3 Min Read
* Accounting issues raised over UK contract, Nordic region
* Company reserved for settlement in last fiscal year
May 16 (Reuters) - Computer Sciences Corp agreed to pay $97.5 million to settle a lawsuit accusing it of defrauding shareholders by hiding a variety of accounting problems.
The settlement averts a trial that had been scheduled to begin on May 21, and was disclosed on Wednesday both in Computer Sciences' annual report and in papers filed with the U.S. district court in Alexandria, Virginia.
Computer Sciences is based in nearby Falls Church, Virginia, and the technology services company said it reserved for the settlement in its fiscal year ended March 29. Its market value on Wednesday was roughly $6.7 billion.
Neither the company nor a lawyer for the shareholders immediately responded on Thursday to requests for comment.
Shareholders led by the Ontario Teachers' Pension Plan Board accused the company of hiding problems related to a $5.4 billion contract with Britain's National Health Service, including problems with a software system known as Lorenzo that was intended to help digitize medical records.
Computer Sciences took a roughly $1.5 billion write-off in late 2011 related to the NHS contract.
Shareholders also accused the company of maintaining inadequate controls over, and relying on, inflated revenue data from its Nordic region, leading to multiple charges. A federal judge dismissed claims related to that region in August.
Computer Sciences said on Wednesday that it continues to cooperate with a formal U.S. Securities and Exchange Commission probe into the Nordic region issues, and also with that regulator's investigation into the NHS contract.
The settlement requires court approval, and a hearing to consider preliminary approval has been set for May 24.
The lawsuit had sought class-action status on behalf of shareholders between Aug. 5, 2008 and Aug. 9, 2011.
Computer Sciences' share price fell by roughly half during the final six months of that period, reducing the company's market value by more than $4 billion.
In morning trading, Computer Sciences shares were down $1.41, or 3.2 percent, at $43.30 on the New York Stock Exchange.
The case is In re: Computer Sciences Corp Securities Litigation, U.S. District Court, Eastern District of Virginia, No. 11-00610.