CROOK NEWS: OMX-OfficeMax probes improper fee claims
Says share buyback on hold until inquiry completed
By Dan Burrows, CBS MarketWatch.com
Last Update: 4:28 PM ET Dec. 20, 2004
NEW YORK (CBS.MW) -- Shares of OfficeMax Inc. plunged more than 4 percent Monday after the company said that it is investigating vendor claims of improper fees and postponing its share repurchase until the inquiry is completed. OfficeMax's (OMX: news, chart, profile) stock closed down $1.37, or 4.2 percent, to $31.13, after recovering from a low of $29.51 earlier in the session.
Before the markets opened Monday, the Itasca, Ill., company disclosed allegations that "certain employees acted inappropriately in requesting promotional payments and in falsifying supporting documentation" for about $3.3 million in claims in 2003 and 2004.
On Oct. 29, the company -- then known as Boise Cascade Corp. -- closed the sale of its paper and forest products businesses and changed its name to OfficeMax. The company received $2.035 billion in cash for the assets sold, as well as an additional $15 million in cash and promissory notes of $1.64 billion for the timberlands portion of the sale. OfficeMax had intended to use part of the proceeds from the sale to buy back $775 million to $815 million of its common stock, as well as pay down some debt.
However, "because the company's investigation has only recently begun, the company is postponing a decision as to the form and timing of share repurchases until the investigation is complete," OfficeMax said in a statement.
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