* Accounting issues raised over UK contract, Nordic region
* Company reserved for settlement in last fiscal year
May 16 Computer Sciences Corp agreed to
pay $97.5 million to settle a lawsuit accusing it of defrauding
shareholders by hiding a variety of accounting problems.
The settlement averts a trial that had been scheduled to
begin on May 21, and was disclosed on Wednesday both in Computer
Sciences' annual report and in papers filed with the U.S.
district court in Alexandria, Virginia.
Computer Sciences is based in nearby Falls Church, Virginia,
and the technology services company said it reserved for the
settlement in its fiscal year ended March 29. Its market value
on Wednesday was roughly $6.7 billion.
Neither the company nor a lawyer for the shareholders
immediately responded on Thursday to requests for comment.
Shareholders led by the Ontario Teachers' Pension Plan Board
accused the company of hiding problems related to a $5.4 billion
contract with Britain's National Health Service, including
problems with a software system known as Lorenzo that was
intended to help digitize medical records.
Computer Sciences took a roughly $1.5 billion write-off in
late 2011 related to the NHS contract.
Shareholders also accused the company of maintaining
inadequate controls over, and relying on, inflated revenue data
from its Nordic region, leading to multiple charges. A federal
judge dismissed claims related to that region in August.
Computer Sciences said on Wednesday that it continues to
cooperate with a formal U.S. Securities and Exchange Commission
probe into the Nordic region issues, and also with that
regulator's investigation into the NHS contract.
The settlement requires court approval, and a hearing to
consider preliminary approval has been set for May 24.
The lawsuit had sought class-action status on behalf of
shareholders between Aug. 5, 2008 and Aug. 9, 2011.
Computer Sciences' share price fell by roughly half during
the final six months of that period, reducing the company's
market value by more than $4 billion.
In morning trading, Computer Sciences shares were down
$1.41, or 3.2 percent, at $43.30 on the New York Stock Exchange.
The case is In re: Computer Sciences Corp Securities
Litigation, U.S. District Court, Eastern District of Virginia,