Michael Dell, CEO and founder of computer maker Dell, is at the centre of a US Securities and Exchange Commission anticompetition probe, it emerged this week.
The SEC has alleged that the Texan billionaire broke "negligence-based fraud provisions" of US in his company’s dealing with chipmaker Intel. It is thought that these allegations are linked to ongoing investigation into Intel, which allegedly broke competition laws by offering PC makers substantial cash rebates for using its chips.
Dell Inc. said that it would be downwardly revising its most recent quarterly net income by $100 million to accommodate any potential settlement with the commission.
The company’s board moved to allay fears that CEO Dell may have to step down as a result of the SEC investigation. "We are hopeful that these settlement discussions will achieve a comprehensive resolution in the near future," said Sam Nunn, presiding director of the Dell board. He added that the company’s CEO "continues to have our complete confidence and support".
A law suit filed against Intel at a US court in late 2009 alleged that the semiconductor firm had paid approximately $6 billion to Dell Inc. in the form of purchase rebates between 2002 and 2007. In December of the same year, Intel paid $1.25 billion to rival chip vendor AMD in order to settle a competition dispute.
The SEC launced an investigation into Dell Inc.’s accounting practices in 2006. A subsequent internal probe found that Dell executives had manipulated company accounts in order to meet business performance targets.