In January, Microsoft bought Norwegian based search engine Fast. Last month Microsoft announced that they intended to expand the Norwegian headquarters to include a development center for search, and last Friday that headquarters was raided by police.
Fast had engaged in questionable bookkeeping in 2006 and 2007, reporting profits when in fact the company lost heavily. The inflation of profits, if proven, could result in fines. Microsoft had been aware of irregularities, it was reported, and had announced intentions to align Fast’s accounting practices with its own, but it seems too late now.
According to Norway’s leading news source, Dagens Næringsliv, a raid was carried out Friday on the Oslo office, as police seized several thousand documents and records as well as computers after the Fast’s auditors, Deloitte, had been contacted by authorities.
The main focus are deals that apparently never occurred, but were entered into Fast’s books as profits earned. Most well known is the so called Telstra deal, an Australian company which had signed a memorandum of understanding with Fast. The MoU was never converted into a proper sales agreement, and this was apparently the source of much of the irregularities in the books.
Directors with Fast also apparently received huge bonuses through straw companies around the time of the falsified account inflations, and several heads may face prison time, including CEO John Lervik, who has headed the company since 2001. Microsoft removed Lervik as board leader for the Fast daughter company Fast Search and Transfer International, although he remains CEO of the main company at this time.
Microsoft declined to comment on the latest news from Oslo. Norway’s financial supervisory authority, the Kredittilsynet, had apparently reported the Norwegian company earlier this year for financial irregularities, and Økokrim (the Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime) had become involved at that time.
Tags: accounting, Fast, fraud, Norway