexico.
Xerox has several offices and one manufacturing plant in Mexico, according to information on the company's Web site. Mexico is Latin America's second-largest IT market.
It hasn't been a good year for Xerox so far. The company announced in March that it would cut 5,200 jobs, a 5.5 percent workforce reduction, as part of a restructuring exercise first mentioned in December of last year. [See "Xerox to Cut 5,200 Jobs in Global Restructuring," March 31.] Then, last month Xerox Chief Executive Officer and President Rick Thoman resigned. [See "UPDATE: Xerox CEO, President Thoman Resigns," May 11.]For fiscal 1999 as a whole, Xerox reported net income of US$1.4 billion on revenue of $19.2 billion.
Xerox, based in Stamford, Connecticut, can be reached at http://www.xerox.com/.