Investors call for the head of Vitesse director
It s 21 months since Vitesse Semiconductor last published its annual report, and investors are clamoring for the board member they feel responsible to resign.
Chapman Capital, an advisor to investors who own 5.3 percent of Vitesse, has filed a statement with the SEC calling for the departure of James A. Cole.
“Jim Cole, perplexingly still head of Vitesse's corporate governance committee, despite being held responsible by major past and present owners for the company's deep-seated problems, and who also holds a seat on Vitesse's compensation committee that appears to have stuffed the pockets of Mr. Cole's friends and business partners, must resign from the board immediately,” said Robert L. Chapman, the managing member of Chapman Capital.
Cole should be worried "“ Chapman says that it has a strong record of changing the policy of companies it has invested in, leading to restructuring or sale of businesses on 25 occasions over the past eleven years.
With the Milpitas, CA, based communications company also suing its former auditors KPMG for $100 million over the failure to provide proper auditing services, it looks like the stock options scandal the company has been through is entering its last, dramatic, stages.
Waiting to exhale
BDO Seidman has been called in as a replacement auditor to help put together Vitesse's accounts for 2006, although it s unlikely that figures for 2004 and 2005 will be restated accurately.
Current Vitesse CEO Chris Gardner appears to have steered the company with a steady hand since taking over from his tainted predecessor, Louis Tomasetta, reporting a positive cash flow in the first three months of 2007.
Even without full accounts, Vitesse was able to announce that it had cut back costs, reducing six-monthly cash burn to $9 million at the end of March from $45 million in the preceding six months.
Gardner claimed the company had improved business with top customers, and there have been moves to hire several extra staff with GaAs and InP processing experience this year.
The conclusion of this financial saga will be met with sighs of relief from Vitesse and its investors "“ but the question of whether further action will be taken against the three executives whose payments prompted all the problems is probably sufficient to prevent those involved exhaling for some time yet.
