OfficeMax CEO Resigns, Six Others Fired in Accounting Scandal

The nation's No.3 office supply store chain has announced the resignation of its chief financial officer and termination of six other employees after an internal investigation yielded accounting irregularities, the Associated Press reported.

OfficeMax Inc. announced the resignation of CEO Christopher C. Milliken and said George J. Harad, the company's executive chairman, would replace him on an interim basis.

The Itasca, IL, company said it would begin a search for a permanent CEO, a task that could be hampered by a simultaneous chief executive search by No. 2 office retailer OfficeDepot.

Last month, OfficeMax's Chief Financial Officer Brian Anderson resigned, and the company said its fourth-quarter earnings report would be delayed because of accounting problems.

As a result of the internal investigation into its accounting, OfficeMax said it had overstated fiscal year 2004 first-quarter operating income by $5 million to $10 million by not reporting some rebates and payments to vendors, the AP reported.

Milliken's resignation was a "mutual decision" between the CEO and the board of directors related to the company's operations and financial situation, spokesman Bill Bonner said and the Associated Press reported. He declined to elaborate. "We are taking steps to strengthen the OfficeMax management team, and fully expect to demonstrate the value inherent in this business for our shareholders," Harad said in a statement Monday.

The six employees were fired when it was discovered that some had fabricated supporting documentation for nearly $3.3 million in claims billed to a supplier of its retail business, the AP reported.

The company plans to report fourth-quarter and full-year results on March 14, anticipating 2004 operating income to be $125 million to $135 million.

Analyst Anthony Chukumba of Chicago-based Morningstar told the AP that Milliken's departure was probably inevitable in light of the company's recent problems. "At the end of the day, when you have a scandal like this, the CEO has got to go," he said.

You may like these other stories...

Scott London, a former senior audit partner at KPMG LLP, was sentenced to 14 months in federal prison on Thursday for providing inside information about several of his firm’s clients to a friend, who used it to make at...
By Teresa Ambord, Correspondent You'd think a man who masterminded the biggest Ponzi scheme in history would have ice water in his veins. The name Bernard Madoff has become synonymous with investment scams after his...
By Ken Berry In a new case decided by the US Supreme Court, the remnants of a tax shelter partially constructed by wily Texas billionaire Billy Joe McCombs - known informally as "Red" - collapsed like a house...

Upcoming CPE Webinars

Jul 16
Hand off work to others with finesse and success. Kristen Rampe, CPA will share how to ensure delegated work is properly handled from start to finish in this content-rich one hour webinar.
Jul 17
This webcast will cover the preparation of the statement of cash flows and focus on accounting and disclosure policies for other important issues described below.
Jul 23
We can’t deny a great divide exists between the expectations and workplace needs of Baby Boomers and Millennials. To create thriving organizational performance, we need to shift the way in which we groom future leaders.
Jul 24
In this presentation Excel expert David Ringstrom, CPA revisits the Excel feature you should be using, but probably aren't. The Table feature offers the ability to both boost the integrity of your spreadsheets, but reduce maintenance as well.