The Wall Street Journal reports that GM’s handling of two transactions in 2000 and 2001 with Delphi Corp. its former parts subsidiary, raises questions about the carmaker’s accounting and disclosure practices.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Delphi is already under investigation by the Securities and Exchange Commission over accounting issues, including the deals with GM, which spun off Delphi in 1999.
According to the WSJ report, the first transaction in question, in the third quarter of 2000, involved a payment of $237 million from Delphi to GM that comprised 19 percent of GM’s pretax profit for that quarter, and helped it beat earnings estimates. At the time GM did not disclose the impact of the payment to investors, the Journal said.
The second transaction was in late 2001, when GM credited $85 million to Delphi. In that case, GM accounted for the credit in a way that did not reduce its reported income, the paper said.
GM spokesman Jerry Dubrowski told the Wall Street Journal that GM accounted for its side of both transactions properly and provided proper disclosure.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData
