Canadian commission ends probe into CP Ships? accounting, trading

Canadian commission ends probe into CP ShipsÆ accounting, trading Canadian commission ends probe into CP Ships' accounting, trading
   CP Ships has welcomed a decision by the Ontario Securities Commission to end its investigation into accounting errors and inappropriate stock trading activities by its management shortly before the stock collapsed after the Canadian-registered company told the market in August 2004 it had overstated its profits.
   “No formal proceedings are to be initiated by Ontario Securities Commission staff with respect to these matters,” CP Ships said in a statement Thursday.
   Yet, Ontario Securities Commission staff said CP Ships should have reported the need for a restatement of financial results earlier — when the company’s management first determined in June 2004 that the restatement was required    — even though the magnitude of the required restatement was not then known.
   CP Ships also reiterated the statement made by its special committee of independent directors that “trading in shares of the company by certain officers during May and June of 2004 should not have taken place.” But the committee of directors virtually exonerated the CP Ships executives involved, including chairman Ray Miles, saying there was no intent to violate applicable securities laws, and noted that the trading was done openly and with required internal trading approvals. At the request of the special committee, earlier this year the CP Ships executives involved paid back trading profits on the inappropriate transactions to the company.
   “Ontario Securities Commission staff have cautioned CP Ships with respect to these matters but advised that, in light of the cooperation received from the company and its officers, no formal proceedings will be commenced against CP Ships or any of its officers,” the company said.
   However, CP Ships is still facing several class lawsuits filed in the United States and Canada after its August 2004 accounting errors.
   Gatwick, U.K.-managed CP Ships, whose stock soared in May amid takeover rumors, will report its second-quarter results Aug. 11.