Parker Auto Sales Overstated in ‘90, SEC Told

Parker Automotive Corp., a troubled maker of engine-cleaning equipment, told the federal Securities and Exchange Commission on Friday that an accountant hired by the company’s new managers found Parker had significantly overstated its sales and understated its losses during three quarters last year.

The company has been the object of a power struggle between its flamboyant former chairman, Michael E. Parker, who was arrested in February and charged with defrauding a Beverly Hills thrift of millions of dollars, and Connie C. Armstrong Jr., a brash Texan who took control of the company shortly before Parker was indicted.

Armstrong was subsequently profiled in a front-page Wall Street Journal article detailing a Federal Express lawsuit that accuses him of diverting millions of dollars from Federal Express through a San Francisco company he owns.

Michael Parker agreed to sign over control of his stock in Parker Automotive to Armstrong in return for an infusion of cash into the struggling company. After publication of the newspaper article, however, Parker--who is out of jail on bail--said he would try to take back control of the company.