CEO of chip maker is put on leave
International Rectifier Corp., an El Segundo-based chip maker, said Thursday that Chief Executive Alex Lidow had been placed on paid leave pending completion of an internal investigation into accounting irregularities.
General Counsel Donald Dancer was named acting CEO.
The move followed the dismissal in July of the company’s chief financial officer. International Rectifier warned in regulatory filings in May that financial statements dating back to September 2005 “should no longer be relied upon” because of “premature revenue recognition of product sales.”
Shares of International Rectifier plummeted $3.52, or 9.2%, on Thursday to $34.87.
The company’s stock has mostly bounced between $32 and $45 for the last three years, with its earnings performance erratic. The stock is down 29% since the end of 2003, compared with a 31% gain for the Standard & Poor’s 500 stock index.
The company reported a profit of $107 million on $1.17 billion in revenue for its 2006 fiscal year, which ended June 30, 2006. It has not yet released 2007 earnings, and gave no indication of when it would conclude its audit.
Lidow, who joined International Rectifier in 1977, remains on the company’s board. He could not be reached for comment.
The company gave no reason for placing Lidow on leave. It said in a statement that the decision was “in the best interests” of the company but stressed that “no conclusion has been reached by the Audit Committee that Dr. Lidow has engaged in any wrongful conduct.”
Lidow received an undergraduate degree in physics from Caltech and a doctorate from Stanford University. He is the son of company Chairman Eric Lidow, who founded International Rectifier in 1947. An engineer of Jewish descent, the elder Lidow escaped from Nazi Germany and came to the United States in 1937 with $14 and a knowledge of photovoltaics.
Today, the company’s chips can be found in all manner of electronics, from PlayStation 3 video game consoles to space satellites.
“Their products have a reputation for high quality and reliability,” said Jing Yuan, an analyst with Wedbush Morgan Securities.
“Our checks indicate that [the investigation] has not affected their sales, which continue to be healthy for the near future.”
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