The company said its corporate controller, Matthew Marini, has been suspended and placed on leave pending completion of the investigation, and that its president and chief operating officer, Jeffrey A. Conway, was asked to relinquish his duties. Conway, who formerly served as the company's senior vice president and chief financial officer, was promoted to president and COO in January.
   
Based on its preliminary investigation, Rent-Way said the accounting irregularities "appear to be limited to fictitious general ledger accounting entries made by a small number of personnel at its corporate headquarters." The entries "appear to have been made for purposes of reducing certain costs and operating expenses, and include adjustments to rental merchandise, certain fixed asset write-offs, other operating expenses, and thereby artificially increasing earnings."

Rent-Way said the news would have a negative, non-cash impact of $25 million to $35 million pre-tax on fiscal year 2000 earnings. The company said it doesn't expect the irregularities to affect fiscal periods prior to fiscal year 2000. Rent-Way added that it doesn't expect any of the irregularities to adversely affect reported revenues in fiscal year 2000.

The Audit Committee of Rent-Way's Board of Directors is conducting an investigation with the help of the firm's outside counsel, Hodgson, Russ, Andrews, Woods & Goodyear LLP, and special counsel to the Committee, Ross & Hardies, LLP. PricewaterhouseCoopers has been called in to assist in the investigation.
     
Rent-Way, which rents home entertainment equipment, computers, furniture and appliances, operates in 42 states.

-- SmartPros News Staff

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